G.R. No. 228905 , July 15, 2020
Brig. General Marcial A. Collao, Jr., in his capacity as Commanding General, Headquarters and Headquarters Support Group, Philippine Army, Petitioner, vs. Moises Albania, Respondent.

FACTS

The Commanding General of the Headquarters and Headquarters Support Group of the Philippine Army at Fort Bonifacio administers concessionaire areas within the military reservation. Respondent Moises Albania was granted a one-year business permit and entered into a Concession Agreement on March 31, 1993, to operate a Tailoring and Barber Shop. The agreement was revocable for violation of terms, camp rules, or due to security, public interest, military exigency, or necessity. When a substantial portion of Fort Bonifacio was taken by the Bases Conversion Development Authority (BCDA), the Philippine Army needed to relocate displaced units to Albania’s area. Petitioner, through its Post Commander, sent demand letters dated May 25, 1995, June 3, 1996, October 15, 19, and November 29, 1997, for Albania to vacate, but he failed to comply and pay rentals. Consequently, then Commanding General Brig. Gen. Lysias Cabusao filed a complaint for unlawful detainer on May 12, 1998, later amended to reflect his successor, Brig. Gen. Marcial A. Collao, Jr., as petitioner. Albania argued in his Answer that there was no demand letter terminating the month-to-month lease and that petitioner continued collecting monthly rentals, indicating no need for the premises. The Metropolitan Trial Court (MeTC) of Makati City, Branch 65, granted the complaint on March 4, 2002, ordering Albania to vacate, pay unpaid rentals of P18,639.72 up to October 1999, and P3,000 monthly thereafter until vacating, plus attorney’s fees. The Regional Trial Court (RTC) of Makati City, Branch 137, reversed the MeTC on September 26, 2003, dismissing the complaint without prejudice for failure to implead the Philippine Army as a real party-in-interest, ruling that the commanding general was merely a representative. Petitioner, through the Office of the Solicitor General (OSG), filed a Motion for Reconsideration on March 12, 2012, after a military officer discovered the case records and the 2003 RTC Decision in 2012, with no registry return cards proving service attached. The RTC denied the motion on February 21, 2014, maintaining its decision had attained finality despite the absence of return cards, and reiterated the real party-in-interest issue. The Court of Appeals (CA) affirmed the denial on April 28, 2015, citing laches due to petitioner’s unreasonable delay of ten years from the 2002 MeTC Decision to take further action. The CA denied reconsideration on November 29, 2016.

ISSUE

1. Whether the principle of laches is applicable against the petitioner.
2. Whether the September 26, 2003 RTC Decision is final and executory.
3. Whether the Philippine Army’s Commanding General has the legal personality to institute the unlawful detainer action for the Philippine Army.
4. Whether the unlawful detainer case could have been dismissed by the RTC without prejudice.

RULING

1. Laches is not applicable against the petitioner. The Court held that laches does not lie against the government when it sues to assert governmental rights, such as recovering land part of a military reservation. The petitioner’s delay in following up the case from 2002 to 2012 did not constitute laches because the government is not bound by the negligence of its officers in the performance of their duties, especially in matters of public interest like military necessity. The elements of laches—conduct on the part of the defendant giving rise to the situation, delay in asserting the complainant’s rights, lack of knowledge or notice on the defendant’s part, and injury or prejudice to the defendant—were not fully established, as respondent Albania did not suffer injury given his expired possessory right.
2. The September 26, 2003 RTC Decision is not final and executory. The Court ruled that finality of judgment requires proof of service of the decision on the parties. Under Section 10, Rule 13 of the Rules of Court, service by registered mail is complete upon actual receipt by the addressee or after five days from the date of first notice of the postmaster, provided the registry return card or unclaimed letter with postmaster’s notice is filed. Here, the absence of registry return cards or proof of notice from the postmaster in the records means there was no valid service of the RTC Decision on petitioner. Therefore, the 15-day period to appeal did not lapse, and the decision did not attain finality.
3. The Philippine Army’s Commanding General has the legal personality to institute the unlawful detainer action. The Court held that the commanding general, as administrator of the Fort Bonifacio Military Reservation, is a legal representative authorized under Section 1, Rule 70 of the Rules of Court to file an unlawful detainer case without impleading the principal, the Philippine Army. The complaint, though filed in the name of the commanding general, was clearly instituted for and on behalf of the Philippine Army, as evidenced by amendments reflecting successors and allegations in the pleadings. The RTC erred in applying Section 3, Rule 3 on real party-in-interest, as Rule 70 governs forcible entry and unlawful detainer cases and allows representatives to sue.
4. The dismissal of the unlawful detainer case should not have been without prejudice. The Court found that the RTC’s dismissal without prejudice was improper because the one-year reglementary period for filing an unlawful detainer case from the last demand (November 1997) had already prescribed. A dismissal without prejudice would allow refiling, but prescription bars such action. Thus, the dismissal should have been on the merits, not based on procedural grounds regarding party representation.
The Supreme Court granted the petition, reversed the CA Decision and Resolution, and reinstated the MeTC Decision with modifications: respondent Albania was ordered to vacate the premises, pay unpaid rentals of P18,639.72 up to October 1999, and P3,000 monthly as reasonable compensation for use and occupancy from November 1999 until vacating, with legal interest at 6% per annum from finality until full payment.