Marine Culture, Inc. v. Coronel
REITERATIONFacts
The Antecedents: Private respondent Alfredo Coronel (Coronel) alleged that petitioner Marine Culture, Inc. (Marine Culture) hired his services as an agent to find a lessee for its fishpond in San Nicolas, Bulacan, for a commission of P50,000.00. Coronel claimed that through his sole efforts and expenses, the fishpond was leased to Messrs. Rufino Reyes and Victorino Ramos. Marine Culture paid only P1,000.00 of the agreed commission, leaving a balance of P49,000.00. Procedural History: Coronel filed a complaint for the recovery of the unpaid balance, collection and litigation expenses, and attorney's fees. Marine Culture denied the existence of any contract with Coronel, invoking the Statute of Frauds and the lack of authority of its former manager, Mr. Danilo Tobias, to enter into such an agreement. The Regional Trial Court (RTC) ruled in favor of Coronel, finding that the resolution empowering Mr. Tobias to take necessary actions deemed vital and important was sufficient to bind the corporation. The RTC ordered Marine Culture to pay the unpaid commission, legal interest, litigation expenses, and attorney's fees. The Court of Appeals (CA) affirmed the RTC's decision with modification, deleting the award for litigation expenses. The Petition: Marine Culture filed a petition for review, questioning whether Danilo Tobias had the authority to engage Coronel as an agent for a commission.
Issue(s)
Whether Danilo Tobias, as General Manager, had the authority to engage Alfredo Coronel as agent for the lease of the fishpond, and whether the agreement entered into by Danilo Tobias was binding on Marine Culture, Inc. Whether Marine Culture, Inc. could be held liable for the unpaid commission despite questioning the authority of its former manager for the first time on appeal. Whether Marine Culture, Inc. unjustly enriched itself at the expense of Alfredo Coronel.
Ruling
The petition is denied for lack of merit. The Court of Appeals' decision affirming the trial court's judgment, with the modification of deleting the award for litigation expenses, is upheld.
Ratio Decidendi
On the authority of Danilo Tobias and the binding nature of the agreement: The Court affirmed the findings of the lower courts that Mr. Danilo Tobias, as General Manager, was empowered by a resolution of the Board of Directors dated October 29, 1979, to "make the necessary action which he deems vital and important." The leasing of the fishpond was considered a vital and important matter for the corporation, which stood to earn millions. Therefore, the agreement entered into by Mr. Tobias, authorizing Coronel to look for lessees for a commission, was within the scope of his authority as granted by the said resolution. The Court emphasized that the resolution provided sufficient basis for binding the defendant corporation, as the agreement involved something "vital and important" to it, fulfilling the requirements of the resolution. The Court held that the agreement signed by Mr. Tobias on August 21, 1984, was binding on Marine Culture, Inc. This was based on the resolution of the Board of Directors dated October 29, 1979, which empowered the General Manager to take necessary actions deemed vital and important. The leasing of the fishpond was clearly a vital and important matter for the corporation's financial goals. Consequently, the authority granted to Mr. Tobias was deemed valid and binding between Coronel and Marine Culture, Inc., preventing the corporation from unjustly enriching itself. On raising issues for the first time on appeal: The Court reiterated the rule that issues not raised in the trial court cannot be raised for the first time on appeal. Marine Culture's argument regarding the requirement of a special power of attorney under the Civil Code was not raised in its Answer or any other pleading before the trial court. Therefore, it could not be considered on appeal, as it would be unfair to the adverse party who had no opportunity to counteract this new issue. This procedural rule prevented Marine Culture from successfully challenging the validity of the agreement on this ground at the appellate stage. On unjust enrichment: The Court found that Marine Culture benefitted from the services of Coronel, as it was able to lease its fishpond to Rufino Reyes and Victorino Ramos for the desired price. Therefore, it was only fair that the corporation should pay for these services. The Court invoked the principle that a party may not unjustly enrich itself at the expense of another. By accepting the benefits of Coronel's efforts in securing the lease, Marine Culture was estopped from denying its obligation to pay the agreed commission.
Main Doctrine
A corporation is bound by the acts of its general manager when such acts are within the scope of the authority granted by a resolution of the board of directors empowering the general manager to take necessary actions deemed vital and important for the corporation's goals. Furthermore, a corporation cannot unjustly enrich itself at the expense of another by benefiting from services rendered, even if the authority of the officer entering into the agreement is questioned for the first time on appeal.