G.R. No. 175687 ; November 28, 2007
MATERRCO, INC., Petitioner, vs. FIRST LANDLINK ASIA DEVELOPMENT CORPORATION, Respondent.

FACTS

Respondent First Landlink Asia Development Corporation (FLADC), owner of Masagana Citimall, filed an ejectment complaint against petitioner Materrco, Inc., operator of Masagana Department Store within the mall. FLADC alleged a verbal lease agreement existed, with Materrco failing to pay substantial back rentals, utility charges, and common area fees despite repeated demands. Materrco countered that a written 1993 Contract of Lease governed, which contained a different rental scheme and a clause requiring disputes to be referred to a committee composed of the parties’ board chairmen. Materrco argued the ejectment suit was premature for non-compliance with this contractual dispute resolution mechanism.
The Metropolitan Trial Court (MeTC) ruled for FLADC, ordering Materrco to vacate and pay accrued amounts. The Regional Trial Court (RTC) and the Court of Appeals (CA) affirmed, giving weight to FLADC’s evidence of unpaid obligations. The CA dismissed Materrco’s appeal, holding the contractual committee referral was not a condition precedent for filing the ejectment case, as the action was based on the expiration of the right to occupy due to non-payment, not a mere contractual breach.

ISSUE

Whether the Court of Appeals erred in dismissing the appeal and upholding the ejectment judgment despite the alleged failure to comply with the contractual dispute resolution clause.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The Court held that an ejectment case is designed to provide a swift, summary remedy for restoring physical possession. The contractual clause requiring referral of disputes to a committee of chairmen was not a jurisdictional prerequisite for an unlawful detainer suit. The foundation of FLADC’s action was the termination of Materrco’s right to possess the premises due to failure to pay rents and charges, which constituted a violation of the lease terms justifying ejectment under the Rules of Court. This cause of action is distinct from resolving a contractual interpretation dispute under the agreement’s terms.
Furthermore, the Court found no reason to disturb the factual findings of the lower courts. The consistent rulings of the MeTC, RTC, and CA on the existence of unpaid obligations were based on substantial evidence. In ejectment proceedings, factual findings of lower courts are conclusive when supported by evidence, as here. The alleged error in the computation of filing fees was also deemed inconsequential, as it did not affect the court’s jurisdiction over the case. The ejectment order was thus proper.