Republic vs. Acoje Mining Co., Inc. 7 SCRA 361 (Corporation Law)

CORPORATION LAW

Republic vs. Acoje Mining Co., Inc.

7 SCRA 361 (G.R. No. L-18062)

February 28, 1963

Petitioner/Appellant: Acoje Mining Company, Inc.

Respondent/Appellee: Republic of the Philippines

J. Bautista - Angelo

FACTS:

Acoje Mining wrote the Director of Posts requesting the opening of a post, telegraph and money order offices and its mining camp at Sta. Cruz, Zambales to serve its employees and their families that were said living in the camp. Acting on the request, Director of Posts replied that if aside from free quarters, the company would provide for all the essential equipment and assign responsible employee to perform a postmasters duties. It is also indicated that the company shall assure direct responsibility for whatever pecuniary loss the Bureau of Post may suffer. The post office branch was opened at the camp with one Hilario Sandrez as postmaster. The postmasters went on a 3 day leave but never returned. The company immediately informed the Manila Post Office of Sanchez's disappearance when the accounts were checked a shortage was found. Several demands made upon the company for the payment of shortage in line with the liability it has assumed having failed, the government brought the present action.

ISSUE:

Whether or not an act outside the scope of powers expressly conferred may be performed.

HELD:

Yes.

While as a rule an ultra vires act is one committed outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the powers conferred upon it by law, there are however certain corporate acts that may be performed outside the scope of the powers expressly conferred if they are necessary to promote the interest and welfare of the corporation, such as the establishment, in the case at bar, of a local post office in a mining camp which is far removed from the postal facilities or means of communication accorded to people living in a city or municipality.

An illegal act is void and cannot be validated, while an ultra vires act is merely voidable and can be enforced by performance, ratification or estoppel, or on equitable grounds. In the present case the validity of the resolution of Board of Directors of the corporation accepting full responsibility in connection with funds to be received by its postmaster, should be upheld on the ground of estoppel.