SECOND DIVISION
G.R. No. 194964-65, January 11, 2016
UNIVERSITY OF MINDANAO, INC., Petitioner, v. BANGKO SENTRAL PILIPINAS, ET AL., Respondents.
D E C I S I O N
LEONEN, J.:
Acts of an officer that arc not authorized by the board of directors/trustees do not bind the corporation unless the corporation ratifies the acts or holds the officer out as a person with authority to transact on its behalf.
This is a Petition for Review on Certiorari1 of the Court of Appeals' December 17, 2009 Decision2 and December 20, 2010 Resolution.3 The Court of Appeals reversed the Cagayan De Oro City trial court's and the Iligan City trial court's Decisions to nullify mortgage contracts involving University of Mindanao's properties.4
University of Mindanao is an educational institution. For the year 1982, its Board of Trustees was chaired by Guillermo B. Torres. His wife, Dolores P. Torres, sat as University of Mindanao's Assistant Treasurer.5
Before 1982, Guillermo B. Torres and Dolores P. Torres incorporated and operated two (2) thrift banks: (1) First Iligan Savings & Loan Association, Inc. (FISLAI); and (2) Davao Savings and Loan Association, Inc. (DSLAI). Guillermo B. Torres chaired both thrift banks. He acted as FISLAI's President, while his wife, Dolores P. Torres, acted as DSLAI's President and FISLAI's Treasurer.6
Upon Guillermo B. Torres' request, Bangko Sentral ng Pilipinas issued a P1.9 million standby emergency credit to FISLAI. The release of standby emergency credit was evidenced by three (3) promissory notes dated February 8, 1982, April 7, 1982, and May 4, 1982 in the amounts of P500,000.00, P600,000.00, and P800,000.00, respectively. All these promissory notes were signed by Guillermo B. Torres, and were co-signed by either his wife, Dolores P. Torres, or FISLAI's Special Assistant to the President, Edmundo G. Ramos, Jr.7
On May 25, 1982, University of Mindanao's Vice President for Finance, Saturnino Petalcorin, executed a deed of real estate mortgage over University of Mindanao's property in Cagayan de Oro City (covered by Transfer Certificate of Title No. T-14345) in favor of Bangko Sentral ng Pilipinas.8 "The mortgage served as security for FISLAI's PI.9 Million loan[.]"9 It was allegedly executed on University of Mindanao's behalf.10
As proof of his authority to execute a real estate mortgage for University of Mindanao, Saturnino Petalcorin showed a Secretary's Certificate signed on April 13, 1982 by University of Mindanao's Corporate Secretary, Aurora de Leon.11 The Secretary's Certificate stated:chanRoblesvirtualLawlibrary
That at the regular meeting' of the Board of Trustees of the aforesaid corporation [University of Mindanao] duly convened on March 30, 1982, at which a quorum was present, the following resolution was unanimously adopted:chanRoblesvirtualLawlibrary"Resolved that the University of Mindanao, Inc. be and is hereby authorized, to mortgage real estate properties with the Central Bank of the Philippines to serve as security for the credit facility of First Iligan Savings and Loan Association, hereby authorizing the President and/or Vice-president for Finance, Saturnino R. Petalcorin of the University of Mindanao,- Inc. to sign, execute and deliver the covering mortgage document or any other documents which may be proper[l]y required."12cralawlawlibrary
3 - Other Matters:(a) Cagayan de Oro and Iligan properties:
Resolution No. 82-1-8
Authorizing the Chairman to appoint Saturnino R. Petalcorin, Vice-President for Finance, to represent the University of Mindanao to transact, transfer, convey, lease, mortgage, or otherwise hypothecate any or all of the following properties situated at Cagayan de Oro and Iligan City and authorizing further Mr. Petalcorin to sign any or all documents relative thereto:chanRoblesvirtualLawlibrarycralawlawlibrary
- A parcel of land situated at Cagayan de Oro City, covered and technically described in TRANSFER CERTIFICATE OF TITLE No. T-14345 of the Registry of Deeds of Cagayan de Oro City;
- A parcel of land situated at Iligan City, covered and technically described in TRANSFER CERTIFICATE OF TITLE NO..T-15696 (a.t.) of the Registry of Deeds of Iligan City; and
- A parcel of land situated at Iligan City, covered and technically described in TRANSFER CERTIFICATE OF TITLE NO. T-15697 (a.f.) of the Registry of Deeds of Iligan City.14
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against defendants:chanRoblesvirtualLawlibrary
1. DECLARING the real estate mortgage Saturnino R. Petalcorin executed in favor of BANGKO SENTRAL NG PILIPINAS involving Lot 421-A located in Cagayan de Oro City with an area of 482 square meters covered by TCT No. T-14345 as annuled [sic];
2. ORDERING the Register of Deeds of Cagayan de Oro City to cancel Entry No. 9951 and Entry No. 9952 annotated at the back of said TCT No. T-14345, Registry of Deeds of Cagayan de Oro City;
Prayer for attorney's fee [sic] is hereby denied there being no proof that in demanding payment of the emergency loan, defendant BANGKO SENTRAL NG PILIPINAS was motivated by evident bad faith,
SO ORDERED.30 (Citation omitted)cralawlawlibrary
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants, as follows:chanRoblesvirtualLawlibrary
1. Nullifying and canceling [sic] the subject Deed of Real Estate Mortgage dated November 5, 1982 for being unenforceable or void contract;
2. Ordering the Office of the Register of Deeds of Iligan City to cancel the entries on TCT No. T-15696 and TCT No. T- 15697 with respect to the aforesaid Deed of Real Estate Mortgage dated November 5, 1982 and all other entries related thereto;
3. Ordering the defendant Bangko Sentral ng Pilipinas to return the owner's duplicate copies of TCT No. T-15696 and TCT No. 15697 to the plaintiff;
4. Nullifying the subject [foreclosure [proceedings and the [a]uction [s]ale conducted by defendant Atty. Gerardo Paguio, Jr. on October 8, 1999 including all the acts subsequent thereto and ordering the Register of Deeds of Iligan City not to register any Certificate of Sale pursuant to the said auction sale nor make any transfer of the corresponding titles, and if already registered and transferred, to cancel all the said entries in TCT No. T-15696 and TCT No. T-15697 and/or cancel the corresponding new TCTs in the name of defendant Bangko Sentral ng Pilipinas;
5. Making the Preliminary Injunction per Order of this Court dated October 13, 2000 permanent.
No pronouncement as to costs.36 (Citation omitted)cralawlawlibrary
FOR THE REASONS STATED, the Decision dated 23 November 2001 of the Regional Trial Court of Cagayan de Oro City, Branch 24 in Civil Case No. 99-414 and the Decision dated 7 December 2001 of the Regional Trial Court of Iligan City, Branch 1 in Civil Case No. 4790 are REVERSED and SET ASIDE. The Complaints in both cases before the trial courts are DISMISSED. The Writ of Preliminary Injunction issued by the Regional Trial Court of Iligan City, Branch 1 in Civil Case No. 4790 is LIFTED and SET ASIDE.
SO ORDERED.47cralawlawlibrary
Acting on the foregoing incidents, the Court RESOLVES to:chanRoblesvirtualLawlibrarycralawlawlibrary
- GRANT the appellant's twin motions for extension of time to file comment/opposition and NOTE the Comment . on the appellee's Motion for Reconsideration it subsequently filed on June 23, 2010;
- GRANT the appellee's three (3) motions for extension of time to file comment/opposition and NOTE the Comment on the appellant's Motion for Partial Reconsideration it filed on July 26, 2010;
- NOTE the appellant's "Motion for Leave to File Attached Reply Dated August 11, 2010" filed on August 13, 2010 and DENY the attached "Reply to Comment Dated July 26, 2010";
- DENY the appellee's Motion for Reconsideration as it does' not offer any arguments sufficiently meritorious to warrant modification or reversal of the Court's 17 December 2009 Decision. The Court finds that there is no compelling reason to reconsider its ruling; and
- GRANT the appellant's Motion for Partial Reconsideration, as the Court finds it meritorious, considering that it ruled in its Decision that "BSP can still foreclose on the UM's real property in Cagayan de Oro City covered by TCT No. T- 14345." It then follows that the injunctive writ issued by the RTC of Cagayan de Oro City, Branch 24 must be lifted. The Court's 17 December 2009 Decision is accordingly MODIFIED and AMENDED to read as follows:chanRoblesvirtualLawlibrary
"FOR THE REASONS STATED, the Decision dated 23 November 2001 of the Regional Trial Court of Cagayan de Oro City, Branch 24 in Civil Case No. 99-414 and the Decision dated 7 December 2001 of the Regional Trial Court of Iligan City, Branch 1 in Civil Case No. 4790 are REVERSED and SET ASIDE. The Complaints in both cases before the trial courts are DISMISSED. The Writs of Preliminary Injunction issued by the Regional Trial Court of Iligan City, Branch 1 in Civil Case No. 4790 and in the Regional Trial Court of Cagayan de Oro City, Branch 24 in Civil Case No. 99-414 are LIFTED and SET ASIDE."
SO ORDERED.61 (Citation omitted)
ART. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:chanRoblesvirtualLawlibrary
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.cralawlawlibrary
ART. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.
Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.
A day certain is understood to be that which must necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.cralawlawlibrary
SEC. 36. Corporate powers and capacity.—Every corporation incorporated under this Code has the power and capacity:chanRoblesvirtualLawlibrarycralawlawlibrary
- To sue and be sued in its corporate name;
- Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;
- To adopt and use a corporate seal;
- To amend its articles of incorporation in accordance with the provisions of this Code;
- To adopt by-laws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code;
- In case of stock corporations, to issue or sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to admit members to the corporation if it be a non stock corporation;
- To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real and personal property, including securities and bonds of other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution;
- To enter into merger or consolidation with other corporations as provided in this Code;
- To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity;
- To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees; and
- To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in its articles of incorporation. (Emphasis supplied)
It is a question, therefore, in each case, of the logical relation of the act to the corporate purpose expressed in the charter. If that act is one which is lawful in itself, and not otherwise prohibited, is done for the purpose of serving corporate ends, and is reasonably tributary to the promotion of those ends, in a substantial, and not in a remote and fanciful, sense, it may fairly be considered within charter powers. The test to be applied is whether the act in question is in direct and immediate furtherance of the corporation's business, fairly incident to the express powers and reasonably necessary to their exercise. If so, the corporation has the power to do it; otherwise, not.79 (Emphasis supplied)cralawlawlibrary
cralawlawlibrary
- To establish, conduct and operate a college or colleges, and/or university;
- To acquire properties,, real and/or personal, in connection with the establishment and operation of such college or colleges;
- To do and perform the various and sundry acts and things permitted by the laws of the Philippines unto corporations like classes and kinds;
- To engage in agricultural, industrial, and/or commercial pursuits in line with educational program of the corporation and to acquire all properties, real and personal [,] necessary for the purposes[;]
- To establish, operate, and/or acquire broadcasting and television stations also in line with the educational program of the corporation and for such other purposes as the Board of Trustees may determine from time to time;
- To undertake housing projects of faculty members and employees, and to acquire real estates for this purpose;
- To establish, conduct and operate and/or invest in educational foundations; [As amended on December 15, 1965][;]
- To establish, conduct and operate housing and dental schools, medical facilities and other related undertakings;
- To invest in other corporations. [As amended on December 9, 1998]. [Amended Articles of Incorporation of the University of Mindanao, Inc. - the Petitioner].80
When a contract is not on its face necessarily beyond the scope of the power of the corporation by which it was made, it will, in the absence of proof to the contrary, be presumed to be valid. Corporations are presumed to contract within their powers. The doctrine of ultra vires, when invoked for or against a corporation, should not be allowed to prevail where it would defeat the ends of justice or work a legal wrong.94cralawlawlibrary
SEC. 2. Conclusive presumptions.— The following are instances of conclusive presumptions:chanRoblesvirtualLawlibrary
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it;
(b) The tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them.cralawlawlibrary
We do not doubt the existence of the presumptions of "good faith" or "regular performance of official duty," yet these presumptions are disputable and may be contradicted and overcome by other evidence. Many civil actions are oriented towards overcoming any number of these presumptions, and a cause of action can certainly be geared towards such effect. The very purpose of trial is to allow a party to present evidence to overcome the disputable presumptions involved. Otherwise, if trial is deemed irrelevant or unnecessary, owing to the perceived indisputability of the presumptions, the judicial exercise would be relegated to a mere ascertainment of what presumptions apply in a given case, nothing more. Consequently, the entire Rules of Court is rendered as excess verbiage, save perhaps for the provisions laying down the legal presumptions.
If this reasoning of the Court of Appeals were ever adopted as a jurisprudential rule, no public officer could ever be sued for acts executed beyond their official functions or authority, or for tortious conduct or behavior, since such acts would "enjoy the presumption of good faith and in the regular performance of official duty." Indeed, few civil actions of any nature would ever reach the trial stage, if a case can be adjudicated by a mere determination from the complaint or answer as to which legal presumptions are applicable. For-example, the presumption that a person is innocent of a wrong is a disputable presumption on the same level as that of the regular performance of official duty. A civil complaint for damages necessarily alleges that the defendant committed a wrongful act or omission that would serve as basis for the award of damages. With the rationale of the Court of Appeals, such complaint can be dismissed upon a motion to dismiss solely on the ground that the presumption is that a person is innocent of a wrong.102 (Emphasis supplied, citations omitted)cralawlawlibrary
Piercing the corporate veil is warranted when "[the separate personality of a corporation] is used as a means to perpetrate fraud or an illegal act, or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, or to confuse legitimate issues." It is also warranted in alter ego cases "where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation."110cralawlawlibrary
SEC. 23. The board of directors or trustees—Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year and until their successors are elected and qualified.cralawlawlibrary
ART. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.cralawlawlibrary
ART. 1317. . . .
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.
. . . .
ART. 1403. The following contracts are unenforceable, unless they are ratified:chanRoblesvirtualLawlibrary
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers[.]cralawlawlibrary
[A] distinction should be made between corporate acts or contracts which are illegal and those which are merely ultra vires. The former contemplates the doing of an act which is contrary to law, morals, or public order, or contravene some rules of public policy or public duty, and are, like similar transactions between individuals, void. They cannot serve as basis of a court action, nor acquire validity by performance, ratification, or estoppel. Mere ultra vires acts, on the other hand, or those which are not illegal and void ab initio, but are not merely within the scope of the articles of incorporation, are merely voidable and may become binding and enforceable when ratified by the stockholders.125cralawlawlibrary
ART. 1910. The principal must comply with all the obligations which the agent may have contracted within the scope of his authority.
As for any obligation wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly.
ART. 1911. Even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the former allowed the latter to act as though he had full powers. (Emphasis supplied)cralawlawlibrary
Authorities, great in number, are one in the idea that "ratification by a corporation of an unauthorized act or contract by its officers or others relates back to the time of the act or contract ratified, and is equivalent to original authority;" and that "[t]he corporation and the other party to the transaction are in precisely the same position as if the act or contract had been authorized at the time." The language of one case is expressive: "The adoption or ratification of a contract by a corporation is nothing more nor less than the making of an original contract. The theory of corporate ratification is predicated on the right of a corporation to contract, and any ratification or adoption is equivalent to a grant of prior authority."131 (Citations omitted)cralawlawlibrary
Knowledge of facts acquired or possessed by an officer or agent of a corporation in the course of his employment, and in relation to matters within the scope of his authority, is notice to the corporation, whether he communicates such knowledge or not.138cralawlawlibrary
ART. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.
. . . .
ART, 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf without authority.
Agency may be oral, unless the law requires a specific form.cralawlawlibrary
The doctrine of apparent authority does not apply if the principal did not commit any acts or conduct which a third party knew and relied upon in good faith as a result of the exercise of reasonable prudence. Moreover, the agent's acts or conduct must have produced a change of position to the third party's detriment. (Citation omitted)cralawlawlibrary
The notary public, Atty. Ruben Silvestre, testified that he was the one who notarized the document and that Dionisio Z. Basilio appeared personally before him and signed the. instrument himself. However, he admitted that he did not know Dionisio Z. Basilio personally to ascertain if the person who signed the document was actually Dionisio Z. Basilio himself, or another person who stood in his place. He could not even recall whether the document had been executed in his office or not.
Thus, considering the testimonies of various witnesses and a comparison of the signature in question with admittedly genuine signatures, the Court is convinced that Dionisio Z. Basilio did not execute the questioned deed of sale. Although the questioned deed of sale was a public document having in its favor the presumption of regularity, such presumption was adequately refuted by competent witnesses showing its forgery and the Court's own visual analysis of the document. (Emphasis supplied, citations omitted)cralawlawlibrary
[I]t is not the intention nor the function of the notary public to validate and make binding' an instrument never, in the first place, intended to have any binding legal effect upon the parties thereto.159cralawlawlibrary
Though petitioner is not expected to conduct an exhaustive investigation on the history of the mortgagor's title, it cannot be excused from the duty of exercising the due diligence required of a banking institution. Banks are expected to exercise more care and prudence than private individuals in their dealings, even those that involve registered lands, for their business is affected with public interest.165 (Citations omitted) cralawlawlibrary
[Annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now [Presidential Decree No.] 1529 or the Property Registration Decree), and serves a warning to third parties dealing with said property that someone is claiming an interest on the same or a better right than that of the registered owner thereof.169 (Emphasis supplied)cralawlawlibrary
Endnotes:
1Rollo, pp. 69-98.
2 Id. at 13-45. The Decision was penned by Associate Justice Edgardo A. Camello (Chair) and concurred in by Associate Justices Edgardo T. Lloren and Leoncia R. Dimagiba of the Twenty-second Division.
3 Id. at 63-67. The Resolution was penned by Associate Justice Edgardo A. Camello (Chair) and concurred in by Associate Justices Edgardo T. Lloren and Leoncia R. Dimagiba of the Former Twenty-second Division.
4 Id. at 25, 27, and 44, Court of Appeals Decision.
5 Id. at 14.
6 Id.
7 Id. at 14-15.
8 Id. at 15.
9 Id.
10 Id.
11 Id. at 16.
12 Id.
13 Id.
14 Id. at 16-17.
15 Id. at 17.
16 Id. at 15.
17 Id.
18 Id. at 17,
19 Id.
20 Id.
21 Id. at 18.
22 Id. at 19.
23 Id.
24 Id. at 19-20.
25 Id. at 20.
26 Id.
27 Id. at 21.
28 Id.
29 Id. at 27.
30 Id. at 27-28.
31 Id. at 28.
32 Id.
33 Id.
34 Id.
35 Id. at 23.
36 Id. at 23-24.
37 Id. at 25.
38 Id. at 24.
39 Id.
40 Id.
41 Civil CODE, art. 1403 provides:chanRoblesvirtualLawlibrary
ART. 1403. The following contracts are unenforceable, unless they are ratified:chanRoblesvirtualLawlibrary
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum, thereof, be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents:chanRoblesvirtualLawlibrary
(a) An agreement that by its terms is not to be performed within a year from the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of another;
(c) An agreement made in consideration of marriage, other than a mutual promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a price not less than five hundred pesos, unless the buyer accept and receive part of such goods and chattels, or the evidences, or some of them, of such things in.action, or pay at the time some part of the purchase money; but when a sale is made by auction and entry is made by the auctioneer in his sales book, at the time of the sale, of the amount and kind of property sold, terms of sale, price, names of the purchasers and person on whose account the sale is made, it is a sufficient memorandum;
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein;
(f) A representation as to the credit of a third person.
(3) Those where both parties are incapable of giving consent to a contract. Rollo, p. 25, Court of Appeals Decision.
43 Id.
44 Id.
45 Id. at 26.
46 Id. at 26 and 29.
47 Id. at 44.
48 Id. at 32.
49 Id.
50 Id. at 32-33.
51 Id. at 33.
52 Id. at 34.
53 Id. at 36.
54 Id. at 37-38.
55 Id. at 38.
56 Id. at 40.
57 Id.
58 Id. at 42.
59 Id.
60 Id. at 46-58.
61 Id. at 65-67, Court of Appeals Resolution.
62 Civil Code, art. 1106 provides:chanRoblesvirtualLawlibrary
ART. 1106. By prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.
In the same way, rights and conditions are lost by prescription.
63 Vda. de Rigonan v. Derecho, 502 Phil. 202, 209 (2005) [Per J. Panganiban, Third Division].
64 CIVIL CODE, arts. 1142, 1144, and 1150 provide:chanRoblesvirtualLawlibrary
ART. 1142. A mortgage action prescribes after ten years.
. . . .
ART. 1144. The following actions must be brought within ten years from the time the right of action accrues:chanRoblesvirtualLawlibrary
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
. . . .
ART. 1150. The time for prescription for all kinds of actions, where there is no special provision which ordains otherwise, shall be counted from the day they may be brought.
65See Cando v. Sps. Olazo, 547 Phil. 630, 637 (2007) [Per J. Tinga, Second Division]; See also Tambunting, Jr. v, Sps. Sumabat 507 Phil. 94,99-100 (2005) [Per J. Corona, Third Division].
66 See De la Rosa v. Bank of the Philippine Islands, 51 Phil. 926, 929 (1924) [Per J. Romualdez, En Banc].
67 See De la Rosa v. Bank of the Philippine Islands, 51 Phil. 926, 929 (1924) [Per J. Romualdez, En Banc]; See also Philippine Charter Insurance Corporation v. Central Colleges of the Philippines, et al.., 682 Phil. 507, 520-521 (2012) [Per J. Mendoza, Third Division].
68 See also Mesina v. Garcia, 538 Phil. 920, 930-931 (2006) [Per J. Chico-Nazario, First Division], on the interruption of prescriptive period.
69Rollo, pp. 41-42, Court of Appeals Decision. The following Monetary Board Resolutions granted extension of the maturity date of FISLAI's loans:chanRoblesvirtualLawlibrary
1. Monetary Board Resolution No. 792 dated April 23, 1982 (payable on demand but not to exceed 60 days);
2. Monetary Board Resolution No. 1127 dated June 18, 1982 (60-day extension);
3. Monetary Board Resolution No. 1950 dated October 22, 1982 (180-day extension);
4. Monetary Board Resolution No. 2137 dated November 19, 1982 (180-day extension);
5. Monetary Board Resolution No. 2307 dated December 17, 1982 (180-day extension);
6. Monetary Board Resolution No. 893 dated May 27, 1983 (180-day extension);
7. Monetary Board Resolution No. 142 dated February 8, 1985 (approval of FISLAI and DSLAI's rehabilitation plan, which made loans due after five years)
The loans became due in 1990. Bangko Sentral ng Pilipinas' demand letter to petitioner dated June 18, 1999 interrupted the prescriptive period.
70 FISLAI was merged with DSLAI, with DSLAI as the surviving corporation. DSLAI became known later as MSLAI. MSLAI was liquidated in 1991.
71 CIVIL CODE, art. 1169 provides:chanRoblesvirtualLawlibrary
ART. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. However, the demand by the creditor shall not be necessary in order that delay may exist:
. . . .
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
72 CIVIL CODE, art. 1155 provides:chanRoblesvirtualLawlibrary
ART. 1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.
See Sps. Larrobis, Jr. v. Philippine Veterans Bank, 483 Phil. 33, 48 (2004) [Per J. Austria-Martinez, Second Division]; Development Bank of the Philippines v. Prudential Bank, 512 Phil. 267, 280 (2005) [Per J. Corona, Third Division].
73Rollo, p. 80, University of Mindanao, Inc.'s Petition.
74 Id. at 82.
75 CORP. CODE, sec. 45 provides:chanRoblesvirtualLawlibrary
SEC. 45. Ultra vires acts of corporations.—No corporation under this Code shall possess or exercise any corporate powers except those conferred by this Code or by its articles of incorporation and except such as are necessary or incidental to the exercise of the powers so conferred.
76Republic v. Acoje Mining Company, Inc., 117 Phil. 379, 383 (1963) [Per J. Bautista Angelo, En Bane].
77 CORP. Code, sec. 45; See also Republic v. Acoje Mining Company, Inc., 117 Phil. 379, 383 (1963) [Per J. Bautista Angelo, En Banc].
78 115 Phil. 18 (1962) [Per J. J. B. L. Reyes, En Banc].
79 Id. at 25, quoting 6 FLETCHER CYC. CORP. 266-268 (1950).
80Rollo, p. 81, University of Mindanao, Inc.'s Petition:chanRoblesvirtualLawlibrary
81Cf. Republic v. Acoje Mining Company, Inc., 117 Phil. 379, 383 (1963) [Per J. Bautista Angelo, En Banc].
82 96 Phil. 335 (1954) [Per J. Bautista Angelo, En Banc].
83 Id. at 367.
84 Id. at 355.
85 446 Phil. 280 (2003) [Per J. Carpio, First Division].
86 Id. at 303-304.
87 Id. at 305-307.
88 Id. at 307.
89 29 Phil. 323 (1915) [Per J. Carson, En Banc].
90 Id. at 326.
91 Id. at 324-326.
92 Id. at 326-327.
93 Id. at 326.
94 Id., quoting Chicago, Rock Island & Pacific R. R. Co. v. Union Pacific Ry. Co., 47. Fed. Rep. 15, 22, which in turn quoted Railway Co. v. McCarthy, 96 U.S. 267.
95Martin v. Court of Appeals, G.R. No. 82248, January 30, 1992, 205 SCRA 591, 595 [Per J. Cruz, First Division], citing 6 Manuel V. Moran, COMMENTS ON THE RULES OF COURT 12 (1980) and Perez v. Ysip, 81 Phil. 218 (1948) [Per J. Briones, En Banc].
96 RULES OF COURT, Rule 131, sec. 2 provides:chanRoblesvirtualLawlibrary
SEC. 2. Conclusive presumptions.— The following are instances of conclusive presumptions:chanRoblesvirtualLawlibrary
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it;
(b) The tenant is not permitted to deny the title of his landlord at the time of the commencement of the relation of landlord and tenant between them.
97 RULES OF COURT, Rule 131, sec. 3 provides:chanRoblesvirtualLawlibrary
SEC. 3. Disputable presumptions.— The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence: . . . .
98Mercado v. Santos and Daza, 66 Phil. 215, 222 (1938) [Per J. Laurel, En Banc], citing Brant v. Morning Journal Association, 80 N.Y.S. 1002, 1004; 81 App. Div. 183 and Joslyn v. Puloer, 59 Hun. 129, 140; 13 N.Y.S. 311.
99 RULES OF COURT, Rule 131, sec. 3.
100De Leon v. Villanueva, 51 Phil. 676, 683 (1928) [Per J. Romualdez, En Banc].
101 522 Phil. 565 (2006) [Per J. Tinga, Third Division].
102 Id. at 584-585.
103Rollo, pp. 272-273, Bangko Sentral ng Pilipinas' Comment on Petition for Review.
104 CORP. CODE, sec. 36.
105Rollo, p. 81, University of Mindanao's Petition.
106Lanuza, Jr. v. BF Corporation, G.R. No. 174938, October 1, 2014, 737 SCRA 275, 296 [Per J. Leonen, Second Division].
107 Id. at 295-296.
108 Id. at 299.
109 G.R. No. 174938, October 1, 2014, 737 SCRA 275 [Per J. Leonen, Second Division].
110 Id. at 299, citing Heirs of Fe Tan Uy v. International Exchange Bank, G.R. No. 166282, February 13, 2013, 690 SCRA 519, 526 [Per J. Mendoza, Third Division] and Pantranco Employees Association (PEA-PTGWO), el al, v. National Labor Relations Commission, et al, 600 Phil. 645, 663 (2009) [Per J. Nachura, Third Division].
111Rollo, p. 88, University of Mindanao, Inc.'s Petition.
112 CORP. CODE, sec. 45 provides:chanRoblesvirtualLawlibrary
SEC. 45. Ultra vires acts of corporations.—No corporation under this Code shall possess or exercise any corporate powers except those conferred by this Code or by its articles of incorporation and except such as are necessary or incidental to the exercise of the powers so conferred. See also AF Realty & Development, Inc. v. Diese/man Freight Services, Co., 424 Phil. 446, 454 (2002) [Per J. Sandoval-Gutierrez, Third Division].
113See Yasuma v. Heirs of Cecilio S. de Villa, 531 Phil. 62, 68 (2006) [Per J. Corona, Second Division], citing San Juan Structural and Steel Fabricators, Inc. v. Court of Appeals, 357 Phil. 631, 644 (1998) [Per J. Panganiban, First Division].
114Premium Marble Resources, Inc. v. Court of Appeals, 332 Phil. 10, 18 (1996) [Per J. Torres, Jr., Af Second Division]; See also People's Aircargo and Warehousing Co. Inc. v. Court of Appeals, 357 Phil. 850, 862 (1998) [Per J. Panganiban, First Division].
115 CIVIL CODE, art. 1318 provides:chanRoblesvirtualLawlibrary
ART. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
116 CIVIL CODE, arts. 1305 and 1318 provide:chanRoblesvirtualLawlibrary
ART. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.
. . . .
ART. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
117 CIVIL CODE, arts. 1403(1), 1404, and 1317 provide:chanRoblesvirtualLawlibrary
ART. 1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;
. . . .
ART. 1404. Unauthorized contracts are governed by article 1317 and the principles of agency in Title X of this Book.
. . . .
ART. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.
118 Two Complaints were filed before two separate trial courts: lligan City Regional Trial Court and Cagayan de Oro City Regional Trial Court.
119Rollo, p. 32, Court of Appeals Decision.
120See Ramos, Sr. v. Gatchalian Realty, Inc., 238 Phil. 689, 698 (1987) [Per J. Gutierrez, Jr., Third Division].
121 CORP. CODE, sec. 31 provides:chanRoblesvirtualLawlibrary
SEC. 31. Liability of directors, trustees or officers.—Directors or trustees who wilfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the. affairs of the corporation . . . shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons[.]
122 CIVIL CODE, art. 1897 provides:chanRoblesvirtualLawlibrary
ART. 1897. The agent who acts as such is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds the limits of his authority without giving such party sufficient notice of his powers.
123 Pirovano, et al. v. De la Rama Steamship Co., 96 Phil. 335, 360 (1954) [Per J. Bautista Angelo, En Banc].
124 Id.
125 Id.
126See Yasuma v. Heirs of Cecilio S. de Villa, 531 Phil. 62, 68 (2006) [Per J. Corona, Second Division] and Lim v. Court of Appeals, Mindanao Station, G.R. No. 192615, January 30, 2013, 689 SCRA 705, 711-712 [Per J.Brion, Second Division]. ' ,
127Yasuma v. Heirs of Cecilio S. de Villa, 531 Phil. 62, 68 (2006) [Per J. Corona, Second Division].
128 CIVIL CODE, art. 1396 provides:chanRoblesvirtualLawlibrary
ART. 1396. Ratification cleanses the contract from all its defects from the moment it was constituted. Pirovano, et al. v. De la Rama Steamship Co., 96 Phil. 335, 362 (1954) [Per J. Bautista Angelo, En Banc].
129 Civil CODE, arts. 1392 and 1393 provide:chanRoblesvirtualLawlibrary
ART. 1392. Ratification extinguishes the action to annul a voidable contract.
ART. 1393. Ratification may be effected expressly or tacitly. It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right.
See Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc., 479 Phil. 896, 910-911 (2004) [Per J. Callejo, Sr., Second Division].
130 127 Phil. 399 (1967) [Per J. Sanchez, En Banc].
131 Id. at 420; See also De Jesus v. Daza, 11 Phil. 152, 160 (1946) [Per J. Hilado, En Banc].
132Yasuma v. Heirs of Cecilio S. de Villa, 531 Phil. 62, 68 (2006) [Per J. Corona, Second Division].
133See also Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc., 479 Phil. 896, 915 (2004) [Per J. Callejo, Sr., Second Division].
134 Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc., 479 Phil. 896, 915 (2004) [Per J. Callejo, Sr., Second Division].
135Yasuma v. Heirs ofCecilio S. de Villa, 531 Phil. 62, 68 (2006) [Per J. Corona, Second Division].
136Rollo, p. 284, Bangko Sentral ng Pilipinas' Comment on Petition for Review.
137 117 Phil. 586 (1963) [Per J. J. B. L. Reyes, En Banc].
138 Id. at 595, quoting BALLENTINE, LAW ON CORPORATIONS, sec. 112.
139Yu Chuck v. "Kong Li Po," 46 Phil. 608, 615 (1924) [Per J. Ostrand, En Banc].
140 Rollo, pp. 34, Court of Appeals Decision, and 280, Bangko Sentral ng Pilipinas' Comment on Petition for Review.
141 Id. at 277-278, Bangko Sentral ng Pilipinas' Comment on Petition for Review.
142People's Aircargo and Warehousing Co. Inc. v. Court of Appeals, 357 Phil. 850, 865 (1998) [Per J. Panganiban, First Division]; Yao Ka Sin Trading v. Court of Appeals, G.R. No. 53820, June 15, 1992, 209 SCRA 763, 781-782 [Per J. Davide, Jr., Third Division].
143See Associated Bank v, Spouses Pronstroller, 580 Phil. 104, 119-120 (2008) [Per'J. Nachura, Third Division].
144 357 Phil. 850 (1998) [Per J. Panganiban, First Division].
145 Id. at 864.
146Francisco v. Government Service Insurance System, 117 Phil. 586, 592-595 (1963) [Per J. J. B. L. Reyes, En Banc].
147 G.R. No. 176897, December 11, 2013, 712 SCRA 313 [Per J. Brion, Second Division].
148 Id. at 330.
149Rollo, p. 24, Court of Appeals Decision.
150Sales v. Court of Appeals, G.R. No. 40145, July 29, 1992, 211 SCRA 858, 865 [Per J. Romero, Third Division].
151 Id.
152 400 Phil. 120 (2000) [Per J. Pardo, First Division].
153 Id. at 125-126.
154 Id. at 125.
155 Id. at 126.
156 321 Phil. 809 (1995) [Per J. Hermosisima, Jr., First Division].
157 Id. at 835-836.
158 Id. at 834.
159 Id.
160See Philippine Commercial International Bank v. Court of Appeals, 403 Phil. 361, 388 (2001) [Per J. Quisumbing, Second Division].
161 Id.
162 Id.
163 527 Phil. 143 (2006) [Per J. Quisumbing, Third Division].
164 Id. at 152-153.
165 Id. at 153.
166Rollo, p. 28, Court of Appeals Decision.
167 Id. at 285-286.
168 327 Phil. 689 (1996) [Per J. Torres, Jr., Second Division].
169 Id. at 701-702.
170See Cuaño v. Court of Appeals, G.R. No. 107159, September 26, 1994, 237 SCRA 122, 136-137 [Per J. Feliciano, Third Division].