Case Summary (G.R. No. 179488)
Complaint and pleadings
After respondent’s payment, respondent demanded indemnity from petitioner; petitioner refused to pay. Respondent then filed a Complaint for Insurance Loss and Damages on October 28, 1999 seeking US$64,492.58 (or equivalent in pesos), interest from date of demand, 25% attorney’s fees and costs. Petitioner answered denying liability and raising defenses including lack of capacity to sue on respondent’s part (unlicensed foreign insurer), prescription, lack of timely claim, and that loss was due to causes beyond carrier’s control or due to inherent nature/insufficient packing/acts of consignee/stevedores. During pre-trial respondent proffered exhibits; petitioner indicated it would mark exhibits later.
Motion to dismiss and RTC ruling
On November 8, 2001 petitioner moved to dismiss arguing the complaint was signed by Atty. Rodolfo Lat who failed to show authority to sign the certification against forum shopping, and that the certification was thus invalid under Section 5, Rule 7. The RTC, in an Order dated March 22, 2002, granted the motion and dismissed the case without prejudice, holding that the certification must be executed by the plaintiff or principal party (not counsel) and that respondent’s counsel lacked a Special Power of Attorney to sign on its behalf. The trial court denied respondent’s motion for reconsideration on July 9, 2002.
Court of Appeals decision
On respondent’s appeal the CA reversed and set aside the RTC order in a March 23, 2007 decision. The CA recognized the general requirement that the certificate of non-forum shopping must be signed by the plaintiff or an authorized individual on behalf of a corporate plaintiff, but considered the factual circumstances sufficient to warrant a liberal application of the rule and remanded the case to the trial court for further proceedings. The CA denied petitioner’s motion for reconsideration on September 3, 2007.
Issue presented to the Supreme Court
Whether Atty. Rodolfo Lat was properly authorized by respondent to sign the certification against forum shopping on respondent’s behalf, given the absence at filing of proof of authority (board resolution or secretary’s certificate), and whether the SPA dated May 11, 2000 signed by Brent Healy cured the defect.
Governing rule on certification and authority
The Court reiterated established precedent: the certification against forum shopping must be signed by the principal parties; if someone signs on their behalf that person must be duly authorized. For corporations, the certification may be signed by a specifically authorized lawyer who has personal knowledge of the facts, but such authority must be evidenced by a board resolution or secretary’s certificate because corporations act through their board and duly authorized officers or agents. The absence of the required proof of authority at filing generally renders the certification fatally defective and is cause for dismissal of the complaint without prejudice under Section 5, Rule 7. Prior cases where the rule was relaxed did so only under special circumstances and typically where subsequent compliance by submitting proof of authority was effected.
Analysis of respondent’s authority evidence
The Court found no proof that respondent’s board of directors authorized Brent Healy to execute the SPA naming Atty. Lat as attorney-in-fact, nor was there any board resolution or secretary’s certificate submitted either at filing or subsequently to validate Healy’s power to appoint counsel and to authorize counsel to sign the certification. The SPA dated May 11, 2000, signed by Healy and notarized before the Consulate General of Chicago, was held to be fatally defective and lacked evidentiary value because it did not establish Healy’s authority to act on respondent’s behalf. The Court emphasized that the power to appoint and authorize agents for corporate acts should be evidenced by the usual corporate documents.
Consideration of precedents permitting relaxation
The Court reviewed authorities where dismissal was not enforced despite initial lack of proof of authority — Republic v. Coalbrine, China Banking v. Mondragon, Abaya Investments v. Merit Philippines — and pointed out that those cases involved subsequent compliance or special circumstances (e.g., board ratification, case already decided on merits, avoidance of relitigation). By contrast, in the present case there was neither subsequent submission of proof of authority nor an adequate explanation for noncompliance; hence, the exceptional relief accorded in those precedents was not appropriate here.
Estoppel/laches argument rejected
Petitioner argued respondent was estopped by laches from attacking the defect in the certification. The Court rejected this, citing established principles that absence of authority renders the complaint not filed and ineffectual; jurisdiction over the plaintiff is acquired only upon filing a valid complaint. The Court recalled that estoppel by laches to bar a jurisdictional defense req
...continue readingCase Syllabus (G.R. No. 179488)
Case Caption and Procedural Posture
- G.R. No. 179488; Decision promulgated April 23, 2012 by the Supreme Court (Peralta, J., writing); reported at 686 Phil. 327, Third Division.
- Petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision and Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 75895, entitled Kemper Insurance Company v. Cosco Philippines Shipping, Inc.
- Relief sought: reversal of CA Decision dated March 23, 2007 and CA Resolution dated September 3, 2007; reinstatement of the Regional Trial Court (RTC), Branch 8, Manila Orders dated March 22, 2002 and July 9, 2002.
Parties and Their Status
- Petitioner: Cosco Philippines Shipping, Inc. — a domestic shipping company organized in accordance with Philippine laws.
- Respondent: Kemper Insurance Company — a foreign insurance company based in Illinois, USA; asserted not to be doing business in the Philippines except in isolated transactions and had no license to engage in business in the Philippines.
- Third party/insured and claimant: Genosi, Inc. — owner/consignee of the imported frozen boneless beef shipment involved in the dispute; represented by its General Manager, Avelino S. Mangahas, Jr., in executing the Loss and Subrogation Receipt.
Facts of the Case — Shipment, Losses, and Adjustment
- In 1998 respondent (Kemper) insured the shipment of imported frozen boneless beef owned by Genosi, Inc., loaded at a port in Brisbane, Australia, for shipment to Genosi, Inc. in the Philippines.
- Upon arrival at the Manila port, a portion of the shipment was rejected by Genosi, Inc. due to spoilage allegedly arising from temperature fluctuations of petitioner’s reefer (refrigerated) containers.
- Genosi, Inc. filed a claim against both Cosco (petitioner) and Kemper (respondent). The claim was referred to McLarens Chartered for investigation, evaluation, and adjustment.
- After processing the claim documents, McLarens Chartered recommended settlement in the amount of US$64,492.58, which Genosi, Inc. accepted.
- Respondent Kemper paid Genosi, Inc. the US$64,492.58 settlement.
Loss and Subrogation Receipt
- On September 22, 1999, Genosi, Inc., through Avelino S. Mangahas, Jr., executed a Loss and Subrogation Receipt stating:
- Receipt from respondent of US$64,492.58 as full and final satisfaction and compromise for losses and expenses sustained by the property insured under various policy numbers.
- Losses were due to spoilage brought about by machinery breakdown occurring on specified dates in October, November, and December 1998.
- In consideration thereof, Genosi, Inc. subrogated respondent to its claims to the extent of the said amount.
Claim by Respondent Against Petitioner and Complaint Filed
- After payment, respondent made demands upon petitioner to recover the settlement amount but petitioner allegedly failed and refused to pay.
- On October 28, 1999 respondent filed a Complaint for Insurance Loss and Damages (Civil Case No. 99-95561) in the RTC, Branch 8, Manila, alleging:
- Repeated demands for US$64,492.58 were ignored, causing damage to respondent.
- The loss was due to petitioner’s fault and negligence — specifically fluctuations in reefer container temperature caused by breakdown in the electronics controller assembly.
- Petitioner should be held liable to pay US$64,492.58 (or equivalent P2,594,513.00 at prevailing exchange), interest from date of demand, 25% of the whole amount due as attorneys’ fees (the fee respondent agreed to pay counsel), and costs.
Petitioner's Answer and Defenses
- In its Answer dated November 29, 1999, petitioner raised, among others, the following defenses:
- Respondent had no capacity to sue because it was doing business in the Philippines without the required license.
- The complaint had prescribed and/or was barred by laches.
- No timely claim was filed against petitioner.
- Any loss or damage was due to causes beyond the carrier’s control, inherent nature or insufficient packing of the shipment, fault of the consignee, or fault of hired stevedores or arrastre operator, or acts/omissions of persons for whose acts the carrier cannot be held liable.
- The subject shipment was discharged under required temperature and was complete, sealed, and in good order condition.
Pre-Trial Proceedings and Proffer of Exhibits
- During pre-trial proceedings respondent’s counsel proffered and marked exhibits.
- Petitioner’s counsel manifested intent to mark petitioner’s exhibits on the next scheduled pre-trial date.
Motion to Dismiss by Petitioner and Grounds
- On November 8, 2001 petitioner filed a Motion to Dismiss contending:
- The complaint was filed by Atty. Rodolfo A. Lat, who failed to show authority to sue and to sign the corresponding certification against forum shopping.
- Atty. Lat’s act of signing the certification against forum shopping violated Section 5, Rule 7 of the 1997 Rules of Court because the certification must be executed by the plaintiff/principal party and not by counsel.
RTC Order Granting Motion to Dismiss
- RTC, Branch 8, Manila issued an Order dated March 22, 2002 granting petitioner’s Motion to Dismiss and dismissed the case without prejudice, reasoning:
- It is mandatory that the certification must be executed by the petitioner himself and not by counsel.
- Respondent’s counsel did not have a Special Power of Attorney (SPA) to act on its behalf; therefore the certification against forum shopping executed by counsel was fatally defective and constituted valid cause for dismissal.
- Respondent’s Motion for Reconsideration was denied by the trial court in an Order dated July 9, 2002.
Court of Appeals Decision and Resolution
- On appeal, the CA in its Decision dated March 23, 2007 reversed and set aside the trial court’s orde