METROPOLITAN BANK and TRUST COMPANY vs. CENTRO DEVELOPMENT CORPORATION, CHONGKING KEHYENG, MANUEL CO KEHYENG and QUIRINO KEHYENG G.R. No. 180974, June 13, 2012 PONENTE: Sereno, J. TOPIC: Negligence FACTS: On 20 March 1990, in a special meeting of the board of directors of respondent Centro Development Corporation (Centro), its president Go Eng Uy was authorized to mortgage its properties and assets to secure the medium-term loan of ₱84 million of Lucky Two Corporation and Lucky Two Repacking. This authorization was subsequently approved on the same day by the stockholders. Thus, on 21 March 1990, respondent Centro, represented by Go Eng Uy, executed a Mortgage Trust Indenture (MTI) with the Bank of the Philippines Islands (BPI). To secure these obligations from different creditors, respondent Centro constituted a continuing mortgage on all or substantially all of its properties and assets enumerated above unto and in favor of BPI, the trustee. Should respondent Centro or any of its affiliates fail to pay their obligations when due, the trustee shall cause the foreclosure of the mortgaged property. Petitioner contends that the stockholders Resolution No. 005, s. 1994 did not constitute a new mortgage in favor of petitioner. Instead, the stockholders merely amended the existing MTI by appointing petitioner as the new trustee for the MTI, which was already existing and held by BPI. Thus, there was no need to secure a 2/3 vote from the stockholders. Petitioner posits that the authority to mortgage the properties was granted in 1990, upon the execution of the first MTI between respondent Centro and BPI. Petitioner also maintains that the CA erred in interpreting the phrase at which meeting a quorum was present contained in the Secretarys Certificate dated 18 August 1994. The bank points out that the phrase indicates that at least a quorum was present, rather than that only a quorum was present. Thus, the Secretarys Certificate did not in any way limit the number of those actually present. Additionally, petitioner argues that Perla Saballe, whose testimony was considered by the CA, was not a competent witness to interpret the directors Resolution. Allegedly, she was never present during the meetings of Centro regarding the present issue, and she was not in a position to answer the questions propounded to her in relation to the requirements of Section 40 of the Corporation Code. Moreover, petitioner cites the CA Decision in CA-G.R. SP No. 84447, which upheld the validity of the foreclosure of the mortgage. It also challenges the CA ruling that the former failed to exercise due diligence in transacting with respondent Centro. Finally, petitioner insists that laches attached when