G.R. No. 176405 ; August 20, 2008
LEO WEE, petitioner, vs. GEORGE DE CASTRO (on his behalf and as attorney-in-fact of ANNIE DE CASTRO and FELOMINA UBAN) and MARTINIANA DE CASTRO, respondents.

FACTS

Respondents, as registered owners, leased a two-storey building to petitioner Leo Wee on a month-to-month basis. The parties agreed to increase the monthly rental from P9,000.00 to P15,000.00 effective October 1, 2001. Petitioner failed to pay the increased amount, prompting respondents to initiate barangay conciliation. The Lupon issued a Certification to File Action after the parties failed to settle. Respondents then sent a demand letter terminating the lease and filed an ejectment complaint before the Municipal Trial Court (MTC). Petitioner contested the suit, arguing there was no valid agreement on the rental increase, that the barangay certification covered only the rental dispute and not the ejectment, and that the complaint lacked an allegation of “unlawful withholding” of possession.
The MTC dismissed the complaint for non-compliance with the conciliation requirement, a decision affirmed by the Regional Trial Court (RTC). The Court of Appeals reversed, ordering petitioner to vacate the property and pay back rentals. The appellate court held that the barangay certification was valid for the ejectment suit, as the core issue of rental non-payment was inseparable from the possession issue. It also ruled that the complaint substantially averred a cause of action for ejectment.

ISSUE

Whether the Court of Appeals erred in reversing the lower courts and ruling in favor of the respondents in the ejectment case.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the jurisdictional issue, the Court held that the barangay certification was valid. The failure to pay the increased rent agreed upon by the parties constituted a violation of the lease terms, making the conciliated issue of rental increase intrinsically related to the consequent action for ejectment. The certification thus satisfied the condition precedent for filing the suit.
On the substantive merits, the Court found a valid cause of action for ejectment. The respondents’ complaint, while not using the precise phrase “unlawful withholding,” sufficiently alleged facts showing petitioner’s refusal to vacate after a valid termination of the lease due to his failure to pay the stipulated rent. A cause of action is determined from the facts pleaded, not the specific terminology used. The tender of payment at the old rate after the demand to vacate constituted a refusal to comply with the lease terms, justifying ejectment. The Court emphasized that technicalities must yield to substantive justice, especially where, as here, a party’s refusal to honor a valid rental agreement unjustly withholds possession from the lawful owner. Petitioner was thus liable to vacate and pay back rentals, attorney’s fees, and costs.