Robern Development Corporation v People’s Landless Association

GR No. 173622, 11 March 2013

FACTS:
(1) Al-Amanah owned a 200 sq.m. lot in Magtu-od, Davao City and in December 1992, Al-amanah asked some of the
members of the People’s Landless Association (PELA) to stop from building their houses on the lot and vacate
the same, unless they are interested to buy it. The informal settlers (IS) expressed their interest to buy the lot at
P100/sq.m. which Al-amanah turned down as it was far below its asking price. Al-amanah thus reiterated its
demand to the IS to vacate the lot.

(2) On March 1993, the IS together with other members of PELA offered to purchase the lot for P300,000, payable
in 2 installments – ½ to be paid as downpayment the other ½ to be paid within 1 year. On May 1993, PELA had
deposited P150k as partial/full deposit. PELA members remained in the property and introduced further
imporvements.

(3) On Nov 1993, Al-Amanah wrote to PELA President Bonifacio Cuizon, Sr. that PELA’s offer to buy the lot was
disapproved on the ground was way below the selling price of the bank on a per square meter basis, as such they
were instructed to vacate the lot and remove all the house structures with special instructions that the amount
deposited may be withdrawn from the bank. 19 other PELA members received a similar letter.

(4) Acting on Robern’s undated written offer, Al-Amanah issued a recommendation dated December 1993 addressed
to its Board Operations Committee indicating that Robern is interested to buy the same lot for P400,000 and that
it has already deposited 20% of the offered purchase prices, that it is buying the lot on an “as is” basis and that it
was willing to shoulder the relocation of all IS. By the end of 1993, the Head Office had accepted Robern’s offer
and the latter was informed of such.

(5) Robern later learned of the transaction between PELA and Al-Amanah and demanded that should the issue remain
unresolved they would pull out of their transaction with the bank. Al-Amanah later proved that such transaction
with PELA was reneged, and upon getting a favorable legal opinion from the City Legal officer, the houses in the
lot was now up for eviction and possible demolition. Thus PELA filed a suit for annulment and cancellation of
void deed of sale against Al-Amanah and Robern before the RTC of Davao City. The RTC ruled in favor of Al-
Amanah and Robern saying that Al-amanah being a corporation can only be bound by actions made by their board
of directors as with the sale with Robern. The CA reversed RTC decision, hence this petition.

ISSUE: Whether or not the decision of the Board of Directors are binding for the corporation

HELD: Yes.

RULING:
In the sale of the disputed property, OIC Dalig of Al-Amanah bank informed PELA that the offer to buy the property is
subject for the approval by the head office in Manila, despite the deposit of ½ of the price. It was clear, and PELA even
acknowledges that OIC Dalig made it clear that the acceptance of the offer, notwithstanding the deposit, is subject to the
approval of the Head Office. Recognizing the corporate nature of the bank and that the power to sell its real properties is
lodged in the higher authorities, OIC Dalig never falsely represented that she has authority to sell the bank’s property
regardless of PELA’s insistence that she execute a written agreement of the sale, she refused and told PELA to wait for
the decision of the Head Office, making it clear that she has no authority to execute any deed of sale.

Section 23 of the Corporation code provides that: “unless otherwise provided in this Code, the corporate powers of all
corporations formed under this Code shall be exercised, all business conducted and all property of such corporations
controlled and held by the board of directors or trustees to be elected from among the holders of stock, or where there is
no stock, from among the members of the corporation, who shall hold office for one (1) year and until their successors
are elected and qualified”