Case Summary (G.R. No. 212034)
MeTC Ruling (Trial Court)
The Metropolitan Trial Court dismissed the ejectment complaint for lack of a valid demand letter. The MeTC concluded the March 5, 2008 demand had no legal effect because petitioner failed to prove Del Castillo had board authority to issue it. The MeTC treated a valid demand letter as a jurisdictional prerequisite for the unlawful detainer action and dismissed the case for its supposed absence.
RTC Ruling (First Level Appellate)
The Regional Trial Court reversed the MeTC. The RTC held the March 5, 2008 demand was issued in the usual course of business and was ratified by petitioner when the Board passed a May 13, 2008 resolution authorizing Del Castillo to file suit. The RTC rendered judgment ordering respondent to vacate, awarding P604,936.35 (unpaid utilities), reasonable compensation of P50,000.00 per month from March 28 until possession restored, attorney’s fees of P150,000.00, and P4,000.00 per court appearance.
Court of Appeals Ruling
The Court of Appeals reversed the RTC and dismissed the complaint. The CA found petitioner’s failure to attach a copy of the May 13, 2008 Board Resolution to the complaint a fatal defect (including in the certification/non‑forum shopping context), warranting dismissal. The CA denied reconsideration, prompting the Supreme Court petition.
Issue Presented to the Supreme Court
Whether the absence of an attached Board Resolution authorizing Del Castillo to issue the demand letter and to file suit was a fatal defect that justified dismissal; and whether the March 5, 2008 demand letter was valid so as to support an action for unlawful detainer and consequent ejection and monetary relief.
Legal Principles Adopted by the Supreme Court
- General rule: A corporation acts through its board of directors (Corporation Code, Section 23); officers ordinarily require board authorization to exercise corporate powers.
- Exception recognized in jurisprudence: The corporate president may sign verification and certification of non‑forum shopping without express board resolution because the president is presumed to have sufficient knowledge to swear to complaint allegations; and the president may be presumed to have authority to perform acts within the usual scope of duties (People’s Aircargo; other cited authorities).
- Apparent authority / ratification: Authority to bind a corporation can arise from express delegation, implied authority by habit or acquiescence, apparent authority created by the corporation’s conduct, or subsequent ratification by the board of otherwise unauthorized acts.
- Unlawful detainer requisites (Dela Cruz): (1) existence of lease (express or implied); (2) expiration/termination of possessor’s right; (3) withholding of possession after termination; (4) written demand on lessee to pay rentals or comply and to vacate; and (5) action filed within one year from last demand.
Supreme Court Analysis on Verification, Board Resolution, and Demand Letter
The Supreme Court held the CA erred in dismissing the complaint solely because petitioner did not attach the May 13, 2008 Board Resolution. Under controlling jurisprudence the president may validly sign verification and certification of non‑forum shopping without an express board resolution. Further, issuing a demand to collect rent and demand vacation falls within the ordinary course of business and within the usual duties of a corporate president, especially where the corporation’s bylaws (Article IV, Section 2) expressly grant the president supervision and general control and authority to execute contracts and perform duties incident to office. Thus, Del Castillo had authority to issue the March 5, 2008 demand letter; and even if he acted beyond his authority, the subsequent May 13, 2008 Board Resolution cured any defect by ratification.
Application of Unlawful Detainer Elements and Findings
The Court found that requisites (1), (2), (3), and (5) for unlawful detainer were established: there was a lease (and assignment), termination due to nonpayment, continued possession by respondent, and the action was filed within one year from the March 5, 2008 demand. Because the March 5, 2008 demand letter was valid (either by implied authority of the president or by later ratificati
...continue readingCase Syllabus (G.R. No. 212034)
Nature of the Case and Relief Sought
- Petition for Review on Certiorari filed under Rule 45 of the Rules of Court challenging the Court of Appeals Decision dated June 13, 2013 and Resolution dated April 7, 2014 in CA-G.R. SP No. 114856. [Rollo, pp. 8-51]
- Subject matter: unlawful detainer/ejectment with damages involving a leased building in Sampaloc, Manila, owned by petitioner Colegio Medico-Farmaceutico de Filipinas, Inc. (petitioner). [Rollo, pp. 60-61]
- Primary reliefs sought by petitioner: reinstatement of the RTC Decision ordering respondent Lily Lim (respondent) to vacate the property, payment of unpaid utility bills and rentals, attorney’s fees and costs, increase of monthly rental award to P55,000.00 per month under the Contract of Lease, and grant of exemplary and moral damages. [Rollo, pp. 200-A to 200-B; 432-434]
Factual Antecedents
- Petitioner is the registered owner of a building located in Sampaloc, Manila. [Rollo, pp. 60-61]
- Parties’ lease history:
- In May 2003, St. John Berchman School of Manila Foundation (St. John), represented by Jean Li Yao, entered into a ten-year Contract of Lease with petitioner (covering June 1, 2003 to May 31, 2013, as contended by respondent). [Rollo, pp. 456-458; 62]
- In June 2005, petitioner entered into a one-year Contract of Lease (June 2005 to May 2006) with respondent after petitioner allegedly persuaded respondent to execute a one-year contract with advance payment of rentals. Respondent claims the one-year contract did not intend to amend or shorten the original ten-year lease and that the parties agreed the lease term would continue until 2013. [Rollo, pp. 62-68; 456-458]
- Respondent occupied the subject property after May 2006; petitioner asserted it did not renew the lease. [Rollo, pp. 62-68; 200-A to 200-B]
- Demand and claimed arrearages:
- On March 5, 2008, petitioner’s then-President Dr. Virgilio C. Del Castillo (Del Castillo) wrote a demand letter to respondent demanding payment of back rentals and utility bills totaling P604,936.35 and requested vacatur on or before March 16, 2008. [Rollo, p. 75; 52]
- Respondent allegedly refused to comply with the demand. [Rollo, pp. 52-59]
- Filing and cause:
- On June 19, 2008, petitioner filed a Complaint for Ejectment with Damages before the Metropolitan Trial Court (MeTC) of Manila, Branch 24, docketed as Civil Case No. 185161-CV, naming respondent (President/Officer-in-charge of St. John) as defendant. [Rollo, pp. 52-59; 6]
Procedural History — Lower Courts and Key Orders
- MeTC (Branch 24, Manila)
- Decision dated June 1, 2009 dismissed the Complaint for lack of a valid demand letter on the ground petitioner failed to show Del Castillo was duly authorized by the Board to issue the demand; MeTC held that a demand letter is a jurisdictional requirement. [Rollo, pp. 78-82]
- RTC (Regional Trial Court, Manila, Branch 11)
- Decision dated May 13, 2010 reversed the MeTC, finding Del Castillo issued the demand in the usual course of business and that petitioner ratified his act by passing a Board Resolution dated May 13, 2008 authorizing Del Castillo to file suit. RTC ordered ejectment, awarded P604,936.35 for unpaid utility bills, P50,000.00 per month as reasonable value for use from March 28 until repossession, attorney’s fees of P150,000.00, P4,000.00 for every court appearance, and costs of suit. [Rollo, pp. 200-A to 200-B]
- RTC issued a writ of execution on June 23, 2010; respondent’s motion for reconsideration denied; respondent’s motion to quash writ of execution denied. [Rollo, pp. 200-A to 200-B]
- Court of Appeals (CA)
- Decision dated June 13, 2013 reversed the RTC and dismissed the Complaint, holding petitioner’s failure to attach a copy of the Board Resolution dated May 13, 2008 to the Complaint was a fatal defect. [Rollo, pp. 46-49]
- Motion for reconsideration denied by CA Resolution dated April 7, 2014 for lack of merit. [Rollo, pp. 50-51]
- Supreme Court
- Petition for Review on Certiorari filed by petitioner under Rule 45; decision penned by Justice Del Castillo delivered July 2, 2018 (G.R. No. 212034). [Header and Rollo references]
MeTC’s Rationale and Disposition
- Ground of dismissal:
- MeTC concluded the March 5, 2008 demand letter was legally non-existent because petitioner failed to prove Del Castillo had Board authorization to issue it.
- Emphasized that a demand letter is a jurisdictional requirement in unlawful detainer cases; absence of valid demand renders the case susceptible to dismissal. [Rollo, pp. 78-82]
RTC’s Rationale and Disposition
- RTC findings and orders:
- RTC found Del Castillo’s issuance of the March 5, 2008 demand was done in the usual course of business.
- RTC held the issuance was ratified by petitioner through Board Resolution dated May 13, 2008 authorizing Del Castillo to file suit.
- RTC reversed MeTC and ordered ejectment, monetary awards as detailed above (P604,936.35; P50,000.00 monthly compensation; P150,000.00 attorney’s fees; P4,000.00 per appearance; costs). [Rollo, pp. 200-A to 200-B]
- Post-decision motions:
- Petitioner moved for writ of execution (granted June 23, 2010); respondent’s motions (reconsideration, quash) denied. [Rollo, pp. 200-A to 200-B]
Court of Appeals’ Rationale and Disposition
- CA’s principal ground for reversal:
- CA held that petitioner’s failure to attach a copy of the Board Resolution dated May 13, 2008 to the Complaint was a fatal defect—apparently treating presentation of the Board Resolution as essential to the Complaint’s validity. [Rollo, pp. 46-49]
- CA’s action:
- Reversed the RTC and dismissed the Complaint; denied reconsideration in April 7, 2014 Resolution. [Rollo, pp. 46-51]
Issues Presented to the Supreme Court
- Whether the CA gravely erred in dismissing the Complaint on the ground petitioner failed to attach the Board Resolution dated May 13, 2008 to the Complaint.
- Whether Del Castillo, as President, had authority to issue the March 5, 2008 demand letter and to sign the verification and certification of non-forum shopping without an express board resolution.
- Whether all requisites of unlawful detainer were present so as to justify ejectment of respondent.
- Proper amount of reasonable compensation for use of the subject property and rate and period of interest on monetary awards. [Rollo, pp. 416-434; 446-458]
Parties’ Main Contentions
- Petitioner’s contentions:
- The failure to attach a copy of the Board Resolution to the Complaint was not a fatal defect because the president of a corporation is presumed authorized to sign the verification and certification of non-forum shopping without a board resolution under prevailing jurisprudence. [Rollo, pp. 416-421; 427-432]
- The March 5, 2008 demand letter was valid as an authorized act in the usual course of business, thus no board resolution was required; alternatively, the demand letter was ratified by the Board Resolution dated May 13, 2008. [Rollo, pp. 427-432]
- Demand to vacate was unnecessary because unlawful detainer was based on expiration of the lease; petitioner further requested increase of monthly rental award to P55,000.00 per the Contract of Lease and sought exemplary and moral damages. [Rollo, p