Bank of The Philippine Islands vs. Hon. Court of Appeals, et al.

G.R. No. 168313, October 6, 2010; per Brion, J.

Facts

First Union Group Enterprises (First Union) borrowed from the Bank of the Philippine Islands (BPI) PhP 5,000,000.00 and USD 123,218.32, evidenced by separate promissory notes. Linda and her spouse Eddy Tien executed a Real Estate Mortgage against two (2) condo units to secure the loan. Linda also agreed to be solidarily liable with First Union for obligations with BPI. However, First Union was eventually unable to pay its loan upon maturity.

BPI initiated extrajudicial foreclosure proceedings. The properties were eventually sold at a public auction, with BPI as highest bidder. After applying the proceeds, First Union still owed BPI PHP 4,742,949.32. Also, the dollar loan remained unpaid. BPI filed a complaint for collection of sum of money in RTC Makati, with the complaint’s verification and certificate of non-forum shopping signed by Ma. Cristina Asis (Asis) and Kristine Ong (Ong). However, no Secretary’s Certificate or Board Resolution was attached to evidence Asis’ and Ong’s authority to file the complaint. Instead of a board resolution, BPI attached a Special Power of Attorney (SPA).

First Union and Linda filed a Motion to Dismiss on the ground of violation of Sec. 5, Rule 7 of the Rules, stating that BPI failed to attach to the complaint the necessary board resolution authorizing Asis and Ong to institute collection action against First Union and Linda. RTC granted First Union and Linda’s Motion to Dismiss. Denying BPI’s Motion for Reconsideration, the Court of Appeals (CA) affirmed the Order of the RTC. Petitioner now seeks reversal of the CA decision.

Issue

Whether BPI was in substantial compliance with the Rules through its submission of the SPA

Ruling

The Supreme Court ruled that the submission of a certificate of non-forum shopping, proper in form and substance, remains to be a strict and mandatory rule. The Court did not find any reason for it to generally apply the “liberal jurisprudential exception” to excuse the failure to submit a Board Resolution. A 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.