13.

TERP COSTRUCTION VS BANCO SAVINGS-

terp, planter's insurance and home insurance guaranty agreed to generate funds for margarita eastville.
Home guaranty agreed to as guarantor that it would pay investors with value of the bond at 8.5%
interest upon maturity. banco savings alleged that it bought margarita bonds from terp with it having
15.5% interests as stated by the senior vice president of terp in his emails. Banco savings then filed a
complaint against terp the rtc ruled that terp cannot be liable for 15.5 % interests of the margarita bond
because the said interest was not ratified. The ca reversed the decision stating that the 15.5% interest is
a pure obligation entered into by terp and banco savings. Terp meanwhile paid the amount equivalent
to the said interest.

Issue: whether or not terp should be liable for the 15.5 interest.

Ruling: yes. The sc said that the authority of board of directors to delegate its power is actual or
apparent. Apparent authority is manifested in the general manner of how the corporation holds out a
corporate officer or agent as having power to act or apparent authority with which clothes him to act
and the acquiesence in his act of a particular nature with actual or constructive knowledge thereof
whether within or without the scope of his authority. In this case the 15.5% claim of banco savings was
based on the acts of Escalona and terp paying said interest twice ratifies said acts. Escalona has apparent
authority. Such as when the corporation holds an officer out or permits him to appear as having such
authority. The corporation is thereby bound to the person who deals with the said officer in good faith
relying on such apparent authority. Banco relied on escalona's apparent authority to promise interest
payments that are above 8.5%. This was further manifested when terp paid the additional interest thus
ratifying the act of escalona. Actual authority is express when it is delegated by board of directors it is
implied when it is measured by prior acts which are ratified by the board of directors.

priINTWELL- Bmpi placed several orders to printwell amounting to 316,342. Bmpi only paid
printwell 25,000 printwell then filed a complaint against bmpi and its stockholders and incorporators
in the rtc including the petitioner to recover from their unpaid subscriptions. The stockholders and
incorporators say that they had paid there subscription in full already and that bmpi has a separate
and distinct personality from the stockholders and incorporators. The rtc ruled in favor of printwell
applying the trust fund doctrine.
Issue: whether or not the trust fund doctrine is applicable in this case
ruling: yes the trust fund doctrine states that the property of the corporation is trust fund for the
payment of creditors but such property can only be called a trust fund in analogy. Since as between
the corporation and the creditors the former is a debtor and between the creditors and stockholders
assets of the corporation are in equity a fund for the payment of its debts. It is established that
subscriptions to the capital of the corporation constitute a fund wherein the creditors may look at to
satisfy their claims. The trust fund doctrine is not limited to unpaid subscriptions but may include
property or assets held in equity as a trust fund for payment of corporate debts. Under the trust fund
doctrine a corporation cannot release its original capital stock subscriber from the obligation of
paying his shares without valuable consideration or fraudulently to prejudice creditors. Halley was
not able to prove that she was able to fully pay her subscriptions to bmpi since the receipt she
presented showed she paid via check which is different from payment of delivering money. Stock
holders liability up to extent of the unpaid subscription.

16. FILIPINAS PORT SERVICES VS GO- eliodor cruz questioned the filipinas port board of
director's creation of several positions alleging that the board of directors do not have the authority to
create positions under the corporation's by laws. Cruz then filed a derivative suit to the sec.

Issue: whether or not the positions created by the board are illegal.
Ruling: no the corporation in sec 23 states that the board of directors exercises the corporate powers
of the corporation as well as being its governing body. Thus the board of directors or board of
trustees for non stock corporations has the sole authority to determine policies of the corporation
enter into contracts and run the day to day operations of the corporation within the scope of its
charter. The authority of board of directors is with management of the regular business affairs of the
corporation unless such authority is extended in this case the positions of assistant vice president for
corporate planning, operations and finance is authorized by the by laws of the corporation. The
creation of executive committee cannot be said to be illegal as the function of the executive
committee is not stated and therefore it may be said to be different from the executive committee
stated in sec 35 of the corporation code which is as powerful as the board of directors. the creation of
such executive committee must be authorized by the by laws of the corporation. the fixing of the
corresponding remuneration for the positions in question is provided for in the same by-laws of the
corporation, viz: xxx The Board of Directors shall fix the compensation of the officers and agents of
the corporation.

17. AGO REALTY VS AGO- the complainants in this case alleged that angelita ago introduced
improvements to lot number h 3 to corporate property without the approval of the board of directors.
Such complaibt has no authorization from the board of directors as well
Issue: whether or not a complaint may be filed without the approval of the board of directors.
Ruling: no the sc said that the business of a corporation is conducted by its board of directors. The
power to sue is one of the powers of a corporation it is lodged with the board of directors of the
corporation thus absence of authority from the board of directors, charter or by laws the suit cannot
be filed. In this case the complainants did not exhaust all remedies available in the corporation's by
laws or articles of incorporation before filing the derevative suit. Since one of the remedies they
could have exerted is have ardc itself through its board of directors institute the case.