Title
Supreme Court
Bank of the Philippine Islands vs. Court of Appeals
Case
G.R. No. 168313
Decision Date
Oct 6, 2010
BPI filed a collection case against First Union and Linda Wu Hu for unpaid loans. The complaint was dismissed due to BPI's failure to attach a board resolution authorizing the signatories, a mandatory procedural requirement. The Supreme Court upheld the dismissal, emphasizing strict compliance with procedural rules.

Case Summary (G.R. No. 189162)

Factual Background

First Union Group Enterprises borrowed PhP5,000,000.00 and USD123,218.32 from BPI, evidenced by promissory notes. To partially secure this loan, Linda Wu Hu and her spouse executed a Real Estate Mortgage covering two condominium units and a Comprehensive Surety Agreement making Linda solidarily liable with First Union. First Union defaulted on the loans. BPI initiated extrajudicial foreclosure proceedings on the mortgaged properties, which were sold at public auction with BPI as the highest bidder. Despite application of the proceeds to the loan, First Union's debt remained unpaid with outstanding principal, interests, and penalties.

Procedural History

Due to non-payment, BPI filed a complaint for collection of sums due against First Union and Linda before the RTC of Makati City on January 3, 2002. The complaint included verification and certificate of non-forum shopping signed by Ma. Cristina F. Asis and Kristine L. Ong but lacked a Secretary’s Certificate or Board Resolution evidencing their authority to file the case. First Union and Linda moved to dismiss on grounds that the lack of a board resolution rendered the complaint defective under Rule 7, Section 5 of the Rules of Civil Procedure. BPI opposed the motion, submitting a Special Power of Attorney (SPA) executed by a BPI Vice-President authorizing the filing lawyers but not the board resolution. The RTC granted the motion to dismiss, and denied BPI’s motion for reconsideration.

Proceedings Before the Court of Appeals

BPI filed a petition for certiorari under Rule 65, arguing grave abuse of discretion by the RTC. The CA upheld the dismissal, reasoning that the lack of an attached board resolution to the verified complaint constituted non-compliance with the procedural requisite for certification against forum shopping, which applies equally to corporations. The CA held that the SPA submitted by BPI was insufficient, and that no substantial compliance could excuse the omission of the required authority document at the time of filing. The CA refused to entertain BPI’s argument that authority could be shown during trial or by subsequent submission of documents.

Petitioner’s Arguments on Appeal

BPI contended that the submission of verification and certificate of non-forum shopping by the authorized officers should suffice, drawing analogy to the Supreme Court’s ruling in Shipside v. Court of Appeals, where belated submission of authority was excused as substantial compliance. BPI also cited General Milling Corp. v. National Labor Relations Commission, arguing that such belated submission was permissible in view of the principle of substantial justice and that technical defects should not defeat substantive rights. BPI urged the Court to reverse the CA decision and remand for further trial.

Respondent’s Arguments

First Union and Linda accused BPI of willful disregard for procedural rules, emphasizing that BPI initially took the position that no board resolution was necessary, opposing the motion to dismiss on this basis. They argued that submission of a SPA cannot substitute for the required board resolution, especially when given belatedly and after the motion to dismiss. They contended that the Shipside exception applies only in special circumstances or compelling reasons, which were absent in this case.

Legal Issue: Compliance with Rule 7, Section 5 on Certification Against Forum Shopping

Under the 1987 Constitution and the Rules of Civil Procedure, verification of pleadings and certification against forum shopping are mandatory procedural requisites intended to ensure orderly administration of justice and prevent multiplicity of suits. Section 5, Rule 7 specifically requires the petition to be verified and to be accompanied by a certificate of non-forum shopping signed by the party or authorized representative. Non-compliance is cause for dismissal without prejudice.

Court’s Analysis on Procedural Compliance

The Supreme Court reaffirmed the mandatory nature of procedural rules, highlighting that verification and certification against forum shopping are fundamental requirements for procedural orderliness and are not mere technicalities. While the Court acknowledged its jurisprudence relaxing strict compliance in some cases, such exceptions apply only under special circumstances or compelling reasons that justify deviation without undermining procedural integrity. Such exception was not warranted here.

The Court distinguished the present case from Shipside, where the petitioner eventually submitted a board resolution showing authority prior to the filing date and only failed to attach it initially. In contrast, BPI in this case initially disputed the requirement for a board resolution and only tendered the SPA and belatedly requested indulgence to submit the Corporate Secretary’s Certificate after the motion to dismiss. This failure to comply was held to be deliberate or due to counsel’s oversight that cannot be disregarded.

Ruling and Disposition

The Court upheld the dismis

    ...continue reading

    Analyze Cases Smarter, Faster
    Jur is a legal research platform serving the Philippines with case digests and jurisprudence resources. AI digests are study aids only—use responsibly.

    About Privacy Terms