Authority to sue

"We find no legitimate and compelling reason to reverse the COA. To begin with, the instant petition is fatally defective. It was filed in the name of the SSS although no directive from the SSC authorized the instant suit and only the officer-in-charge in behalf of petitioner executed the purported directive. Clearly, this is irregular since under Sec. 4, par. 10, in relation to par. 7,13 RA 1161 as amended by RA 8282 (The Social Security Act of 1997, which was already effective14 when the instant petition was filed), it is the SSC as a collegiate body which has the power to approve, confirm, pass upon or review the action of the SSS to sue in court. Moreover, the appearance of the internal legal staff of the SSS as counsel in the present proceedings is similarly questionable because under both RA 1161 and RA 8282 it is the Department of Justice (DoJ) that has the authority to act as counsel of the SSS.15 It is well settled that the legality of the representation of an unauthorized counsel may be raised at any stage of the proceedings16 and that such illicit representation produces no legal effect.17 Since nothing in the case at bar shows that the approval or ratification of the SSC has been undertaken in the manner prescribed by law and that the DoJ has not delegated the authority to act as counsel and appear herein, the instant petition must necessarily fail. These procedural deficiencies are serious matters which this Court cannot take lightly and simply ignore since the SSS is in reality confessing judgment to charge expenditure against the trust fund under its custodianship.

In Premium Marble Resources v. Court of Appeals18 we held that no person, not even its officers, could validly sue in behalf of a corporation in the absence of any resolution from the governing body authorizing the filing of such suit. Moreover, where the corporate officer’s power as an agent of the corporation did not derive from such resolution, it would nonetheless be necessary to show a clear source of authority from the charter, the by-laws or the implied acts of the governing body.19 Unfortunately there is no palpable evidence in the records to show that the officer-in-charge could all by himself order the filing of the instant petition without the intervention of the SSC, nor that the legal staff of SSS could act as its counsel and appear therein without the intervention of the DoJ. The power of attorney supposedly authorizing this suit as well as the signature of the legal counsel appearing on the signing page of the instant petition is therefore ineffectual."

EN BANC, G.R. No. 149240, July 11, 2002

SOCIAL SECURITY SYSTEM, petitioner,
vs.
COMMISSION ON AUDIT, respondent.


https://lawphil.net/judjuris/juri2002/jul2002/gr_149240_2002.html