G.R. No. 213939, 12 October 2016
Multi Agri-Forest and Community Development Cooperative (respondent) is a registered credit cooperative wherein Lylith Fausto (Lylith), Jonathan Fausto (Jonathan), Rico Alvia (Rico), Arsenia Tocloy (Arsenia), Lourdes Adolfo (Lourdes) and Anecita Mancita (Anecita)(collectively, the petitioners) are active members.
Lylith obtained a loan from the respondent in the amount of P80,000.00. Subsequently, she secured another loan in the amount of P50,000.00. And a third loan from the respondent also in the amount of P50,000.00. All of the mentioned transactions were evidenced by separate promissory notes, with Anecita and Lourdes signing as co-makers in the first and second loans, and Rico and Glicerio Barce (Glicerio) in the third loan.
Similarly, Jonathan obtained a loan from the respondent in the amount of P60,000.00 with Lylith and Glicerio as co-makers and a second loan in the amount of P100,000.00, with Lylith and Arsenia as his co-makers.
Lylith and Jonathan, however, failed to pay their loans despite repeated demands. The respondent, through its Acting Manager Ma. Lucila G. Nacario (Nacario), filed five separate complaints for Collection of Sum of Money. Petitioners filed a motion to dismiss by way of a demurrer to evidence on the ground of lack of authority of Nacario to file the complaints and to sign the verification against forum shopping.
MTCC ruled in favor of the respondent and held the petitioners liable. RTC rendered a Joint Decision affirming with modification the decision of the MTCC. CA affirmed the decision of RTC.
Whether Nacario has no authority to act on behalf of the respondent, there being no board resolution empowering her to do so at the time she filed the complaints.
The petitioners asseverate that Nacario has no authority to file the complaints on behalf of the respondent. They argue that it is only by the authority of a board resolution that Nacario may be able to validly pursue acts in representation of the cooperative. They also contend that the applicable law is R.A. No. 6938 or the Cooperative Code of the Philippines (Cooperative Code), and not the Corporation Code of the Philippines (Corporation Code).
That the applicable law should be the Cooperative Code and not the Corporation Code is not sufficient to warrant a different resolution of this case. Verily, both codes recognize the authority of the BOD, through a duly-issued board resolution, to act and represent the corporation or the cooperative, as the case maybe, in the conduct of official business. In Section 23of the Corporation Code, it is provided that all corporate powers of all corporations formed under the Code shall be exercised by the BOD. All businesses are conducted and all properties of corporations are controlled and held by the same authority. In the same manner, under Section 39 of the Cooperative Code, the BOD is given the power to direct and supervise the business, manages the property of the cooperative and may, by resolution, exercise all such powers of the cooperative. The BOD, however, may authorize a responsible officer to act on its behalf through the issuance of a board resolution attesting to its consent to the representation and providing for the scope of authority.
Nevertheless, there were instances when the Court recognized the authority of some officers to file a case on behalf of the corporation even without the presentation of the board resolution.
The rationale in justifying the authority of corporate officers or representatives of the corporation to sign the verification or certificate against forum shopping is that they are in the best position to verify the truthfulness and correctness of the allegations in the petition.Nonetheless, this was not meant to trump the established rule of issuing a board resolution and appending a copy thereof to the complaint or petition so as to preclude any question on the authority to file the petition, particularly in signing the verification and certification against forum shopping.
Apart from the foregoing, the lack of authority of a corporate officer to undertake an action on behalf of the corporation or cooperative may be cured by ratification through the subsequent issuance of a board resolution, recognizing the validity of the action or the authority of the concerned officer.
In this case, the respondent expressly recognized the authority of Nacario to file the complaints in Resolution No. 47, Series of 2008,in which the BOD resolved to recognize, ratify and affirm as if the same were fully authorized by the BOD, the filing of the complaints before the MTCC of Naga City by Nacario. Here, considering that Nacario’s authority had been ratified by the BOD, there is no reason for the Court not to uphold said authority.
*Case Digest by Legine S. Ramayla, JD-IV, Andres Bonifacio College, SY: 2019-2020