Colegio Medico-Farmaceutico v. Lim
REITERATIONFacts
The Antecedents: Petitioner Colegio Medico-Farmaceutico de Filipinas, Inc. (Colegio) is the registered owner of a building in Sampaloc, Manila. Respondent Lily Lim, as President/Officer-in-charge of St. John Berchman School of Manila Foundation (St. John), leased the property. The Colegio alleged that the lease contract expired in May 2006, and despite demands, respondent failed to return the leased premises and pay outstanding rentals and utility bills totaling P604,936.35. Respondent, however, claimed a 10-year lease agreement from 2003 to 2013, with an assignment of rights to her, and that she suspended rental payments due to the Colegio's failure to make necessary repairs. Procedural History: The Colegio filed an ejectment case against respondent with the Metropolitan Trial Court (MeTC), which dismissed the complaint for lack of a valid demand letter, finding that the President of the Colegio, Dr. Virgilio C. Del Castillo, was not duly authorized by the Board of Directors to issue it. The Regional Trial Court (RTC) reversed the MeTC's decision, ruling that the demand letter was issued in the usual course of business and ratified by a subsequent Board Resolution authorizing the filing of the case. The RTC ordered the respondent to vacate, pay back rentals and utilities, and monthly compensation for use of the property. The Court of Appeals (CA) reversed the RTC, holding that the failure to attach the Board Resolution to the complaint was a fatal defect. The Colegio then filed the instant petition. The Petition: The petitioner filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. The petitioner argues that the president's authority to sign the verification and certification of non-forum shopping is presumed, and the failure to attach the Board Resolution was not a fatal defect. It further contends that the demand letter was validly issued within the usual course of business and, even if not, was ratified by the subsequent Board Resolution. The petitioner also asserts that a demand to vacate was unnecessary as the case was based on the expiration of the lease. The petitioner seeks the reversal of the CA decision and the reinstatement of the RTC decision, with a modification to increase the monthly rental to P55,000.00.
Issue(s)
Whether the Court of Appeals erred in dismissing the complaint for failure to attach a board resolution authorizing the president to sign the verification and certification of non-forum shopping. Whether the demand letter issued by the president of the petitioner corporation was valid and sufficient to institute an unlawful detainer case. Whether all the essential requisites for an unlawful detainer case are present. Whether the monthly compensation for the use of the property should be P50,000.00 or P55,000.00. Whether the award of damages should include interest and at what rate.
Ruling
The Petition is granted. The Court of Appeals' Decision and Resolution are reversed and set aside. The RTC Decision is reinstated and affirmed with modification regarding the monthly compensation and interest rates on damages.
Ratio Decidendi
On the failure to attach a board resolution for verification and certification: The Court ruled that the CA erred in dismissing the complaint on this ground. Jurisprudence allows the president of a corporation to sign the verification and certification of non-forum shopping without a board resolution, as the president is presumed to have sufficient knowledge to swear to the truth of the allegations. This is a jurisprudential exception to the general rule that corporate powers are exercised by the board of directors. Therefore, the absence of the Board Resolution dated May 13, 2008, attached to the complaint, was not a fatal defect. On the validity of the demand letter: The Court held that the demand letter dated March 5, 2008, was valid. The issuance of such a letter to collect unpaid rentals and demand vacation falls within the ordinary course of business and the usual duties of a corporate president. The Court cited People's Aircargo and Warehousing Co., Inc. v. Court of Appeals, emphasizing that a president is presumed to have the authority to act within the general objectives of the business and the scope of usual duties, absent contrary charter or by-law provisions. Furthermore, even if Del Castillo acted beyond his authority, the subsequent Board Resolution dated May 13, 2008, ratifying his authority to file the case, cured any defect. On the essential requisites of unlawful detainer: The Court found that requisites 1 (fact of lease), 2 (expiration of right to possess), 3 (withholding possession), and 5 (filing within one year) were established. The primary issue was the validity of the written demand (requisite 4). As established above, the demand letter was deemed valid, thus satisfying all requisites for unlawful detainer. The non-payment of rentals, a ground for lease termination, and the continued possession by respondent after termination were undisputed. The complaint was filed within one year from the last demand. On the monthly compensation: The Court modified the RTC's award, increasing the monthly compensation for the use of the property from P50,000.00 to P55,000.00, as stipulated in the Contract of Lease. This aligns the compensation with the agreed-upon rate in the lease agreement. On the interest rates for damages: The Court applied the ruling in Nacar v. Gallery Frames, stating that the award of actual damages shall earn interest at the rate of 12% per annum from March 5, 2008 (date of extrajudicial demand) to June 30, 2013. From July 1, 2013, until full satisfaction, the interest rate shall be 6% per annum.
Main Doctrine
The president of a corporation is presumed to have the authority to act within the domain of the general objectives of its business and within the scope of his or her usual duties, including issuing demand letters for unpaid rentals and filing suits, even without an express board resolution, especially when such acts are subsequently ratified by the board.