Inter-Asia Investment Industries, Inc. vs. Court of Appeals 403 SCRA 452 (Corporation Law)

CORPORATION LAW

Inter-Asia Investment Industries, Inc. vs. Court of Appeals

403 SCRA 452 (G.R. No. 125778)

June 10, 2003

Petitioner: Inter-Asia Investments Industries, Inc.

Respondents: Court of Appeals and Asia Industries, Inc.

J. Carpio-Morales

FACTS:

Petitioner, by a Stock Purchase Agreement, sold to private respondent Asia Industries all its rights, title and interest in, and to all outstanding shares of stocks of FARMACOR, Inc.. Such was signed by Leonidas P. Gonzales and Jesus J. Vergara, presidents of respective corporations. It was provided that respondent may retain ₱7,500,000.00 out of the stipulated price of ₱19,500,000.00 from which may be deducted any shortfall on the Minimum Guaranteed Net Worth of ₱12,000,000.00. It turned out that the guaranteed net worth shortfall amounted to ₱13,244,225.00. Private respondent having already paid petitioner ₱12,000,000.00 was entitled to ₱5,744,225.00 refund since it was also stated that if the amount retained is not sufficient to make up for the deficiency in the Minimum Guaranteed Net Worth, petitioner shall pay the difference within 5 days from date of receipt of the audited financial statements. Petitioner thereafter proposed by letter signed by its president, that private respondent's claim for refund be reduced to ₱4,093,993.00, it promise to pay the cost of the Northern Cotabato Industries, Inc. superstructures in the amount of ₱759,570.00 to which respondent agreed. Petitioner, however, wielded on its promise. Private respondent filed a case against petitioner with RTC Makati. The trial court ruled in favor of respondent. Such was upheld by the Court of Appeals.

ISSUE:

Whether or not an officer of a corporation who is authorized purchased stock of another corporation has the implied power to perform all other obligations arising therefrom.

HELD:

Yes.

As correctly argued by private respondent, an officer of a corporation who is authorized to purchase the stock of another corporation has the implied power to perform all other obligations arising therefrom, such as payment of the shares of stock. By allowing, its president to sign the agreement on its behalf, petitioner clothed him with apparent capacity to perform all acts which are expressly, impliedly and inherently stated therein.