COSCO PHILIPPINES SHIPPING, INC.

, Petitioner, petitioner, but the latter failed and refused to pay the
vs. said amount.
KEMPER INSURANCE COMPANY, Respondent.
Hence, on October 28, 1999, respondent filed a
DECISION Complaint for Insurance Loss and Damages 4 against
petitioner before the trial court, docketed as Civil Case
PERALTA, J.:
No. 99-95561, entitled Kemper Insurance Company v.
This is a petition for review on certiorari under Rule 45 Cosco Philippines Shipping, Inc. Respondent alleged that
of the Rules of Court seeking to reverse and set aside despite repeated demands to pay and settle the total
the Decision1 and Resolution2 of the Court of Appeals amount of US$64,492.58, representing the value of the
(CA), in CA-G.R. CV No. 75895, entitled Kemper loss, petitioner failed and refused to pay the same,
Insurance Company v. Cosco Philippines Shipping, Inc. thereby causing damage and prejudice to respondent in
The CA Decision reversed and set aside the Order dated the amount of US$64,492.58; that the loss and damage
March 22, 2002 of the Regional Trial Court (RTC), it sustained was due to the fault and negligence of
Branch 8, Manila, which granted the Motion to Dismiss petitioner, specifically, the fluctuations in the
filed by petitioner Cosco Philippines Shipping, Inc., and temperature of the reefer container beyond the
ordered that the case be remanded to the trial court for required setting which was caused by the breakdown in
further proceedings. the electronics controller assembly; that due to the
unjustified failure and refusal to pay its just and valid
The antecedents are as follows: claims, petitioner should be held liable to pay interest
Respondent Kemper Insurance Company is a foreign thereon at the legal rate from the date of demand; and
insurance company based in Illinois, United States of that due to the unjustified refusal of the petitioner to
America (USA) with no license to engage in business in pay the said amount, it was compelled to engage the
the Philippines, as it is not doing business in the services of a counsel whom it agreed to pay 25% of the
Philippines, except in isolated transactions; while whole amount due as attorney's fees. Respondent
petitioner is a domestic shipping company organized in prayed that after due hearing, judgment be rendered in
accordance with Philippine laws. its favor and that petitioner be ordered to pay the
amount of US$64,492.58, or its equivalent in Philippine
In 1998, respondent insured the shipment of imported currency at the prevailing foreign exchange rate, or a
frozen boneless beef (owned by Genosi, Inc.), which total of ₱2,594,513.00, with interest thereon at the
was loaded at a port in Brisbane, Australia, for shipment legal rate from date of demand, 25% of the whole
to Genosi, Inc. (the importer-consignee) in the amount due as attorney's fees, and costs.
Philippines. However, upon arrival at the Manila port, a
portion of the shipment was rejected by Genosi, Inc. by In its Answer5 dated November 29, 1999, petitioner
reason of spoilage arising from the alleged temperature insisted, among others, that respondent had no capacity
fluctuations of petitioner's reefer containers. to sue since it was doing business in the Philippines
without the required license; that the complaint has
Thus, Genosi, Inc. filed a claim against both petitioner prescribed and/or is barred by laches; that no timely
shipping company and respondent Kemper Insurance claim was filed; that the loss or damage sustained by
Company. The claim was referred to McLarens the shipments, if any, was due to causes beyond the
Chartered for investigation, evaluation, and adjustment carrier's control and was due to the inherent nature or
of the claim. After processing the claim documents, insufficient packing of the shipments and/or fault of the
McLarens Chartered recommended a settlement of the consignee or the hired stevedores or arrastre operator
claim in the amount of $64,492.58, which Genosi, Inc. or the fault of persons whose acts or omissions cannot
(the consignee-insured) accepted. be the basis of liability of the carrier; and that the
Thereafter, respondent paid the claim of Genosi, Inc. subject shipment was discharged under required
(the insured) in the amount of $64,492.58. temperature and was complete, sealed, and in good
Consequently, Genosi, Inc., through its General order condition.
Manager, Avelino S. Mangahas, Jr., executed a Loss and During the pre-trial proceedings, respondent's counsel
Subrogation Receipt3 dated September 22, 1999, stating proffered and marked its exhibits, while petitioner's
that Genosi, Inc. received from respondent the amount counsel manifested that he would mark his client's
of $64,492.58 as the full and final satisfaction exhibits on the next scheduled pre-trial. However, on
compromise, and discharges respondent of all claims for November 8, 2001, petitioner filed a Motion to
losses and expenses sustained by the property insured, Dismiss,6 contending that the same was filed by one
under various policy numbers, due to spoilage brought Atty. Rodolfo A. Lat, who failed to show his authority to
about by machinery breakdown which occurred on sue and sign the corresponding certification against
October 25, November 7 and 10, and December 5, 14, forum shopping. It argued that Atty. Lat's act of signing
and 18, 1998; and, in consideration thereof, subrogates the certification against forum shopping was a clear
respondent to the claims of Genosi, Inc. to the extent of violation of Section 5, Rule 7 of the 1997 Rules of Court.
the said amount. Respondent then made demands upon
In its Order7 dated March 22, 2002, the trial court Consulate General of Chicago, Illinois, USA, allegedly
granted petitioner's Motion to Dismiss and dismissed authorizing him to represent respondent in the pre-trial
the case without prejudice, ruling that it is mandatory and other stages of the proceedings was signed by one
that the certification must be executed by the petitioner Brent Healy (respondent's underwriter), who lacks
himself, and not by counsel. Since respondent's counsel authorization from its board of directors.
did not have a Special Power of Attorney (SPA) to act on
In its Comment, respondent admitted that it failed to
its behalf, hence, the certification against forum
attach in the complaint a concrete proof of Atty. Lat's
shopping executed by said counsel was fatally defective
authority to execute the certificate of non-forum
and constituted a valid cause for dismissal of the
shopping on its behalf. However, there was subsequent
complaint.
compliance as respondent submitted an authenticated
Respondent's Motion for Reconsideration8 was denied SPA empowering Atty. Lat to represent it in the pre-trial
by the trial court in an Order 9 dated July 9, 2002. and all stages of the proceedings. Further, it averred
that petitioner is barred by laches from questioning the
On appeal by respondent, the CA, in its Decision 10 dated
purported defect in respondent's certificate of non-
March 23, 2007, reversed and set aside the trial court's
forum shopping.
order. The CA ruled that the required certificate of non-
forum shopping is mandatory and that the same must The main issue in this case is whether Atty. Lat was
be signed by the plaintiff or principal party concerned properly authorized by respondent to sign the
and not by counsel; and in case of corporations, the certification against forum shopping on its behalf.
physical act of signing may be performed in behalf of
The petition is meritorious.
the corporate entity by specifically authorized
individuals. However, the CA pointed out that the We have consistently held that the certification against
factual circumstances of the case warranted the liberal forum shopping must be signed by the principal
application of the rules and, as such, ordered the parties.15 If, for any reason, the principal party cannot
remand of the case to the trial court for further sign the petition, the one signing on his behalf must
proceedings. have been duly authorized.16 With respect to a
corporation, the certification against forum shopping
Petitioner's Motion for Reconsideration11 was later
may be signed for and on its behalf, by a specifically
denied by the CA in the Resolution 12 dated September 3,
authorized lawyer who has personal knowledge of the
2007.
facts required to be disclosed in such document. 17 A
Hence, petitioner elevated the case to this corporation has no power, except those expressly
Court via  Petition for Review on Certiorari under Rule conferred on it by the Corporation Code and those that
45 of the Rules of Court, with the following issues: are implied or incidental to its existence. In turn, a
corporation exercises said powers through its board of
THE COURT OF APPEALS SERIOUSLY ERRED IN RULING
directors and/or its duly authorized officers and agents.
THAT ATTY. RODOLFO LAT WAS PROPERLY AUTHORIZED
Thus, it has been observed that the power of a
BY THE RESPONDENT TO SIGN THE CERTIFICATE
corporation to sue and be sued in any court is lodged
AGAINST FORUM SHOPPING DESPITE THE UNDISPUTED
with the board of directors that exercises its corporate
FACTS THAT:
powers. In turn, physical acts of the corporation, like the
A) THE PERSON WHO EXECUTED THE SPECIAL POWER signing of documents, can be performed only by natural
OF ATTORNEY (SPA) APPOINTING ATTY. LAT AS persons duly authorized for the purpose by corporate
RESPONDENT'S ATTORNEY-IN-FACT WAS MERELY AN by-laws or by a specific act of the board of directors. 18
UNDERWRITER OF THE RESPONDENT WHO HAS NOT
In Philippine Airlines, Inc. v. Flight Attendants and
SHOWN PROOF THAT HE WAS AUTHORIZED BY THE
Stewards Association of the Philippines (FASAP), 19 we
BOARD OF DIRECTORS OF RESPONDENT TO DO SO.
ruled that only individuals vested with authority by a
B) THE POWERS GRANTED TO ATTY. LAT REFER TO [THE valid board resolution may sign the certificate of non-
AUTHORITY TO REPRESENT DURING THE] PRE-TRIAL forum shopping on behalf of a corporation. We also
[STAGE] AND DO NOT COVER THE SPECIFIC POWER TO required proof of such authority to be presented. The
SIGN THE CERTIFICATE.13 petition is subject to dismissal if a certification was
submitted unaccompanied by proof of the signatory's
Petitioner alleged that respondent failed to submit any authority.
board resolution or secretary's certificate authorizing
Atty. Lat to institute the complaint and sign the In the present case, since respondent is a corporation,
certificate of non-forum shopping on its behalf. the certification must be executed by an officer or
Petitioner submits that since respondent is a juridical member of the board of directors or by one who is duly
entity, the signatory in the complaint must show proof authorized by a resolution of the board of directors;
of his or her authority to sign on behalf of the otherwise, the complaint will have to be
corporation. Further, the SPA 14 dated May 11, 2000, dismissed.20 The lack of certification against forum
submitted by Atty. Lat, which was notarized before the shopping is generally not curable by mere amendment
of the complaint, but shall be a cause for the dismissal was there a copy of the board resolution or secretary's
of the case without prejudice.21 The same rule applies to certificate subsequently submitted to the trial court that
certifications against forum shopping signed by a person would attest to the fact that Atty. Lat was indeed
on behalf of a corporation which are unaccompanied by authorized to file said complaint and sign the
proof that said signatory is authorized to file the verification and certification against forum shopping,
complaint on behalf of the corporation. 22 nor did respondent satisfactorily explain why it failed to
comply with the rules. Thus, there exists no cogent
There is no proof that respondent, a private
reason for the relaxation of the rule on this matter.
corporation, authorized Atty. Lat, through a board
Obedience to the requirements of procedural rules is
resolution, to sign the verification and certification
needed if we are to expect fair results therefrom, and
against forum shopping on its behalf. Accordingly, the
utter disregard of the rules cannot justly be rationalized
certification against forum shopping appended to the
by harking on the policy of liberal construction.25
complaint is fatally defective, and warrants the
dismissal of respondent's complaint for Insurance Loss Moreover, the SPA dated May 11, 2000, submitted by
and Damages (Civil Case No. 99-95561) against respondent allegedly authorizing Atty. Lat to appear on
petitioner. behalf of the corporation, in the pre-trial and all stages
of the proceedings, signed by Brent Healy, was fatally
In Republic v. Coalbrine International Philippines,
defective and had no evidentiary value. It failed to
Inc.,23 the Court cited instances wherein the lack of
establish Healy's authority to act in behalf of
authority of the person making the certification of non-
respondent, in view of the absence of a resolution from
forum shopping was remedied through subsequent
respondent's board of directors or secretary's certificate
compliance by the parties therein. Thus,
proving the same. Like any other corporate act, the
[w]hile there were instances where we have allowed power of Healy to name, constitute, and appoint Atty.
the filing of a certification against non-forum shopping Lat as respondent's attorney-in-fact, with full powers to
by someone on behalf of a corporation without the represent respondent in the proceedings, should have
accompanying proof of authority at the time of its filing, been evidenced by a board resolution or secretary's
we did so on the basis of a special circumstance or certificate.
compelling reason. Moreover, there was a subsequent
Respondent's allegation that petitioner is estopped by
compliance by the submission of the proof of authority
laches from raising the defect in respondent's certificate
attesting to the fact that the person who signed the
of non-forum shopping does not hold water.
certification was duly authorized.
In Tamondong v. Court of Appeals, 26 we held that if a
In China Banking Corporation v. Mondragon
complaint is filed for and in behalf of the plaintiff who is
International Philippines, Inc., the CA dismissed the
not authorized to do so, the complaint is not deemed
petition filed by China Bank, since the latter failed to
filed. An unauthorized complaint does not produce any
show that its bank manager who signed the certification
legal effect. Hence, the court should dismiss the
against non-forum shopping was authorized to do so.
complaint on the ground that it has no jurisdiction over
We reversed the CA and said that the case be decided
the complaint and the plaintiff.27 Accordingly, since Atty.
on the merits despite the failure to attach the required
Lat was not duly authorized by respondent to file the
proof of authority, since the board resolution which was
complaint and sign the verification and certification
subsequently attached recognized the pre-existing
against forum shopping, the complaint is considered not
status of the bank manager as an authorized signatory.
filed and ineffectual, and, as a necessary consequence,
In Abaya Investments Corporation v. Merit Philippines, is dismissable due to lack of jurisdiction.
where the complaint before the Metropolitan Trial
Jurisdiction is the power with which courts are invested
Court of Manila was instituted by petitioner's Chairman
for administering justice; that is, for hearing and
and President, Ofelia Abaya, who signed the verification
deciding cases. In order for the court to have authority
and certification against non-forum shopping without
to dispose of the case on the merits, it must acquire
proof of authority to sign for the corporation, we also
jurisdiction over the subject matter and the parties.
relaxed the rule. We did so taking into consideration the
Courts acquire jurisdiction over the plaintiffs upon the
merits of the case and to avoid a re-litigation of the
filing of the complaint, and to be bound by a decision, a
issues and further delay the administration of justice,
party should first be subjected to the court's
since the case had already been decided by the lower
jurisdiction.28 Clearly, since no valid complaint was ever
courts on the merits. Moreover, Abaya's authority to
filed with the RTC, Branch 8, Manila, the same did not
sign the certification was ratified by the Board. 24
acquire jurisdiction over the person of
Contrary to the CA's finding, the Court finds that the respondent.1âwphi1
circumstances of this case do not necessitate the
Since the court has no jurisdiction over the complaint
relaxation of the rules. There was no proof of authority
and respondent, petitioner is not estopped from
submitted, even belatedly, to show subsequent
challenging the trial court's jurisdiction, even at the pre-
compliance with the requirement of the law. Neither
trial stage of the proceedings. This is so because the
issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver
or by estoppel.29

In Regalado v. Go,30 the Court held that laches should be

clearly present for the Sibonghanoy31 doctrine to apply,
thus:

Laches is defined as the "failure or neglect for 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 stage of the proceedings, and it
cannot be said that considerable length of time had
elapsed for laches to attach.

WHEREFORE, the petition is GRANTED. The Decision

and the Resolution of the Court of Appeals, dated
March 23, 2007 and September 3, 2007, respectively, in
CA-G.R. CV No. 75895 are REVERSED and SET ASIDE. The
Orders of the Regional Trial Court, dated March 22,
2002 and July 9, 2002, respectively, in Civil Case No. 99-
95561, are REINSTATED.

SO ORDERED.