Case Summary (G.R. No. 86344)
Lease, improvements, payments, and dishonored checks
Respondents leased a commercial parcel to petitioners by a contract executed August 14, 1997 for a 15-year term from November 1, 1999 to October 31, 2013. Petitioners constructed a two-storey commercial building identified as J-G Shopping Mall, allegedly at a cost of ₱22,000,000.00. For the period from November 1, 1999 to June 30, 2000 (the precise terminal month is disputed by petitioners), petitioners paid only ₱2,000,000.00 of an outstanding rental obligation of ₱3,000,000.00, leaving ₱1,000,000.00 unpaid. Petitioners issued two checks that were dishonored: one dated February 29, 1999 for ₱1,000,000.00 and another dated April 30, 2000 for ₱250,000.00.
Events leading to forcible entry proceedings
Eviction and alleged forcible entry
On June 3, 2000 at about 8:30 a.m., respondents, accompanied by Atty. Reynaldo B. Robles and twelve security guards, served a Notice of Eviction upon petitioners’ mall guards and barricaded the administration office entrance. Respondents issued a notice to tenants asserting they had reassumed possession, control, and management of the mall. Later that evening respondents ordered petitioners’ security guards to leave, and they did. Petitioners thereafter filed a complaint for Forcible Entry before the Municipal Trial Court in Cities (MTCC), docketed Civil Case No. 8220.
MTCC decision
MTCC ruling: lawful possession for respondents and reimbursement awards
On February 17, 2003 the MTCC found that respondents did not commit forcible entry, reasoning that petitioners’ representative’s departure following service of the eviction notice constituted a lawful turnover of possession to respondents. Nonetheless, the MTCC ordered respondents to reimburse petitioners for unused advance rentals in the amount of ₱2,250,000.00 and to pay one-half of the value of the improvements introduced by petitioners, to be determined by an independent appraiser. The MTCC dismissed respondents’ counterclaim.
RTC first appeal ruling (May 30, 2005)
RTC Branch 43 initial judgment: lessors not liable for improvements; reduced rental refund
On May 30, 2005, the Regional Trial Court (Branch 43) affirmed in part and modified the MTCC decision. The RTC declared respondents in lawful possession effective June 3, 2000, reduced the refund of unused rentals to ₱500,000.00, and held that the building and permanent improvements became respondents’ property free of any obligation to refund their value to petitioners, based on a lease clause. The RTC dismissed respondents’ counterclaim and ordered no costs.
RTC reconsideration and reversal (October 6, 2011)
RTC reconsideration: finding of forcible entry and awards to petitioners
On October 6, 2011, upon petitioners’ motion for reconsideration, the RTC revised its earlier judgment and declared that respondents committed forcible entry in retaking possession, finding that respondents’ overwhelming security presence intimidated petitioners’ guards. The RTC ruled respondents liable to reimburse one-half the value of the building (ordering ₱12,000,000.00), refund ₱2,250,000.00 as advance rentals, and pay ₱300,000.00 for VAT on the 15th year, while dismissing respondents’ counterclaim and ordering no costs.
RTC subsequent modification (May 15, 2012)
RTC modification by different magistrate: partial rollback favoring respondents
On respondents’ motion for reconsideration, a different RTC judge partially granted relief on May 15, 2012 by modifying the October 6, 2011 Judgment. The RTC reverted to declaring respondents in lawful possession effective June 3, 2000; ordered that the building and permanent improvements become respondents’ property without obligation to pay petitioners; and ordered a refund to petitioners of ₱250,000.00 representing the excess after applying ₱2,000,000.00 as rental payments for November 1, 1999 to June 2, 2000. The counterclaim dismissal and no-costs pronouncement remained.
CA Rule 42 petition and its dismissals
Court of Appeals dismissal on technical grounds and denial of reconsideration
Petitioners filed a Rule 42 Petition for Review with the Court of Appeals (CA). On July 24, 2012 the CA dismissed the petition outright on technical grounds: (1) an affidavit of service had a jurat but the notary failed to indicate his notarial commission number, province or city of commission, and office address under the 2004 Rules on Notarial Practice; (2) the Verification and Certification against forum shopping was defective because only one petitioner signed it and the notary likewise failed to indicate commission particulars; and (3) copies of documents and pleadings filed before the RTC Br. 43 and MTCC Branch 1 were not attached. Petitioners’ motion for reconsideration was denied by the CA on November 13, 2012.
Issue presented to the Supreme Court
Central issue: whether the CA erred in outright dismissal of the Rule 42 petition
The Supreme Court’s task was to determine whether the CA properly dismissed outright petitioners’ Rule 42 Petition for Review on the technical defects identified, or whether the CA’s dismissal constituted manifest injustice and misapplication of procedural standards permitting substantial compliance or correction.
Supreme Court’s general approach to technical rules
Judicial perspective: balancing procedural technicalities and substantial justice
The Supreme Court reiterated that procedural rules are tools to achieve justice and are not ends in themselves; while indispensable technicalities must be observed to ensure fairness, strict adherence should yield when it would cause grave injustice. The Court cited authority recognizing courts’ discretion to relax rules when necessary to promote substantial justice, referencing Grand Placement and General Services Corporation v. Court of Appeals and other jurisprudence emphasizing that procedural technicalities may take a backseat to substantive rights when appropriate.
Verification and certification against forum shopping: substantial compliance
Analysis of verification and forum-shopping certification under Altres and related jurisprudence
The Court examined the petitioners’ Verification and Certification against forum shopping dated June 23, 2012, sworn by petitioner Emiliano D. Joven alone and containing a statement of non-forum shopping and personal knowledge of the petition. Applying the principles articulated in Altres v. Empleo and subsequent cases, the Court distinguished verification (a formal requirement, generally curable or subject to substantial compliance) from certification against forum shopping (generally required to be signed by all petitioners and less readily curable). However, when petitioners share a common interest, claims, defenses, and cause of action, the signature of one petitioner in the certification may substantially comply with the rule. Considering that both petitioners shared a common interest in the leased property and common claims, the Court found the singular signature sufficient for substantial compliance.
Notarial defects and curability
Notarial errors: non-fatal and cured by subsequent submission
The Court addressed the notary’s failure to indicate commission number, province/city of commission, and office address. It held that these notarial omissions were not fatal because verification is a formal, not jurisdictional, requirement, and courts may waive strict compliance when justice requires. Importantly, petitioners promptly submitted a copy of the notarial commission of the notary public (Atty. Carmelino M. Roque) after
...continue readingCase Syllabus (G.R. No. 86344)
Case Caption and Procedural Posture
- G.R. No. 204567, decision dated August 04, 2021, Second Division; ponente: GAERLAN, J.
- Petition for Review on Certiorari under Rule 45 assailing the Court of Appeals Resolutions dated July 24, 2012 and November 13, 2012 in CA-G.R. SP No. 125036.
- Petitioners: Emiliano D. Joven and Cicero V. Garcia. Respondents: Spouses Raul L. Tulio and Cristina Panganiban Tulio.
- Relief sought: reinstatement of petition filed with the Court of Appeals and review of the CA’s outright dismissal on technical grounds.
Antecedent Facts — Property, Lease, and Improvements
- Subject property: a parcel of commercial land located in San Fernando, Pampanga, registered under TCT No. 429707-12 in the name of the Tulios (respondents).
- Lease agreement: executed August 14, 1997, between respondents (lessors) and petitioners (lessees) for 15 years, stated to run from November 1, 1999 until October 31, 2013.
- Improvements: petitioners constructed a two-storey commercial building named J-G Shopping Mall, allegedly at a cost of P22,000,000.00.
- Disputed rental payments: for the period between November 1, 1999 and June 30, 2000 (scope contested by petitioners who argue it should end October 31, 2000), petitioners paid only P2,000,000.00 out of an outstanding P3,000,000.00, leaving a P1,000,000.00 balance.
- Dishonored checks: petitioners issued two checks dated February 29, 1999 (P1,000,000.00) and April 30, 2000 (P250,000.00) which were dishonored.
Events Leading to Litigation — Eviction and Possession
- June 3, 2000, around 8:30 a.m.: respondents, assisted by Atty. Reynaldo B. Robles and 12 security guards, served a Notice of Eviction on petitioners’ two security guards at J-G Shopping Mall — the notice addressed to petitioners and their employees, agents and assigns.
- Respondents barricaded the Administration Office entrance, issued notice to tenants and stallholders that they had reassumed possession, control and management, and later ordered petitioners’ security guards to leave; the guards complied.
- Petitioners filed a complaint for Forcible Entry before the Municipal Trial Court in Cities (MTCC) Branch I, San Fernando — docketed Civil Case No. 8220.
MTCC Ruling (Decision dated February 17, 2003)
- MTCC held respondents did not commit forcible entry.
- Rationale: the action of petitioners’ representative leaving the premises after service of the Notice of Eviction constituted a lawful turnover of possession to respondents.
- Remedies awarded to petitioners:
- Reimbursement of advance rentals in the amount of P2,250,000.00.
- One-half of the cost of improvements introduced by petitioners, to be determined by an independent appraiser chosen by both parties.
- MTCC disposition summary: defendants in lawful possession effective June 3, 2000; reimbursement and appraisal ordered; counterclaim dismissed; no costs.
RTC Proceedings — First Judgment (May 30, 2005)
- Case appealed to Regional Trial Court, Branch 43, City of San Fernando, Pampanga.
- RTC (Presiding Judge Carmelita S. Gutierrez-Fruelda) modified MTCC decision:
- Declared defendants (respondents) in lawful possession effective June 3, 2000.
- Ordered refund of unused rental to plaintiffs (petitioners) in the reduced amount of P500,000.00.
- Ruled that the building and permanent improvements at termination form part of the leased property and become property of defendants free and clear, without obligation on defendants to pay or refund their value or costs to plaintiffs; plaintiffs to execute documents evidencing transfer.
- Dismissed defendants’ counterclaim for lack of merit; no costs.
RTC Proceedings — Reconsideration and Second Judgment (October 6, 2011)
- On petitioners’ motion for reconsideration, RTC issued a new judgment (acting judge) that overturned the May 30, 2005 ruling:
- Declared forcible entry in respondents’ repossession of the leased property.
- Ordered defendants to reimburse plaintiffs one-half of the value of the building, fixed at P12,000,000.00 (one-half value equated to P12 Million in the judgment).
- Ordered refund to plaintiffs of P2,250,000.00 as advance rentals and P300,000.00 for VAT on the 15th year of the Contract of Lease.
- Dismissed defendants’ counterclaim for lack of merit; no costs.
RTC Proceedings — Partial Grant of Respondents’ Motion (May 15, 2012)
- A different magistrate (Acting Judge Esperanza S. Paglinawan-Rozario) partly granted respondents’ motion for reconsideration and further modified the October 6, 2011 judgment:
- Modified the dispositive paragraph to declare defendants in lawful possession effective June 3, 2000.
- Declared that the building and permanent improvements at termination form part of the leased property and shall become property of defendants free and clear, without obligation to pay or refund value or costs; plaintiffs to execute documents to effect transfer.
- Ordered defendants to refund plaintiffs the sum of P250,000.00, representing the excess paid to them after applying P2,000,000.00 as payment for rentals from November 1, 1999 to June 2, 2000.
- Dismissal of defendants’ counterclaim and no pronouncement of costs remained.
- Ordered remand of the complete records to the court of origin for executi