Morales, Inc. is a domestic corporation organized to operate a customs-bonded warehouse. To obtain a license for the operation of a bonded warehouse from the Bureau of Customs Mr. Reyes, the corporation president, solicited a proposal from Mr. Sioson for the preparation of a feasibility study. The initial proposal of Mr. Sioson was accepted by Mr. Reyes. Later, upon Mr. Reyes' request, Sioson sent another proposal to Morales Inc. for an operations manual and seminar/workshop for its employees. The manual was sent to the Bureau of Customs which thereafter issued a license in favour of Morales Inc to operate an abandoned warehouse. Mr. Sioson likewise conducted a 3-day training seminar for the employees of the corporation. Alleging nonpayment Mr. Sioson subsequently filed a collection suit against the corporation. Morales Inc resisted the claim on the ground that the second contract for services did not bind it because it was entered into by its president without the authority of the board of directors. Is the contention of the Corporation valid?

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The validity of the contention put forward by Morales Inc depends on whether the president Mr Reyes had the authority to bind the corporation in enter... View the full answer