In Gabriel Yap, Sr. v. Letecia Siao, the Supreme Court addressed the extent of a corporation president’s authority to represent the company in legal proceedings. The Court ruled that a corporation’s president, by virtue of their office, generally possesses the authority to sign the verification and certification against forum shopping without needing a separate board resolution. This decision clarifies the scope of corporate officers’ inherent powers and underscores the principle of substantial compliance in procedural rules, ensuring that cases are decided on their merits rather than being dismissed on technicalities. The ruling streamlines corporate litigation and empowers company presidents to act swiftly on behalf of their organizations.

From Loan Collateral to Legal Battle: When Can a Corporation President Act Without Board Approval?

The case originated from a dispute involving Gabriel Yap, Sr. and Letecia Siao concerning parcels of land intended for conversion into memorial lots. Yap claimed that Siao’s husband had used the land titles as collateral for a loan, and upon forgiving the debt, they agreed to develop the land into memorial lots. A Certificate of Agreement was drafted outlining these terms, including the transfer of land ownership to a corporation. When the respondents allegedly refused to transfer the properties to Cebu South Memorial Garden, Inc., the petitioners filed a complaint for specific performance, leading to a protracted legal battle. Central to the dispute was whether Gilbert Yap, as President of Cebu South Memorial Garden, had the authority to sign the verification and certification against forum shopping without an explicit board resolution.

The Court of Appeals initially set aside a Summary Judgment in favor of the petitioners, citing the lack of a board resolution authorizing Gilbert Yap to sign the certification against forum shopping. This procedural challenge formed the crux of the Supreme Court’s review. Petitioners argued that as president, Gilbert Yap inherently possessed the authority to represent the corporation and that the subsequent submission of a board resolution constituted substantial compliance with the rules. Respondents, on the other hand, contended that the absence of a board resolution rendered the certification defective, thus affecting the court’s jurisdiction. The Supreme Court then had to determine whether the lack of an initial board resolution was a fatal defect or if the subsequent ratification could cure the procedural lapse.

The Supreme Court anchored its decision on established jurisprudence, particularly the case of Cagayan Valley Drug Corporation v. Commission on Internal Revenue, which delineates the corporate officers who can sign the verification and certification without needing a board resolution. These officers include the Chairperson of the Board of Directors, the President, the General Manager, Personnel Officer, and an Employment Specialist in labor cases. The rationale is that these officers are positioned to verify the truthfulness and correctness of the allegations in the petition. Building on this principle, the Court cited Cebu Metro Pharmacy, Inc v. Euro-Med Laboratories, Pharmacy, Inc., emphasizing that a corporation’s President and Manager has the authority to sign the verification and certification of non-forum shopping even without a written authorization from the board, which is presumed to be included in the scope of their authority.

Moreover, the Supreme Court highlighted the significance of the subsequent board resolution, which explicitly ratified Gilbert Yap’s actions in signing the certification. Citing Swedish Match Philippines, Inc. v. The Treasurer of the City of Manila, the Court held that the belated submission of a Secretary’s certification constitutes substantial compliance with the rules. The Court emphasized that the corporation had ratified the authority of its representative, affirming the authority and providing a strong reason to uphold it. The Supreme Court also looked at Cosco Philippine Shipping, Inc. v. Kemper Insurance, where it cited instances wherein the lack of authority was remedied through subsequent compliance by the parties.

“Clearly, this is not an ordinary case of belated submission of proof of authority from the board of directors. Petitioner-corporation ratified the authority of Ms. Beleno to represent it in the Petition filed before the RTC, particularly in Civil Case No. 03-108163, and consequently to sign the verification and certification of non-forum shopping on behalf of the corporation. This fact confirms and affirms her authority and gives this Court all the more reason to uphold that authority.” (Swedish Match Philippines, Inc. v. The Treasurer of the City of Manila)

The Court found that the appellate court erred in focusing on procedural rules rather than the merits of the case. The ruling also addressed the respondents’ argument that Gabriel Yap, Jr. and Hyman Yap’s signatures were indispensable for the validity of the certification. The Court clarified that because these petitioners shared a common cause of action with Gilbert Yap, their individual signatures were not necessary. Ultimately, the Supreme Court reversed the Court of Appeals’ decision, affirming the Summary Judgment rendered by the trial court. By prioritizing substance over form and recognizing the inherent authority of a corporation’s president, the Court facilitated the resolution of a long-standing dispute and underscored the importance of resolving cases based on their merits.

The decision reinforces the principle of **substantial compliance**, which allows for the relaxation of procedural rules when the underlying purpose of the rule has been achieved. Additionally, the ruling reaffirms the doctrine of the **law of the case**, preventing the relitigation of issues already decided by an appellate court. The Supreme Court emphasized that when respondents relied on the Certificate of Agreement to seek support, they effectively admitted its validity, precluding them from later challenging its enforceability. The Court stated that any objection as to compliance with the requirement of verification in the complaint should have been raised in the proceedings below, and not in the appellate court for the first time, citing S.C. Megaworld Construction and Development Corporation v. Parada, G.R. No. 183804, September 2013.

FAQs

What was the key issue in this case?	The key issue was whether the President of a corporation has the authority to sign the verification and certification against forum shopping without a board resolution.
What is a certification against forum shopping?	A certification against forum shopping is a sworn statement, required in many legal filings, asserting that the party has not filed any similar case in other courts or tribunals. It aims to prevent parties from pursuing multiple legal avenues simultaneously.
What did the Court rule regarding the need for a board resolution?	The Court ruled that certain corporate officers, including the President, have the inherent authority to sign the certification without needing a separate board resolution.
What is the principle of substantial compliance?	Substantial compliance is a legal doctrine that allows courts to consider whether a party has met the essential requirements of a rule, even if there are minor deviations or omissions. It prevents strict adherence to technicalities from defeating the overall purpose of justice.
What is the doctrine of the law of the case?	The law of the case doctrine dictates that once an appellate court has ruled on a specific legal issue in a case, that ruling becomes binding in subsequent proceedings of the same case. This prevents the same legal question from being relitigated.
Why did the Court reverse the Court of Appeals’ decision?	The Court reversed the Court of Appeals’ decision because the appellate court focused on a procedural technicality, rather than addressing the merits of the case. The subsequent submission of the board resolution constituted substantial compliance.
Who are the parties involved in the certificate of agreement?	The parties in the certificate of agreement are the late Gabriel Yap, Sr. and Letecia Siao, where they agreed on converting the parcels of land to a memorial lot.
What was the original claim of the plaintiff?	The original claim of the plaintiff was for specific performance from respondents, i.e. to transfer ownership of the subject properties to petitioner corporation based on the Certificate of Agreement.

The Supreme Court’s decision in this case offers important clarity on corporate representation in legal proceedings and the application of procedural rules. By prioritizing the merits of the case and recognizing the inherent authority of corporate presidents, the Court promoted efficiency and fairness in the judicial process. This ruling confirms that technical defects can be excused when there is substantial compliance and that the courts must not allow procedural obstacles to stand in the way of justice.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Gabriel Yap, Sr. v. Letecia Siao, G.R. No. 212493, June 01, 2016