4. Litonjua, Jr. vs. Eternit Corp.

, 490 SCRA 204 (2006)

Eternit Corporation (EC) is a corporation duly organized and registered under Philippine laws and had been
engaged in the manufacture or roofing materials and pipe products. Its manufacturing operations were
conducted on eight parcels of land. The properties were located in Mandaluyong City under the name of Far
East Bank as trustee. 90% of the shares of stock of stocks of EC were owned by Eteroutremer S.A. Corp
(ESAC), corporation organized under the laws of Belgium. Jack Glanville was the General Manager and
President of EC while Delsaux was the Regional Director for Asia of ESAC. Both holding offices in Belgium.
In 1986, ESAC management grew concerned of the political situation in the Philippines and instructed Michael
Adams to dispose of the eight parcels of land. Adams engaged the services of broker Marquez so the properties
be offered for sale. Litonjua, Jr. & Antonio Litonjua responded to the offer and offered to buy the property at
P20M and Glanville sent the counterproposal of the Litonjuas to Delsaux. It was only on February 12, 1987
that Delsaux replied with the final offer to which Litonjua agreed to and deposited the amount in Security Bank
with Escrow Agreement. With the assumption of Cory Aquino as President, ESAC decided to continue its
operations in the Philippines and no longer proceed with the sale of the eight parcels of land.
Marquez informed the Litonjuas of the development and the latter filed a complaint for specific performance
and damages against EC after writing several demands to honor the sale.

Trial court ruled in favor of EC on the ground that the authority of the real estate broker did not include the
authority to sell therefore there was no valid agency. In addition, Marquez has no authority to sell because there
was no board resolution authorizing him to do so. Same ruling as to Glanville and Delsaux. The contention of
agency by estoppel is untenable.

The CA affirmed the ruling of the lower court.

ISSUE: Whether or not Marquez, Glanville and Delsaux have the necessary authority as agents to do acts within
the scope of their authority to sell the properties?

HELD:
No, it must be stressed that when specific performance is sought of a contract made with an agent, the agency
must be established by clear, certain and specific proof.

The law provides that an agency may be express or implied from the act of the principal, from his silence or
lack of action or failure to repudiate the agency. Agency may be oral unless the law requires a specific form.
However, to create or convey real rights, a special power of attorney is necessary.

A corporation, being a juridical person, may only act through its board of directors or, when authorized either
by its by-laws or by its board resolution, through its officers or agents in the normal course of business.
The general principles of agency govern the relation between the corporation and its officers or agents, subject
to the articles of incorporation, by-laws, or relevant provisions of law. While a corporation may appoint agents
to negotiate for the sale of its real properties, the final say will have to be with the board of directors through its
officers and agents as authorized by a board resolution or by its by-laws. Any sale of real property of a
corporation by a person purporting to be an agent thereof but without written authority from the corporation is
null and void. In this case, there was no board resolution clothing Adams, Glanville nor Delsaux the authority
to sell the properties. Thus, making the sale null and void.