G.R. No. 171989, July 4, 2007
First Corporation, petitioner, vs. Former Sixth Division of the Court of Appeals, Branch 218 of the Regional Trial Court of Quezon City, Eduardo M. Sacris, and Cesar A. Abillar, respondents.

FACTS

Petitioner First Corporation, through its then-President Cesar Abillar, obtained loans totaling P2.2 million from Eduardo Sacris between 1991 and 1997. The corporation issued receipts in Abillar’s name and made partial payments, leaving a balance of P1.8 million. In March 1998, Sacris executed a Deed of Assignment transferring his right to collect this balance to Abillar. Abillar then sued the corporation for collection. However, Abillar failed to pay Sacris as agreed, leading them to rescind the Deed of Assignment in August 1998. Sacris subsequently intervened in Abillar’s suit to assert his own claim. The trial court admitted the complaint in intervention, but the Court of Appeals set this aside, directing the dismissal of Abillar’s complaint and the denial of Sacris’s intervention without prejudice.
Sacris then filed a separate collection suit against First Corporation before the RTC of Quezon City. The corporation defended itself by arguing that the loans were personal obligations of Abillar, not corporate debts, since the receipts were issued in his name. The RTC ruled in favor of Sacris, a decision affirmed by the Court of Appeals. First Corporation elevated the case to the Supreme Court via a petition for review on certiorari.

ISSUE

Whether the Court of Appeals erred in affirming the RTC’s finding that the loans obtained by Cesar Abillar from Eduardo Sacris were corporate obligations of First Corporation, not Abillar’s personal debts.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ decisions. The legal logic rests on the principle that factual findings of the trial court, when affirmed by the Court of Appeals, are generally conclusive and binding upon the Supreme Court. Exceptions to this rule were not present. The evidence substantiated the corporate nature of the debt. The certifications and receipts, though issued in Abillar’s name, were official documents of the corporation acknowledging receipt of the funds. Crucially, the corporation itself made partial payments on the principal and interest through its own check vouchers. These acts of payment constitute clear ratification and acknowledgment by the corporation of the obligation as its own. The corporation cannot now disavow the debt by claiming it was a personal transaction of its former president, having previously recognized and performed its obligations under it. Therefore, the loan is a valid corporate debt enforceable against First Corporation.