G.R. No. 129459.

September 29, 1998

SAN JUAN STRUCTURAL AND STEEL FABRICATORS, INC., Petitioner, v. COURT OF
APPEALS, MOTORICH SALES CORPORATION, NENITA LEE GRUENBERG, ACL
DEVELOPMENT CORP. and JNM REALTY AND DEVELOPMENT CORP., Respondents.

Facts:
• This is petition for review on certiorari regarding the decision that ordered Nenita Lee
Gruenberg to refund the downpayment of P100,000.
• San Juan Structural and Steel Fabricators entered into an agreement with Motorich Sales
Corporation for the transfer of a parcel of land to it. Downpayment was paid and San Juan
Structural requested for a computation of the balance to be paid and when the payment was
ready, the treasurer of Motorich, Nenita Lee, did not appear. Hence, the instituted a suit saying
that no action was taken to execute the transfer of rights/deed of assignment for the transfer of
certificate of title despite their repeated demands.
• Motorich Corporation stated that the President and the Chairman did not sign the agreement
for this transfer and that Nenita Lee’s signature is inadequate to bind the corporation as she is
merely the Treasurer.

Issue:
• Whether or not the acts of the Treasurer of a corporation is binding to the corporation.

Ruling:
• NO. The general principles of agency govern the relation between the corporation and its
officers or agents, subject to the articles of incorporation, bylaws, or relevant provisions of law.
Hence, a corporate officer or an agent may bind the corporation in transactions with third
persons to the extent that such authority was conferred to him which were intentional,
incidental, or implied.
• Here, Motorich categorically denies that it authorized its Treasurer to sell the parcel of land.
Nenita Lee cannot assume that she was authorized to sell the property of the corporation
because this is not among the functions of a Treasurer. Sale of properties is not also a normal
business activity of Motorich since they primarily deal with marketing, distributing, exporting,
and importing general merchandising.
• Article 1874 provides that when a sale of a piece of land or any interest therein is through an
agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.
• Article 1876 also states that SPA are necessary 5) to enter any contract by which the ownership
of an immovable is transmitted or acquired either gratuitously or for a valuable consideration.
• Here, all these were not observed. Hence, Nenita Lee as Treasurer and agent, cannot bind the
corporation.
• Nenita was ordered to return the downpayment received from San Juan Structural.