G.R. No. 206617 , January 30, 2017
PHILIPPINE NUMISMATIC AND ANTIQUARIAN SOCIETY, Petitioner, vs. GENESIS AQUINO, ANGELO BERNARDO, JR., EDUARDO M. CHUA, FERNANDO FRANCISCO, JR., FERMIN S. CARINO, PERCIVAL M. MANUEL, FERNANDO M. GAITE, JR., JOSE CHOA, TOMAS DE GUZMAN, JR., LI VI JU, CATALINO M. SILANGIL, RAMUNDO SANTOS, PETER SY, and WILSON YULOQUE, Respondents

FACTS

Petitioner Philippine Numismatic and Antiquarian Society, Inc. (PNAS) is a non-stock, non-profit corporation. On December 22, 2009, a complaint (Civil Case No. 09-122709) was filed in the RTC, Manila, by PNAS against the respondents, praying that a Membership Meeting conducted on November 25, 2008 be declared null and void and for injunctive relief. The verification of this complaint was signed by Atty. William L. Villareal, and PNAS was represented by the Siguion Reyna Montecillo and Ongsiako Law Office. Earlier, on October 29, 2009, a separate complaint (Civil Case No. 09-122388) was filed by PNAS against respondent Angelo Bernardo, Jr., verified by respondents Eduardo M. Chua, Catalino M. Silangil, and Percival M. Manuel claiming to be attorneys-in-fact per a Secretary’s Certificate, with PNAS represented by a different counsel. Faced with two different groups claiming to represent PNAS, the RTC issued a Joint Order directing the parties to submit pleadings and documentary exhibits to establish who the true officers of PNAS were and who had authority to represent it. Only some of the respondents complied, alleging that Atty. Villareal had no authority from PNAS’s Board of Directors to file the complaint, making it an ultra vires act. The petitioner (through Atty. Villareal) failed to comply with the court’s order to submit proof of authority. Consequently, the RTC dismissed Civil Case No. 09-122709, finding that Atty. Villareal had no authority to represent PNAS and file the complaint. The Court of Appeals affirmed the dismissal. PNAS elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in upholding the dismissal of the intra-corporate case, primarily on the ground that the suit was not prosecuted by the real party-in-interest due to the filing counsel’s lack of authority.

RULING

The Supreme Court denied the petition and affirmed the dismissal. The Court held that an action must be prosecuted in the name of the real party-in-interest, as required by Section 2, Rule 3 of the Rules of Court, which applies suppletorily to intra-corporate cases under the Interim Rules. A corporation, as a juridical entity, is the real party-in-interest in suits concerning its rights and obligations. However, it can only act through its duly authorized officers or agents. The authority to sue on behalf of a corporation must be granted by the board of directors through a board resolution. In this case, the complaint in Civil Case No. 09-122709 was filed by counsel on behalf of PNAS based on the verification of Atty. Villareal, who claimed to be its President. When the RTC ordered the submission of proof of authority to file the suit, the petitioner failed to comply. This failure lent credence to the respondents’ assertion that the suit was unauthorized. The Court emphasized that the requirement of real party-in-interest prevents the prosecution of actions by persons without right, title, or interest, ensures the actual party entitled to relief prosecutes the action, avoids multiplicity of suits, and discourages litigation. Since the suit was not properly authorized by the corporation, it was not prosecuted by the real party-in-interest. The dismissal was proper, and the courts correctly refrained from delving into the merits of a case initiated without proper authority.