Case Summary (G.R. No. 248495)
Key Dates
• August 20, 1998 – Execution of three five-year lease contracts.
• July 26, 1999 – Approval of Compromise Agreement settling Civil Case No. 98-91587.
• July 27, 2004 – Memorandum of Agreement (MOA) for settlement of arrears.
• April 28, 2010 – IA’s Complaint for Ejectment filed in the Metropolitan Trial Court (MTC).
• October 19, 2010 – MTC Order dismissing ejectment case for forum shopping and lack of jurisdiction.
• April 14, 2011 – RTC Decision affirming the MTC.
• March 7, 2018 – Supreme Court Decision under Rule 45.
Applicable Law
• 1987 Philippine Constitution, Article VIII, Section 5(e) (direct certiorari on questions of law).
• Rules of Court: Rule 45 (petition for review on certiorari), Rule 42 (petition for review to Court of Appeals), Rule 70 (summary ejectment).
• Civil Code Articles on lease (Articles 1643, 1657) and implied reconduction (Articles 1670, 1687).
• Presidential Decree No. 1616 (architectural conformity in Intramuros).
Background of Lease Agreements
In 1998 IA leased three Intramuros properties to Offshore—Baluarte de San Andres (2,793 sqm), Baluarte de San Francisco de Dilao (1,880 sqm), and Revellin de Recoletos (1,036 sqm)—for five years (Sept 1, 1998–Aug 31, 2003), renewable by agreement. Offshore commenced improvements.
Compromise Agreement of 1999
Offshore’s non-conforming improvements triggered Civil Case No. 98-91587. In July 1999 the parties executed and the RTC approved a Compromise Agreement: it affirmed two leases (excluding Revellin de Recoletos), retained the five-year term, and prescribed specific areas and allowable structures.
Subsequent Defaults and MOA 2004
Offshore failed to pay rent and utilities, accruing P6.76 M arrears by July 2004. To settle, it agreed under a July 27, 2004 MOA to offset Department of Tourism operational expenses against past rental arrears. By December 31, 2009, arrears ballooned to P13.45 M despite MOA.
Ejectment Proceeding and Motion to Dismiss
IA filed for ejectment in MTC on April 28, 2010, within one year of its last written demand (March 26, 2010). Offshore answered and moved to dismiss, alleging: (1) non-forum shopping violation, (2) lack of MTC jurisdiction (relationship is concession not lease), and (3) litis pendentia due to two pending RTC cases (specific performance by Offshore, interpleader by 4H Intramuros, Offshore’s subtenants).
MTC Dismissal on Forum Shopping and Jurisdiction
The MTC granted the motion, finding IA guilty of forum shopping for failing to disclose the two pending RTC cases and concluding MTC lacked jurisdiction because the parties’ relationship was a concession agreement, not a simple lease subject to summary ejectment.
RTC Affirmation
On April 14, 2011, the RTC, acting in appellate capacity, affirmed the MTC’s dismissal in toto. IA then filed a petition for review on certiorari under Rule 45 directly with the Supreme Court.
Direct Resort to Supreme Court
Offshore argued IA should have filed in the Court of Appeals under Rule 42. The Supreme Court held that direct resort under Rule 45 was proper because IA raised pure questions of law (jurisdiction, forum shopping, nature of relationship) and summary ejectment proceedings demand expeditious resolution.
Issue 1: Jurisdiction Over Ejectment Complaint
Summary ejectment courts decide only the right to physical possession. Jurisdiction hinges on complaint allegations: (1) initial lawful or tolerated possession, (2) notice of termination, (3) refusal to vacate, (4) filing within one year of last demand. IA’s complaint met all elements; Offshore’s defense did not divest jurisdiction. The MTC and RTC erred by yielding to Offshore’s motion and conflating the merits with jurisdictional inquiry.
Issue 2: Alleged Forum Shopping
Forum shopping requires identity of parties, rights, and reliefs such that judgment in one case would be res judicata in another. IA’s ejectment sought restoration of possession and unpaid rent. Offshore’s specific performance cas
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Facts
- In 1998, Intramuros Administration (Intramuros) leased three government-administered properties to Offshore Construction Development Company (Offshore Construction):
- Baluarte de San Andres (2,793 sq. m.), Baluarte de San Francisco de Dilao (1,880 sq. m.), and Revellin de Recoletos (1,036 sq. m.)
- Lease term: September 1, 1998 to August 31, 2003 (five years), with a provision for renewal every five years upon mutual agreement per the August 20, 1998 memorandum of stipulations
- Offshore Construction occupied and made improvements; projects were halted for non-compliance with Presidential Decree No. 1616 (Philippine-Spanish architecture requirement)
- Offshore Construction filed Civil Case No. 98-91587 (RT Court, Manila) for preliminary injunction against Intramuros and the Department of Tourism; the parties executed a Compromise Agreement on July 26, 1999, approved February 8, 2000
- The Compromise Agreement:
- Affirmed two lease contracts (San Andres and San Francisco de Dilao) and terminated the Revellin de Recoletos lease
- Retained the original five-year lease period
- Prescribed specific structures and areas for continued use or transfer
- The Compromise Agreement:
- Offshore Construction’s arrears:
- ₱6,762,153.70 as of July 31, 2004; parties executed a Memorandum of Agreement (August 15, 2004 to August 25, 2005) to offset arrears through payment of DOT operational expenses
- Arrears rose to ₱13,448,867.45 as of December 31, 2009; Intramuros issued a demand letter on March 26, 2010
- Intramuros filed a Complaint for Ejectment on April 28, 2010 before the Manila Metropolitan Trial Court (MTC, Case No. 186955-CV)
Procedural History
- Offshore Construction answered, raised affirmative defenses and compulsory counterclaim, and on July 12, 2010 filed a “Very Urgent Motion” to dismiss for:
- Forum shopping (failure to disclose two pending cases)
- Lack