In LBL Industries, Inc. v. City of Lapu-Lapu, the Supreme Court clarified that a Secretary’s Certificate is sufficient proof of a corporate officer’s authority to represent the corporation in legal proceedings. This ruling prevents the dismissal of cases based on mere technicalities, ensuring that substantial justice prevails. The Court emphasized that dismissing a case due to a lack of a formal board resolution, when a Secretary’s Certificate is already provided, elevates form over substance and undermines the pursuit of justice. This decision reaffirms the importance of resolving cases on their merits rather than on procedural defects.

When Technicalities Obscure Justice: Examining Corporate Representation in Eminent Domain

This case arose from an eminent domain complaint filed by the City of Lapu-Lapu to expropriate a portion of LBL Industries’ land for a road opening project. LBL Industries contested the expropriation, and the case eventually reached the Court of Appeals (CA). The CA dismissed LBL’s petition for certiorari based on several procedural defects, including the alleged lack of a proper board resolution authorizing the corporation’s representative, Roberto Sison, to act on its behalf. This ruling hinged on the CA’s interpretation of what constitutes sufficient proof of authority for a corporate officer to represent the corporation in court.

The Supreme Court disagreed with the CA’s strict interpretation. The Court highlighted that a Secretary’s Certificate, which attests to the board’s resolution, is generally sufficient to establish the authority of a corporate representative. The Court cited previous cases that have recognized the validity of a Secretary’s Certificate for this purpose, underscoring a consistent legal principle. The Court referred to Vicar International Construction, Inc. v. FEB Leasing and Finance Corp., stating:

In Shipside Incorporated v. Court of Appeals, the petitioner had not attached any proof that its resident manager was authorized to sign the Verification and the non-forum shopping Certification, as a consequence of which the Petition was dismissed by the Court of Appeals. Subsequent to the dismissal, however, the petitioner filed a motion for reconsideration, to which was already attached a Certificate issued by its board secretary who stated that, prior to the filing of the Petition, the resident manager had been authorized by the board of directors to file the Petition.

Building on this principle, the Supreme Court emphasized that the CA erred in requiring a formal board resolution when a Secretary’s Certificate was already provided. The Court noted that LBL Industries had presented Secretary’s Certificates executed shortly before filing both the answer to the expropriation complaint and the petition for certiorari. These certificates explicitly authorized the designated representatives to act on behalf of the corporation in the eminent domain case.

However, the Supreme Court also addressed the issue of whether the trial court erred in denying LBL’s motion to dismiss the case due to the City of Lapu-Lapu’s alleged failure to prosecute the case diligently. LBL argued that the city had failed to set the case for pre-trial within a reasonable time, violating the Rules of Court. The Court acknowledged that the duty to set a case for pre-trial initially rests with the plaintiff. However, the Court also noted that the rules had been amended, shifting the responsibility to the branch clerk of court if the plaintiff fails to act within a specified period.

The Court also examined Section 3 of Rule 17, which pertains to the dismissal of a case due to the plaintiff’s fault, stating:

Sec. 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails x x x to prosecute his action for an unreasonable length of time, x x x the complaint may be dismissed upon motion of the defendant or upon the court’s own motion x x x.

Despite these considerations, the Supreme Court ultimately sided with the City of Lapu-Lapu on this issue. The Court found that the delay in prosecuting the case was not solely attributable to the city but also to the trial court’s own inaction in resolving pending motions and setting the case for pre-trial. The Court further recognized that LBL Industries itself had contributed to the delay by filing a motion for a joint survey, which remained unresolved.

The Court stated:

A consideration of the events that transpired in the said expropriation case readily shows that the delay cannot solely be attributed to respondent City of Lapu Lapu but is in fact due to the failure of the branch clerk of court to set the case for pre-trial pursuant to A.M. No. 03-1-09-SC, as well as the trial court’s delay in resolving petitioner’s Motion to Conduct Joint Survey and Set the Case for Pre-Trial.

In balancing the interests of both parties and promoting justice, the Supreme Court affirmed the trial court’s denial of LBL’s motion to dismiss. However, the Court also directed the trial court to expedite the resolution of the case, considering the long delay and the potential prejudice to LBL Industries. The Court ordered the trial court to take immediate action on all pending matters, set the case for pre-trial, and expedite the resolution of the expropriation case to ensure that LBL Industries receives just compensation for the use of its property.

This ruling underscores the principle that procedural rules should not be used to frustrate the ends of justice. By prioritizing the substance of the matter over technical formalities, the Supreme Court ensured that the expropriation case could proceed to a resolution on its merits, while also protecting the rights of LBL Industries to just compensation for its property.

FAQs

What was the key issue in this case?	The main issue was whether a Secretary’s Certificate is sufficient proof of a corporate officer’s authority to represent the corporation in legal proceedings, specifically in an eminent domain case. The court had to determine if dismissing the case for lack of a formal board resolution was justified when a Secretary’s Certificate was provided.
What is a Secretary’s Certificate?	A Secretary’s Certificate is a document signed by the corporate secretary attesting to certain facts, such as the adoption of a resolution by the board of directors. It serves as evidence of the actions taken by the corporation’s governing body.
Why did the Court of Appeals dismiss the case?	The Court of Appeals dismissed the petition due to procedural defects, including the lack of a board resolution expressly authorizing Roberto Sison to represent LBL Industries. The CA deemed the Secretary’s Certificate insufficient proof of such authority.
How did the Supreme Court rule on the issue of the Secretary’s Certificate?	The Supreme Court reversed the Court of Appeals’ decision, holding that the Secretary’s Certificate was indeed sufficient proof of Sison’s authority to represent LBL Industries. The Court emphasized that requiring a separate board resolution elevated form over substance.
What is the significance of this ruling for corporations?	This ruling clarifies that corporations can rely on Secretary’s Certificates to prove the authority of their representatives in legal proceedings. It provides a more streamlined approach and prevents cases from being dismissed based on technicalities.
What was the eminent domain case about?	The City of Lapu-Lapu sought to expropriate a portion of LBL Industries’ land for a road opening project. Eminent domain is the power of the government to take private property for public use upon payment of just compensation.
Did the Supreme Court address the issue of delay in the case?	Yes, while the Court acknowledged the delay in prosecuting the case, it found that the delay was not solely attributable to the City of Lapu-Lapu. The Court also directed the trial court to expedite the resolution of the case.
What is the practical effect of the Supreme Court’s decision?	The decision allows the eminent domain case to proceed on its merits, ensuring that the issues of just compensation and public use can be properly addressed. It also prevents unnecessary delays caused by procedural technicalities.

In conclusion, the Supreme Court’s decision in LBL Industries, Inc. v. City of Lapu-Lapu serves as a reminder that legal proceedings should prioritize substance over form. The Court’s ruling ensures that corporations are not unduly prejudiced by technicalities and that cases are resolved on their merits, promoting fairness and justice.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: LBL Industries, Inc. v. City of Lapu-Lapu, G.R. No. 201760, September 16, 2013