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BPI v.

CA
October 6, 2010 | Brion, J. | Rule 1 (General Provisions)
PETITIONERS: BPI
RESPONDENTS: CA, Hon. Romeo Barza (as Makati RTC presiding judge), First Union Group
Enterprises, & Linda Wu Hu
SUMMARY: First Union borrowed sums of money from BPI with condominiums used as partial security by its co-debtor Linda Wu
Hu. After failing to satisfy their obligations, the condominiums were sold at auction but that was not enough to cover the accumulated
interest and penalties. When BPI filed a case against them, they attached neither a Secretarys Certificate nor a Board Resolution to
grant Ma. Cristina Asis and Kristine L. Ong authority to initiate the action against them. The Court would ultimately grant the
respondents motion to dismiss on account of said failure to grant authority, as strict procedural requirements must be complied with.
DOCTRINE:
Rule for the submission of a certificate of non-forum shopping, proper in form and substance, remains to be a strict and
mandatory rule; any liberal application has to be justified by ample and sufficient reasons that maintain the integrity of, and
do not detract from, the mandatory character of the rule.
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. [Rule 7, s. 5, par. 2]

FACTS:

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First Union (FU) borrowed sums of P5M and US $120,000.32 from BPI, with Linda Wu Hu and her spouse executing a Real
Estate Mortgage Agreement on 2 condominium units as partial security, followed up with a Comprehensive Surety Agreement,
where she agreed to be solidarily liable w/ FU for its obligations to BPI. Despite repeated demands, FU failed to pay.
On October 16 2000, BPI initiated w/ Pasig RTCs Office of the Sheriff extra-judicial foreclosure proceedings against the condo
units, w/ said properties being sold for auction on June 29, 2001, and BPI was the highest bidder w/ P5,798,400. The proceeds
were applied to the costs and expenses of the foreclosure and then FUs obligation; despite all this FU still owed BPI
P4,742,949.32 inclusive of interests and penalties, still not counting the US $175,324.35 due from the other obligation. Still
Linda and FU would continue to fail these obligations.
On January 3 2002 BPI filed a complaint for collection of sum of money w/ Makati RTC; the complaints verification and
certificate of non-forum shopping were signed but no Secretarys Certificate nor Board Resolution was attached to the signatures
granting the signees such authority. On April 1 2002 FU and Linda filed a motion to dismiss on the ground that BPI violated Rule
7, s. 5 in its failure to attach to the complaint the necessary board resolution granting authority to institute collection action. BPI
opposed saying that (1) verification and certificate of forum-shopping sufficiently established such authority, and (2) a complaint
can only be dismissed under Rule 7, s. 5 if there was no certification against forum shopping, w/o a requirement that the person
certifying should show proof of authority.
Instead of submitting a board resolution, BPI attached a Special Power of Attorney (SPA) executed by its VP, authorizing the
signees (Asis and Ong) or any lawyer from Benedicto Versoza Gealogy and Burkley Law Offices to initiate any legal action
against FU and Linda. FU and Linda opposed this too, saying that BPIs reading of the law lacked jurisprudential support.
RTC would grant Lindas and FUs 1st motion to dismiss as well as dismissing BPIs MR. BPI would file for certiorari under
Rule 65 to the CA, to w/c the respondents replied saying that the remedy is improper as an order granting a motion is not
interlocutory but final, so the proper remedy should be appeal. The CA would disagree w/ the respondents position re proper
remedy but would also dismiss BPIs motion citing a failure to comply w/ procedural requirements for non-forum shopping.

ISSUES/HELD
1. W/N BPIs failure to attach a board resolution to grant authority violates the procedural requirements for non-forum shopping?
YES; the need to abide by the Rules of Court and the procedural requirements it imposes. The verification of a complaint
and the attachment of a certificate of non-forum shopping are requirements that as pointed out by the Court, time and
again are basic, necessary and mandatory for procedural orderliness.
RATIO:

While we may have excused strict compliance in the past, we did so only on sufficient and justifiable grounds
that compelled a liberal approach while avoiding the effective negation of the intent of the rule on non-forum
shopping. In other words, the rule for the submission of a certificate of non-forum shopping, proper in form and
substance, remains to be a strict and mandatory rule; any liberal application has to be justified by ample and
sufficient reasons that maintain the integrity of, and do not detract from, the mandatory character of the rule.

Rules of procedure are intended to ensure the orderly administration of justice and the protection of substantive rights in
judicial and extrajudicial proceedings. It is a mistake to propose that substantive law and adjective law are contradictory to
each other or, as often suggested, that enforcement of procedural rules should never be permitted if it will result in prejudice
to the substantive rights of the litigants. This is not exactly true; the concept is much misunderstood. As a matter of fact, the
policy of the courts is to give both kinds of law, as complementing each other, in the just and speedy resolution of the dispute
between the parties. [Limpot v CA, et al.]

the requirement under Administrative Circular No. 04-94 for a certificate of non-forum shopping is mandatory.
The subsequent compliance with said requirement does not excuse a party's failure to comply therewith in the first instance.
In those cases where this Court excused the non-compliance with the requirement of the submission of a certificate of nonforum shopping, it found special circumstances or compelling reasons which made the strict application of said Circular
clearly unjustified or inequitable. [Tible & Tible v Royal Savings and Loan Association]

Shipside (doctrine that BPI claims guarantees authority): In the Motion for Reconsideration that followed the dismissal of the
case, the movant attached a certificate issued by its board secretary stating that ten (10) days prior to the filing of the petition,
the filing officer had been authorized by petitioners board of directors to file said petition. Thus, proper authority existed but
was simply not attached to the petition. On this submission, the petitioner sought and the Court positively granted relief.

In the present case, we do not see a situation comparable to the cited Shipside. BPI did not submit any proof of
authority in the first instance because it did not believe that a board resolution evidencing such authority was
necessary. In fact, BPI merely attached to its opposition a special power of attorney issued by Mr. Kabigting, a bank
vice-president, granting Asis and Ong the authority to file the complaint. Thus, no direct authority to file a complaint
was initially ever given by BPI the corporate entity in whose name and behalf the complaint was filed.

Only in its Reply to the Comment to plaintiffs Opposition to the Motion to Dismiss did BPI beg the kind indulgence of the
Honorable Court as it inadvertently failed to submit with the Special Power of Attorney the Corporate Secretarys Certificate
which authorized Mr. Zosimo Kabigting to appoint his substitutes. Even this submission, however, was a roundabout way of
authorizing the filing officers to file the complaint. In the usual course in the handling of a case, the failure was a mistake of
counsel that BPI never cared to admit but which nevertheless bound it as a client.

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. [Rule 7, s. 5, par. 2]