G.R. No. 159624 - Cebu Mactan Members Center, Inc. vs. Tsukahara

The case involves a petition for review by Cebu Mactan Members Center, Inc. (CMMCI) against Masahiro Tsukahara.
The Court of Appeals affirmed the Regional Trial Court's (RTC) decision regarding the liability of CMMCI for loans obtained by its president.

In February 1994, CMMCI, represented by its president Mitsumasa Sugimoto, borrowed P6,500,000 from Tsukahara, issuing seven postdated checks as payment.
On April 13, 1994, CMMCI secured an additional loan of P10,000,000 from Tsukahara, with Sugimoto signing a promissory note in both his corporate and personal capacity.
The loans were allegedly used for improvements to CMMCI's beach resort.
Tsukahara's attempts to collect the loan payments were unsuccessful, leading to the filing of a case for collection against CMMCI and Sugimoto.

The RTC ruled in favor of Tsukahara, ordering CMMCI and Sugimoto to pay the total loan amounts, including interest and attorney's fees.
Sugimoto was declared in default due to being served summons by publication.

The Court of Appeals upheld the RTC's decision, dismissing CMMCI's appeal and affirming the lower court's ruling.

The primary issue was whether the Court of Appeals erred in holding CMMCI liable for the loans contracted by Sugimoto without a board resolution.

The Supreme Court found the petition without merit, emphasizing that a corporation acts through its board of directors, which holds the authority to bind the corporation.
Section 23 of the Corporation Code stipulates that corporate powers are exercised by the board, but the board may delegate authority to officers.

The ruling clarified that corporate officers can bind the corporation if they have been granted authority, either expressly or impliedly.
The corporate by-laws of CMMCI explicitly granted the president the power to borrow money and execute contracts on behalf of the corporation.