G.R. No. L-30299 - Republic vs. Quasha

University of Mindanao, Inc. (UM) is an educational institution whose 1982 Board of Trustees was chaired by Guillermo B. Torres; his wife, Dolores P. Torres, served as Assistant Treasurer.
Guillermo and Dolores Torres also founded and managed two thrift banks: First Iligan Savings & Loan Association, Inc. (FISLAI) and Davao Savings & Loan Association, Inc. (DSLAI), with interlocking officer and shareholder relationships.

In early 1982, Bangko Sentral ng Pilipinas (BSP) extended a ₱1.9 million standby emergency credit to FISLAI, evidenced by three promissory notes signed by Guillermo Torres and co-signed by Dolores Torres or Edmundo G. Ramos, Jr.
To secure FISLAI’s loan, UM’s Vice President for Finance, Saturnino R. Petalcorin, executed:

A real estate mortgage on UM’s Cagayan de Oro property (TCT No. T-14345) on May 25, 1982;
A separate mortgage on two Iligan City properties (TCT Nos. T-15696 and T-15697) on November 5, 1982.

These mortgages were allegedly authorized by a Secretary’s Certificate dated April 13, 1982, signed by Corporate Secretary Aurora de Leon, supported by an excerpt of Board minutes from a purported March 30 and January 19, 1982 meeting.

FISLAI and DSLAI merged into Mindanao Savings and Loan Association, Inc. (MSLAI) in January 1985; MSLAI was liquidated in May 1991.
On June 18, 1999, BSP threatened foreclosure of UM’s mortgaged properties for MSLAI’s outstanding ₱12.53 million debt; UM denied any mortgages or loan proceeds.
On July 16, 1999, UM filed two Complaints for nullification and cancellation of the mortgages before the Regional Trial Courts (RTCs) of Cagayan de Oro City and Iligan City.

Both RTCs (Cagayan de Oro on November 23, 2001; Iligan City on December 7, 2001) nullified the mortgages, finding no board resolution, a fictitious Secretary’s Certificate, and Petalcorin’s lack of authority.
BSP appealed; the Court of Appeals (CA), on December 17, 2009, reversed and dismissed UM’s complaints, holding that:

The Secretary’s Certificate conferred apparent authority on Petalcorin;
UM was estopped from denying the mortgages, having tacitly ratified them and received annotations;
BSP’s foreclosure action had not prescribed.

Whether BSP’s foreclosure action against the mortgaged properties had prescribed under the Civil Code’s prescription rules.
Whether UM is bound by the real estate mortgage contracts executed by Petalcorin without an authentic board resolution.