Unformatted text preview: of his authority do not bind the principal unless the
latter ratifies the same expressly or impliedly.
● In 1985, Safic , a corporation, entered into an agreement with Imperial Vegetable Oil Co., Inc. (IVO)
whereby the latter shall deliver tones of coconut oil to Safic. Both parties complied. IVO was
represented by its president, Dominador Monteverde. In 1986, Salfic again entered into several
agreements with IVO but this time it was agreed that IVO shall deliver the coconut oil 8 months
from the agreement or sometime in 1987. This time, IVO failed to deliver and Salfic sued IVO.
● IVO in its defense aver that Monteverde was acting beyond his power as president when he made
the 1986 agreement with Safic; that Monteverde is acting beyond his power because the 1986
contracts were speculative in nature and speculative contracts are prohibited by the bylaws of IVO.
● Salfic insists that there is an implied agency between IVO and Monteverde because Salfic and
Monteverde has been transacting since 1985 and that IVO benefited from said transactions.
● Safic (petitioner) is a French corporation engaged in the international purchase, sale and trading of
● Safic filed with the RTC Manila a complaint against IVO (private respondent)
○ Safic alleged that on relevant dates (July and Sept 1986), it placed purchase orders with
IVO for 2,000 long tons of crude coconut oil, covered by Purchase Contract to be delivered
within the month of January 1987
○ Private respondent, however, failed to deliver the said coconut oil and, instead, offered a
“wash out” settlement, whereby the coconut oil subject of the purchase contracts were to
be “sold back” to IVO at the prevailing price in the international market at the time of wash
○ Thus, IVO bound itself to pay to Safic the difference between the said prevailing price and
the contract price of the 2,000 long tons of crude coconut oil, which amounted to
○ VO failed to pay this amount despite rep...
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- Fall '14
- gutierrez hermanos, B.A. Finance Corporation