Cosco Philippines Shipping v. Kemper Insurance
REITERATIONFacts
The Antecedents: Respondent Kemper Insurance Company, a foreign insurance company not licensed to do business in the Philippines, insured a shipment of imported frozen boneless beef owned by Genosi, Inc. The shipment, upon arrival in Manila, was rejected by Genosi, Inc. due to spoilage allegedly caused by temperature fluctuations in petitioner Cosco Philippines Shipping, Inc.'s reefer containers. Genosi, Inc. filed a claim against both Kemper and Cosco. McLarens Chartered recommended a settlement of $64,492.58, which Genosi, Inc. accepted. Kemper paid the claim and was subrogated to Genosi, Inc.'s rights. Kemper demanded payment from Cosco, which Cosco refused. Procedural History: Kemper filed a complaint for insurance loss and damages against Cosco. Cosco moved to dismiss, arguing, among others, that Kemper lacked the capacity to sue and that the certification against forum shopping was signed by Atty. Rodolfo A. Lat without sufficient proof of authority. The RTC granted the motion to dismiss, ruling that the certification must be executed by the principal and not by counsel without an SPA. The CA reversed, ordering the remand of the case for further proceedings, citing liberal application of rules. Cosco's motion for reconsideration was denied. The Petition: Cosco filed a petition for review on certiorari, arguing that Atty. Lat was not properly authorized to sign the certification against forum shopping, as the SPA was executed by an underwriter without proof of his authority from the board of directors, and the SPA did not specifically grant authority to sign the certification.
Issue(s)
Whether Atty. Rodolfo Lat was properly authorized by respondent Kemper Insurance Company to sign the certification against forum shopping on its behalf. Whether the Court of Appeals erred in reversing the trial court's dismissal of the complaint; and whether the circumstances of the case warrant relaxation of the rules on certification against forum shopping, including considerations of subsequent compliance, ratification, and estoppel by laches.
Ruling
The petition is meritorious. The Court reversed and set aside the Decision and Resolution of the Court of Appeals and reinstated the Orders of the Regional Trial Court, dismissing the complaint.
Ratio Decidendi
On the issue of whether Atty. Rodolfo Lat was properly authorized to sign the certification against forum shopping: The Court reiterated its consistent ruling that the certification against forum shopping must be signed by the principal parties. If signed by counsel, the counsel must be duly authorized. For corporations, the certification may be signed by an authorized lawyer, but proof of authority must be presented. Corporations exercise their powers through their board of directors or authorized officers and agents, and physical acts like signing documents require specific authorization, typically evidenced by a board resolution or secretary's certificate. In this case, there was no proof that respondent corporation authorized Atty. Lat through a board resolution to sign the verification and certification against forum shopping. The SPA submitted was signed by Brent Healy, an underwriter, without proof of his authority to act on behalf of the corporation. Therefore, the certification appended to the complaint was fatally defective. On the issue of whether the Court of Appeals erred in reversing the trial court's dismissal; and whether the circumstances of the case warrant relaxation of the rules on certification against forum shopping, including considerations of subsequent compliance, ratification, and estoppel by laches: The Court found that the circumstances of the case did not warrant the relaxation of the rules on the certification against forum shopping. Unlike in previous cases where subsequent compliance or ratification cured the defect, no such proof was submitted here. The SPA was also found to be fatally defective for failing to establish Healy's authority. The Court emphasized that obedience to procedural rules is necessary for fair results, and liberal construction cannot justify utter disregard of the rules. Furthermore, the Court held that since Atty. Lat was not duly authorized, the complaint was considered not filed and ineffectual, meaning the RTC did not acquire jurisdiction over the person of the respondent. Petitioner was not estopped by laches from questioning the jurisdiction, as the issue was raised during the pre-trial stage, and the factual milieu was not analogous to the Sibonghanoy case where jurisdiction was questioned after a considerable length of time and after actively participating in the proceedings to obtain affirmative relief.
Main Doctrine
A certification against forum shopping executed by counsel without a Special Power of Attorney (SPA) from the corporate principal, or without proof of the signatory's authority from the board of directors, is fatally defective and warrants the dismissal of the complaint, as it constitutes a failure to acquire jurisdiction over the plaintiff.