Lim v. Bank of the Philippine Islands
REITERATIONFacts
The Antecedents: Respondent Bank of the Philippine Islands (BPI) filed a complaint for collection of money with a prayer for preliminary injunction against petitioners Spouses Eugene L. Lim and Constancia Lim. The complaint was signed by Francisco R. Ramos, BPI Assistant Vice-President and Mindanao Region Lending Head. Petitioners moved to dismiss, citing a pending foreclosure proceeding with a different cause of action, which the Regional Trial Court (RTC) denied. Petitioners also moved to consolidate cases, which was denied. Procedural History: Petitioners filed a second motion to dismiss, alleging a fatal defect in the verification and certification against forum shopping, as Ramos allegedly lacked the authority to file the complaint. BPI submitted a Special Power of Attorney (SPA) granting Ramos authority, and a Corporate Secretary's Certificate showing authorization for such SPAs. BPI argued substantial compliance and that petitioners were estopped by laches. The RTC denied the second motion to dismiss and the subsequent motion for reconsideration. Petitioners assailed these denials via certiorari before the Court of Appeals (CA). The Petition: The CA dismissed the certiorari petition, ruling that the belatedly submitted SPA and Corporate Secretary's Certificate constituted substantial compliance. The CA also noted that an Assistant Vice-President holds a sufficiently elevated position to be presumed knowledgeable of verification requirements. Petitioners sought review from the Supreme Court.
Issue(s)
Whether the Court of Appeals gravely erred in affirming the RTC's denial of the motion to dismiss due to the alleged lack of authority of Francisco R. Ramos to file the complaint and sign its attached verification and certification against forum shopping; specifically, whether BPI's subsequent actions ratified Ramos's representation. Whether the Special Power of Attorney and Corporate Secretary's Certificate belatedly submitted by BPI constituted substantial compliance with the requirements under the rules on verification and certification, and the effect of Ramos's position within BPI.
Ruling
The Supreme Court denied the petition for review on certiorari, affirming the decision of the Court of Appeals. The Court held that the CA did not commit any reversible error in its assailed decision and resolution.
Ratio Decidendi
On the alleged lack of authority of Francisco R. Ramos: The Court found that at the time the complaint was filed, Ramos did not have express authority. However, BPI's subsequent execution of the Special Power of Attorney (SPA) constituted a ratification of Ramos' unauthorized representation. The Court cited PNCC Skyway Traffic Management and Security Division Workers Organization v. PNCC Skyway Corporation where a subsequent board resolution authorizing the union president was deemed a ratification curing defects in the verification. A corporation can ratify the unauthorized acts of its officers, and this ratification confirms what its agent has done without or with insufficient authority. The Court also noted that Ramos, as Assistant Vice-President for BPI Northern Mindanao, held a sufficiently high and authoritative position to verify the allegations and file the complaint, and any strictly corporate deficiency was cured by the subsequent SPA. On whether the SPA and Corporate Secretary's Certificate constituted substantial compliance: The Court affirmed the CA's ruling that these documents constituted substantial compliance. The Court reiterated that verification and certification against forum shopping are not jurisdictional requirements. Verification ensures good faith, and non-compliance does not necessarily render a pleading fatally defective, especially when signed by someone with ample knowledge of the allegations' truthfulness. The certification against forum shopping, while obligatory, can be cured by subsequent correction or submission under special circumstances or on the ground of substantial compliance. The Court found that the belated submission of the SPA and the Corporate Secretary's Certificate, coupled with Ramos' position, satisfied the requirements of substantial compliance, thereby curing any initial defect.
Main Doctrine
A corporation can ratify the unauthorized acts of its officers, and the subsequent issuance of a Special Power of Attorney or a Board Resolution can cure defects in the verification and certification against forum shopping, constituting substantial compliance. Furthermore, the requirements of verification and certification against forum shopping are not jurisdictional and non-compliance can be cured under special circumstances or through substantial compliance.