G.R. No.
161838 April 7, 2010 damages with prayer for the issuance of a TRO and/or
REPUBLIC OF THE PHILIPPINES, represented by
DANTE QUINDOZA, in his capacity as Zone
Administrator of the Bataan Economic
Zone, Petitioner,
vs.
COALBRINE INTERNATIONAL PHILIPPINES, INC.
and SHEILA F. NERI, Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari filed by
petitioner is the Decision1 dated January 21, 2004 of the
Court of Appeals in CA-G.R. SP No 74667, which
affirmed the Order2 dated September 24, 2002 of the
Regional Trial Court (RTC) of Balanga, Bataan, in Civil
Case No. 548-ML, denying petitioner's Motion to
Dismiss.
The Export Processing Zone Authority (EPZA),
predecessor of the Philippine Economic Zone Authority
(PEZA), is the owner of the Bataan Hilltop Hotel and
Country Club, located at the Bataan Export Processing
Zone, Mariveles, Bataan. Dante M. Quindoza is the
Zone Administrator of the Bataan Economic Zone.
On August 4, 1994, EPZA, now PEZA, and respondent
Coalbrine International Philippines, Inc. entered into a
contract in which the latter would rehabilitate and lease
the Bataan Hilltop Hotel, Golf Course and Clubhouse for
twenty-five (25) years, which commenced on January 1,
1994, and renewable for another twenty-five (25) years
at the option of respondent Coalbrine. Respondent
Sheila F. Neri was the Managing Director of the hotel.
On July 11, 1996, the PEZA Board passed Resolution
No. 96-231 rescinding the contract to rehabilitate and
lease, on the ground of respondent Coalbrine's repeated
violations and non-performance of its obligations as
provided in the contract. Subsequently, PEZA sent
respondent Coalbrine a notice to vacate the premises
and to pay its outstanding obligations to it.
On April 3, 1998, respondent Coalbrine filed with the
RTC of Manila a Complaint for specific performance with
prayer for the issuance of a temporary restraining order
(TRO) and/or writ of preliminary injunction with damages
against PEZA and/or Bataan Economic Zone wherein
respondent Coalbrine sought to declare that PEZA had
no valid cause to rescind the contract to rehabilitate and
lease; and to enjoin PEZA from taking over the hotel and
country club and from disconnecting the water and
electric services to the hotel. The complaint is pending
with Branch 17 of the RTC of Manila.
On April 24, 2002, respondents Coalbrine and Neri filed
with the RTC of Balanga, Bataan, a Complaint for
writ of preliminary prohibitory/mandatory injunction
against Zone Administrator Quindoza, docketed as Civil
Case No. 548-ML. Respondent alleged that: in October
2001, Quindoza started to harass the hotel's operations
by causing the excavation of the entire width of a cross-
section of the only road leading to the hotel for the
supposed project of putting up a one length steel pipe;
that such project had been stopped, which,
consequently, paralyzed the hotel's operations;
respondent Neri undertook the construction of a
temporary narrow access ramp in order that the hotel
guests and their vehicles could pass through the wide
excavations; Quindoza had also placed a big "ROAD
CLOSED" sign near the hotel, which effectively blocked
all access to and from the hotel and created an
impression that the hotel had been closed; in the last
week of March 2002, Quindoza cut the pipelines that
supplied water to the hotel to the great inconvenience of
respondents and the hotel guests, and, subsequently,
the pipelines were reconnected. Respondents prayed for
the payment of damages, for the issuance of a TRO and
a writ of preliminary injunction to enjoin Quindoza from
cutting or disconnecting the reconnected water pipelines
to the hotel and from committing further acts of
harassment; and to cause the construction of a
reasonable access road at Quindoza's expense.
Administrator Quindoza, through the Solicitor General,
filed a Motion to Dismiss3 on the following grounds:
1. The Honorable Court has no jurisdiction over
the instant case;
2. The Honorable Court is an improper venue for
the instant case;
3. Plaintiff (respondent Coalbrine) is guilty of
forum shopping;
4. With respect to plaintiff (respondent) Neri, the
complaint states no cause of action against
defendant;
5. The complaint is fatally defective for being
unauthorized.
On September 24, 2002, the RTC issued an
Order4 denying petitioner's motion to dismiss.
Administrator Quindoza filed a Motion for
Reconsideration, which the RTC denied in its
Order5 dated December 9, 2002.
On January 2, 2003, petitioner Republic of the
Philippines, represented by Dante Quindoza, in his
capacity as Zone Administrator of the Bataan Economic
Zone, filed with the CA a petition for certiorari under Rule
65 seeking to annul the RTC Orders, reiterating the
grounds raised by Administrator Quindoza in the RTC.
On January 21, 2004, the CA issued its assailed
Decision denying petitioner's petition for certiorari for
lack of merit.
Hence, petitioner is now before us in a petition for review
on certiorari raising the lone issue of respondent Neri's
lack of proof of authority to file the complaint in the RTC
of Balanga, Bataan, which was docketed as Civil Case
No. 548-ML.1avvphi1
In their Comment, respondents argue that the Republic
of the Philippines was not a party to the civil case
subject of this petition, hence, it has no personality to file
the instant petition for review; that the RTC Order
denying the motion to dismiss the complaint was a mere
interlocutory order, thus, the same is not appealable and
not a proper subject of a petition for certiorari unless it
was shown that there was a grave abuse of discretion in
its issuance; that petitioner had already filed an answer
to the complaint incorporating the grounds stated in their
motion to dismiss; and that respondents had already
presented their evidence by way of an opposition to the
motion to dismiss and in support of their application for
the issuance of a writ of preliminary mandatory
injunction.
In its Reply, petitioner argues that it has the personality
to file this petition, since Administrator Quindoza is being
sued for damages for certain acts he performed in an
official capacity; that the denial of petitioner's motion to
dismiss was tainted with grave abuse of discretion,
which justified the filing of a petition for certiorari with the
CA. The parties filed their respective memoranda as
required under the Resolution dated January 26, 2005.
In its Memorandum, petitioner raises the following
arguments, to wit:
THE COMPLAINT IS FATALLY DEFECTIVE FOR
BEING UNAUTHORIZED.
PETITIONER REPUBLIC OF THE PHILIPPINES IS THE
REAL PARTY-IN-INTEREST IN THE CASE AT BAR.
RESPONDENT JUDGE ACTED WITH GRAVE ABUSE
OF DISCRETION IN DENYING PETITIONER'S
MOTION TO DISMISS, NECESSITATING THE FILING
OF A PETITION FOR CERTIORARI UNDER RULE 65
BEFORE THE HONORABLE COURT OF APPEALS.6
Petitioner claims that respondent Neri's signature in the
verification and certification against non-forum shopping
attached to the complaint filed by respondents in the
RTC was defective, since there was no proof of her
authority to institute the complaint on behalf of the
corporation; and that respondent Neri is not a real party-
in-interest.
We agree.
The verification and certification against non-forum
shopping reads:
xxxx
That I am the Managing Director of Bataan Hilltop Hotel
and one of the plaintiffs in this case.7
Notably, respondent Neri signed the
verification/certification as one of the plaintiffs. However,
we find that respondent Neri is not a real party-in-
interest. Section 2, Rule 3 of the Rules of Civil
Procedure provides:
SEC. 2. Parties-in interest. – A real party-in-interest is
the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of
the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in
the name of the real party-in-interest.
And "interest," within the meaning of the rule, means
material interest, an interest in issue and to be affected
by the decree, as distinguished from mere interest in the
question involved, or a mere incidental interest.8 Cases
construing the real party-in-interest provision can be
more easily understood if it is borne in mind that the true
meaning of real party-in-interest may be summarized as
follows: An action shall be prosecuted in the name of the
party who, by the substantive law, has the right sought to
be enforced.9
The RTC based its conclusion that respondent Neri had
a cause of action against petitioner on the allegations in
the complaint. The CA, however, did not rule on the
matter despite the fact that it was raised in petitioner's
petition for certiorari filed before it and merely said that
there was no necessity to discuss such issue after
deciding the other grounds raised in the petition.
We find the RTC in error. A reading of the allegations in
the complaint shows that the acts complained of and
said to have been committed by petitioner against
respondents have solely affected the hotel's operations
where respondent Neri was the hotel's Managing
Director and whose interest in the suit was incidental.
Thus, we find that respondent Neri has no cause of
action against petitioner. Consequently, the plaintiff in
this case would only be respondent Coalbrine.
A corporation has no power, except those expressly
conferred on it by the Corporation Code and those that
are implied or incidental to its existence. In turn, a
corporation exercises said powers through its board of
directors and/or its duly authorized officers and
agents.10 Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged
with the board of directors that exercises its corporate
powers. In turn, physical acts of the corporation, like the
signing of documents, can be performed only by natural
persons duly authorized for the purpose by corporate by-
laws or by a specific act of the board of directors.11
In this case, respondent Coalbrine is a corporation.
However, when respondent Neri filed the complaint in
the RTC, there was no proof that she was authorized to
sign the verification and the certification against non-
forum shopping.
The Court has consistently held that the requirement
regarding verification of a pleading is formal, not
jurisdictional. Such requirement is simply a condition
affecting the form of the pleading, non-compliance with
which does not necessarily render the pleading fatally
defective.12 Verification is simply intended to secure an
assurance that the allegations in the pleading are true
and correct, and not the product of the imagination or a
matter of speculation, and that the pleading is filed in
good faith. The court may order the correction of the
pleading if verification is lacking or act on the pleading
although it is not verified, if the attending circumstances
are such that strict compliance with the rules may be
dispensed with in order that the ends of justice may
thereby be served.13
On the other hand, the lack of certification against non-
forum shopping is generally not curable by mere
amendment of the complaint, but shall be a cause for the
dismissal of the case without prejudice.14 The same rule
applies to certifications against non-forum shopping
signed by a person on behalf of a corporation which are
unaccompanied by proof that said signatory is
authorized to file the complaint on behalf of the
corporation.15
In Philippine Airlines, Inc. v. Flight Attendants and
Stewards Association of the Philippines (FASAP),16 we
ruled that only individuals vested with authority by a valid
board resolution may sign the certificate of non-forum
shopping on behalf of a corporation. We also required
that proof of such authority must be attached. Failure to
provide a certificate of non-forum shopping is sufficient
ground to dismiss the petition. Likewise, the petition is
subject to dismissal if a certification was submitted
unaccompanied by proof of signatory's authority.
While there were instances where we have allowed the
filing of a certificate against non-forum shopping by
someone on behalf of a corporation without the
accompanying proof of authority at the time of its filing,
we did so on the basis of a special circumstance or
compelling reason. Moreover, there was a subsequent
compliance by the submission of the proof of authority
attesting to the fact that the person who signed the
certification was duly authorized.
In China Banking Corporation v. Mondragon
International Philippines, Inc.,17 the CA dismissed the
petition filed by China Bank, since the latter failed to
show that its bank manager who signed the certification
against non-forum shopping was authorized to do so.
We reversed the CA and said that the case be decided
on the merits despite the failure to attach the required
proof of authority, since the board resolution which was
subsequently attached recognized the pre-existing
status of the bank manager as an authorized signatory.
In Abaya Investments Corporation v. Merit
Philippines,18 where the complaint before the
Metropolitan Trial Court of Manila was instituted by
petitioner's Chairman and President, Ofelia Abaya, who
signed the verification and certification against non-
forum shopping without proof of authority to sign for the
corporation, we also relaxed the rule. We did so taking
into consideration the merits of the case and to avoid a
re-litigation of the issues and further delay the
administration of justice, since the case had already
been decided by the lower courts on the merits.
Moreover, Abaya's authority to sign the certification was
ratified by the Board.
In the present case, the RTC, in denying petitioner's
motion to dismiss the complaint when the latter raised
respondent Neri's lack of authority to sign the
certification, found that respondent Neri testified that she
was the Managing Director of the Bataan Hilltop Hotel
which was being leased by respondent Coalbrine, and
that she was authorized by the Corporate Secretary to
file the case. Notably, while the matter of lack of
authority was raised by petitioner in its petition
for certiorari filed with the CA, it chose not to tackle the
issue after disposing of the other issues raised therein.
We cannot agree with the RTC's reasoning and find the
certification signed by respondent Neri to be defective.
The authority of respondent Neri to file the complaint in
the RTC had not been proven. First, the certification
against non-forum shopping did not even contain a
statement that she was authorized by the corporate
secretary to file the case on behalf of Coalbrine as she
claimed. More importantly, while she testified that she
was authorized by the corporate secretary, there was no
showing that there was a valid board resolution
authorizing the corporate secretary to file the action, and
to authorize respondent Neri to file the action. In fact,
such proof of authority had not been submitted even
belatedly to show subsequent compliance. Thus, there
was no reason for the relaxation of the rule.
As to respondents' claim that petitioner Republic of the
Philippines was not a party to the civil case subject of
this petition since Administrator Quindoza was the sole
defendant therein and, thus, has no personality to file
this petition, their claim is not persuasive.
Notably, Administrator Quindoza was sued for damages
for certain acts that he allegedly committed while he was
the Zone Administrator of the Bataan Export Processing
Zone. Therefore, the complaint is in the nature of suit
against the State, and the Republic has the personality
to file the petition.
Anent respondents' claim that the RTC Order denying a
motion to dismiss is a mere interlocutory order, thus, not
appealable and may not be a subject of a petition
for certiorari filed by the petitioner before the CA, the
same is also not meritorious.
While indeed, the general rule is that the denial of a
motion to dismiss cannot be questioned in a special civil
action for certiorari, which is not intended to correct
every controversial interlocutory ruling,19 and that the
appropriate recourse is to file an answer and to
interpose as defenses the objections raised in the
motion, to proceed to trial, and, in case of an adverse
decision, to elevate the entire case by appeal in due
course,20 this rule is not absolute.
Even when appeal is available and is the proper remedy,
the Supreme Court has allowed a writ of certiorari (1)
where the appeal does not constitute a speedy and
adequate remedy; (2) where the orders were also issued
either in excess of or without jurisdiction or with grave
abuse of discretion; (3) for certain special
considerations, as public welfare or public policy; (4)
where in criminal actions, the court rejects rebuttal
evidence for the prosecution as, in case of acquittal,
there could be no remedy; (5) where the order is a
patent nullity; and (6) where the decision in the certiorari
case will avoid future litigations. 21
In this case, we find that the RTC committed grave
abuse of discretion amounting to lack of jurisdiction
when it failed to consider the lack of proof of authority of
respondent Neri to file the action on behalf of the
corporation as we have discussed above.
WHEREFORE, the petition for review is GRANTED. The
Decision dated January 21, 2004 of the Court of Appeals
in CA-G.R. SP No 74667 is REVERSED and SET
ASIDE. The Complaint in Civil Case No. 548-ML
pending in the Regional Trial Court, Branch 4, Balanga,
Bataan, is ordered DISMISSED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
G.R. No. 179488 April 23, 2012
COSCO PHILIPPINES SHIPPING, INC., Petitioner,
vs.
KEMPER INSURANCE COMPANY, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of
the Rules of Court seeking to reverse and set aside the
Decision1 and Resolution2 of the Court of Appeals (CA),
in CA-G.R. CV No. 75895, entitled Kemper Insurance
Company v. Cosco Philippines Shipping, Inc. The CA
Decision reversed and set aside the Order dated March
22, 2002 of the Regional Trial Court (RTC), Branch 8,
Manila, which granted the Motion to Dismiss filed by
petitioner Cosco Philippines Shipping, Inc., and ordered
that the case be remanded to the trial court for further
proceedings.
The antecedents are as follows:
Respondent Kemper Insurance Company is a foreign
insurance company based in Illinois, United States of
America (USA) with no license to engage in business in
the Philippines, as it is not doing business in the
Philippines, except in isolated transactions; while
petitioner is a domestic shipping company organized in
accordance with Philippine laws.
In 1998, respondent insured the shipment of imported
frozen boneless beef (owned by Genosi, Inc.), which
was loaded at a port in Brisbane, Australia, for shipment
to Genosi, Inc. (the importer-consignee) in the
Philippines. However, upon arrival at the Manila port, a
portion of the shipment was rejected by Genosi, Inc. by
reason of spoilage arising from the alleged temperature
fluctuations of petitioner's reefer containers.
Thus, Genosi, Inc. filed a claim against both petitioner
shipping company and respondent Kemper Insurance
Company. The claim was referred to McLarens
Chartered for investigation, evaluation, and adjustment
of the claim. After processing the claim documents,
McLarens Chartered recommended a settlement of the
claim in the amount of $64,492.58, which Genosi, Inc.
(the consignee-insured) accepted.
Thereafter, respondent paid the claim of Genosi, Inc.
(the insured) in the amount of $64,492.58.
Consequently, Genosi, Inc., through its General
Manager, Avelino S. Mangahas, Jr., executed a Loss
and Subrogation Receipt3 dated September 22, 1999,
stating that Genosi, Inc. received from respondent the
amount of $64,492.58 as the full and final satisfaction
compromise, and discharges respondent of all claims for
losses and expenses sustained by the property insured,
under various policy numbers, due to spoilage brought
about by machinery breakdown which occurred on
October 25, November 7 and 10, and December 5, 14,
and 18, 1998; and, in consideration thereof, subrogates
respondent to the claims of Genosi, Inc. to the extent of
the said amount. Respondent then made demands upon
petitioner, but the latter failed and refused to pay the
said amount.
Hence, on October 28, 1999, respondent filed a
Complaint for Insurance Loss and Damages4 against
petitioner before the trial court, docketed as Civil Case
No. 99-95561, entitled Kemper Insurance Company v.
Cosco Philippines Shipping, Inc. Respondent alleged
that despite repeated demands to pay and settle the
total amount of US$64,492.58, representing the value of
the loss, petitioner failed and refused to pay the same,
thereby causing damage and prejudice to respondent in
the amount of US$64,492.58; that the loss and damage
it sustained was due to the fault and negligence of
petitioner, specifically, the fluctuations in the temperature
of the reefer container beyond the required setting which
was caused by the breakdown in the electronics
controller assembly; that due to the unjustified failure
and refusal to pay its just and valid claims, petitioner
should be held liable to pay interest thereon at the legal
rate from the date of demand; and that due to the
unjustified refusal of the petitioner to pay the said
amount, it was compelled to engage the services of a
counsel whom it agreed to pay 25% of the whole amount
due as attorney's fees. Respondent prayed that after
due hearing, judgment be rendered in its favor and that
petitioner be ordered to pay the amount of
US$64,492.58, or its equivalent in Philippine currency at
the prevailing foreign exchange rate, or a total of
₱2,594,513.00, with interest thereon at the legal rate
from date of demand, 25% of the whole amount due as
attorney's fees, and costs.
In its Answer5 dated November 29, 1999, petitioner
insisted, among others, that respondent had no capacity
to sue since it was doing business in the Philippines
without the required license; that the complaint has
prescribed and/or is barred by laches; that no timely
claim was filed; that the loss or damage sustained by the
shipments, if any, was due to causes beyond the
carrier's control and was due to the inherent nature or
insufficient packing of the shipments and/or fault of the
consignee or the hired stevedores or arrastre operator or
the fault of persons whose acts or omissions cannot be
the basis of liability of the carrier; and that the subject
shipment was discharged under required temperature
and was complete, sealed, and in good order condition.
During the pre-trial proceedings, respondent's counsel
proffered and marked its exhibits, while petitioner's
counsel manifested that he would mark his client's
exhibits on the next scheduled pre-trial. However, on
November 8, 2001, petitioner filed a Motion to
Dismiss,6 contending that the same was filed by one
Atty. Rodolfo A. Lat, who failed to show his authority to
sue and sign the corresponding certification against
forum shopping. It argued that Atty. Lat's act of signing
the certification against forum shopping was a clear
violation of Section 5, Rule 7 of the 1997 Rules of Court.
In its Order7 dated March 22, 2002, the trial court
granted petitioner's Motion to Dismiss and dismissed the
case without prejudice, ruling that it is mandatory that
the certification must be executed by the petitioner
himself, and not by counsel. Since respondent's counsel
did not have a Special Power of Attorney (SPA) to act on
its behalf, hence, the certification against forum
shopping executed by said counsel was fatally defective
and constituted a valid cause for dismissal of the
complaint.
Respondent's Motion for Reconsideration8 was denied
by the trial court in an Order9 dated July 9, 2002.
On appeal by respondent, the CA, in its Decision 10 dated
March 23, 2007, reversed and set aside the trial court's
order. The CA ruled that the required certificate of non-
forum shopping is mandatory and that the same must be
signed by the plaintiff or principal party concerned and
not by counsel; and in case of corporations, the physical
act of signing may be performed in behalf of the
corporate entity by specifically authorized individuals.
However, the CA pointed out that the factual
circumstances of the case warranted the liberal
application of the rules and, as such, ordered the
remand of the case to the trial court for further
proceedings.
Petitioner's Motion for Reconsideration11 was later
denied by the CA in the Resolution12 dated September 3,
2007.
Hence, petitioner elevated the case to this
Court via Petition for Review on Certiorari under Rule 45
of the Rules of Court, with the following issues:
THE COURT OF APPEALS SERIOUSLY ERRED IN
RULING THAT ATTY. RODOLFO LAT WAS
PROPERLY AUTHORIZED BY THE RESPONDENT TO
SIGN THE CERTIFICATE AGAINST FORUM
SHOPPING DESPITE THE UNDISPUTED FACTS
THAT:
A) THE PERSON WHO EXECUTED THE
SPECIAL POWER OF ATTORNEY (SPA)
APPOINTING ATTY. LAT AS RESPONDENT'S
ATTORNEY-IN-FACT WAS MERELY AN
UNDERWRITER OF THE RESPONDENT WHO
HAS NOT SHOWN PROOF THAT HE WAS
AUTHORIZED BY THE BOARD OF
DIRECTORS OF RESPONDENT TO DO SO.
B) THE POWERS GRANTED TO ATTY. LAT
REFER TO [THE AUTHORITY TO
REPRESENT DURING THE] PRE-TRIAL
[STAGE] AND DO NOT COVER THE SPECIFIC
POWER TO SIGN THE CERTIFICATE.13
Petitioner alleged that respondent failed to submit any
board resolution or secretary's certificate authorizing
Atty. Lat to institute the complaint and sign the certificate
of non-forum shopping on its behalf. Petitioner submits
that since respondent is a juridical entity, the signatory in
the complaint must show proof of his or her authority to
sign on behalf of the corporation. Further, the
SPA14 dated May 11, 2000, submitted by Atty. Lat, which
was notarized before the Consulate General of Chicago,
Illinois, USA, allegedly authorizing him to represent
respondent in the pre-trial and other stages of the
proceedings was signed by one Brent Healy
(respondent's underwriter), who lacks authorization from
its board of directors.
In its Comment, respondent admitted that it failed to
attach in the complaint a concrete proof of Atty. Lat's
authority to execute the certificate of non-forum
shopping on its behalf. However, there was subsequent
compliance as respondent submitted an authenticated
SPA empowering Atty. Lat to represent it in the pre-trial
and all stages of the proceedings. Further, it averred that
petitioner is barred by laches from questioning the
purported defect in respondent's certificate of non-forum
shopping.
The main issue in this case is whether Atty. Lat was
properly authorized by respondent to sign the
certification against forum shopping on its behalf.
The petition is meritorious.
We have consistently held that the certification against
forum shopping must be signed by the principal
parties.15 If, for any reason, the principal party cannot
sign the petition, the one signing on his behalf must have
been duly authorized.16 With respect to a corporation, the
certification against forum shopping may be signed for
and on its behalf, by a specifically authorized lawyer who
has personal knowledge of the facts required to be
disclosed in such document.17 A corporation has no
power, except those expressly conferred on it by the
Corporation Code and those that are implied or
incidental to its existence. In turn, a corporation
exercises said powers through its board of directors
and/or its duly authorized officers and agents. Thus, it
has been observed that the power of a corporation to
sue and be sued in any court is lodged with the board of
directors that exercises its corporate powers. In turn,
physical acts of the corporation, like the signing of
documents, can be performed only by natural persons
duly authorized for the purpose by corporate by-laws or
by a specific act of the board of directors.18
In Philippine Airlines, Inc. v. Flight Attendants and
Stewards Association of the Philippines (FASAP),19 we
ruled that only individuals vested with authority by a valid
board resolution may sign the certificate of non-forum
shopping on behalf of a corporation. We also required
proof of such authority to be presented. The petition is
subject to dismissal if a certification was submitted
unaccompanied by proof of the signatory's authority.
In the present case, since respondent is a corporation,
the certification must be executed by an officer or
member of the board of directors or by one who is duly
authorized by a resolution of the board of directors;
otherwise, the complaint will have to be dismissed.20 The
lack of certification against forum shopping is generally
not curable by mere amendment of the complaint, but
shall be a cause for the dismissal of the case without
prejudice.21 The same rule applies to certifications
against forum shopping signed by a person on behalf of
a corporation which are unaccompanied by proof that
said signatory is authorized to file the complaint on
behalf of the corporation.22
There is no proof that respondent, a private corporation,
authorized Atty. Lat, through a board resolution, to sign
the verification and certification against forum shopping
on its behalf. Accordingly, the certification against forum
shopping appended to the complaint is fatally defective,
and warrants the dismissal of respondent's complaint for
Insurance Loss and Damages (Civil Case No. 99-95561)
against petitioner.
In Republic v. Coalbrine International Philippines,
Inc.,23 the Court cited instances wherein the lack of
authority of the person making the certification of non-
forum shopping was remedied through subsequent
compliance by the parties therein. Thus,
[w]hile there were instances where we have allowed the
filing of a certification against non-forum shopping by
someone on behalf of a corporation without the
accompanying proof of authority at the time of its filing,
we did so on the basis of a special circumstance or
compelling reason. Moreover, there was a subsequent
compliance by the submission of the proof of authority
attesting to the fact that the person who signed the
certification was duly authorized.
In China Banking Corporation v. Mondragon
International Philippines, Inc., the CA dismissed the
petition filed by China Bank, since the latter failed to
show that its bank manager who signed the certification
against non-forum shopping was authorized to do so.
We reversed the CA and said that the case be decided
on the merits despite the failure to attach the required
proof of authority, since the board resolution which was
subsequently attached recognized the pre-existing
status of the bank manager as an authorized signatory.
In Abaya Investments Corporation v. Merit Philippines,
where the complaint before the Metropolitan Trial Court
of Manila was instituted by petitioner's Chairman and
President, Ofelia Abaya, who signed the verification and
certification against non-forum shopping without proof of
authority to sign for the corporation, we also relaxed the
rule. We did so taking into consideration the merits of the
case and to avoid a re-litigation of the issues and further
delay the administration of justice, since the case had
already been decided by the lower courts on the merits.
Moreover, Abaya's authority to sign the certification was
ratified by the Board.24
Contrary to the CA's finding, the Court finds that the
circumstances of this case do not necessitate the
relaxation of the rules. There was no proof of authority
submitted, even belatedly, to show subsequent
compliance with the requirement of the law. Neither was
there a copy of the board resolution or secretary's
certificate subsequently submitted to the trial court that
would attest to the fact that Atty. Lat was indeed
authorized to file said complaint and sign the verification
and certification against forum shopping, nor did
respondent satisfactorily explain why it failed to comply
with the rules. Thus, there exists no cogent reason for
the relaxation of the rule on this matter. Obedience to
the requirements of procedural rules is needed if we are
to expect fair results therefrom, and utter disregard of
the rules cannot justly be rationalized by harking on the
policy of liberal construction.25
Moreover, the SPA dated May 11, 2000, submitted by
respondent allegedly authorizing Atty. Lat to appear on
behalf of the corporation, in the pre-trial and all stages of
the proceedings, signed by Brent Healy, was fatally
defective and had no evidentiary value. It failed to
establish Healy's authority to act in behalf of respondent,
in view of the absence of a resolution from respondent's
board of directors or secretary's certificate proving the
same. Like any other corporate act, the power of Healy
to name, constitute, and appoint Atty. Lat as
respondent's attorney-in-fact, with full powers to
represent respondent in the proceedings, should have
been evidenced by a board resolution or secretary's
certificate.
Respondent's allegation that petitioner is estopped by
laches from raising the defect in respondent's certificate
of non-forum shopping does not hold water.
In Tamondong v. Court of Appeals,26 we held that if a
complaint is filed for and in behalf of the plaintiff who is
not authorized to do so, the complaint is not deemed
filed. An unauthorized complaint does not produce any
legal effect. Hence, the court should dismiss the
complaint on the ground that it has no jurisdiction over
the complaint and the plaintiff.27 Accordingly, since Atty.
Lat was not duly authorized by respondent to file the
complaint and sign the verification and certification
against forum shopping, the complaint is considered not
filed and ineffectual, and, as a necessary consequence,
is dismissable due to lack of jurisdiction.
Jurisdiction is the power with which courts are invested
for administering justice; that is, for hearing and deciding
cases. In order for the court to have authority to dispose
of the case on the merits, it must acquire jurisdiction
over the subject matter and the parties. Courts acquire
jurisdiction over the plaintiffs upon the filing of the
complaint, and to be bound by a decision, a party should
first be subjected to the court's jurisdiction.28 Clearly,
since no valid complaint was ever filed with the RTC,
Branch 8, Manila, the same did not acquire jurisdiction
over the person of respondent.1âwphi1
Since the court has no jurisdiction over the complaint
and respondent, petitioner is not estopped from
challenging the trial court's jurisdiction, even at the pre-
trial stage of the proceedings. This is so because the
issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver
or by estoppel.29
In Regalado v. Go,30 the Court held that laches should
be clearly present for the Sibonghanoy31 doctrine to
apply, thus:
Laches is defined as the "failure or neglect for an
unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have
been done earlier, it is negligence or omission to assert
a right within a reasonable length of time, warranting a
presumption that the party entitled to assert it either has
abandoned it or declined to assert it."
The ruling in People v. Regalario that was based on the
landmark doctrine enunciated in Tijam v. Sibonghanoy
on the matter of jurisdiction by estoppel is the exception
rather than the rule. Estoppel by laches may be invoked
to bar the issue of lack of jurisdiction only in cases in
which the factual milieu is analogous to that in the cited
case. In such controversies, laches should have been
clearly present; that is, lack of jurisdiction must have
been raised so belatedly as to warrant the presumption
that the party entitled to assert it had abandoned or
declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction was
raised for the first time in a motion to dismiss filed by the
Surety almost 15 years after the questioned ruling had
been rendered. At several stages of the proceedings, in
the court a quo as well as in the Court of Appeals, the
Surety invoked the jurisdiction of the said courts to
obtain affirmative relief and submitted its case for final
adjudication on the merits. It was only when the adverse
decision was rendered by the Court of Appeals that it
finally woke up to raise the question of jurisdiction.32
The factual setting attendant in Sibonghanoy is not
similar to that of the present case so as to make it fall
under the doctrine of estoppel by laches. Here, the trial
court's jurisdiction was questioned by the petitioner
during the pre-trial stage of the proceedings, and it
cannot be said that considerable length of time had
elapsed for laches to attach.
WHEREFORE, the petition is GRANTED. The Decision
and the Resolution of the Court of Appeals, dated March
23, 2007 and September 3, 2007, respectively, in CA-
G.R. CV No. 75895 are REVERSED and SET ASIDE.
The Orders of the Regional Trial Court, dated March 22,
2002 and July 9, 2002, respectively, in Civil Case No.
99-95561, are REINSTATED.
G.R. No. 153413 March 1, 2007
NECTARINA S. RANIEL and MA. VICTORIA R. PAG-
ONG, Petitioners,
vs.
PAUL JOCHICO, JOHN STEFFENS and SURYA
VIRIYA, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the present Petition for Review
on Certiorari is the Decision1 of the Court of Appeals
(CA) dated April 30, 2002, affirming with modification the
Decision dated October 27, 2000 rendered by the
Securities and Exchange Commission (SEC) which held
as valid the removal of petitioners Ma. Victoria R. Pag-
ong (Pag-ong) as director and Nectarina S. Raniel
(Raniel) as director and corporate officer of Nephro
Systems Dialysis Center (Nephro).
Petitioners first questioned their removal in SEC Case
No. 02-98-5902 for Declaration of Nullity of the Illegal
Acts of Respondents, Damages and Injunction.
Petitioners, together with respondents Paul Jochico
(Jochico), John Steffens and Surya Viriya, were
incorporators and directors of Nephro, with Raniel acting
as Corporate Secretary and Administrator. The conflict
started when petitioners questioned respondents' plan to
enter into a joint venture with the Butuan Doctors'
Hospital and College, Inc. sometime in December 1997.
Because of this, petitioners claim that respondents tried
to compel them to waive and assign their shares with
Nephro but they refused. Thereafter, Raniel sought an
indefinite leave of absence due to stress, but this was
denied by Jochico, as Nephro President. Raniel,
nevertheless, did not report for work, causing Jochico to
demand an explanation from her why she should not be
removed as Administrator and Corporate Secretary.
Raniel replied, expressing her sentiments over the
disapproval of her request for leave and respondents'
decision with regard to the Butuan venture.
On January 30, 1998, Jochico issued a Notice of Special
Board Meeting on February 2, 1998. Despite receipt of
the notice, petitioners did not attend the board meeting.
In said meeting, the Board passed several resolutions
ratifying the disapproval of Raniel's request for leave,
dismissing her as Administrator of Nephro, declaring the
position of Corporate Secretary vacant, appointing Otelio
Jochico as the new Corporate Secretary and authorizing
the call of a Special Stockholders' Meeting on February
16, 1998 for the purpose of the removal of petitioners as
directors of Nephro.
Otelio Jochico issued the corresponding notices for the
Special Stockholders' Meeting to be held on February
16, 1998 which were received by petitioners on February
2, 1998. Again, they did not attend the meeting. The
stockholders who were present removed the petitioners
as directors of Nephro. Thus, petitioners filed SEC Case
No. 02-98-5902.
On October 27, 2000, the SEC rendered its Decision,
the dispositive portion of which reads:
WHEREFORE, the Commission so holds that
complainants cannot be awarded the reliefs prayed for in
reinstating Nectarina S. Raniel as secretary and
administrator.
The corporation acting thru its Board of Directors can
validly remove its corporate officers, particularly
complainant Nectarina S. Raniel as corporate secretary,
treasurer and administrator of the Dialysis Clinic.
Also, the Commission cannot grant the relief prayed for
by complainants in restraining the respondents from
interfering in the administration of the Dialysis Clinic
owned by the corporation and the use of corporate
funds.
The administration of the Dialysis Clinic of the
corporation and the use of corporate funds, rightfully
belong to the officers of the corporation, which in this
case are the respondents.
The counterclaim of respondents to return or assign
back the complainants' shares in favor of respondent
Paul Jochico or his nominee is hereby denied for lack of
merit.
The respondents failed to show any clear and convincing
evidence to rebut the presumption of the validity and
truthfulness of documents submitted to the Commission
in the grant of corporate license.
The claim for attorney's fees and damages of both
parties are likewise denied for lack of merit, as neither
party should be punished for vindicating a right, which
he/she believes should be protected or enforced.
SO ORDERED.2
Dissatisfied, petitioners filed a petition for review with the
CA.
On April 30, 2002, the CA rendered the assailed
Decision, with the following dispositive portion:
WHEREFORE, in light of the foregoing discussions, the
appealed decision of the Securities and Exchange
Commission is hereby AFFIRMED with the
MODIFICATION that the renewal of petitioners as
directors of Nephro is declared valid.
SO ORDERED.3
Respondents filed a Manifestation and Motion to Correct
Typographical Error, stating that the term "renewal" as
provided in the CA Decision should be
"removal."4 Petitioners, on the other hand, filed the
present petition for review on certiorari.
On November 20, 2002, the CA issued a Resolution
resolving to refrain from acting on all pending incidents
before it in view of the filing of the petition with the
Court.5
In the present petition, petitioners raised basically the
same argument they had before the SEC and the
CA, i.e., their removal from Nephro was not valid.
Both the SEC and the CA held that Pag-ong's removal
as director and Raniel's removal as director and officer
of Nephro were valid. For its part, the SEC ruled that the
Board of Directors had sufficient ground to remove
Raniel as officer due to loss of trust and confidence, as
her abrupt and unauthorized leave of absence exhibited
her disregard of her responsibilities as an officer of the
corporation and disrupted the operations of Nephro. The
SEC also held that the Special Board Meeting held on
February 2, 1998 was valid and the resolutions adopted
therein are binding on petitioners.6
The CA upheld the SEC's conclusions, adding further
that the special stockholders' meeting on February 16,
1998 was likewise validly held. The CA also ruled that
Pag-ong's removal as director of Nephro was justified as
it was due to her "undenied delay in the release of
Nephro's medical supplies from the warehouse of the
Fly-High Brokerage where she was an officer, on top of
her and her co-petitioner Raniel's absence from the
aforementioned directors' and stockholders' meetings of
Nephro despite due notice."7
It is well to stress the settled rule that the findings of fact
of administrative bodies, such as the SEC, will not be
interfered with by the courts in the absence of grave
abuse of discretion on the part of said agencies, or
unless the aforementioned findings are not supported by
substantial evidence. They carry even more weight when
affirmed by the CA.8 Such findings are accorded not only
great respect but even finality, and are binding upon this
Court, unless it is shown that it had arbitrarily
disregarded or misapprehended evidence before it to
such an extent as to compel a contrary conclusion had
such evidence been properly appreciated.9 This rule is
rooted in the doctrine that this Court is not a trier of facts,
as well as in the respect to be accorded the
determinations made by administrative bodies in general
on matters falling within their respective fields of
specialization or expertise.10
A review of the petition failed to demonstrate any
reversible error committed by the two tribunals, hence,
the petition must be denied. It does not present any
argument which convinces the Court that the SEC and
the CA made any misappreciation of the facts and the
applicable laws such that their decisions should be
overturned.
A corporation exercises its powers through its board of
directors and/or its duly authorized officers and agents,
except in instances where the Corporation Code
requires stockholders’ approval for certain specific
acts.11
Based on Section 23 of the Corporation Code which
provides:
SEC. 23. The Board of Directors or Trustees. Unless
otherwise provided in this Code, the corporate powers of
all corporations formed under this Code shall be
exercised, all business conducted and all property of
such corporations controlled and held by the board of
directors or trustees x x x.
a corporation’s board of directors is understood to be
that body which (1) exercises all powers provided for
under the Corporation Code; (2) conducts all business of
the corporation; and (3) controls and holds all property of
the corporation. Its members have been characterized
as trustees or directors clothed with a fiduciary
character. 12 Moreover, the directors may appoint
officers and agents and as incident to this power of
appointment, they may discharge those appointed.13
In this case, petitioner Raniel was removed as a
corporate officer through the resolution of Nephro's
Board of Directors adopted in a special meeting on
February 2, 1998. As correctly ruled by the SEC,
petitioners' removal was a valid exercise of the powers
of Nephro's Board of Directors, viz.:
In the instant complaint, do respondents have sufficient
grounds to cause the removal of Raniel from her
positions as Corporate Secretary, Treasurer and
Administrator of the Dialysis Clinic? Based on the facts
proven during the hearing of this case, the answer is in
the affirmative.
Raniel's letter of January 26, 1998 speaks for itself. Her
request for an indefinite leave, immediately effective yet
without prior notice, reveals a disregard of the critical
responsibilities pertaining to the sensitive positions she
held in the corporation. Prior to her hasty departure,
Raniel did not make a proper turn-over of her duties and
had to be expressly requested to hand over documents
and records, including keys to the office and the cabinets
(Exh. 15).
xxxx
Since Raniel occupied all three positions in Nephro, it is
not difficult to foresee the disruption that her immediate
and indefinite absence can inflict on the operations of
the company. By leaving abruptly, Raniel abandoned the
positions she is now trying to reclaim. Raniel's actuation
has been sufficiently proven to warrant loss of the
Board's confidence.14
The SEC also correctly concluded that petitioner Raniel
was removed as an officer of Nephro in compliance with
established procedure, thus:
The resolutions of the Board dismissing complainant
Raniel from her various positions in Nephro are valid.
Notwithstanding the absence of complainants from the
meeting, a quorum was validly constituted. x x x.
xxxx
Based on its articles of incorporation, Nephro has five
directors – two of the positions were occupied by
complainants and the remaining three are held by
respondents. This being the case, the presence of all
three respondents in the Special Meeting of the Board
on February 2, 1998 established a quorum for the
conduct of business. The unanimous resolutions carried
by the Board during such meeting are therefore valid
and binding against complainants.
It bears emphasis that Raniel was given sufficient
opportunity to be heard. Jochico's letters of January 26,
1998 and January 27, 1998, albeit adversarial,
recognized her right to explain herself and gave her the
chance to do so. In fact, Raniel did respond to Jochico's
letter on January 28, 1998 and took the occasion to
voice her opinions about Jochico's alleged "practice of
using others for your own benefit, without cost." (Exh.
14). Moreover, the Special Meeting of the Board could
have been the appropriate venue for Raniel to air her
side. Had Raniel decided to grace the meeting with her
presence, she could have explained herself before the
board and tried to convince them to allow her to keep
her posts.15
propose such removal, must be given by publication or
by written notice as prescribed in this Code. x x
x Removal may be with or without cause: Provided,
That removal without cause may not be used to deprive
minority stockholders or members of the right of
representation to which they may be entitled under
Section 24 of this Code. (Emphasis supplied)
Petitioners do not dispute that the stockholders' meeting
was held in accordance with Nephro's By-Laws. The
ownership of Nephro's outstanding capital stock is
distributed as follows: Jochico - 200 shares; Steffens -
100 shares; Viriya - 100 shares; Raniel - 75 shares; and
Pag-ong - 25 shares,17 or a total of 500 shares. A two-
thirds vote of Nephro's outstanding capital stock would
be 333.33 shares, and during the Stockholders' Special
Meeting held on February 16, 1998, 400 shares voted
for petitioners' removal. Said number of votes is more
than enough to oust petitioners from their respective
positions as members of the board, with or without
cause.
Verily therefore, there is no cogent reason to grant the
present petition.
WHEREFORE, the petition is DENIED for lack of merit.

Petitioners Raniel and Pag-ong's removal as members

of Nephro's Board of Directors was likewise valid.

Only stockholders or members have the power to

remove the directors or trustees elected by them, as laid
down in Section 28 of the Corporation Code,16 which
provides in part:

SEC. 28. Removal of directors or trustees. -- Any

director or trustee of a corporation may be removed
from office by a vote of the stockholders holding or
representing at least two-thirds (2/3) of the
outstanding capital stock, or if the corporation be a
non-stock corporation, by a vote of at least two-thirds
(2/3) of the members entitled to vote: Provided, that such
removal shall take place either at a regular meeting of
the corporation or at a special meeting called for the
purpose, and in either case, after previous notice to
stockholders or members of the corporation of the
intention to propose such removal at the meeting. A
special meeting of the stockholders or members of a
corporation for the purpose of removal of directors or
trustees or any of them, must be called by the secretary
on order of the president or on the written demand of the
stockholders representing or holding at least a majority
of the outstanding capital stock, or if it be a non-stock
corporation, on the written demand of a majority of the
members entitled to vote. x x x Notice of the time and
place of such meeting, as well as of the intention to