GR No.

154291 / November 12, 2014

Lopez Realty, Inc. (LRI) and Asuncion Lopez-Gonzales v.
Spouses Reynaldo Tanjangco and Maria Luisa Arguelles-Tanjangco

Facts:
LRI and Dr. Jose Tangjangco are co-owners of the three parcels of land where Trade Center Building was
erected thereon. Dr. Tanjangco’s share was transferred to his son while LRI’s share was opened for sale.
Spouses Tanjangco and Asuncion were contending as buyers for the property. Since Asuncion failed to
match the purchase price of the spouses, the latter were designated as buyers. Paying half of the
purchase price, spouses Tanjangco transferred the whole property in their name. LRI and Asuncion filed
complaint for annulment of sale, cancellation of title and reconveyance, alleging that no notice was sent
to her for the meeting giving authority to Arturo act as LRI’s representative to proceed on the sale.
Meanwhile, stockholders of LRI ratified and confirmed the sale in a board meeting. Asuncion challenged
the ratification saying that Juanito, a representative of the deceased director Teresita, is not himself a
director entitled to vote. The trial court declared the sale null and void for lack of notice to Asuncion on
the meeting giving authority to Arturo and for the lack of required number of votes during the meeting
ratifying the same. But the appellate court, however, upheld the validity of the sale and the ratification
thereof. Hence, the appeal.

Issue:
Whether or not Arturo has the authority to act as LRI’s representative on the sale and, if none, whether
or not there was a valid ratification of his authority.

Held:
No, Arturo has no authority to act as LRI’s representative on the sale as there was no notice given to
Asuncion as one of its directors but the ratification thereof was valid. The meeting calling for the
ratification of giving Arturo the authority was one of joint stockholder’s and director’s meeting. Since
the majority of the board of directors already approved the sale, the power to ratify lies in the
stockholders. And so when Juanito voted in place of Teresita together with other stockholders and
gained affirmative vote for ratification, Arturo’s authority to act as LRI’s representative is accomplished.
Whatever defect was on the sale was cured through ratification. By virtue of ratification, the acts of the
board of directors become the acts of the stockholders themselves.