Mr. Amado P. Sancho

November 23, 1987 Mr. Amado P. Sancho C/o A. P. Sancho Industries 1117 M. Natividad, Sta. Cruz Metro Manila Sir : This refers to your letter, dated November 18, 1987, requesting information on the following queries affecting Asia Investment Corporation: 1. Capacity and authority of Mr. Benigno C. Chan of Asia Investment Corporation to enter into a lease contract. 2. Is Mr. Chan an officer, stockholder of Asia Investment Corporation? 3. Who is the officer empowered by Asia Investment Corporation to enter into any contract, negotiation, sale or lease of its corporate assets? In reply to your first and second queries, please be informed that the record of Asia Investment Corporation on file with this Commission as of November, 1986, fails to show Mr. Benigno Chan as an officer or director of subject company. As to whether or not Mr. Chan is a stockholder therein, this Commission regrets its inability to confirm or deny such fact considering that we are not in possession of the stock and transfer book of the corporation which admittedly is the best evidence of the fact of stockholdings and ownership. In view of the foregoing, the Commission could not make an appropriate comment as to the capacity and authority of Mr. Chan to enter into a lease contract concerning the properties of Asia Investment Corporation. Apropos your third query, the pertinent provisions of the Corporation Code of the Philippines, read thus: "SECTION 40. Sale or other disposition of assets. Subject to the provisions of existing laws on illegal combinations and monopolies, a corporation may, by majority vote of the board of directors or trustees, sell, lease, exchange, mortgage, pledge or otherwise dispose of all or substantially all of its property and assets, including its goodwill, upon such terms and conditions and for such consideration, which may be money, stocks, bonds or other instruments for the payment of money or other property as consideration, as its board of directors or trustees may deem expedient, when authorized by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock ; A sale or other disposition shall be deemed to cover substantially all the corporate property and assets if thereby the corporation would be rendered incapable of continuing the business or accomplishing the purpose for which it was incorporated. cdlex xxx xxx xxx Nothing in this section is intended to restrict the power of any corporation, without the authorization by the stockholders or members, to sell, lease, exchange, mortgage, pledge or otherwise dispose of any of its property and assets if the same is necessary in the usual and regular course of business of said corporation, or if the proceeds of the sale or other disposition of such property and assets be appropriated for the conduct of its remaining business. xxx xxx xxx (Emphasis supplied). Corporate contracts should be executed in the name of the corporation by an officer authorized to act, but his authority to execute the contract is determined by his actual office, and not by the description he may use in connection with his signature. (7 Fletcher, Cyc. of Corps. 1978 rev. vol.,sec. 3003, pp. 122-123).Generally, corporate contracts should be signed by the president of the corporation, and it is the better practice for the secretary to sign also, although it has been held that in the absence of statute, or provision in the charter or by-laws or resolution of the board of directors, it is not strictly necessary that the signature of the secretary appear. (Fletcher Supra.,sec. 3028 at 159).The manager may, in a proper case, lease property belonging to the corporation (Georgia Cas. Co. V Massey, 201 Ala. 601, 79 So. 33, cited in Fletcher, Cyc. Corps.,Vol. 2A, 1982 rev. vol.,sec. 691, p. 307);and persons dealing with him may rely on appearances, if he is acting within his authority, the person dealing with him is not charged with knowledge of extrinsic facts making it improper for him to act in the particular case. (Povey v. Colonial Beacon Oil, 294 Mass. 86, 200 N.E. 891). Jurisprudence likewise shows that "a lease executed by the proper corporate officers of a corporation whose business included the rental of corporate property was not required to be approved by board of directors".(Fletcher, Cyc. of Corps.,Vol. 2, 1954 rev. vol.,sec. 472 at 451). A reading of the by-laws of Asia Investment Corporation shows the president thereof or the general manager, in a proper case, as the officer authorized to enter into any contract for and on behalf of the corporation. Conformably to your request, we are enclosing herewith xeroxed copies of the articles of incorporation and by-laws of Asia Investment Corporation for your ready reference and guidance. Very truly yours, (SGD.) ROSARIO N. LOPEZ Associate Commissioner