G.R. No. 102300, 17 March 1993
FACTS:
Petitioner Citibank, N.A. is a foreign commercial banking corporation duly licensed to do business in the Philippines.
Private respondents spouses Cresencio and Zenaida Velez, were good clients of petitioner bank’s branch in Cebu until March 14, 1986 when they filed a complaint for specific performance and damages against it before the RTC of Cebu, Branch 10.
On March 30, 1990, the date of the pre-trial conference, counsel for petitioner bank appeared, presenting a special power of attorney executed by Citibank officer Florencia Tarriela in favor of petitioner bank’s counsel, the J.P. Garcia & Associates, to represent and bind petitioner bank at the pre-trial conference of the case at bar.
Inspite of this special power of attorney, counsel for private respondents orally moved to declare petitioner bank as in default on the ground that the special power of attorney was not executed by the Board of Directors of Citibank. In petitioner’s written opposition, attached was another special power of attorney made by William W. Ferguson, Vice President and highest ranking officer of Citibank, Philippines, constituting and appointing the J.P. Garcia & Associates to represent and bind the BANK at the pre-trial conference and/or trial of the case of “Cresencio Velez, et al. vs. Citibank, N.A.” In an Order dated April 23, 1990, respondent judge denied private respondents’ oral motion to declare petitioner bank as in default and set the continuation of the pre-trial conference for May 2, 1990.
On the scheduled pre-trial conference, private respondents reiterated, by way of asking for reconsideration, their oral motion to declare petitioner bank as in default for its failure to appear through an authorized agent and that the documents presented are not in accordance with the requirements of the law. Petitioner bank again filed its opposition thereto, attaching therewith a special power of attorney executed by William W. Ferguson in favor of Citibank employees to represent and bind Citibank on the pre-trial conference of the case at bar.
On August 15, 1990, respondent judge issued an order declaring petitioner bank as in default on the reason that petitioner bank, although a foreign corporation, is bound by Philippine laws when doing and conducting business in the Philippines, and its corporate powers could only be exercised by its Board of Directors. The exercise of such corporate powers could only be valid if it bears the approval of the majority of the Board (Sec. 25, par. 2, Corporation Code). The records does not show however the requisite document.
The alleged authority executed by Mr. William W. Ferguson in favor of the alleged Citibank employees, assuming the same to be a delegable authority, to represent the defendant in the pre-trial conference, made no mention of J.P. Garcia & Associates as one of the employees of the defendant. It stands to reason therefore, that the petitioner bank has no proper representation during the pre-trial conference. Motion for reconsideration was denied.
Petitioner bank then filed a petition for certiorari, prohibition and mandamus with preliminary injunction and/or temporary restraining order with the Court of Appeals. On June 26, 1991, the CA dismissed the petition. Hence, this petition.
ISSUE:
Whether or not a resolution of the Board of Directors of a corporation is always necessary for granting authority to an agent to represent the corporation in court cases.
RULING:
NO. Section 23 of the Corporation Code of the Philippines in part provides:
SEC. 23. The board of directors or trustees. 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 stocks, 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. Thus, although as a general rule, all corporate powers are to be exercised by the board of directors, exceptions are made where the Code provides otherwise.
Section 25 of said Code provides that the directors of the corporation shall elect its corporate officers, and further provides as follows:
“SEC. 25. Corporate officers; quorum. The directors or trustees and officers to be elected shall perform the duties enjoined on them by law and by the by-laws of the corporation . . .” Furthermore, Section 47 of the same Code enumerates what may be contained in the by-laws, among which is a provision for the “qualifications, duties and compensation of directors or trustees, officers and employees”. (Emphasis supplied.)
Taking all the above provisions of law together, it is clear that corporate powers may be directly conferred upon corporate officers or agents by statute, the articles of incorporation, the by-laws or by resolution or other act of the board of directors. In addition, an officer who is not a director may also appoint other agents when so authorized by the by-laws or by the board of directors. Such are referred to as express powers. There are also powers incidental to express powers conferred.
It is a fundamental principle in the law of agency that every delegation of authority, whether general or special, carries with it, unless the contrary be expressed, implied authority to do all of those acts, naturally and ordinarily done in such cases, which are reasonably necessary and proper to be done in order to carry into effect the main authority conferred.
Since the by-laws are a source of authority for corporate officers and agents of the corporation, a resolution of the Board of Directors of Citibank appointing an attorney in fact to represent and bind it during the pre-trial conference of the case at bar is not necessary because its by-laws allow its officers, the Executing Officer and the Secretary Pro-Tem, to execute a power of attorney to a designated bank officer, William W. Ferguson in this case, clothing him with authority to direct and manage corporate affairs.
Since paragraph XXI general power of attorney specifically allows Ferguson to delegate his powers in whole or in part, there can be no doubt that the special power of attorney in favor, first, of J.P. Garcia & Associates and later, of the bank’s employees, constitutes a valid delegation of Ferguson’s express power to represent petitioner bank in the pre-trial conference in the lower court.
*Case Digest by Bryne Angelo M. Brillantes, JD-IV, Andres Bonifacio Law School, SY 2019-2020