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Leveriza vs.

IAC, 157 SCRA 282 (1988)

FACTS: This case involves three contracts of lease: 1) Contract A: executed between Civil Aeronautics Administration (lessor) and Rosario Leveriza (lessee) 2) Contract B: executed between Leveriza (lessor) and Mobil Oil (lessee) 3) Contract C: executed between CAA (lessor) and Mobil Oil (lessee) When Leveriza subleased the property to Mobil Oil (Contract B) without permission from the lessor, CAA cancelled Contract A and executed Contract C with Mobil Oil. Leveriza contended that Contract C was invalid not only because it was entered into by CAA without approval by the Department Secretary but also because it was not executed by the President of the Philippines or officer duly designated. According to Leveriza, the officer duly designated to cancel the contract is not the Airport General Manager but the Secretary of Public Works and Communication or the Director of the CAA. ISSUE: W/N Contract C was validly entered into HELD: SC held that the Airport General Manager had authority to enter into contracts of lease. In executing Contract C, the Airport General Manager signed for the Director of the CAA, who subsequently ratified the same. Under sec. 567 of the RAC, a contract of lease may be executed by: (1) President; (2) officer duly designated by him; and (3) officer expressly vested by law. Under sec. 32 (24) of RA 776, the Director of the CAA is one such officer vested by law.