CASE 2018-0016: COLEGIO MEDICO-FARMACEUTICO DE FILIPINAS, INC. VS. LILY LIM AND ALL PERSON CLAIMING UNDER HER (G.R. NO. 212034, 02 JULY 2011, DEL CASTILLO, J.) (SUBJECT/S: UNLAWFUL DETAINER; CAN PRESIDENT OF A CORPORATION SEND DEMAND LETTER WITHOUT BOARD APPROVAL?) (BRIEF TITLE: COLEGIO MEDICO-FARMACEUTICO VS. LIM)

  

DISPOSITIVE:

 

“WHEREFORE, the Petition is hereby GRANTED. The assailed June 13, 2013 Decision and the April 7, 2014 Resolution of the Court of Appeals in CA-G .R. SP No. 114856 are hereby REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Manila, Branch 11, dated May 13, 2010 is hereby REINSTATED and AFFIRMED with MODIFICATION that the amount of reasonable compensation for the use of the subject property be increased to 1155,000.00 as stipulated in the Contract of Lease. In addition, the award of actual damages shall earn interest at the rate of 12% per annum from March 5, 2008, the date of extrajudicial demand, to June 30, 2013. From July 1, 2013 until full satisfaction of the monetary award, the rate of interest shall be six percent ( 6%) per annum.

 

SO ORDERED.”

 

SUBJECTS/DOCTRINES/DIGEST:

 

CAN THE PRESIDENT OF A CORPORATION SEND DEMAND LETTER WITHOUT BOARD RESOLUTION?

 

YES.

 

“In the absence of a charter or byr-1law provision to the contrary, the president is presumed to have the authority to act within the domain of the general objectives ofits business and within the scope of his or her usual duties.”

 

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“In this case, the issuance of the demand letter dated March 5, 2008 to collect the payment of unpaid rentals from respondent and to demand the latter to vacate the subject property was done in the ordinary course of business, and thus, within the scope of the powers of Del Castillo. In fact, it was his duty as President to manage the affairs of petitioner, which included the collection of receivables. Article IV, Section 2 of the By-laws of petitioner expressly states that the President has the power to:

 

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  1. Exercise general [supervision], control and direction of the business and affairs of the Colegio;

 

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  1. Execute in behalf of the Colegio, bonds, mortgages, and all other contracts and agreements which the Colegio may enter into.

 

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  1. Exercise or perfonn such other duties as are incident to his office or such powers and duties as the Board may from time to time [prescribe]. 33

 

Accordingly, even without a board resolution, Del Castillo had the power and authority to issue the demand letter dated March 5, 2008.

 

In any case, even if, for the sake of argument, Del Castillo acted beyond the scope of his authority in issuing the demand letter dated March 5, 2008, the subsequent issuance of the Board Resolution dated May 13, 2008 cured any defect possibly arising therefrom as it was a clear indication that the Board agreed to, consented to, acquiesced in, or ratified the issuance of the said demand letter.”

 

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 SCD-2018-0016-Colegio Medico-Farmaceutico De Filipinas, Inc. Vs. Lily Lim and all person claiming under her

 

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