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BANK OF PHILIPPINE ISLANDS v. CA

FACTS:

This case involves a petition for review on certiorari filed by the Bank of the Philippine Islands (BPI) seeking the reversal of the Court of Appeals (CA) decision affirming the Regional Trial Court's (RTC) order granting the motion to dismiss filed by First Union Group Enterprises (First Union) and Linda Wu Hu (Linda). First Union borrowed a total of Five Million Pesos (PhP5,000,000.00) and One Hundred Twenty Thousand U.S. Dollars and 32 cents (USD123,218.32) from BPI and executed a Real Estate Mortgage Agreement and Comprehensive Surety Agreement as partial security. Despite demands for payment, First Union failed to settle its obligations. BPI initiated extra-judicial foreclosure proceedings, sold the mortgaged properties at public auction, and applied the proceeds to the costs and expenses of foreclosure. However, First Union still owed BPI a balance of Four Million Seven Hundred Forty Two Thousand Nine Hundred Forty Nine & 32/100 Pesos (PhP4,742,949.32) and One Hundred Seventy Five Thousand Three Hundred Twenty Four Thousand & 35/100 US Dollars (USD175,324.35). BPI filed a complaint for collection of a sum of money with the RTC of Makati City, which First Union and Linda moved to dismiss on the ground that BPI violated the Rules of Civil Procedure. BPI argued that the verification and certificate of non-forum shopping were sufficient to establish authority, but attached a Special Power of Attorney executed by its Vice-President instead of a board resolution. The RTC granted the motion to dismiss, which was affirmed by the CA. BPI now seeks reversal of the CA's decision through a petition for review on certiorari before the Supreme Court.

ISSUES:

  1. Whether or not the submission of a board resolution is necessary and mandatory for compliance with the rule on non-forum shopping.

  2. Whether or not the liberal jurisprudential exception in Shipside applies to excuse the failure to submit a board resolution.

  3. Whether the submission of a board resolution authorizing the filing of a complaint is necessary for compliance with the certification requirement on non-forum shopping.

  4. Whether the failure to submit a board resolution can be cured by mere amendment of the complaint or other initiatory pleading.

RULING:

  1. The submission of a board resolution is necessary and mandatory for compliance with the rule on non-forum shopping.

  2. The liberal jurisprudential exception in Shipside does not apply to excuse the failure to submit a board resolution. Any liberal application of the rule on non-forum shopping must be justified by ample and sufficient reasons that maintain the integrity of the rule.

  3. The submission of a board resolution authorizing the filing of a complaint is necessary for compliance with the certification requirement on non-forum shopping. The failure to submit a board resolution is a cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing.

  4. The failure to submit a board resolution cannot be cured by mere amendment of the complaint or other initiatory pleading.

PRINCIPLES:

  • The verification of a complaint and the attachment of a certificate of non-forum shopping are basic, necessary, and mandatory requirements for procedural orderliness.

  • Procedural rules are not to be disdained as mere technicalities but are important in ensuring the effective enforcement of substantive rights through the orderly and speedy administration of justice.

  • The application of procedural rules must generally be upheld, and the suspension or relaxation of their application is the exception.

  • Compliance with procedural rules is indispensable for the prevention of needless delays and the orderly and expeditious dispatch of judicial business.

  • The submission of a board resolution is necessary and mandatory for compliance with the rule on non-forum shopping, and subsequent compliance does not excuse the initial failure to comply.

  • Liberal construction of the rules may be invoked in situations where there may be some excusable formal deficiency or error in a pleading, provided that it does not subvert the essence of the proceeding and connotes at least a reasonable attempt at compliance with the rules.

  • Compliance with the certification requirement on non-forum shopping should not be made subject to a party's afterthought.

  • Failure to comply with the certification requirement shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing.