Authority to Sue: Why Corporate Resolutions Matter in Forum Shopping Certifications

When a corporation files a lawsuit in the Philippines, the complaint must include a certification against forum shopping signed by a properly authorized person. A recent Supreme Court decision, Cosco Philippines Shipping, Inc. v. Kemper Insurance Company (G.R. No. 179488, April 23, 2012), clarifies what happens when that authority is not proven: the complaint may be dismissed entirely.

The Case: An Insurer's Claim Against a Shipping Company

Kemper Insurance Company, a foreign insurer, paid over US$64,000 to Genosi, Inc. for a shipment of frozen beef that arrived spoiled. After paying the claim, Kemper was subrogated to Genosi's rights against the shipper, Cosco Philippines Shipping, Inc. When Cosco refused to pay, Kemper filed a complaint for damages.

Cosco moved to dismiss the case, arguing that the lawyer who signed the certification against forum shopping, Atty. Rodolfo Lat, had no proven authority to do so. The trial court agreed and dismissed the case. The Court of Appeals reversed, but the Supreme Court reinstated the dismissal.

The Rule: Who May Sign the Certification

Under Section 5, Rule 7 of the Rules of Court, the plaintiff or principal party must sign the certification against forum shopping under oath. This rule is strict: failure to comply is not curable by mere amendment and is a ground for dismissal without prejudice.

For corporations, the rule has a specific application. A corporation acts only through its board of directors or duly authorized officers and agents. Therefore, the certification may be signed by:

• A corporate officer or board member, or
• A lawyer or agent specifically authorized by a board resolution.

The Supreme Court in Philippine Airlines, Inc. v. FASAP held that only individuals vested with authority by a valid board resolution may sign the certification on behalf of a corporation, and proof of that authority must be presented.

The Problem: No Board Resolution, No Secretary's Certificate

In this case, Kemper failed to attach any proof that Atty. Lat was authorized to file the complaint and sign the certification. The only document submitted later was a Special Power of Attorney dated May 11, 2000, appointing Atty. Lat to represent the corporation.

That SPA was fatally defective for two reasons:

1. The signatory lacked authority. The SPA was signed by Brent Healy, described only as an "underwriter." There was no board resolution or secretary's certificate proving Healy had authority to appoint counsel for the corporation.
2. The document was submitted too late. Even if the SPA were valid, it was not attached to the original complaint. The Court noted that the lack of proof of authority was never cured, even belatedly.

Why the Court Refused to Relax the Rules

The Court acknowledged that in some cases it has allowed subsequent compliance—for example, where a board resolution was later attached showing the signatory was already an authorized officer, or where the case had already been decided on the merits and the board ratified the act.

But here, no such special circumstance existed. Kemper submitted no board resolution or secretary's certificate at any point and offered no explanation for its failure to comply. As the Court warned: "Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction."

The Consequence: The Complaint Is Deemed Not Filed

The most significant ruling is the effect of an unauthorized certification. Citing Tamondong v. Court of Appeals, the Court held that when a complaint is filed by someone not authorized to do so, the complaint is deemed not filed and produces no legal effect. The court does not acquire jurisdiction over the plaintiff, and the case must be dismissed.

This also defeated Kemper's argument that Cosco was barred by laches from raising the defect. Since the trial court never acquired jurisdiction, the issue could be raised at any time—even at pre-trial—and was not lost by waiver or estoppel.

Practical Takeaways

• Always attach proof of authority. When a corporation files a complaint, the certification against forum shopping must be accompanied by a board resolution or secretary's certificate showing the signatory's authority.
• A Special Power of Attorney is not enough. An SPA appointing counsel does not prove the corporation authorized the filing of the case. The person who executed the SPA must also have proven authority from the board.
• Defects are rarely curable. The lack of a proper certification is not curable by amendment. Subsequent compliance may be allowed only in exceptional cases with compelling reasons.
• An unauthorized complaint is void. If the certification is signed without authority, the complaint is deemed not filed, and the court never acquires jurisdiction over the plaintiff.
• Act early. Do not wait for the other side to raise the defect. Verify authority before filing, not after a motion to dismiss is served.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.