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CITYBANK VS. CHUAG.R. NO. 102300

FACTS OF THE CASE

Petitioner Citibank, N.A. is a foreign commercial banking corporationduly licensed to do business in the Philippines. Private respondents spousesCresencio and Zenaida Velez, ere good clients of petitioner bank!s branch inCebu until "arch #$, #%&' hen they (led a complaint for speci(cperformance and damages against it before the )*C of Cebu, +ranch # . -n"arch , #%% , the date of the pre/trial conference, counsel for petitionerbank appeared, presenting a special po er of attorney e0ecuted by Citibanko1cer 2lorencia *arriela in favor of petitioner bank!s counsel, the 3.P. 4arcia 5Associates, to represent and bind petitioner bank at the pre/trial conferenceof the case at bar. 6nspite of this special po er of attorney, counsel forprivate respondents orally moved to declare petitioner bank as in default onthe ground that the special po er of attorney as not e0ecuted by the +oardof 7irectors of Citibank. 6n petitioner8s ritten opposition, attached asanother special po er of attorney made by 9illiam 9. 2erguson, VicePresident and highest ranking o1cer of Citibank, Philippines, constituting andappointing the 3.P. 4arcia 5 Associates to represent and bind the +AN: at the

pre/trial conference and;or trial of the case of udge deniedprivate respondents! oral motion to declare petitioner bank as in default andset the continuation of the pre/trial conference for "ay =, #%% . -n thescheduled pre/trial conference, private respondents reiterated, by ay of asking for reconsideration, their oral motion to declare petitioner bank as indefault for its failure to appear through an authorized agent and that thedocuments presented are not in accordance ith the re?uirements of thela . Petitioner bank again (led its opposition thereto, attaching there ith aspecial po er of attorney e0ecuted by 9illiam 9. 2erguson in favor of Citibank employees to represent and bind Citibank on the pre/trialconference of the case at bar. -n August #@, #%% , respondent >udge issuedan order declaring petitioner bank as in default on the reason that petitionerbank, although a foreign corporation, is bound by Philippine la s hen doingand conducting business in the Philippines, and its corporate po ers couldonly be e0ercised by its +oard of 7irectors. *he e0ercise of such corporate

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po ers could only be valid if it bears the approval of the ma>ority of the+oard Bec. =@, par. =, Corporation Code . *he records does not shoho ever the re?uisite document. *he alleged authority e0ecuted by "r.9illiam 9. 2erguson in favor of the alleged Citibank employees, assumingthe same to be a delegable authority, to represent the defendant in the pre/trial conference, made no mention of 3.P. 4arcia 5 Associates as one of theemployees of the defendant. 6t stands to reason therefore, that the petitionerbank has no proper representation during the pre/trial conference. "otion forreconsideration as denied. Petitioner bank then (led a petition forcertiorari, prohibition and mandamus ith preliminary in>unction and;ortemporary restraining order ith the Court of Appeals. -n 3une =', #%%#, theCA dismissed the petition. Dence, this petition.

ISSUES

9hether or not a resolution of the +oard of 7irectors of a corporation isal ays necessary for granting authority to an agent to represent thecorporation in court cases.

RULINGS

N-. Bection = of the Corporation Code of the Philippines in partprovidesE

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incorporation, the by/la s or by resolution or other act of the board of directors. 6n addition, an o1cer ho is not a director may also appoint otheragents hen so authorized by the by/la s or by the board of directors. Buchare referred to as e0press po ers. *here are also po ers incidental toe0press po ers conferred. 6t is a fundamental principle in the la of agencythat every delegation of authority, hether general or special, carries ith it,unless the contrary be e0pressed, implied authority to do all of those acts,naturally and ordinarily done in such cases, hich are reasonably necessaryand proper to be done in order to carry into eKect the main authorityconferred. Bince the by/la s are a source of authority for corporate o1cersand agents of the corporation, a resolution of the +oard of 7irectors of Citibank appointing an attorney in fact to represent and bind it during thepre/trial conference of the case at bar is not necessary because its by/la sallo its o1cers, the F0ecuting -1cer and the Becretary Pro/*em, to e0ecute

a po er of attorney to a designated bank o1cer, 9illiam 9. 2erguson in thiscase, clothing him ith authority to direct and manage corporate aKairs.Bince paragraph LL6 general po er of attorney speci(cally allo s 2ergusonto delegate his po ers in hole or in part, there can be no doubt that thespecial po er of attorney in favor, (rst, of 3.P. 4arcia 5 Associates and later,of the bank!s employees, constitutes a valid delegation of 2erguson!s e0presspo er to represent petitioner bank in the pre/trial conference in the lo ercourt.