GR 170782; (June, 2009) (Digest)
G.R. No. 170782, June 22, 2009
SIAIN ENTERPRISES, INC., Petitioner, vs. CUPERTINO REALTY CORP. and EDWIN R. CATACUTAN, Respondents.
FACTS
On April 10, 1995, petitioner Siain Enterprises, Inc. obtained a loan of ₱37,000,000.00 from respondent Cupertino Realty Corporation, secured by a real estate mortgage and evidenced by a promissory note signed by their respective presidents, Cua Le Leng and Wilfredo Lua. An amendment on April 12, 1995, provided for 17% annual interest. On August 16, 1995, Cua Le Leng signed a second promissory note for ₱160,000,000.00, representing herself both as petitioner’s president and as a personal co-maker. The note stipulated a 30% compounding annual interest, payable monthly, and various penalties. On the same date, the parties executed an amendment to the real estate mortgage, increasing the secured loan amount from ₱37,000,000.00 to ₱197,000,000.00. Subsequently, petitioner, through counsel, demanded the release of the ₱160,000,000.00 loan, claiming it was never received. Cupertino refuted this, asserting the loan proceeds had been released, and initiated extrajudicial foreclosure proceedings. Petitioner filed a complaint to enjoin the foreclosure, arguing the second promissory note and mortgage amendment were void for lack of board approval and that the loan was never released. The Regional Trial Court dismissed the complaint, a decision affirmed by the Court of Appeals.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s dismissal of the complaint, specifically in upholding the validity of the second promissory note for ₱160,000,000.00 and the amended real estate mortgage despite petitioner’s claims of lack of board approval and non-release of the loan proceeds.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals’ decision. The Court held that the second promissory note, signed by Cua Le Leng as president, is valid and binding on the corporation. The note itself stated that a copy of her authority was attached, giving Cupertino the right to presume she was duly authorized. Petitioner failed to rebut this presumption. The Court further ruled that the issue of whether the ₱160,000,000.00 loan proceeds were released is a question of fact, which is not reviewable in a petition for review on certiorari under Rule 45. The trial court’s factual finding, affirmed by the Court of Appeals, was that the loan had been released. The Court also found petitioner estopped from denying Cua Le Leng’s authority, as she, as majority stockholder and president, had consistently held herself out to the public and to Cupertino as possessing such power.