Facts:

This case revolves around the petition for review on certiorari filed by the Bank of the Philippine Islands (BPI) against the Court of Appeals and Judge Romeo Barza, involving First Union Group Enterprises (First Union) and Linda Wu Hu (Linda) as respondents. The legal conflict originated from a loan transaction initiated by First Union on November 28, 1997, where the bank lent the enterprise ₱5,000,000 and USD 123,218.32, secured by a Real Estate Mortgage and Comprehensive Surety Agreement executed by Linda, asserting her solidary liability with First Union. Despite BPI's demands for payment upon loan maturity, First Union defaulted, prompting BPI to initiate extra-judicial foreclosure proceedings on the mortgaged properties, leading to a public auction of the two condominium units on June 29, 2001.

BPI emerged as the highest bidder at ₱5,798,400, but even after the auction, First Union had an outstanding balance of ₱4,742,949.32 and an unpaid foreign currency obligation of

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Facts:

Parties and Loan Transaction

• Petitioner: Bank of the Philippine Islands (BPI).
• Respondents: First Union Group Enterprises and Linda Wu Hu.
• Loan Details:
• First Union borrowed PhP5,000,000.00 and USD123,218.32 from BPI, evidenced by separate promissory notes.
• As partial security, Linda and her spouse executed a Real Estate Mortgage Agreement covering two condominium units and a Comprehensive Surety Agreement whereby Linda agreed to be solidarily liable with First Union.

Foreclosure and Collection Proceedings

• BPI initiated extra-judicial foreclosure proceedings on October 16, 2000, due to First Union’s failure to pay upon maturity.
• The foreclosure sale took place on June 29, 2001; BPI became the highest bidder with a bid of PhP5,798,400.00.
• Proceeds from the sale were applied first to foreclosure expenses and then to First Union’s obligation, leaving a balance of PhP4,742,949.32 plus an unpaid foreign currency loan of USD175,324.35 as of December 21, 2001.

Initiation of Legal Action by BPI

• A complaint for collection of sum of money was filed on January 3, 2002, with the RTC of Makati City, Branch 61.
• The complaint contained a verification and a certificate of non-forum shopping signed by Ma. Cristina F. Asis and Kristine L. Ong.
• A key deficiency noted was the failure to attach a Secretary’s Certificate or Board Resolution evidencing the authority of Asis and Ong to file the complaint.

Motion to Dismiss and Subsequent Developments

• First Union and Linda filed a Motion to Dismiss on April 1, 2002, arguing that BPI violated Rule 7, Section 5 of the Rules of Civil Procedure by not attaching the board resolution.
• BPI, in its opposition filed on August 7, 2002, contended that the verification and certificate of non-forum shopping adequately established the authority and that the required proof of authority could be supplied during trial.
• Instead of the required board resolution, BPI submitted a Special Power of Attorney (SPA) executed on December 20, 2001, which was deemed insufficient to bind the corporate entity.
• The RTC issued an order on August 22, 2002, granting the motion to dismiss, and subsequently, a Motion for Reconsideration by BPI was denied on November 13, 2002.

Appeal Proceedings and Arguments Raised

• BPI filed a petition for certiorari before the Court of Appeals (CA) on February 5, 2003, alleging grave abuse of discretion on the part of the lower court.
• First Union and Linda argued that the dismissal order was interlocutory (dismissal without prejudice) and that BPI failed to comply with the non-forum shopping requirements even as a corporate petitioner.
• The CA held that even for corporations the certificate against forum shopping must be signed by a duly authorized representative, and that BPI’s failure to attach the board resolution constituted a procedural defect warranting dismissal.
• BPI’s later arguments relied on precedents such as Shipside and General Milling Corporation to justify its position and claim substantial compliance, which was rejected by the CA.

Issue:

Whether the absence of an attached Board Resolution, evidencing the authority to sign the verification and certificate of non-forum shopping, constitutes a fatal defect warranting dismissal under Section 5, Rule 7 of the Rules of Civil Procedure.

• The debate centered around whether the subsequent submission of a Special Power of Attorney could cure the defect.
• Whether technical compliance with the certificate against non-forum shopping requirement is mandatory for both natural and juridical persons.

The appropriateness of invoking the jurisprudential exception (as seen in Shipside) in excusing the failure to attach the required board resolution.

• Determining if such an omission was inadvertent or represented an initial, deliberate stance by BPI.
• Whether after-the-fact amendments or belated submissions can suffice to cure the defect without prejudicing procedural orderliness.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)