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Court of Appeals
G.R. No. 168313 October 6, 2010 J. Brion petitioners Bank of the Philippine Islands (BPI) respondents Court of Appeals, Hon. Romeo Barza (RTC Br. 61 Makati), First Union Group, Linda Wu Hu
summary FU borrowed a large sum of money from BPI, which it was not able to do so. After
extrajudicial foreclosure proceedings the proceeds were not enough so BPI instituted money claims. Complaints verification and certificate against forum shopping was signed by CK, supported by SPA from BPIs VP. SC held that liberal interpretation of rules only allowed under special circumstances and upon showing of substantial compliance. Mistake of BPIs counsel in believing that board resolution was unnecessary cost BPI the case.
issue
Whether BPI was in substantial compliance with the Rules through its submission of the Board Resolution with SPA. NO.
ratio
In ruling for FU and Linda, the SC emphasized the need to abide by the Rules, pointing out that the verification of a complaint and attachment of a certificate of non-forum shopping are requirements that are basic, necessary and mandatory for procedural orderliness . The SC did not find any reason for it to generally apply the liberal jurisprudential exception held in the Shipside case to excuse the failure to submit a Board Resolution. The rule for the submission of a certificate of non-forum shopping, proper in form and substance, remains to be a strict and mandatory rule. A liberal application has to be justified by ample and sufficient reasons that maintain the integrity of, and do not 1
detract from, the mandatory character of the rule. Citing Tible & Tible Company, Inc. v. Royal Savings and Loan Association and Mediserv v. Court of Appeals, the SC stated that it will only allow the liberal interpretation of the rules if special circumstances or compelling reasons which will make the strict application of the Rules inequitable exist, and even then the SC will look for a reasonable attempt at (substantial) compliance with the rules. These were not seen in the case of BPI, who did not submit any proof of authority in the first instance because it did not believe that a board resolution evidencing such authority was necessary, and even argued that Sec. 5, Rule 7 does not require proof of authority as a necessity for the certification against forum shopping. In fact, BPI only attached the SPA issued by Zosimo, granting authority to CK. Therefore, no direct authority was initially ever given by BPI. Only in the Reply to the Comment did BPI ask the Court to allow submission of the Corporate Secretarys Certificate authorizing Zosimo to appoint substitutes. BPI did not even elaborate or explain on its claimed inadvertence in failing to submit the Corporate Secretarys Certificate. The SC held, therefore, that the failure was a mistake of counsel that BPI never cared to admit but which nevertheless bound it as a client .