Formoso v. Philippine National Bank

The certification against forum shopping must be signed by all petitioners, and the signature of only one petitioner is insufficient unless the petitioners share a common interest and invoke a common cause of action or defense—such as when they are immediate relatives or co-owners—and the lone signatory is authorized or reasonably situated to speak for the rest. Absent such circumstances, the defect is not curable and warrants dismissal of the petition.

Nellie Panelo Vda. De Formoso and her late husband Benjamin S. Formoso had secured a loan from Philippine National Bank, Vigan Branch on September 4, 1980, secured by a real estate mortgage over certain real properties. On October 14, 1989, Nellie and her children executed a special power of attorney in favor of Primitivo Malcaba, authorizing him to secure documents and owner's copies of the titles pertaining to that loan. The Formosos subsequently sold the mortgaged properties to Malcaba via a Deed of Absolute Sale on April 20, 1990. Malcaba was thus a transferee of the mortgaged properties but was not a party to the original loan agreement with PNB.

On September 4, 1980, Nellie Panelo Vda. De Formoso and her late husband, Benjamin S. Formoso, secured a loan from Philippine National Bank, Vigan Branch, secured by a real estate mortgage over certain real properties. On October 14, 1989, Nellie and her children—Ma. Theresa Formoso-Pescador, Roger Formoso, Mary Jane Formoso, Bernard Formoso, and Benjamin Formoso—executed a special power of attorney in favor of Primitivo Malcaba, authorizing him, among other things, to secure all papers and documents including the owner's copies of the titles of the real properties pertaining to the loan. On April 20, 1990, the Formosos sold the mortgaged properties to Malcaba through a Deed of Absolute Sale.

On March 22, 1994, Malcaba and his lawyer went to PNB to fully pay the loan obligation, including interests, in the amount of ₱2,461,024.74. PNB allegedly refused to accept the tender of payment and to release the mortgage or surrender the titles of the subject properties. Two days later, on March 24, 1994, the petitioners filed a Complaint for Specific Performance against PNB before the Regional Trial Court of Vigan, Ilocos Sur, praying that PNB be ordered to accept the amount as full settlement of the Formosos' loan obligation.

After an exchange of pleadings, the RTC rendered its decision on October 27, 1999, favoring the petitioners on the main action but denying their prayer for exemplary or corrective damages, attorney's fees, and annual and daily interest for lack of evidence. PNB's motion for reconsideration was denied for failure to comply with Rule 15, Section 5, and its notice of appeal was dismissed as filed out of time. The petitioners received their copy of the decision on November 26, 1999. On January 25, 2001, they filed a Petition for Relief from Judgment, questioning the RTC's finding that no testimonial evidence had been presented to warrant an award of moral and exemplary damages. They explained that they could not earlier file a motion for reconsideration because they could not obtain a copy of the transcripts of stenographic notes. The RTC denied the petition for lack of merit in its August 6, 2001 Order and denied the subsequent motion for reconsideration in its Omnibus Order of September 26, 2001.

On November 29, 2001, the petitioners filed a petition for certiorari before the Court of Appeals challenging the RTC's August 6, 2001 and September 26, 2001 Orders. The petition listed seven petitioners: Nellie, her five children, and Malcaba. However, only Malcaba signed the verification and certification of non-forum shopping, with no showing that he was authorized by the Formosos to sign on their behalf. The CA dismissed the petition on January 25, 2002, citing the rule that all petitioners must sign the certification unless the signatory is authorized by the others. The CA denied the motion for reconsideration on August 8, 2002, prompting the present petition for review before the Supreme Court.

• Substantial Compliance: Petitioners argued that they substantially complied with the requirements under the 1997 Rules of Civil Procedure on verification and certification of non-forum shopping, and that the rule requiring all petitioners to sign should be liberally construed since only questions of law were raised in the petition for certiorari, with no factual issues requiring the personal knowledge of each petitioner.
• Partial Due Course: Petitioners alternatively argued that the CA should not have dismissed the entire petition but should have given it due course at least insofar as Malcaba was concerned, he being the signatory of the certification.
• Meritorious Petition: Petitioners contended that the CA gave undue weight to technicalities when the petition was clearly meritorious, asserting that based on the transcript of stenographic notes, there was sufficient testimonial evidence for the RTC to grant damages and attorney's fees as prayed for.

• Mandatory Signature Requirement: PNB countered that the mandatory rule on certification against forum shopping requires all six petitioners to sign, making the signature of Malcaba alone insufficient.
• Malcaba's Lack of Standing: PNB argued that Malcaba was not a party or signatory to the original contract of loan, nor was there evidence that he was a relative or co-owner of the subject properties.
• Factual Nature of the Issue: PNB asserted that the issue raised before the CA—whether petitioners were entitled to moral and exemplary damages and attorney's fees—was a factual one, not a question of law.
• No Individual Claim by Malcaba: PNB maintained that the body of the complaint failed to allege that Malcaba alone suffered damages or was alone entitled to relief, the wordings being clear that all petitioners were collectively seeking moral and exemplary damages and attorney's fees.

• Certification Against Forum Shopping: Whether the CA erred in dismissing the petition for certiorari on the ground that only one of the petitioners signed the verification and certification of non-forum shopping, without proof of authority to sign for the others.
• Partial Due Course: Whether the CA should have given due course to the petition at least insofar as Malcaba, the signatory, was concerned.
• Nature of the Issue: Whether the issue raised by the petitioners—entitlement to moral and exemplary damages and attorney's fees—presents a question of law cognizable in a petition for review on certiorari.
• Petition for Relief: Whether the Petition for Relief from Judgment may be granted on the grounds alleged.

• Certification Against Forum Shopping: No. The CA correctly dismissed the petition, the certification against forum shopping having been signed by only one of seven petitioners without proof of authority from the others, and the signatory not being a relative or co-owner sharing a common interest with the rest.
• Partial Due Course: No. The CA afforded petitioners an opportunity to comply when they filed their motion for reconsideration, but they still failed to secure the signatures of all petitioners, justifying the denial.
• Nature of the Issue: No. The question of entitlement to moral and exemplary damages and attorney's fees is factual, involving an examination of the probative value of evidence, and is beyond the province of a Rule 45 petition.
• Petition for Relief: No. The Petition for Relief disclosed no fact constituting fraud, accident, mistake, or excusable negligence, the transcript having been in counsel's cabinet all along.

• Certification Against Forum Shopping: The certification against forum shopping must be signed by all petitioners; the signature of only one is insufficient. The attestation requires personal knowledge by the executing party, and a lone signatory cannot be presumed to have personal knowledge of the filing or non-filing by co-petitioners of any similar action. While the Rules may be relaxed under reasonable or justifiable circumstances—such as when all petitioners share a common interest and invoke a common cause of action or defense, as when they are immediate relatives or co-owners—no such circumstance obtains here. Malcaba is not a relative of the Formosos, was not a party to the original loan, and was not shown to be a co-owner of the subject properties. There was no special power of attorney authorizing him to sign for the others, nor was any reasonable explanation offered for the failure of the other petitioners to sign. The cases where leniency was accorded (Heirs of Domingo Hernandez, Sr. vs. Plaridel Mingoa, Sr. and Cavile vs. Heirs of Cavile) involved relatives and co-owners sharing a common interest, which is absent in this case.

• Partial Due Course: The CA gave petitioners the opportunity to comply with the Rules when they filed their motion for reconsideration, but they refused to do so. Despite the opportunity to have all petitioners sign the verification and certification, they still failed to comply. Procedural rules are not to be belittled or dismissed simply because their non-observance may have prejudiced a party's substantive rights; they must be faithfully followed except for the most persuasive of reasons, none of which are present here.

• Nature of the Issue: Section 1, Rule 45 of the Rules of Court states that a petition shall raise only questions of law. A question of law arises when there is doubt as to what the law is on a certain state of facts, while a question of fact exists when the doubt arises as to the truth or falsity of the alleged facts. Once the issue invites a review of the evidence presented, the question is one of fact. The petitioners' claim that they were entitled to damages based on the transcript of stenographic notes necessarily requires an examination of the probative value of the evidence presented, which is a factual matter beyond the scope of a Rule 45 petition.

• Petition for Relief: A perusal of the Petition for Relief of Judgment discloses no fact constituting fraud, accident, mistake, or excusable negligence—the grounds for such relief. The transcript of stenographic notes was in counsel's cabinet all along and was only discovered when he was disposing of old and terminated cases. Had counsel been attentive to his records, he could have filed a motion for reconsideration or notice of appeal on behalf of the petitioners.

• Certification Against Forum Shopping — Requirement of All Petitioners' Signatures — The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties. Under reasonable or justifiable circumstances, as when all petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them substantially complies with the Rule. The attestation requires personal knowledge by the party executing the same, and the lone signatory cannot be presumed to have personal knowledge of the filing or non-filing by co-petitioners of any similar action. Non-compliance is generally not curable by subsequent submission or correction, unless there is a need to relax the Rule on the ground of substantial compliance or presence of special circumstances or compelling reasons.

• Verification — Substantial Compliance — Non-compliance with the requirement on or submission of defective verification does not necessarily render the pleading fatally defective. The Court may order its submission or correction or act on the pleading if strict compliance may be dispensed with in order that the ends of justice may be served. Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations signs the verification, and when matters alleged have been made in good faith or are true and correct.

• Distinction Between Verification and Certification Against Forum Shopping — A distinction must be made between non-compliance with the requirement on verification and non-compliance with the requirement on certification against forum shopping. As to verification, defects do not necessarily render the pleading fatally defective. As to certification against forum shopping, defects are generally not curable by subsequent submission or correction, unless there are special circumstances or compelling reasons justifying relaxation.

• Question of Law vs. Question of Fact (Rule 45) — A question of law arises when there is doubt as to what the law is on a certain state of facts, while a question of fact arises when the doubt concerns the truth or falsity of the alleged facts. For a question to be one of law, it must not involve an examination of the probative value of the evidence presented. Once the issue invites a review of the evidence, the question is one of fact and is beyond the province of a Rule 45 petition.

• "The certificate of non-forum shopping should be signed by all the petitioners or plaintiffs in a case, and that the signing by only one of them is insufficient. The attestation on non-forum shopping requires personal knowledge by the party executing the same, and the lone signing petitioner cannot be presumed to have personal knowledge of the filing or non-filing by his co-petitioners of any action or claim the same as similar to the current petition." — This passage articulates the core rationale for requiring all petitioners to sign the certification against forum shopping, emphasizing the personal-knowledge requirement that a lone signatory cannot satisfy on behalf of non-relatives.

• "While the Rules of Court may be relaxed for persuasive and weighty reasons to relieve a litigant from an injustice commensurate with his failure to comply with the prescribed procedures, nevertheless they must be faithfully followed. In the instant case, petitioners have not shown any reason which justifies relaxation of the Rules." — This passage defines the standard for when procedural rules may be relaxed and explains why the petitioners' circumstances did not meet that standard.

• "Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact." — This passage states the canonical test for distinguishing questions of law from questions of fact in the context of Rule 45 petitions, explaining why the petitioners' claim for damages was not cognizable.

• Loquias vs. Office of the Ombudsman, G.R. No. 139396, Aug. 15, 2000 — Cited by the CA for the rule that all petitioners must sign the certification of non-forum shopping unless the signatory is authorized by the others, and that substantial compliance does not suffice in matters requiring strict observance of the Rules.

• Athena Computers, Inc. and Joselito R. Jimenez vs. Wesnu A. Reyes, G.R. No. 156905, Sept. 5, 2007, 532 SCRA 343 — Followed for the proposition that when only one co-petitioner signs the verification and certification without proof of authority from the other, the defect warrants dismissal; also cited for the guideline that the certification must be executed by the party-pleader, not counsel.

• Docena vs. Lapesura — Followed for the rule that the certification of non-forum shopping should be signed by all petitioners or plaintiffs, and that signing by only one is insufficient due to the personal-knowledge requirement.

• Heirs of Domingo Hernandez, Sr. vs. Plaridel Mingoa, Sr., G.R. No. 146548, Dec. 18, 2009, 608 SCRA 394 — Distinguished. In that case, leniency was accorded because all petitioners were immediate relatives sharing a common interest in the land and a common cause of action, which circumstances are absent in the present case.

• Oldarico S. Traveno vs. Bobongon Banana Growers Multi-Purpose Cooperative, G.R. No. 164205, Sept. 3, 2009, 598 SCRA 27 — Cited for the consolidated guidelines on verification and certification against forum shopping drawn from Altres vs. Empleo, and distinguished on the ground that the leniency applied there involved relatives and co-owners sharing a common interest.

• Cavile vs. Heirs of Cavile — Cited within Traveno as a case where leniency was applied because the lone signatory was a relative and co-owner of the other petitioners, a circumstance not present here.

• Cebu Bionic Builders Supply, Inc. vs. Development Bank of the Philippines, G.R. No. 154366, Nov. 17, 2010 — Cited for the distinction between questions of law and questions of fact under Rule 45.

• Section 1, Rule 65, 1997 Rules of Civil Procedure — Governs petitions for certiorari and requires that the petition be verified and accompanied by a sworn certification of non-forum shopping as provided in Section 3, Rule 46. Applied to emphasize that certiorari is an extraordinary remedy requiring strict observance of the Rules.

• Section 3, Rule 46, 1997 Rules of Civil Procedure — Requires that petitions for certiorari be verified and accompanied by a sworn certification of non-forum shopping, and provides that failure to comply with any of the requirements shall be sufficient ground for dismissal. Applied as the procedural basis for the CA's dismissal.

• Sections 4 and 5, Rule 7, 1997 Rules of Civil Procedure — Section 4 defines verification; Section 5 requires the certification against forum shopping and provides that failure to comply is cause for dismissal without prejudice. Applied to distinguish the treatment of defective verification from defective certification against forum shopping.

• Section 1, Rule 45, Rules of Court — Provides that a petition for review shall raise only questions of law, which must be distinctly set forth. Applied to hold that the petitioners' issue on entitlement to damages was factual and thus beyond the scope of a Rule 45 petition.

Carpio (Chairperson), Nachura, Peralta, and Abad, JJ., concurred.