G.R. No. 227070 - Adamson University Faculty and Employees Union vs. Adamson University

On 22 June 1974, Hilltop Market Fish Vendors’ Association, Inc. (Hilltop), represented by its president Gerardo Rillera, entered into a Contract of Lease with the City of Baguio, represented by Mayor Luis Lardizabal, covering a 568.80 sqm lot at Hilltop Market, Baguio City.
The lease term was 25 years, renewable for another 25 years by mutual option. Annual rent was set at ₱25,000, payable within 30 days of each lease year, with the first payment to commence only upon issuance of a Certificate of Full Occupancy by the City Engineer’s Office. Before issuance of the Certificate, the city could collect market fees from vendors occupying any portion of the building. Ownership of the constructed building would vest in the city at lease end without reimbursement.

In 1975, Hilltop constructed the “Rillera building” on the leased lot. Despite non-issuance of the occupancy Certificate, Hilltop’s members occupied and transacted business in the building.
Between 1980 and 1986, the City Council passed resolutions (Nos. 74-80, 18-81, 50-86) rescinding the lease contract due to Hilltop’s alleged failure to complete the building.
On 16 October 1980, Mayor Ernesto Bueno closed the two upper floors for sanitary noncompliance under P.D. No. 856. City health and engineering offices later declared the building unsafe and recommended condemnation.
In 2003, Mayor Bernardo Vergara issued a takeover notice of the Rillera building. On 28 February 2005, Mayor Braulio Yaranon issued Administrative Order No. 030-S.2005, ordering the building closed for cleaning, sanitization, enclosure, prevention of illegal activities, and completion for commercial use.

On 7 March 2005, Hilltop filed a Complaint with Very Urgent Application for TRO and Writ of Preliminary Injunction in RTC Branch 3, Baguio City, seeking to enjoin AO No. 30 and compel issuance of the occupancy Certificate.
Defendants answered, contending the Certificate was withheld due to incomplete building, lack of electrical/plumbing works, and that occupancy without Certificate constituted waiver of the condition.
On 28 September 2006, the RTC dismissed the complaint, holding the lease expired on 22 June 1999 and the building was unsanitary and dangerous.
On 27 November 2008 and, upon denial of a motion for reconsideration on 15 May 2009, the CA affirmed the RTC Decision and Resolution. Hilltop then filed the present petition for review.

Whether the CA erred in finding that the lease contract was already perfected despite non-issuance of the occupancy Certificate.

Whether Hilltop is estopped from claiming the lease period had not yet begun because it occupied the building without the Certificate.

Whether respondents properly withheld issuance of the occupancy Certificate given Hilltop’s alleged non-completion of requirements.

Whether the CA erred in not awarding damages to Hilltop despite alleged wrongful withholding of the Certificate and enforcement of AO No. 30.