Republic of the Philippines Thus, Genosi, Inc.

filed a claim against both

SUPREME COURT petitioner shipping company and respondent
Baguio City Kemper Insurance Company. The claim was
referred to McLarens Chartered for investigation,
THIRD DIVISION evaluation, and adjustment of the claim. After
processing the claim documents, McLarens
G.R. No. 179488 April 23, 2012 Chartered recommended a settlement of the
claim in the amount of $64,492.58, which
Genosi, Inc. (the consignee-insured) accepted.
COSCO PHILIPPINES SHIPPING,
INC., Petitioner,
Thereafter, respondent paid the claim of Genosi,
vs.
KEMPER INSURANCE Inc. (the insured) in the amount of $64,492.58.
COMPANY, Respondent. Consequently, Genosi, Inc., through its General
Manager, Avelino S. Mangahas, Jr., executed a
Loss and Subrogation Receipt3 dated
DECISION September 22, 1999, stating that Genosi, Inc.
received from respondent the amount of
PERALTA, J.: $64,492.58 as the full and final satisfaction
compromise, and discharges respondent of all
This is a petition for review on certiorari under claims for losses and expenses sustained by the
Rule 45 of the Rules of Court seeking to reverse property insured, under various policy numbers,
and set aside the Decision1 and Resolution2 of due to spoilage brought about by machinery
the Court of Appeals (CA), in CA-G.R. CV No. breakdown which occurred on October 25,
75895, entitled Kemper Insurance Company v. November 7 and 10, and December 5, 14, and
Cosco Philippines Shipping, Inc. The CA 18, 1998; and, in consideration thereof,
Decision reversed and set aside the Order dated subrogates respondent to the claims of Genosi,
March 22, 2002 of the Regional Trial Court Inc. to the extent of the said amount.
(RTC), Branch 8, Manila, which granted the Respondent then made demands upon
Motion to Dismiss filed by petitioner Cosco petitioner, but the latter failed and refused to pay
Philippines Shipping, Inc., and ordered that the the said amount.
case be remanded to the trial court for further
proceedings. Hence, on October 28, 1999, respondent filed a
Complaint for Insurance Loss and
The antecedents are as follows: Damages4 against petitioner before the trial
court, docketed as Civil Case No. 99-95561,
Respondent Kemper Insurance Company is a entitled Kemper Insurance Company v. Cosco
foreign insurance company based in Illinois, Philippines Shipping, Inc. Respondent alleged
United States of America (USA) with no license that despite repeated demands to pay and settle
to engage in business in the Philippines, as it is the total amount of US$64,492.58, representing
not doing business in the Philippines, except in the value of the loss, petitioner failed and
isolated transactions; while petitioner is a refused to pay the same, thereby causing
domestic shipping company organized in damage and prejudice to respondent in the
accordance with Philippine laws. amount of US$64,492.58; that the loss and
damage it sustained was due to the fault and
negligence of petitioner, specifically, the
In 1998, respondent insured the shipment of
fluctuations in the temperature of the reefer
imported frozen boneless beef (owned by
container beyond the required setting which was
Genosi, Inc.), which was loaded at a port in
caused by the breakdown in the electronics
Brisbane, Australia, for shipment to Genosi, Inc.
controller assembly; that due to the unjustified
(the importer-consignee) in the Philippines.
failure and refusal to pay its just and valid
However, upon arrival at the Manila port, a
claims, petitioner should be held liable to pay
portion of the shipment was rejected by Genosi,
interest thereon at the legal rate from the date of
Inc. by reason of spoilage arising from the
demand; and that due to the unjustified refusal
alleged temperature fluctuations of petitioner's
of the petitioner to pay the said amount, it was
reefer containers.
compelled to engage the services of a counsel
whom it agreed to pay 25% of the whole amount Respondent's Motion for Reconsideration8 was
due as attorney's fees. Respondent prayed that denied by the trial court in an Order9 dated July
after due hearing, judgment be rendered in its 9, 2002.
favor and that petitioner be ordered to pay the
amount of US$64,492.58, or its equivalent in On appeal by respondent, the CA, in its
Philippine currency at the prevailing foreign Decision10 dated March 23, 2007, reversed and
exchange rate, or a total of ₱2,594,513.00, with set aside the trial court's order. The CA ruled
interest thereon at the legal rate from date of that the required certificate of non-forum
demand, 25% of the whole amount due as shopping is mandatory and that the same must
attorney's fees, and costs. be signed by the plaintiff or principal party
concerned and not by counsel; and in case of
In its Answer5 dated November 29, 1999, corporations, the physical act of signing may be
petitioner insisted, among others, that performed in behalf of the corporate entity by
respondent had no capacity to sue since it was specifically authorized individuals. However, the
doing business in the Philippines without the CA pointed out that the factual circumstances of
required license; that the complaint has the case warranted the liberal application of the
prescribed and/or is barred by laches; that no rules and, as such, ordered the remand of the
timely claim was filed; that the loss or damage case to the trial court for further proceedings.
sustained by the shipments, if any, was due to
causes beyond the carrier's control and was due Petitioner's Motion for Reconsideration11 was
to the inherent nature or insufficient packing of later denied by the CA in the Resolution 12 dated
the shipments and/or fault of the consignee or September 3, 2007.
the hired stevedores or arrastre operator or the
fault of persons whose acts or omissions cannot
Hence, petitioner elevated the case to this
be the basis of liability of the carrier; and that the Court via Petition for Review on Certiorari under
subject shipment was discharged under required
Rule 45 of the Rules of Court, with the following
temperature and was complete, sealed, and in
issues:
good order condition.
THE COURT OF APPEALS SERIOUSLY
During the pre-trial proceedings, respondent's ERRED IN RULING THAT ATTY. RODOLFO
counsel proffered and marked its exhibits, while
LAT WAS PROPERLY AUTHORIZED BY THE
petitioner's counsel manifested that he would
RESPONDENT TO SIGN THE CERTIFICATE
mark his client's exhibits on the next scheduled
AGAINST FORUM SHOPPING DESPITE THE
pre-trial. However, on November 8, 2001,
UNDISPUTED FACTS THAT:
petitioner filed a Motion to Dismiss,6 contending
that the same was filed by one Atty. Rodolfo A.
Lat, who failed to show his authority to sue and A) THE PERSON WHO EXECUTED
sign the corresponding certification against THE SPECIAL POWER OF ATTORNEY
forum shopping. It argued that Atty. Lat's act of (SPA) APPOINTING ATTY. LAT AS
signing the certification against forum shopping RESPONDENT'S ATTORNEY-IN-FACT
was a clear violation of Section 5, Rule 7 of the WAS MERELY AN UNDERWRITER OF
1997 Rules of Court. THE RESPONDENT WHO HAS NOT
SHOWN PROOF THAT HE WAS
AUTHORIZED BY THE BOARD OF
In its Order7 dated March 22, 2002, the trial court
DIRECTORS OF RESPONDENT TO
granted petitioner's Motion to Dismiss and
DO SO.
dismissed the case without prejudice, ruling that
it is mandatory that the certification must be
executed by the petitioner himself, and not by B) THE POWERS GRANTED TO ATTY.
counsel. Since respondent's counsel did not LAT REFER TO [THE AUTHORITY TO
have a Special Power of Attorney (SPA) to act REPRESENT DURING THE] PRE-
on its behalf, hence, the certification against TRIAL [STAGE] AND DO NOT COVER
forum shopping executed by said counsel was THE SPECIFIC POWER TO SIGN THE
fatally defective and constituted a valid cause for CERTIFICATE.13
dismissal of the complaint.
Petitioner alleged that respondent failed to that exercises its corporate powers. In turn,
submit any board resolution or secretary's physical acts of the corporation, like the signing
certificate authorizing Atty. Lat to institute the of documents, can be performed only by natural
complaint and sign the certificate of non-forum persons duly authorized for the purpose by
shopping on its behalf. Petitioner submits that corporate by-laws or by a specific act of the
since respondent is a juridical entity, the board of directors.18
signatory in the complaint must show proof of
his or her authority to sign on behalf of the In Philippine Airlines, Inc. v. Flight Attendants
corporation. Further, the SPA14 dated May 11, and Stewards Association of the Philippines
2000, submitted by Atty. Lat, which was (FASAP),19 we ruled that only individuals vested
notarized before the Consulate General of with authority by a valid board resolution may
Chicago, Illinois, USA, allegedly authorizing him sign the certificate of non-forum shopping on
to represent respondent in the pre-trial and other behalf of a corporation. We also required proof
stages of the proceedings was signed by one of such authority to be presented. The petition is
Brent Healy (respondent's underwriter), who subject to dismissal if a certification was
lacks authorization from its board of directors. submitted unaccompanied by proof of the
signatory's authority.
In its Comment, respondent admitted that it
failed to attach in the complaint a concrete proof In the present case, since respondent is a
of Atty. Lat's authority to execute the certificate corporation, the certification must be executed
of non-forum shopping on its behalf. However, by an officer or member of the board of directors
there was subsequent compliance as or by one who is duly authorized by a resolution
respondent submitted an authenticated SPA of the board of directors; otherwise, the
empowering Atty. Lat to represent it in the pre- complaint will have to be dismissed.20 The lack
trial and all stages of the proceedings. Further, it of certification against forum shopping is
averred that petitioner is barred by laches from generally not curable by mere amendment of the
questioning the purported defect in respondent's complaint, but shall be a cause for the dismissal
certificate of non-forum shopping. of the case without prejudice.21 The same rule
applies to certifications against forum shopping
The main issue in this case is whether Atty. Lat signed by a person on behalf of a corporation
was properly authorized by respondent to sign which are unaccompanied by proof that said
the certification against forum shopping on its signatory is authorized to file the complaint on
behalf. behalf of the corporation.22

The petition is meritorious. There is no proof that respondent, a private

corporation, authorized Atty. Lat, through a
We have consistently held that the certification board resolution, to sign the verification and
against forum shopping must be signed by the certification against forum shopping on its
principal parties.15 If, for any reason, the behalf. Accordingly, the certification against
principal party cannot sign the petition, the one forum shopping appended to the complaint is
signing on his behalf must have been duly fatally defective, and warrants the dismissal of
authorized.16 With respect to a corporation, the respondent's complaint for Insurance Loss and
certification against forum shopping may be Damages (Civil Case No. 99-95561) against
signed for and on its behalf, by a specifically petitioner.
authorized lawyer who has personal knowledge
of the facts required to be disclosed in such In Republic v. Coalbrine International
document.17 A corporation has no power, except Philippines, Inc.,23 the Court cited instances
those expressly conferred on it by the wherein the lack of authority of the person
Corporation Code and those that are implied or making the certification of non-forum shopping
incidental to its existence. In turn, a corporation was remedied through subsequent compliance
exercises said powers through its board of by the parties therein. Thus,
directors and/or its duly authorized officers and
agents. Thus, it has been observed that the [w]hile there were instances where we have
power of a corporation to sue and be sued in allowed the filing of a certification against non-
any court is lodged with the board of directors forum shopping by someone on behalf of a
corporation without the accompanying proof of rationalized by harking on the policy of liberal
authority at the time of its filing, we did so on the construction.25
basis of a special circumstance or compelling
reason. Moreover, there was a subsequent Moreover, the SPA dated May 11, 2000,
compliance by the submission of the proof of submitted by respondent allegedly authorizing
authority attesting to the fact that the person Atty. Lat to appear on behalf of the corporation,
who signed the certification was duly authorized. in the pre-trial and all stages of the proceedings,
signed by Brent Healy, was fatally defective and
In China Banking Corporation v. Mondragon had no evidentiary value. It failed to establish
International Philippines, Inc., the CA dismissed Healy's authority to act in behalf of respondent,
the petition filed by China Bank, since the latter in view of the absence of a resolution from
failed to show that its bank manager who signed respondent's board of directors or secretary's
the certification against non-forum shopping was certificate proving the same. Like any other
authorized to do so. We reversed the CA and corporate act, the power of Healy to name,
said that the case be decided on the merits constitute, and appoint Atty. Lat as respondent's
despite the failure to attach the required proof of attorney-in-fact, with full powers to represent
authority, since the board resolution which was respondent in the proceedings, should have
subsequently attached recognized the pre- been evidenced by a board resolution or
existing status of the bank manager as an secretary's certificate.
authorized signatory.
Respondent's allegation that petitioner is
In Abaya Investments Corporation v. Merit estopped by laches from raising the defect in
Philippines, where the complaint before the respondent's certificate of non-forum shopping
Metropolitan Trial Court of Manila was instituted does not hold water.
by petitioner's Chairman and President, Ofelia
Abaya, who signed the verification and In Tamondong v. Court of Appeals,26 we held
certification against non-forum shopping without that if a complaint is filed for and in behalf of the
proof of authority to sign for the corporation, we plaintiff who is not authorized to do so, the
also relaxed the rule. We did so taking into complaint is not deemed filed. An unauthorized
consideration the merits of the case and to avoid complaint does not produce any legal effect.
a re-litigation of the issues and further delay the Hence, the court should dismiss the complaint
administration of justice, since the case had on the ground that it has no jurisdiction over the
already been decided by the lower courts on the complaint and the plaintiff.27 Accordingly, since
merits. Moreover, Abaya's authority to sign the Atty. Lat was not duly authorized by respondent
certification was ratified by the Board.24 to file the complaint and sign the verification and
certification against forum shopping, the
Contrary to the CA's finding, the Court finds that complaint is considered not filed and ineffectual,
the circumstances of this case do not and, as a necessary consequence, is
necessitate the relaxation of the rules. There dismissable due to lack of jurisdiction.
was no proof of authority submitted, even
belatedly, to show subsequent compliance with Jurisdiction is the power with which courts are
the requirement of the law. Neither was there a invested for administering justice; that is, for
copy of the board resolution or secretary's hearing and deciding cases. In order for the
certificate subsequently submitted to the trial court to have authority to dispose of the case on
court that would attest to the fact that Atty. Lat the merits, it must acquire jurisdiction over the
was indeed authorized to file said complaint and subject matter and the parties. Courts acquire
sign the verification and certification against jurisdiction over the plaintiffs upon the filing of
forum shopping, nor did respondent satisfactorily the complaint, and to be bound by a decision, a
explain why it failed to comply with the rules. party should first be subjected to the court's
Thus, there exists no cogent reason for the jurisdiction.28 Clearly, since no valid complaint
relaxation of the rule on this matter. Obedience was ever filed with the RTC, Branch 8, Manila,
to the requirements of procedural rules is the same did not acquire jurisdiction over the
needed if we are to expect fair results therefrom, person of respondent.1âwphi1
and utter disregard of the rules cannot justly be
Since the court has no jurisdiction over the stage of the proceedings, and it cannot be said
complaint and respondent, petitioner is not that considerable length of time had elapsed for
estopped from challenging the trial court's laches to attach.
jurisdiction, even at the pre-trial stage of the
proceedings. This is so because the issue of WHEREFORE, the petition is GRANTED. The
jurisdiction may be raised at any stage of the Decision and the Resolution of the Court of
proceedings, even on appeal, and is not lost by Appeals, dated March 23, 2007 and September
waiver or by estoppel.29 3, 2007, respectively, in CA-G.R. CV No. 75895
are REVERSED and SET ASIDE. The Orders of
In Regalado v. Go,30 the Court held the Regional Trial Court, dated March 22, 2002
that laches should be clearly present for and July 9, 2002, respectively, in Civil Case No.
the Sibonghanoy31 doctrine to apply, thus: 99-95561, are REINSTATED.

Laches is defined as the "failure or neglect for SO ORDERED.

an unreasonable and unexplained length of
time, to do that which, by exercising due
diligence, could or should have been done
earlier, it is negligence or omission to assert a
right within a reasonable length of time,
warranting a presumption that the party entitled
to assert it either has abandoned it or declined
to assert it."

The ruling in People v. Regalario that was based

on the landmark doctrine enunciated in Tijam v.
Sibonghanoy on the matter of jurisdiction by
estoppel is the exception rather than the rule.
Estoppel by laches may be invoked to bar the
issue of lack of jurisdiction only in cases in which
the factual milieu is analogous to that in the cited
case. In such controversies, laches should have
been clearly present; that is, lack of jurisdiction
must have been raised so belatedly as to
warrant the presumption that the party entitled to
assert it had abandoned or declined to assert it.

In Sibonghanoy, the defense of lack of

jurisdiction was raised for the first time in a
motion to dismiss filed by the Surety almost 15
years after the questioned ruling had been
rendered. At several stages of the proceedings,
in the court a quo as well as in the Court of
Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and
submitted its case for final adjudication on the
merits. It was only when the adverse decision
was rendered by the Court of Appeals that it
finally woke up to raise the question of
jurisdiction.32

The factual setting attendant in Sibonghanoy is

not similar to that of the present case so as to
make it fall under the doctrine of estoppel by
laches. Here, the trial court's jurisdiction was
questioned by the petitioner during the pre-trial