ABAYA INVESTMENTS G.R. No. 176324
CORPORATION,
Petitioner, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario,
Nachura, and
Reyes, JJ.
MERIT
SERVULO
C. DOMINISE, Promulgated:
Respondents.
April 16, 2008
x
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YNARES-SANTIAGO, J.:
This Petition for Review
on Certiorari assails the August 24, 2006 Decision[1]
of the Court of Appeals in CA-G.R. SP No. 79495 which reversed and set aside
the Decision of the Regional Trial Court of Manila, Branch 36 affirming with
modification the Decision of the Metropolitan Trial Court of Manila, Branch 12,
as well as the
Petitioner leased a
commercial building known as “
Thereafter, respondents
failed to pay the rentals for the months of January, February, March and April
2001 totaling P450,000.00. After several
demands, respondents paid petitioner P150,000.00 in April 2001, P150,000.00 on
However, respondents
again failed to pay the rentals for the succeeding months. Petitioner also discovered that respondents
subleased a portion of the building to a computer gaming entity without its
consent. Hence, on
Respondents made payments in August and September, 2001. However, they again reneged on their
obligation to pay the rents due and to terminate the sublease contract which
compelled petitioner to send another demand letter dated
Respondents made partial payments in November and December,
2001. However, with the accrual of
rentals, interest, and electricity bill, respondents’ obligation amounted to
P352,232.70. Finally, on
Respondents admitted that
as of
During the pendency of
the case, respondents paid petitioner P300,000.00 and vacated the premises in
May, 2002. Petitioner however claimed
that respondents left the premises stealthily sometime in June 2002 without
paying the rentals due for the period January to May 2002.
On
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor
of the plaintiff and against the defendants and all persons claiming rights
under them, ordering them to immediately vacate the premises located at Carmen
Building, 886 Espana corner Cataluna Street, Sampaloc Manila and to solidarily
pay herein plaintiff:
1. Php
482,885.02 - As earlier indicated; and
2. Php
20,000.00 - Representing reasonable
reimbursement of attorney’s fees and litigation expenses.
SO ORDERED.[4]
Respondents appealed
before the Regional Trial Court of Manila arguing that petitioner is not
properly clothed with authority to file the ejectment case; that the case was
considered moot since it vacated the premises; and that the award of damages is
not proper.
On
Thus, respondents filed a
Petition for Review before the Court of Appeals which rendered the assailed
Decision reversing the decisions of the Regional Trial Court and the Metropolitan
Trial Court. The dispostive portion of
the Decision reads:
WHEREFORE, premises considered, the
instant petition for review is hereby GRANTED.
ACCORDINGLY,
the decision of the Regional Trial Court of Manila, Branch 36, dated
SO ORDERED.[6]
The Court of Appeals ruled
that the trial court was without jurisdiction when it took cognizance of the
complaint filed before it. It held that
the issue was not one of possession but rather rescission of contracts over
which the Metropolitan Trial Court is without jurisdiction, thus:
Evidently, under those circumstances, ejectment is not the
proper remedy. This is because proof of
any violation is a condition precedent to resolution or rescission of the contract.
It is only when the violation has been established that the contract can be
declared rescinded. Hence, it is only upon such rescission that there can be a
pronouncement that possession of the realty has become unlawful. Thus, the
basic issue is not possession but one of rescission of a contract, which is
beyond the jurisdiction of the trial court to hear and determine.
In the case of Nera
vs. Vacante, the Supreme Court said that:
“A violation by a party of any of the stipulations of a
contract on agreement to sell real property would entitle the other party to
resolve or rescind it. An allegation of such violation in a detainer suit may
be proved by competent evidence. And if proved a justice of the peace court
might make a finding to that effect, but it certainly cannot declare and hold
that the contract is resolved or rescinded. It is beyond its power so to do.
And as the illegality of the possession of realty by a party to a contract to
sell is premised upon the resolution of the contract, it follows that an
allegation and proof of such violation, a condition precedent to such
resolution or rescission, to render unlawful the possession of the land or
building erected thereon by the party who has violated the contract, cannot be
taken cognizance of by a justice of the peace court...”
Hence, where the unlawful possession of the property by a
party to a contract is premised upon the rescission of the contract, an
allegation and proof of such violation is a condition precedent to such
rescission to render unlawful the possession of the property by the party who
has violated the contract which cannot be taken cognizance of by a Metropolitan
Trial Court.
The rescission of the contract is the basis of, and
therefore a condition precedent for, the illegality of a party's possession of
a piece of realty. Without judicial intervention and determination, even a
stipulation entitling one party to take possession of the land and building in
case the other party violates the contract cannot confer upon the former the
right to take possession thereof, if that move is objected to.
In the instant case, the ejectment case filed by respondent
before the trial court will not prosper. This is because the proof of violation
is a condition precedent to rescission of the contract. Since violation has not
been established, the pronouncement by the trial court that the possession by
the petitioners of the building has become unlawful is premature.
While it is true that the contract between the parties
provided for extrajudicial rescission, nevertheless, a judicial determination
is necessary where it is objected to by the other party. As said by the Supreme
Court in the case of JOSE ZULUETA vs.
Petitioner filed a motion
for reconsideration but it was denied.
Hence, the instant
petition for review on certiorari raising the following errors:
1. The MTC and
the RTC saw the Complaint as one for ejectment, but the Court of Appeals
erroneously read it out of context and saw it as one for rescission, contrary
to the very allegations of said Complaint;
2. The Decision
of the Court of Appeals is contrary to Art. 1673 of the New Civil Code, among
others, existing Rules, opinions of experts and jurisprudence. It even
encourages multiplicity of suit, and it is based on inapplicable decisions with
totally different factual milieu;
3. The Court
of Appeals went beyond its jurisdiction over the case and the issue raised in
the petition for review; and it deprived herein petitioner of due process of
law.[8]
Petitioner argues that
the subject Complaint is one for unlawful detainer and not rescission of
contract; that the Complaint alleged the existence
of the lease of land and building evidenced by a lease contract; that the lessee
was in arrears for several months; and that the lessee, without any right,
subleased part of the building in violation of the lease contract; that
the legal bases of the ejectment case were violation of law and contract, specifically,
Articles 1673, 1650, 1159, and 1315 of the Civil Code; that the reliefs prayed for in the Complaint are
constitutive of those in an ejectment suit: vacate the subject premises,
to pay the unpaid rentals and attorney’s fees and other damages.
On the other hand, respondents
contend that the filing of a complaint for rescission is a condition sine qua
non before the ejectment; that in unilaterally terminating the lease contract
without first rescinding the same, the respondents’ right to address the
alleged violation was effectively foreclosed.
This Court has
consistently held that jurisdiction is determined by the nature of the action
as pleaded in the complaint. The test of
the sufficiency of the facts alleged in the complaint is whether or not
admitting the facts alleged therein, the court could render a valid judgment
upon the same in accordance with the prayer of the plaintiff.[9]
In a complaint for unlawful detainer an
allegation that the withholding of the possession or the refusal to vacate is
unlawful without necessarily employing the terminology of the law is
sufficient.[10]
A review of the averments
of the Complaint reveals that there is an allegation that respondents’
occupancy of the premises was by virtue of a lease contract and that
infractions were committed which served as basis for terminating the same and
for respondents to vacate the premises. Clearly,
the complaint avers ultimate facts required for a cause of action in an
unlawful detainer case which is within the jurisdiction of the Metropolitan
Trial Court.
The ruling of the Court
of Appeals requiring prior rescission of the subject lease contract is
misplaced. Nera v. Vacante[11] and Zulueta v. Mariano[12]
are inapplicable to the instant case. In
the cases cited, the basis for the occupation of the parties thereon are
contracts to sell the premises on installment. Thus, the contractual relations between the
parties are more than that of a lessor-lessee. They involved violations of contracts to sell
in installments the validity of which was the basis of the defendants’
possession of the subject premises.
The instant case however involves a contract of
lease. Article 1673 of the Civil Code[13]
provides that the lessor may judicially eject the lessee for non-payment of the
price stipulated and violation of any of the conditions agreed upon in the
contract. In instituting an action for
unlawful detainer, Section 2, Rule 70 of the Rules of Court[14]
requires the lessor to make a demand upon the lessee to comply with the
conditions of the lease and to vacate the premises. It is the owner’s demand for the tenant to
vacate the premises and the tenant's refusal to do so which makes unlawful the
withholding of possession. Such refusal
violates the owner's right of possession giving rise to an action for unlawful
detainer.[15]
The availability of the action for rescission
does not preclude the lessor to avail of the remedy of ejectment. In Dayao v. Shell Company of the
Philippines, Ltd.,[16]
where a complaint for unlawful detainer on the ground of violation of contract
was filed, the Court held that a lessor is not required to bring first an
action for rescission but could ask the Court to do so and simultaneously seek to
eject the lessee in a single action for illegal detainer.[17]
Respondents next claim
that the Complaint before the Metropolitan Trial Court of Manila was instituted
by Ofelia C. Abaya, petitioner’s Chairman and President, who signed the
Verification and Certification against Forum Shopping without however proof of
authority to sign for plaintiff-corporation.
Section 5, Rule 7 of the
Rules of Court requires the plaintiff or principal party to execute a
certification against forum shopping simultaneous with the filing of the
complaint. In Fuentebella v. Castro,[18]
the Court ruled that, if, for any reason, the principal party cannot sign the
petition, the one signing on his behalf must have been duly authorized. Where such party is a corporate body, an
officer of the corporation can sign the certification against forum shopping so
long as he has been duly authorized by a resolution of its board of directors
and a certification which had been signed without the proper authorization is
defective and constitutes a valid cause for the dismissal of the petition.[19]
However, in Shipside
Inc. v. Court of Appeals,[20]
the Court ruled that technical rules of procedure should be used to promote,
and not frustrate justice. While the requirement of the
certificate of non-forum shopping is mandatory, nonetheless the requirements
must not be interpreted too literally and thus defeat the objective of
preventing the undesirable practice of forum shopping.
The Court also held that on several
occasions, it has excused non-compliance with the requirement as to the
certificate of non-forum shopping and with more reason should it allow the
petition submitted therein since petitioner did submit a certification on
non-forum shopping, failing only to show that the signatory was authorized.[21]
In view of the merits of
the case and to avoid a re-litigation of the issues and further delay in the
administration of justice, we find it more in accord with substantial justice
to relax the application of procedural rules and sustain the validity of the
proceedings before the trial courts in the present case. In any event, we note that Ms. Abaya’s
authority to sign the certification was ratified by the Board.[22]
In Benguet Corporation v. Cordillera
Caraballo Mission, Inc,[23]
the Court gave due course to the petition considering that the signatory’s
authority to sign the certification was ratified by the Board and the purpose
of the certification, which is to prohibit and penalize the evils of forum
shopping, was not circumvented.[24]
Likewise, in China Banking Corporation v.
Mondragon International Philippines, Inc.,[25]
the Court ruled that the complaint be decided on the merits despite the failure
to attach the required proof of authority, because the board resolution subsequently
attached recognized the signatory’s preexisting status as an authorized
signatory.[26]
WHEREFORE, premises considered, the petition for review on certiorari
is GRANTED. The
Decision and Resolution of the Court Appeals dated August 24, 2006 and January
17, 2007, respectively, in CA-G.R. SP No. 79495 setting aside the Decision of
the Regional Trial Court of Manila, Branch 36, are REVERSED and SET ASIDE. The
Decision of the Regional Trial Court of Manila, Branch 36, affirming with
modification the Decision of the Metropolitan Trial Court of Manila, Branch 12,
is REINSTATED and AFFIRMED.
SO
ORDERED.
CONSUELO
YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA
Associate
Justice Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I
attest that the conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Rollo,
pp. 31-41; penned by Associate Justice Monina Arevalo-Zenarosa and concurred in
by Associate Justices Martin S. Villarama, Jr. and Lucas P. Bersamin.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
Huibonhua v. Court of Appeals, 378
Phil. 386, 418 (1999).
[10]
[11]
G.R. No. L-15725, November 29, 1961, 3
[12]
G.R. No. L-29360, January 30, 1982, 197
[13]
See the Separate Opinion of Justice Vitug in Dio v. Concepcion,
357 Phil. 578, 595 (1998).
[14] Section 2. Lessor to proceed against lessee only
after demand.—Unless otherwise stipulated, such action by the lessor shall
be commenced only after demand to pay or comply with the conditions of the
lease and to vacate is made upon the lessee, or by serving written notice
of such demand upon the person found on the premises, or by posting such notice
on the premises if no person be found thereon, and the lessee fails to
comply therewith after fifteen (15) days in the case of land or five (5) days
in the case of buildings.
[15] Dio v. Concepcion, 357 Phil. 578, 591 (1998).
[16] 186 Phil. 266 (1980).
[17]
[18]
G.R. No. 150865, June 30, 2006, 494 SCRA 183.
[19]
[20]
404 Phil. 981 (2001).
[21]
[22]
Rollo, p. 224.
[23] G.R. No. 155343, September 2, 2005, 469 SCRA 381.
[24]
[25] G.R. No. 164798, November 17, 2005, 475 S
[26]