8. ASSOCIATED BANK vs. PRONSTROLLER558 SCRA 113

FACTS:Sps. Vaca executed a Real Estate Mortgage in favor of the petitioner over their parcel of residential land and the house constructed thereon.For failure of the sps. Vaca to pay their obligation, the subject property was sold at public auction with the petitioner as the highest bidder.TCT in the name of sps. Vaca, was cancelled and a new one was issued in the name of the petitioner. The sps. Vaca, however, commenced an action for the nullification of the real estate mortgage and the foreclosure sale.Petitioner, on the other hand, filed a petition for the issuance of a writ of possession which was denied by the RTC.Petitioner, thereafter, obtained a favorable judgment when the CA granted its petition but the spouses Vaca questioned the CAs decision before this Court in the case docketed as G.R. No. 109672. During the pendency of the aforesaid cases, petitioner advertised the subject property for sale to interested buyers.Respondents Rafael and Monaliza Pronstroller offered to purchase the property. Petitioners accepted respondents offer and consequently, the respondents paid petitionerP750,000.00, or 10% of the purchase price, as down payment. OnMarch 18, 1993, Petitioner, through Atty. Soluta(petitioners VP, Corporate Secretary and a member of its Board of Directors), and respondents, executed a Letter-Agreement setting forth therein the terms and conditions of the sale.Prior to the expiration of the 90-day period within which to make the escrow deposit, in view of the pendency of the case between the spouses Vaca and petitioner involving the subject property, respondents requested that the balance of the purchase price be made payable only upon service on them of a final decision or resolution of this Court affirming petitioners right to possess the subject property.Atty. Soluta referred respondents proposal to petitioners Asset Recovery and Remedial Management Committee (ARRMC) but the latter deferred action thereon. On July 14, 1993, a month after they made the request and after the payment deadline had lapsed, respondents and Atty. Soluta, acting for the petitioner, executed another Letter-Agreement allowing the former to pay the balance of the purchase price upon receipt of a final order from this Court (in theVacacase) and/or the delivery of the property to them free from occupants. Petitioner reorganized its management;Atty. Dayday became petitioners Assistant VP and Head of the Documentation Section, while Atty. Soluta was relieved of his responsibilities.Atty. Dayday reviewed petitioners records of its outstanding accounts and discovered that respondents failed to deposit the balance of the purchase price of the subject property.He, likewise, found that respondents requested for an extension of time within which to pay.The matter was then resubmitted to the ARRMC during its meeting, and it was disapproved.ARRMC, thus, referred the matter to petitioners Legal Department for rescission or cancellation of the contract due to respondents breach thereof. Atty. Dayday informed respondents that their request for extension was disapproved by ARRMC and, in view of their breach of the contract, petitioner was rescinding the same and forfeiting their deposit.Petitioner added that if respondents were still interested in buying the subject property, they had to submit their new proposal. Respondents went to the petitioners office, talked to Atty. Dayday and gave him the Letter-Agreementto show that they were granted an extension.However, Atty. Dayday claimed that the letter was a mistake and that Atty. Soluta was not authorized to give such extension. The respondents proposed to pay the balance of the purchase price as follows:P3, 000,000.00 upon the approval of their proposal and the balance after six (6) months. However, the proposal was disapproved by the petitioners President.In a letter, petitioner advised respondents that the former would accept the latters proposal only if they would pay interest at the rate of 24.5% per annum on the unpaid balance.Petitioner also allowed respondents a refund of their deposit ofP750,000.00 if they would not agree to petitioners new proposal. For failure of the parties to reach an agreement, respondents, through their counsel, informed petitioner that they would be enforcing their agreement. Petitioner countered that it was not aware of the existence of agreement and that Atty. Soluta was not authorized to sign for and on behalf of the bank.It, likewise, reiterated the rescission of their previous agreement because of the breach committed by respondents. In theVacacase, this Court upheld petitioners right to possess the subject property.Respondents commenced the instant suit by filing a Complaint forSpecific Performancebefore the RTC. Respondents prayed that petitioner be ordered to sell the subject property to them in accordance with their letter-agreement.They likewise, caused the annotation of a notice oflis pendensat the dorsal portion of TCT.For its part, petitioner contended that their contract had already been rescinded because of respondents failure to deposit in escrow the balance of the purchase price within the stipulated period. The trial court finally resolved the matter in favor of respondents. Applying the rule of apparent authority, the court upheld the validity of the Letter-Agreement where the respondents were given an extension within which to make payment.Consequently, respondents did not incur in delay, and thus, the court concluded that the rescission of the contract was without basis and contrary to law. On appeal, the CA affirmed the RTC decision.

ISSUE:Whether or not the CAs findings is not supported by the evidence on record and is purely based on erroneous assumptions, presumptions, surmises and conjectures.

HELD:Well-settled is the rule that the findings of the RTC, as affirmed by the appellate court, are binding on this Court.In a petition for review oncertiorariunder Rule 45 of the Rules of Court, as in this case, this Court may not review the findings of fact all over again.It must be stressed that this Court is not a trier of facts, and it is not its function to re-examine and weigh anew the respective evidence of the parties.The findings of the CA are conclusive on the parties and carry even more weight when these coincide with the factual findings of the trial court, unless the factual findings are not supported by the evidence on record.Petitioner failed to show why the above doctrine should not be applied to the instant case.

Contrary to petitioners contention that the CAs factual findings are not supported by the evidence on record, the assailed decision clearly shows that the appellate court not only relied on the RTCs findings but made its own analysis of the record of the case.The CA decision contains specific details drawn from the contents of the pleadings filed by both parties, from the testimonies of the witnesses and from the documentary evidence submitted.It was from all these that the appellate court drew its own conclusion using applicable legal principles and jurisprudential rules.

The Court notes that the March 18, 1993 Letter-Agreement was written on a paper with petitioners letterhead.It was signed by Atty. Soluta with the conformity of respondents. The authority of Atty. Soluta to act for and on behalf of petitioner was not reflected in said letter or on a separate paper attached to it.Yet, petitioner recognized Atty. Solutas authority to sign the same and, thus, acknowledged its binding effect.On the other hand, theJuly 14, 1993letter was written on the same type of paper with the same letterhead and of the same form as the earlier letter.It was also signed by the same person with the conformity of the same respondents.Again, nowhere in said letter did petitioner specifically authorize Atty. Soluta to sign it for and on its behalf.This time, however, petitioner questioned the validity and binding effect of the agreement, arguing that Atty. Soluta was not authorized to modify the earlier terms of the contract and could not in any way bind the petitioner.We beg to differ.The general rule is that, in the absence of authority from the board of directors, no person, not even its officers, can validly bind a corporation.The power and responsibility to decide whether the corporation should enter into a contract that will bind the corporation is lodged in the board of directors.However, just as a natural person may authorize another to do certain acts for and on his behalf, the board may validly delegate some of its functions and powers to officers, committees and agents.The authority of such individuals to bind the corporation is generally derived from law, corporate bylaws or authorization from the board, either expressly or impliedly, by habit, custom, or acquiescence, in the general course of business. Accordingly, the authority to act for and to bind a corporation may be presumed from acts of recognition in other instances, wherein the power was exercised without any objection from its board or shareholders.Undoubtedly, petitioner had previously allowed Atty. Soluta to enter into the first agreement without a board resolution expressly authorizing him; thus, it had clothed him with apparent authority to modify the same via the second letter-agreement. It is not the quantity of similar acts which establishes apparent authority, but the vesting of a corporate officer with the power to bind the corporation.

Naturally, the third person has little or no information as to what occurs in corporate meetings; and he must necessarily rely upon the external manifestations of corporate consent.The integrity of commercial transactions can only be maintained by holding the corporation strictly to the liability fixed upon it by its agents in accordance with law. What transpires in the corporate board room is entirely an internal matter.Hence, petitioner may not impute negligence on the part of the respondents in failing to find out the scope of Atty. Solutas authority.Indeed, the public has the right to rely on the trustworthiness of bank officers and their acts.