Board Resolution Not Always Required for Corporate Verification in Appeals

Mid-Pasig Land Development Corp. v. Tablante (G.R. No. 162924, February 4, 2010) clarifies an important procedural point for corporations involved in litigation: when is a board resolution required for a corporate officer to sign the verification and certification against forum shopping?

The case is a useful reminder that while corporations act through their boards, the rules on verification are applied with some flexibility to avoid technical dismissals that defeat substantial justice.

The Dispute

Mid-Pasig Land Development Corporation owned a parcel of land in Pasig City. In December 1999, it leased about one hectare to ECRM Enterprises for three months as a staging area for a Home and Garden Exhibition Fair. When the lease expired on March 6, 2000, ECRM's proprietor assigned his rights to Rockland Construction Company and Laurie Litam.

Mid-Pasig later discovered that ECRM had entered into another lease contract with MC Home Depot over the same property. MC Home Depot then built 59 commercial stalls and subleased them to various tenants.

When Mid-Pasig demanded that the respondents vacate, Rockland filed a case for specific performance to compel a new three-year lease. Mid-Pasig responded by filing an unlawful detainer case. The municipal trial court dismissed the ejectment case, ruling that the issue—whether ECRM had the right to renew—was incapable of pecuniary estimation and thus belonged to the Regional Trial Court. The RTC affirmed.

The Procedural Issue

Mid-Pasig filed a petition for certiorari with the Court of Appeals. The CA dismissed it on two technical grounds:

1. The verification and certification against non-forum shopping was signed by Antonio Merelos as General Manager, but no corporate secretary's certificate or board resolution was attached showing he was authorized to sign.
2. The petition lacked pertinent documents required by Section 2, Rule 42 of the Rules of Civil Procedure.

The Supreme Court's Ruling

The Supreme Court reversed the CA and granted the petition.

The Court acknowledged the general rule from the Corporation Code: all corporate powers are exercised by the board of directors, and an individual corporate officer cannot exercise corporate powers without board authority.

However, the Court recognized exceptions. Citing Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue (G.R. No. 151413, February 13, 2008), the Court listed corporate officers who may sign the verification and certification without a board resolution:

• The Chairperson of the Board of Directors
• The President of a corporation
• The General Manager or Acting General Manager
• A Personnel Officer
• An Employment Specialist (in labor cases)

The rationale: these officers are "in a position to verify the truthfulness and correctness of the allegations in the petition."

Applying this to the case, the Court held that the failure to attach a secretary's certificate attesting to the General Manager's authority was not fatal. Moreover, Mid-Pasig later submitted the board resolution and pertinent documents to the CA, showing substantial compliance.

The Court emphasized that dismissing an appeal on purely technical grounds is frowned upon, especially when it results in unfairness. Rules of procedure exist to secure substantial justice, not to override it.

Mootness

Despite reversing the CA's dismissal, the Court declared the main case closed and terminated. The parties' possessory claims had lapsed—Rockland admitted it was no longer in possession, and MC Home Depot held possession under a separate agreement with Pasig Printing Corporation, which had been awarded possession by the RTC. The issue of possession had become moot.

Practical Takeaways

• General managers may sign without a board resolution. A corporation's general manager or acting general manager can sign the verification and certification against forum shopping without attaching a board resolution, following the Supreme Court's recognition of their authority.
• When in doubt, attach the board resolution anyway. While not always required, attaching a secretary's certificate or board resolution eliminates any question about the signatory's authority and avoids delays.
• Substantial compliance can cure defects. Courts may accept later submission of missing documents if the corporation substantially complied with the rules, particularly when dismissal would prejudice a party's right to appeal.
• Technical dismissals are disfavored. Philippine courts repeatedly stress that procedural rules should not be applied so rigidly as to defeat substantial justice.
• Check for mootness before litigating. If the underlying dispute—such as possession of property—has been resolved by later events, the case may be dismissed as moot, making further proceedings unnecessary.

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