RIZAL COMMERCIAL BANKING CORPORATION, ROLAND R. PAITA, HELENA N. MONTEMAYOR, AND LOU ANNABELLE C. SIBUG, PETITIONERS, VS. THE HON. FERNANDO L. FELICEN, IN HIS CAPACITY AS THE PR…
BUESER, J.:
The factual antecedents, as borne out by the record, reveals that:
On October 1, 2004, private respondent New Electronics System Company, Inc. (NESCI, for brevity), represented by Nan Young Park Kim, opened with RCBC Rosario Business Center Dollar Account No. 8-354-023297.[1]
On even date and same occasion, NESCI likewise opened Peso Savings Account No. 1-354-687824, which allowed the transfer of funds to a current account in order to facilitate the issuance of checks. For this reason, NESCI likewise opened Peso Current Account No. 0-354-518104. Jong Gap Kim was the principal signatory of these accounts.[2]
On several occasions during the year 2010, Ms. Maluto transacted with RCBC Rosario Business Center. During such dealings, she presented several RCBC forms and documents, such as deposit and withdrawal slips, as well as RCBC checks drawn from NESCI’s Peso Current Account. These forms, documents and checks bore Jong Gap Kim’s signature.[3]
During the last months of the year 2010, Ms. Maluto likewise caused several fund transfers from NESCI’s Dollar Savings Account to its Peso Savings Account using RCBC’s standard application forms for Manually Initiated Fund Transfers (MIFTs), also bearing Jong Gap Kim’s signature.
A month thereafter, NESCI, through counsel, sent RCBC Rosario Business Center a letter dated January 25, 2011, demanding the return of the amounts purportedly debited from NESCI’s Dollar Savings Account upon the instance of Ms. Maluto. The letter intimated that Ms. Maluto was no longer connected with NESCI and that she forged the signatures of Jong Gap Kim on the MIFTs processed by RCBC Rosario Business Center.[4]
In a letter dated March 9, 2011, Roland R. Paita, acting for and in behalf of RCBC, denied NESCI’s demand, pointing out that (1) granting for the sake of argument that the fund transfers in issue were unauthorized, still, NESCI did not suffer any loss since the amounts debited went into its own Peso Savings Account; (2) NESCI never called the attention of RCBC regarding any of the various transactions done and/or initiated by Ms. Maluto so that at no point did RCBC suspect any irregularity in her transactions for and in behalf of NESCI; and (3) NESCI should instead proceed against Ms. Maluto to recover the funds transferred without its authorization.[5]
On July 13, 2011, NESCI initiated a Complaint against RCBC, Roland R. Paita, Helena N. Montemayor and Lou Annabelle C. Sibug for collection of sum of money and damages.[6] The case was docketed as Civil Case No. 4887-11.[7]
On September 9, 2011, the trial court issued summons directing RCBC to file its Answer and/or any responsive pleading to the Complaint.[8]
In lieu of filing an Answer, RCBC filed its Special Appearance with Motion to Dismiss dated October 14, 2011, praying for the dismissal of the case a quo on several grounds, including, inter alia, the lack of cause of action due to lack of corporate authority, failure to state a cause of action, as well as waiver of claim and extinguishment thereof.[9]
NESCI filed its Opposition Cum Motion, after which RCBC filed its Reply With Opposition to Motion For Issuance of Alias Summons.[10]
On March 12, 2012, the trial court issued the assailed Order. In said Order, the trial court a quo held that, as to the issue of compliance with the requirement of verification and certification of non-forum shopping, plaintiff NESCI substantially complied with the Rules. On the matter of the alleged failure to state a cause of action, the trial court likewise opined that the complaint thus filed sufficiently stated a cause of action.[11]
On April 27, 2012, RCBC filed its Motion for Reconsideration.[12]
On May 21, 2012, NESCI filed its Comment.[13]
On June 5, 2011, RCBC filed its Reply.[14]
On September 11, 2012, the trial court denied RCBC’s Motion for Reconsideration.
Hence, the present Petition, assailing the March 12, 2012 Order issued by the trial court on the following grounds, thus.
“A
THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN FAILING TO DISMISS THE CASE A QUO ON THE GROUND OF LACK OF CAUSE OF ACTION, GIVEN THAT ABSENT THE PROPER AND VALID CORPORATE AUTHORITY, THE INDIVIDUAL WHO INITIATED THE CASE A QUO, NAN YOUNG PARK KIM, HAS NO CAUSE OF ACTION AGAINST PETITIONERS RCBC, PAITA, MONTEMAYOR AND SIBUG.
B
THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN FAILING TO DISMISS THE CASE A QUO NOTWITHSTANDING THE CLEAR SHOWING ON THE FACE OF THE COMPLAINT THAT THE SO-CALLED NEGLIGENCE OF PETITIONER RCBC IS NOT THE PROXIMATE CAUSE OF THE LOSS ALLEGEDLY SUFFFERED BY PRIVATE RESPONDENT NESCI.”[15]
Petitioner’s position, in the present case, is that Nan Young Park Kim who, in behalf of respondent NESCI, signed the Verification and Certification of Non-Forum Shopping attached to the Complaint, was without authority to commence the case before the court a quo inasmuch as the Corporate Resolution attached to the Complaint was defective such that no valid delegation of power to sue was vested in Nan Young Park Kim. Such being the case, Mr. Park Kim has, thus, no cause of action in the case a quo. Consequently, the issuance by the trial court of the Order dated March 8, 2012, which denied herein petitioner’s motion to dismiss, constitutes grave abuse of discretion amounting to lack or excess of jurisdiction, assailable by certiorari.
We disagree.
Indeed, it is settled that the power of a corporation to sue and be sued is lodged in the board of directors, which exercises its corporate powers.[16] It necessarily follows that an individual corporate officer cannot solely exercise any corporate power pertaining to the corporation without authority from the board of directors.[17] Thus, physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors.[18]
Consequently, a verification signed without an authority from the board of directors is defective. However, the requirement of verification is simply a condition affecting the form of the pleading and non-compliance does not necessarily render the pleading fatally defective.[19] The court may, in fact, order the correction of the pleading if verification is lacking or, it may act on the pleading although it may not have been verified, where it is made evident that strict compliance with the rules may be dispensed with so that the ends of justice may be served.[20]
A distinction between noncompliance and substantial compliance with the requirements of a certificate of non-forum shopping and verification as provided in the Rules of Court must be made.[21] In this case, it is undisputed that the Complaint filed with the trial court was accompanied by a Verification and Certification of Non-Forum Shopping signed by Mr. Park Kim, although the proof of authority from the board is being questioned by herein petitioner. Nonetheless, this Court finds that the submission of a Verification and Certification of Non-Forum Shopping signed by Mr. Park coupled with a Corporate Resolution signed by NESCI’s President and other members of the Board[22] constitutes substantial compliance with Sections 4 and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure.
Indeed, in some older cases, the High Court took a quite stringent stand on matters regarding the validity of the verification and certification of non-forum shopping. Thus, in PAL v. FASAP,[23] it was held that only individuals vested with authority by a valid board resolution may sign a certificate of non-forum shopping on behalf of a corporation. The petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatory’s authority.[24]
In a number of cases, however, the Supreme Court has recognized exceptions to this rule.[25] Thus, in Pasos v. Philippine National Construction Corp.,[26] it was held:
“It has been the constant holding of this Court in cases instituted by corporations that an individual corporate officer cannot exercise any corporate power pertaining to the corporation without authority from the board of directors pursuant to Section 23, in relation to Section 25 of the Corporation Code which clearly enunciates that all corporate powers are exercised, all business conducted, and all properties controlled by the board of directors. However, we have in many cases recognized the authority of some corporate officers to sign the verification and certification against forum-shopping. Some of these cases were enumerated in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue which was cited by the appellate court:
‘In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general manager to sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a verification signed by an “employment specialist” who had not even presented any proof of her authority to represent the company; in Novelty Philippines, Inc. v. CA, we ruled that a personnel officer who signed the petition but did not attach the authority from the company is authorized to sign the verification and non-forum shopping certificate; and in Lepanto Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the Board and President of the Company can sign the verification and certificate against non-forum shopping even without the submission of the board’s authorization.
In sum, we have held that the following officials or employees of the company can sign the verification and certification without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized signatories to the verification and certification required by the rules, the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping, being “in a position to verify the truthfulness and correctness of the allegations in the petition.’
While we agree with petitioner that in Cagayan Valley, the requisite board resolution was submitted though belatedly unlike in the instant case, this Court still recognizes the authority of Mr. Erece, Jr. to sign the verification and certification on behalf of PNCC sans a board resolution or secretary’s certificate as we have allowed in Pfizer, Inc. v. Galan, one of the cases cited in Cagayan Valley. In Pfizer, the Court ruled as valid the verification signed by an employment specialist as she was in a position to verify the truthfulness and correctness of the allegations in the petition despite the fact that no board resolution authorizing her was ever submitted by Pfizer, Inc. even belatedly. We believe that like the employment specialist in Pfizer, Mr. Erece, Jr. too, as head of the Personnel Services Department of PNCC, was in a position to assure that the allegations in the pleading have been prepared in good faith and are true and correct.”[27] (Emphasis and underscoring supplied.)
In the present case, this Court finds that Mr. Park Kim, NESCI’s representative in the case a quo and the one who signed the Verification and Certification of Non-Forum Shopping, is the petitioner NESCI’s current General Manager, who was in a position to verify the truthfulness and correctness of the allegations in the Complaint filed against herein petitioner. Such being the case, this Court, thus, holds, and so holds, that Mr. Park Kim has been authorized by NESCI to represent it in the case a quo and, hence, the submission of the Verification and Certification of Non-Forum Shopping signed by him substantially complies with Sections 4 and 5, Rule 7 of the 1997 Revised Rules on Civil Procedure.
We likewise disagree with the petitioner that private respondent failed to state a cause of action in its Complaint.
A cause of action is defined as the act or omission by which a party violates a right of another.[28]
A complaint states a cause of action when it contains the following elements: (1) the legal right of plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right.[29]
It is well-settled that the existence of a cause of action is determined by the allegations in the complaint.[30] In this relation, a complaint is said to sufficiently assert a cause of action if, admitting what appears solely on its face to be correct, the plaintiff would be entitled to the relief prayed for.[31] Thus, if the allegations furnish adequate basis by which the complaint can be maintained, then the same should not be dismissed, regardless of the defenses that may be averred by the defendants.[32]
The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify the relief demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein? The inquiry is into the sufficiency, not the veracity of the material allegations. If the allegations in the complaint furnish sufficient basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented by the defendants.[33] In other words, a cause of action arises when that should have been done is not done, or that which should not have been done is done.[34]
Stated otherwise, the resolution on this matter should stem from an analysis on whether or not the complaint is able to convey a cause of action; and not that the complainant has no cause of action. Lest it be misunderstood, failure to state a cause of action is properly a ground for a motion to dismiss under Section 1 (g), Rule 16 of the Rules of Court (Rules), while the latter is not a ground for dismissal under the same rule.[35]
Before an action can properly be commenced, all the essential elements of the cause of action must, however, be in existence, that is, the cause of action must be complete. All valid conditions precedent to the institution of the particular action, whether prescribed by statute, fixed by agreement of the parties or implied by law must be performed or complied with before commencing the action, unless the conduct of the adverse party has been such as to prevent or waive performance or excuse non-performance of the condition.[36]
Moreover, it is not enough that a party has, in effect, a cause of action. The rules of procedure require that the complaint must contain a concise statement of the ultimate or essential facts constituting the plaintiff’s cause of action. The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer of plaintiff.[37] The focus is on the sufficiency, not the veracity, of the material allegations. Failure to make a sufficient allegation of a cause of action in the complaint warrants its dismissal.[38]
Section 3 of Rule 6 of the Rules of Court states that a “complaint is a concise statement of the ultimate facts constituting the plaintiff’s cause or causes of action.” Further elaborating thereon, Section 1 of Rule 8 thereof declares that every pleading, including, of course, a complaint, “shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts xxx omitting the statement of mere evidentiary facts.” “Ultimate facts” are the essential and substantial facts which either form the basis of the primary right and duty or which directly make up the wrongful acts or omissions of the defendant,[39] while “evidentiary facts” are those which tend to prove or establish said ultimate facts.[40]
A complaint is sufficient if it contains sufficient notice of the cause of action even though the allegation may be vague or indefinite, for in such case, the recourse of the defendant would be to file a motion for a bill of particulars[41] It is, indeed, the better rule that, pleadings, as well as remedial laws, should be liberally construed so that the litigants may have ample opportunity to prove their respective claims so as to avoid possible denial of substantial justice due to legal technicalities.[42]
In this case, the Court finds that NESCI’s complaint in the court a quo properly states a cause of action since the allegations therein sufficiently bear out a case for negligence in violation of the Manual Regulations for Banks. Specifically, the complaint states:
xxx xxx xxx
“Through unauthorized Manually Initiated Fund Transfers (MIFTs) involving NESCI’s RCBC dollar account no. 8-354-02329-7 to its RCBC peso account no. 1-354-68782-4, Ms. Ruby Ann T. Maluto by forging NESCI President Gong Jap Kim’s signature was able to secure the transfer of the following:
3,500 Dollars at an exchange rate of P42.40 to a dollar on November 4, 2010 xxx.
3,000 Dollars at an exchange rate of P44.15 to a dollar on November 26, 2010 xxx.
2,000 Dollars at an exchange rate of P43.10 to a dollar on December 1, 2010 xxx.
3,000 Dollars at an exchange rate of P44.15 to a dollar on December 22, 2010 xxx.
3,000 Dollars at an exchange rate of P43.30 to a dollar on December 28, 2010 xxx.
2,000 Dollars at an exchange rate of P44.30 to a dollar on January 26, 2010 xxx.
A manually initiated fund transfer form dated January 21, 2011 bearing the original signature of NESCI President Mr. Jong Gap Kim xxx.
That the Manual of Regulations for Banks (MORB) specifically the Minimum Guidelines for Fund Transfers (Part VIII on Risk-Based Due Diligence & Validation) require signature verification and telephone callback, among others, as precautionary measures;
That RCBC Rosario Business Center Branch through its employees was negligent on both counts as they failed to detect an obviously forged signature and derelict in their duty for a telephone callback;
Because of the said unauthorized transfer from NESCI’s RCBC dollar account to its RCBC peso account, Ms. Maluto, through fraud and machination on check/cash disbursement, was able to withdraw on NESCI’s RCBC peso account an accumulated amount of P932,143.00 from August 18, 2010 up to January 25, 2011;
Ms. Ruby Maluto is currently facing 23 counts of Estafa under I.S. [N]o. B-0729 at the Office of Provincial Prosecutor, Imus, Cavite;
That written demand to return the debited amount in NESCI’s dollar account was made xxx to no avail;
As a result of defendants’ refusal to pay, plaintiff as represented by its General Manager suffered sleepless nights, serious anxieties and lost business opportunities-unquantifiable losses for which defendants should be made to pay at least P50,000.00 as moral and exemplary damages.”[43]
xxx xxx xxx
In the present case, it is, thus, clear that the elements of a cause of action are manifest in NESCI’s complaint, which alleged that: (1) that NESCI opened a dollar as well as peso accounts with RCBC; (2) that on account of Manual Guidelines for Fund Transfers (Part VIII, Risk-Based Due Diligence and Validation, RCBC has corresponding obligation to require signature verification and telephone callback, inter alia, as precautionary measures, to effect transfer of funds from one account to another; (3) that RCBC, through its personnel, was negligent such that it failed to detect a forged signature and derelict in its telephone callback duty, thus, allowing an unauthorized transfer by Ruby Ann T. Maluto through fraud and machinations from its dollar to its peso account in the amount of Php932,143.00; (4) and that RCBC did not pay despite demand.
Indeed, the fact that the purported negligence of RCBC was not the proximate cause of the alleged fraudulent and unauthorized transfer of funds from NESCI’s dollar to its peso account are merely evidentiary and such may be put up during trial. Such counter allegation does not affect the sufficiency of the complaint.
WHEREFORE, in view of the foregoing, the Order dated March 12, 2012 issued by the trial court is hereby AFFIRMED. The instant Petition is DISMISSED for lack of merit.
SO ORDERED.
Zalameda[*] (Acting Chairperson) and Sempio Diy,[**] JJ., concur.
[*] Vice Justice De Guia-Salvador per Office Order No. 184-14-ABR dated May 5, 2014.
[**] Acting Junior Member per Office Order No. 187-14-ABR dated May 6, 2014.
[1] Rollo, p. 7.
[2] Id.
[3] Id.
[4] Id.
[5] Rollo, p. 8.
[6] Id., pp. 8; 74-77.
[7] Id., p. 8.
[8] Id.
[9] Id.
[10] Id.
[11] Id., pp. 32-34.
[12] Rollo, 37-53.
[13] Id., pp. 133-134.
[14] Id., pp. 137-150.
[15] Id., pp. 9-10.
[16] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, G.R. No. 181277, July 3, 2013: citing Cebu Metro Pharmacy, Inc. v. Euro-Med Laboratories, Philippines, Inc., G.R. No. 164757, 18 October 2010, 633 SCRA 320, 328.
[17] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, supra: citing Cebu Metro Pharmacy, Inc. v. Euro-Med Laboratories, Philippines, Inc., supra.
[18] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, G.R. No. 181277, July 3, 2013: citing Shipside Incorporated v. Court of Appeals, 404 Phil. 981, 994 (2001).
[19] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, supra: citing Shipside Incorporated v. Court of Appeals, supra.
[20] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, G.R. No. 181277, July 3, 2013: citing Shipside Incorporated v. Court of Appeals, 404 Phil. 981, 995 (2001).
[21] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, supra: citing Mediserv, Inc. v. Court of Appeals (Special Former 13th Division), G.R. No. 161368, 5 April 2010, 617 SCRA 284, 296.
[22] Rollo, p. 78.
[23] 515 Phil. 579 (2006).
[24] Id.
[25] Swedish Match Philippines, Inc. v. Treasurer of City of Manila, supra.
[26] G.R. No. 192394, July 3, 2013.
[27] Pasos v. Philippine National Construction Corp., supra.
[28] Unicapital, Inc. v. Consing, Jr., G.R. Nos. 175277, 175285 & 192073, September 11, 2013: citing Section 2, Rule 2 of the Rules of Court.
[29] Lucas v. Lucas, G.R. No. 190710, June 6, 2011: citing Spouses Diaz v. Diaz, 387 Phil. 314, 329 (2000).
[30] Unicapital, Inc. v. Consing, Jr., supra: citing Peltan Dev., Inc. v. Court of Appeals, 336 Phil. 824, 833 (1997).
[31] Unicapital, Inc. v. Consing, Jr., supra: citing Davao Light & Power Co., Inc. v. Judge, Regional Trial Court, Davao City, Br. 8, G.R. No. 147058, March 10, 2006, 484 SCRA 272, 281.
[32] Unicapital, Inc. v. Consing, Jr., supra: citing The Consolidated Bank and Trust Corp. v. Court of Appeals, 274 Phil. 947, 955 (1991).
[33] Unicapital, Inc. v. Consing, Jr., supra: citing Pioneer Concrete Philippines, Inc. v. Todaro, G.R. No. 154830, June 8, 2007, 524 SCRA 153; and Hongkong and Shanghai Banking Corporation, Limited v. Catalan, 483 Phil. 525, 538 (2004).
[34] Anchor Savings Bank v. Furigay, G.R. No. 191178, March 13, 2013: citing Soloil, Inc. v. Philippine Coconut Authority, G.R. No. 174806, August 11, 2010, 628 SCRA 185, 190.
[35] Unicapital, Inc. v. Consing, Jr., supra.
[36] Anchor Savings Bank v. Furigay, supra: citing Philippine American General Insurance Co., Inc. v. Sweet Lines, Inc., G.R. No. 87434, August 5, 1992, 212 SCRA 194, 207.
[37] Anchor Savings Bank v. Furigay, supra: citing First Bancorp, Inc. v. Court of Appeals, 525 Phil. 309, 327 (2006).
[38] Anchor Savings Bank v. Furigay, supra: citing Philippine Daily Inquirer v. Alameda, G.R. No. 160604, March 28, 2008, 550 SCRA 199, 207.
[39] Far East Marble (Phils.), Inc. v. Court of Appeals, G.R. No. 94093, August 10, 1993: citing Tantuico, Jr. vs. Republic of the Phils., et al., 204 SCRA 428 [1991].
[40] Far East Marble (Phils.), Inc. v. Court of Appeals, supra.
[41] Id.: citing Ramos v. Condez, 20 SCRA 1146 [1967].
[42] Far East Marble (Phils.), Inc. v. Court of Appeals, supra: citing Adamao, et al. vs. Intermediate Appellate Court, et al., 191 SCRA 195 [1990].
[43] Rollo, pp. 75-76.