Page 1 of 5
16. BP OIL v. TOTAL DISTRIBUTION, GR
No. 214406, 2017-02-06
Facts:
A Complaint for Sum of Money was filed by
petitioner BP Oil against respondent Total
Distribution & Logistic Systems, Inc. (TDLSI)
on April 15, 2002, seeking to recover the
sum of P36,440,351.79 representing the
total value of the moneys, stock and
accounts receivables that TDLSI has
allegedly refused to return to BP Oil.
In its Decision dated January 21, 2011, the
RTC ruled in favor of the petitioner
After the respondent elevated the case to
the CA, the latter court reversed and set
aside the decision of the RTC and found in
favor of the respondent in its Decision dated
April 30, 2014
Issues:
THE COURT OF APPEALS ERRED IN NOT
RULING THAT TDLSI HAS MADE A JUDICIAL
ADMISSION THAT IT HAS POSSESSION OF
THE STOCKS, MONEYS AND RECEIVABLES
THAT BP OIL SEEKS TO RECOVER IN THE
COMPLAINT
The CA, however, ruled that while TDLSI
admitted Exhibit "J", it nevertheless qualified
and limited said admission to, merely, the
existence thereof, thus, without Exhibit "J"
the same court was not convinced that
petitioner was able to preponderantly
establish its claim against TDLSI
Ruling:
The Rules of Court require that only
questions of law should be raised in petitions
filed under Rule 45.[6] This court is not a
trier of facts.
This is erroneous. The fact is, TDLSI indeed
admitted the existence of Exhibit "J." Thus,
Exhibit "J" can be considered as an
admission against interest. Admissions
against interest are those made by a party
to a litigation or by one in privity with or
identified in legal interest with such party,
and are admissible whether or not the
declarant is available as a witness.[19] An
admission against interest is the best
evidence that affords the greatest certainty
of the facts in dispute, based on the
presumption that no man would declare
anything against himself unless such
declaration is true.[20] It is fair to presume
that the declaration corresponds with the
truth, and it is his fault if it does not.[21] No
doubt, admissions against interest may be
refuted by the declarant.[22] In this case,
however, respondent failed to refute the
contents of Exhibit "J."
WHEREFORE, the Petition for Review on
Certiorari under Rule 45 of the Rules of
Court dated November 10, 2014 of BP Oil
and Chemicals International Philippines, Inc.
is GRANTED. Consequently, the Decision
dated April 30, 2014 of the Court of Appeals
is REVERSED and SET ASIDE and the
Decision dated January 21, 2011 of the
Regional Trial Court, Branch 148, Makati City
is AFFIRMED and REINSTATED, with the
MODIFICATION that the interest imposed
should be 12% per annum from July 19,
2001 until June 30, 2013 and 6% per annum
from July 1, 2013 until fully paid.
Principles:
statcon
As distinguished from a question of law -
which exists "when the doubt or difference
arises as to what the law is on a certain
state of facts" - "there is a question of fact
when the doubt or difference arises as to the
truth or the falsehood of alleged facts;" or
when the "query necessarily invites
calibration of the whole evidence considering
mainly the credibility of witnesses, existence
and relevancy of specific surrounding
circumstances, their relation to each other
and to the whole and the probabilities of the
situation."

q of fact - appellate courts
However, these rules do admit
exceptions.[13] Over time, the exceptions to
these rules have expanded. At present, there
are 10 recognized exceptions that were first
listed in Medina v. Mayor Asistio, Jr.:14
When the conclusion is a finding grounded
entirely on speculation, surmises
conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible;
(3) Where there is a grave abuse of
discretion; (4) When the judgment is based
on a misapprehension of facts; (5) When the
findings of fact are conflicting; (6) When the
Court of Appeals, in making its findings,
went beyond the issues of the case and the
same is contrary to the admissions of both
appellant and appellee; (7) The findings, of
the Court of Appeals are contrary to those of
the trial court; (8) When the findings of fact
are conclusions without citation of specific
evidence on which they are based; (9) When
the facts set forth in the petition as well as in
the petitioner's main and reply briefs are not
disputed by the respondents; and (10) The
finding of fact of the Court of Appeals is
premised on the supposed absence of
evidence and is contradicted by the evidence
on record.
civil law
When the obligation is breached, and it
consists in the payment of a sum of money,
i.e., a loan or forbearance of money, the
interest due should be that which may have
been stipulated in writing. Furthermore, the
interest due shall itself earn legal interest
from the time it is judicially demanded. In
the absence of stipulation, the rate of
interest shall be 6% per annum to be
computed from default, i.e., from judicial or
extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil
Code.
18. UNIVERSITY OF MINDANAO v.
BANGKO SENTRAL PILIPINAS, GR No.
194964-65, 2016-01-11
Page 2 of 5
Facts:
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.
or
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.
Upon Guillermo B. Torres' request, Bangko
Sentral ng Pilipinas issued a P1.9 million
standby emergency credit to FISLAI.
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.
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
"The mortgage served as security for
FISLAI's PI.9 Million loan[.]"[9] It was
allegedly executed on University of
Mindanao's behalf.
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.
The Secretary's
Certificate stated:

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."
The Secretary's Certificate was supported by
an excerpt from the minutes of the January
19, 1982 alleged meeting of University of
Mindanao's Board of Trustees.
On October 21, 1982, Bangko Sentral ng
Pilipinas granted FISLAI an additional loan of
P620,700.00. Guillermo B. Torres and
Edmundo Ramos executed a promissory note
on October 21, 1982 to cover that amount.
On November 5, 1982, Saturnino Petalcorin
executed another deed of real estate
mortgage, allegedly on behalf of University
of Mindanao, over its two properties in Iligan
City. This mortgage served as additional
security for FISLAI's loans.
On January 17, 1983, Bangko Sentral ng
Pilipinas' mortgage lien over the Iligan City
properties and Aurora de Leon's certification
were annotated
Bangko Sentral ng Pilipinas also granted
emergency advances to DSLAI
On January 11, 1985, FISLAI, DSLAI, and
Land Bank of the Philippines entered into a
Memorandum of Agreement intended to
rehabilitate the thrift banks, which had been
suffering from their depositors' heavy
withdrawals. Among the terms of the
agreement was the merger of FISLAI and
Page 3 of 5
DSLAI, with DSLAI as the surviving
corporation. DSLAI later became known as
Mindanao Savings and Loan Association, Inc.
(MSLAI).
Guillermo B. Torres died on March 2, 1989.
MSLAI failed to recover from its losses and
was liquidated on May 24, 1991.
Bangko Sentral ng Pilipinas sent a letter to
University of Mindanao, informing it that the
bank would foreclose its properties if MSLAI's
total outstanding obligation of
P12,534,907.73 remained unpaid.
In its reply to Bangko Sentral ng Pilipinas'
June 18, 1999 letter, University of Mindanao,
through its Vice President for Accounting,
Gloria E. Detoya, denied that University of
Mindanao's properties were mortgaged. It
also denied having received any loan
proceeds from Bangko
Sentral ng Pilipinas.
University of Mindanao filed two Complaints
for nullification and cancellation of mortgage.
University of Mindanao alleged in its
Complaints that it did not obtain any loan
from Bangko Sentral ng Pilipinas. It also did
not receive any loan proceeds from the
bank.
University of Mindanao also alleged that
Aurora de Leon's certification was
anomalous. It never authorized Saturnino
Petalcorin to execute real estate mortgage
contracts involving its properties to secure
FISLAI's debts. It never ratified the
execution of the mortgage contracts.
Moreover, as an educational institution, it
cannot mortgage its properties to secure
another person's debts.
Regional Trial Court of Cagayan de Oro City
rendered a Decision in favor of University of
Mindanao

The Regional Trial Court of Cagayan de Oro
City ruled that Saturnino Petalcorin was not
authorized to execute mortgage contracts for
University of Mindanao. Hence, the mortgage
of University ofMindanao's Cagayan de Oro
City property was unenforceable. Saturnino
Petalcorin's... unauthorized acts should be
annulled.
Bangko Sentral ng Pilipinas separately
appealed the Decisions of both the Cagayan
de Oro City and the Iligan City trial courts
The Court of Appeals ruled that "[although
BSP failed to prove that the UM Board of
Trustees actually passed a Board Resolution
authorizing Petalcorin to mortgage the
subject real properties,"[48] Aurora de
Leon's Secretary's Certificate "clothed
Petalcorin... with apparent and ostensible
authority to execute the mortgage deed on
its behalf[.]"[49] Bangko Sentral ng Pilipinas
merely relied in good faith on the Secretary's
Certificate.[50] University of Mindanao is
estopped from denying
Saturnino Petalcorin's authority.[51]
Issues:
whether petitioner University of Mindanao is
bound by the real estate mortgage contracts
executed by Saturnino Petalcorin.
Ruling:
Petitioner argues that the execution of the
mortgage contract was ultra vires. As an
educational institution, it may not secure the
loans of third persons.[73] Securing loans of
third persons is not among the purposes for
which petitioner was... established.
Corporations are artificial entities granted
legal personalities upon their creation by
their incorporators in accordance with law.
Unlike natural persons, they have no
inherent powers. Third persons dealing with
corporations cannot assume that
corporations have powers. It is up... to those
persons dealing with corporations to
Page 4 of 5
determine their competence as expressly
defined by the law and their articles of
incorporation.
A corporation may exercise its powers only
within those definitions. Corporate acts that
are outside those express definitions under
the law or articles of incorporation or those
"committed outside the object for which a
corporation is created"[76] are... ultra vires.
The only exception to this, rule is when acts
are necessary and incidental to carry out a
corporation's purposes, and to the exercise
of powers conferred by the Corporation Code
and under a corporation's articles of
incorporation.[77] This exception is...
specifically included in the general powers of
a corporation under Section 36 of the
Corporation Code:
SEC. 36. Corporate powers and capacity.—
Every corporation incorporated under this
Code has the power and capacity:
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
 Page 5 of 5

property, including securities and bonds of Petitioner does not have the power to
other corporations, as the transaction of the mortgage its properties in order to secure
lawful business of the corporation may loans of other persons. As an educational
reasonably and... necessarily require, institution, it is limited to developing human
subject to the limitations prescribed by law capital through formal instruction. It is not a
and the Constitution; corporation engaged in the business of
securing loans of... others.
To enter into merger or consolidation with
other corporations as provided in this Code; Securing FISLAI's loans by mortgaging
petitioner's properties does not appear to
To make reasonable donations, including have even the remotest connection to the
those for the public welfare or for hospital, operations of petitioner as an educational
charitable, cultural, scientific, civic, or similar institution. Securing loans is not an adjunct
purposes: Provided, That no corporation, of the educational institution's conduct of
domestic or foreign, shall give donations in business.[81] It does not appear that
aid of any political party or candidate or... securing third-party loans was necessary to
for purposes of partisan political activity; maintain petitioner's business of providing
instruction to individuals.
To establish pension, retirement, and other
plans for the benefit of its directors, In this case, the presumption that the
trustees, officers and employees; and execution of mortgage contracts was within
petitioner's corporate powers does not apply.
To exercise such other powers as may be Securing third-party loans is not connected
essential or necessary to carry out its to petitioner's purposes as an educational
purpose or purposes as stated in its articles institution.
of incorporation. (Emphasis supplied)
regardless of the number of shares that
Montelibano, et al. v. Bacolod-Murcia Milling petitioner had with FISLAI, DSLAI, or MSLAI,
Co., Inc.[78] stated the test to determine if securing loans of third persons is still beyond
a corporate act is in accordance with its petitioner's power to do. It is still
purposes: inconsistent with its purposes under the
law[104] and its articles of... incorporation.[
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)