G.R. No. 192615 Case Digest

G.R. No. 192615, January 30, 2013

Spouses Eugene Lim and Constancia Lim, petitioners

vs Court of Appeals, Judge Florenci Sealana-Abbu and the Bank of the Philippine Islands, respondents

Ponente: Brion

Facts:

January 26, 1999, BPI filed before the RTC, Branch 20 of Cagayan de Oro a complaint for collection of money with prayer for preliminary injunction against petitioners. Verification and certification against forum-shopping attached to the complaint were signed by Ramos the BPI vice-president and Mindanao Region Lending Head.

Petitioners moved to dismiss the BPI complaint on the ground that there was a pending action for forclosure proceedings in Ozamis City. RTC found that the present complaint involved causes of action, hence RTC denied the motion to dismiss and the subsequent motion for reconsideration.

Petitioners filed another motion to dismiss, this time on the ground that there had been fatal defect in the verification against forum shopping. That it did not state that Ramos was the one filing the complaint in his capacity as authorized by BPI's board of directors.

BPI answered and submitted a copy of the special power of attorney signed by the VP granting Ramos authority to represent the bank. RTC denied the second motion to dismiss. So petitioner filed with CA petition for certiorari. CA dismissed the certiorari, ruling that the SPA granting Ramos substantially complied with the Rules of Court. Petitioners moved for reconsideration, but CA denied their motion, hence this petition for review on certiorari.

Issue: (1) whether CA erred and (2) SPA is a substantial compliance?

Held:

(1) CA did not commit a grave error.

(2) BPI’s subsequent execution of the SPA, however, constituted a ratification of Ramos’ unauthorized representation in the collection case filed against the petitioners. A corporation can act only through natural persons duly authorized for the purpose or by a specific act of its board of directors, and can also ratify the unauthorized acts of its corporate officers. The act of ratification is confirmation of what its agent or delegate has done without or with insufficient authority.

We note that, at the time the complaint against the petitioners was filed, Ramos also held the position of Assistant Vice-President for BPI Northern Mindanao and was then the highest official representing the bank in the Northern Mindanao area. This position and his standing in the BPI hierarchy, to our mind, place him in a sufficiently high and authoritative position to verify the truthfulness and correctness of the allegations in the subject complaint, to justify his authority in filing the complaint and to sign the verification and certification against forum shopping. Whatever is lacking, from the strictly corporate point of view, was cured when BPI subsequently (although belatedly) issued the appropriate SPA.