LBL Industries, Inc. v. City of Lapu-Lapu
REITERATIONFacts
The Antecedents: Respondent City of Lapu-Lapu initiated an expropriation proceeding to acquire a portion of Lot No. 4839, registered to petitioner LBL Industries, Inc., for a road opening project. Initially seeking 300 square meters, the City amended its complaint to expropriate 2,750 square meters. Upon depositing 15% of the property's fair market value, the City took possession and utilized the land. Petitioner LBL Industries, Inc. filed an Answer, authorizing its officer, Elsie Tan Mariño, to act on its behalf in the eminent domain case. Procedural History: The Regional Trial Court (RTC) issued orders for a writ of possession, which the branch clerk of court failed to implement. Petitioner moved to dismiss the case for the respondent's failure to prosecute for an unreasonable length of time. The RTC denied this motion, directing the respondent to prosecute the case within thirty days, and later denied petitioner's motion for reconsideration, again directing the issuance of a writ of possession. Petitioner then filed a Petition for Certiorari with the Court of Appeals (CA) assailing these RTC orders. The CA dismissed the petition due to deficiencies, including the lack of a board resolution authorizing the signatory to represent the corporation. Petitioner's motion for reconsideration was also denied by the CA. The Petition: Petitioner LBL Industries, Inc. filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's resolutions. The core issues raised are whether the CA erred in holding that a Secretary's Certificate was insufficient proof of authority for Roberto Z. Sison to represent the corporation in filing the Petition for Certiorari, and whether the CA erred in dismissing the case on a technicality when valid grounds existed to set aside the RTC's denial of the motion to dismiss. Petitioner argues that the Secretary's Certificate, along with a subsequent Board Resolution, sufficiently authorized its representative, and that the CA should have addressed the merits of the case rather than dismissing it on procedural grounds.
Issue(s)
Whether the Court of Appeals erred in holding that the Secretary's Certificate executed by the Assistant Corporate Secretary authorizing Roberto Z. Sison to act for and on behalf of the Petitioner Corporation in filing the Petition for Certiorari did not constitute sufficient proof of Sison's authority to represent the corporation. Whether the Court of Appeals erred in dismissing the case based on a technicality when Petitioner had substantially raised valid grounds to set aside the Orders of the trial court denying Petitioner's Motion to Dismiss for failure of the respondent to prosecute the case for an unreasonable length of time.
Ruling
The Supreme Court partially granted the petition. It reversed and set aside the CA Resolutions, holding that petitioner's representative was duly authorized to sign the verification and certification against forum shopping, as a Secretary's Certificate is sufficient proof of such authority. However, the Court affirmed the RTC Orders denying the motion to dismiss, but directed the RTC to take immediate action on all pending matters, set the case for pre-trial, and expedite the resolution of the expropriation case in the interest of substantial justice.
Ratio Decidendi
On Issue 1: The Supreme Court held that the Court of Appeals erred in dismissing the petition for certiorari based on the alleged lack of authority of Roberto Z. Sison to represent LBL Industries, Inc. The Court reiterated its stance that a Secretary's Certificate, attesting to a board resolution that authorizes an individual to file a suit or represent the corporation, is sufficient proof of authority. In this case, the Secretary's Certificate executed by Elsie T. Mariño, Assistant Corporate Secretary, clearly stated that the Board of Directors, in a special meeting on April 8, 2011, authorized both Mariño and Sison to represent the corporation in the eminent domain case. This certificate, along with the earlier one authorizing Mariño to act on behalf of the corporation in the initial stages of the case, demonstrated that Sison was indeed authorized. The Court found that the CA's dismissal on this ground was too strict and overlooked the established jurisprudence on the matter. On Issue 2: The Supreme Court affirmed the RTC's denial of petitioner's motion to dismiss the expropriation case for failure to prosecute for an unreasonable length of time. While acknowledging that Section 1, Rule 18 of the Rules of Court, as superseded by A.M. No. 03-1-09-SC, places the duty on the plaintiff to promptly move for pre-trial within five days from the filing of the reply, and that failure to do so can lead to dismissal under Section 3, Rule 17, the Court found justifiable reasons for the delay in this specific case. The Court noted that the delay was partly due to the RTC's failure to resolve petitioner's own motion for joint survey and pre-trial setting, and the branch clerk of court's failure to implement the writ of possession orders. Furthermore, the respondent city had not moved for pre-trial because the petitioner had already done so, making another motion from the respondent redundant. The Court also considered that the respondent had deposited the initial payment and taken possession of the property, indicating a continued interest in the project. However, to prevent further prejudice to the petitioner due to the prolonged occupation without just compensation, the RTC was directed to expedite the proceedings.
Main Doctrine
A Secretary's Certificate is sufficient proof of authority for an individual to represent a corporation in legal proceedings, and the duty to set a case for pre-trial, after the plaintiff's failure to move for it within the prescribed period, now falls upon the Branch Clerk of Court under A.M. No. 03-1-09-SC, although the plaintiff's duty to diligently prosecute the case remains. The Court also emphasized that substantial justice should prevail over strict technicalities when procedural defects can be cured.