In the Philippine legal system, the requirement for a certification against forum shopping is strictly enforced to prevent parties from simultaneously pursuing the same case in multiple courts. This case underscores the necessity for corporations to explicitly authorize representatives, typically through a board resolution, to sign such certifications. The Supreme Court ruled that without this explicit authorization, the case could be dismissed due to a lack of proper verification, highlighting the importance of adherence to procedural rules in litigation.

Who Can Sign? Corporate Authority and the Anti-Forum Shopping Rule

The case of Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company arose from an insurance claim related to spoiled goods during shipment. Kemper Insurance Company, having paid the claim of its insured, Genosi, Inc., sought to recover the amount from Cosco Philippines Shipping, Inc., alleging negligence in the handling of the goods. However, Cosco challenged Kemper’s legal standing, questioning the authority of the attorney who signed the certification against forum shopping on behalf of Kemper. This challenge questioned whether the attorney, Atty. Rodolfo Lat, had the proper authorization from Kemper to represent them in court.

The central legal question revolved around the validity of the certification against forum shopping. Philippine jurisprudence requires that this certification be signed by the principal party. For corporations, this means a duly authorized officer or agent. The Supreme Court has consistently held that the certification must be signed by the principal parties, and if someone signs on their behalf, they must be duly authorized. This requirement aims to ensure that the person signing is fully aware of the case and affirms that no similar actions are pending.

In analyzing this case, the Supreme Court emphasized the necessity of proving that the person signing the certification against forum shopping on behalf of a corporation is duly authorized. A Special Power of Attorney (SPA) was presented, but the Court found it insufficient because the person who executed the SPA, Brent Healy, an underwriter for Kemper, had not demonstrated that he had the authority from Kemper’s board of directors to appoint Atty. Lat. The Court noted that:

In Philippine Airlines, Inc. v. Flight Attendants and Stewards Association of the Philippines (FASAP), we ruled that only individuals vested with authority by a valid board resolution may sign the certificate of non-forum shopping on behalf of a corporation. We also required proof of such authority to be presented. The petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatory’s authority.

Building on this principle, the Court reiterated that a corporation’s power to sue and be sued lies with its board of directors, who exercise corporate powers. Actions such as signing documents can only be performed by natural persons authorized by corporate by-laws or a specific act of the board of directors. Therefore, without a clear resolution from Kemper’s board of directors authorizing Atty. Lat to sign the certification, the complaint was deemed fatally defective.

The Court also addressed the argument of laches, which the respondent raised, suggesting that the petitioner delayed in questioning the defect in the certificate of non-forum shopping. The Supreme Court dismissed this argument, citing Tamondong v. Court of Appeals, which held that a complaint filed on behalf of a plaintiff without proper authorization is not deemed filed and does not produce any legal effect. The Court clarified that since Atty. Lat was not duly authorized, the complaint was considered not filed, depriving the court of jurisdiction over the respondent.

Furthermore, the Court clarified the application of estoppel by laches, referencing Regalado v. Go and Tijam v. Sibonghanoy. The Court stated that for the Sibonghanoy doctrine to apply, laches must be clearly present, with the lack of jurisdiction raised so belatedly as to suggest abandonment. In this case, the issue of jurisdiction was raised during the pre-trial stage, and therefore, the petitioner was not estopped from challenging the trial court’s jurisdiction.

The Supreme Court emphasized that procedural rules are essential for ensuring fairness and that their disregard cannot be justified by a policy of liberal construction. Section 5 of Rule 7 of the 1997 Rules of Civil Procedure explicitly states that failure to comply with the requirements of the certification against forum shopping is not curable by mere amendment and shall be cause for the dismissal of the case without prejudice.

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing.

The Supreme Court’s decision underscores the critical importance of adhering to procedural rules, especially regarding the certification against forum shopping. The ruling serves as a reminder to corporations to ensure that their representatives are explicitly authorized to act on their behalf in legal proceedings. Failure to do so can result in the dismissal of their case, regardless of the merits of their claim. Therefore, it is essential for corporations to maintain meticulous records of board resolutions and authorizations to avoid procedural pitfalls.

In conclusion, the Supreme Court granted the petition, reversing the Court of Appeals’ decision and reinstating the Regional Trial Court’s orders dismissing the case. The ruling reinforces the strict application of the rules on certification against forum shopping and the necessity for clear corporate authorization in legal proceedings. This case serves as a cautionary tale for corporations, highlighting the importance of procedural compliance and meticulous record-keeping to ensure their legal standing in court.

FAQs

What was the key issue in this case?	The key issue was whether Atty. Rodolfo Lat was properly authorized by Kemper Insurance Company to sign the certification against forum shopping on its behalf, which is a mandatory requirement for filing a complaint in court.
Why is a certification against forum shopping required?	A certification against forum shopping is required to prevent litigants from simultaneously pursuing the same action in multiple courts, thereby avoiding conflicting decisions and promoting judicial efficiency.
What happens if the certification is not properly signed?	If the certification against forum shopping is not properly signed, the case may be dismissed without prejudice, meaning the plaintiff can refile the case after rectifying the deficiency.
What constitutes proper authorization for a corporation?	Proper authorization for a corporation typically involves a board resolution or secretary’s certificate explicitly granting the signatory the power to represent the corporation in legal proceedings and to sign the necessary certifications.
Can a Special Power of Attorney (SPA) suffice as proof of authorization?	An SPA can suffice, but only if the person who executed the SPA on behalf of the corporation has the authority to do so, which usually requires a board resolution or secretary’s certificate establishing their power.
What is the doctrine of laches, and how did it apply in this case?	Laches is the failure to assert a right within a reasonable time, warranting a presumption that the party has abandoned it. The Court held that laches did not apply because the issue of jurisdiction was raised during the pre-trial stage, not after a significant delay.
What is estoppel, and how does it relate to jurisdiction?	Estoppel prevents a party from denying a fact that has already been established. In this context, it could prevent a party from challenging the court’s jurisdiction if they had previously participated in the proceedings without raising the issue. However, the Court found no basis for estoppel in this case.
What is the significance of this ruling for corporations?	This ruling emphasizes the importance of ensuring that corporate representatives are explicitly authorized to sign legal documents, such as the certification against forum shopping, to avoid procedural errors that could lead to the dismissal of their cases.
What is the effect of filing an unauthorized complaint?	An unauthorized complaint is considered not filed and has no legal effect. This means the court does not acquire jurisdiction over the case, and any subsequent proceedings are invalid.

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: Cosco Philippines Shipping, Inc. vs. Kemper Insurance Company, G.R. No. 179488, April 23, 2012