This case clarifies that if a person files a lawsuit on behalf of someone else but does not properly prove they have the authority to do so, the court might not have the power to hear the case. The Supreme Court emphasized the importance of proper legal representation, particularly regarding the verification and certification against forum shopping, ensuring that only authorized individuals can initiate legal actions. This protects the judicial process from unauthorized claims and ensures that all parties are properly represented.

Can an Attorney-in-Fact Initiate a Lawsuit Without Proof of Authority?

The case revolves around a property dispute stemming from a real estate mortgage. Josefina Gabriel foreclosed on a property owned by Secundina Cebrero after Cebrero failed to pay her debt. Later, Gabriel discovered that Cebrero, through her attorney-in-fact, Celso Laviña, had sold the property to Progressive Trade & Services Enterprises, represented by Manuel C. Chua. Eduardo Cañiza, claiming to be Gabriel’s attorney-in-fact, filed a lawsuit to nullify this sale. However, Cañiza did not provide a Special Power of Attorney (SPA) to prove his authority to act on Gabriel’s behalf, which became a central issue in the case.

The core legal question is whether a complaint filed by an attorney-in-fact, without sufficient proof of authority, can grant a court jurisdiction over the case. The Court of Appeals (CA) reversed the trial court’s decision, holding that the lack of an SPA meant Cañiza was not authorized to file the complaint, thus the court lacked jurisdiction. The Supreme Court (SC) affirmed the CA’s decision, emphasizing that proper authorization is crucial for a valid legal representation. This case underscores the importance of providing adequate proof when one person acts on behalf of another in legal proceedings.

The Supreme Court’s analysis hinged on the rules governing real parties-in-interest and the requirements for verification and certification against forum shopping. According to Section 2, Rule 3 of the 1997 Rules of Court, a real party-in-interest is someone who stands to benefit or be injured by the judgment in a suit. Gabriel, as the highest bidder at the foreclosure sale and claimant of ownership, was deemed the real party-in-interest. However, the issue was not her status but the authority of Cañiza, who acted on her behalf.

The Court referred to the guidelines established in Altres, et al. v. Empleo, et al., which distinguish between defects in verification and certification against forum shopping. While defects in verification can sometimes be excused, non-compliance with certification requirements is generally not curable unless there is “substantial compliance” or “special circumstances.” The Court highlighted that the certification must be signed by all plaintiffs, and if a representative signs, they must have a Special Power of Attorney (SPA).

“Finally, the certification against forum shopping must be executed by the party-pleader, not by his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must execute a Special Power of Attorney designating his counsel of record to sign on his behalf.” (Altres, et al. v. Empleo, et al., 594 Phil. 246 (2008))

The reason for requiring the party-pleader to sign the certification is that they are best positioned to know whether similar cases have been filed. If the principal party cannot sign, the representative must be duly authorized. In this case, Cañiza claimed to be Gabriel’s attorney-in-fact but failed to provide an SPA to support this claim. The Court found that the mere mention of Cañiza as Gabriel’s attorney-in-fact in a previous decision was insufficient proof of authorization. The absence of an SPA was particularly significant given that Gabriel was declared incompetent and confined to a medical center, making it even more critical to establish Cañiza’s authority.

The Court emphasized that a complaint filed by an unauthorized person is not deemed filed and produces no legal effect. Consequently, the court lacks jurisdiction over the complaint and the plaintiff. This principle was reiterated in Palmiano-Salvador v. Rosales, where a similar lack of proof of authority led to the dismissal of the case. Jurisdiction over the parties is essential for a court to dispose of a case on its merits. Jurisdiction over the plaintiff is acquired upon filing a valid complaint.

Substitution of heirs, which occurred after Gabriel’s death, did not cure the defect in the initial complaint. While substitution ensures that the deceased party’s interests are represented, it does not retroactively validate an unauthorized filing. The purpose of substitution is to bring the heirs within the court’s jurisdiction, not to correct jurisdictional defects that existed from the beginning. This is consistent with the rule that the court acquires jurisdiction over the plaintiff upon the filing of the complaint.

The Court noted the annotation of the real estate mortgage on the property’s title, indicating that Progressive Trade & Services Enterprises had notice of Gabriel’s interest. A mortgage is a real right that follows the property, binding subsequent transferees. As such, Progressive could not claim to be a buyer in good faith to avoid the mortgage. However, this did not change the outcome because the complaint was invalid from the outset due to Cañiza’s lack of authority.

Despite Progressive’s awareness of the mortgage, the case was dismissed because the court never validly acquired jurisdiction due to the defect in the complaint’s filing. The Supreme Court underscored that procedural rules, such as the requirement for proper authorization, are essential for ensuring fairness and order in legal proceedings. Failure to comply with these rules can have significant consequences, including the dismissal of a case.

FAQs

What was the key issue in this case?	The key issue was whether a complaint filed by an attorney-in-fact without a Special Power of Attorney (SPA) could confer jurisdiction to the court. The Supreme Court ruled that without proper authorization, the complaint was invalid, and the court lacked jurisdiction.
What is a Special Power of Attorney (SPA)?	A Special Power of Attorney (SPA) is a legal document authorizing a person (the attorney-in-fact) to act on behalf of another person (the principal) in specific matters. It must clearly define the scope of the attorney-in-fact’s authority.
Why is the certification against forum shopping important?	The certification against forum shopping is a sworn statement by the plaintiff that they have not filed similar cases in other courts or tribunals. It prevents parties from pursuing multiple lawsuits simultaneously to increase their chances of a favorable outcome.
What happens if the person who signs the certification is not authorized?	If the person signing the certification against forum shopping is not authorized, the complaint may be dismissed for lack of jurisdiction. The court requires proof of authority, such as an SPA, to ensure the case is legitimately filed.
Can a defect in the complaint be cured by substitution of heirs?	No, the substitution of heirs does not cure a defect in the original complaint, such as the lack of proper authorization. Substitution only ensures that the deceased party’s interests are represented but does not retroactively validate an unauthorized filing.
What is the role of a real party-in-interest in a lawsuit?	A real party-in-interest is the person who stands to benefit or be injured by the judgment in the suit. The law requires that every action must be prosecuted or defended in the name of the real party-in-interest to ensure that the case involves an actual controversy.
What is the effect of a mortgage on a property that is sold?	A mortgage is a real right that follows the property, meaning that the sale of the mortgaged property does not release the mortgage. The buyer of the property takes it subject to the existing mortgage and must respect the encumbrance.
What does it mean for a court to lack jurisdiction over a case?	When a court lacks jurisdiction, it means that it does not have the legal authority to hear and decide a case. Without jurisdiction, any judgment or order issued by the court is void and unenforceable.

In summary, the Supreme Court’s decision underscores the critical importance of proper legal representation and compliance with procedural rules. The absence of a Special Power of Attorney invalidated the complaint, preventing the court from acquiring jurisdiction. This ruling serves as a reminder to ensure that all representatives are duly authorized and all legal documents are properly executed before initiating legal action.

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: HEIRS OF JOSEFINA GABRIEL VS. SECUNDINA CEBRERO, G.R. No. 222737, November 12, 2018