Chinese Young Men's Christian Association of the Philippine Islands vs. Remington Steel Corporation

Substantial compliance with the certification of non-forum shopping requirement is achieved when a corporate petitioner timely files the verification and certification but belatedly submits proof of the signatory's authority via a Secretary's Certificate attached to a motion for reconsideration, provided the board authorization was granted prior to the filing of the petition. A final resolution on substantially identical facts between the same parties binds subsequent cases under the doctrine of stare decisis et non quieta movere.

Remington Steel Corporation leased ground floor units 964 and 966 and second floor unit 963 of a building owned by the Manila Downtown YMCA on Benavidez Street, Binondo, Manila. Remington used the combined areas of the ground floor units as a hardware store, offices, and display shops for its steel products, as well as a passageway to the second floor unit, which served as a staff room for its Manila sales force. The parties' lease relationship generated multiple ejectment, lease-fixing, and consignation cases across different MeTC branches and appellate courts, culminating in parallel proceedings before the Supreme Court involving the two ground floor units separately.

Remington Steel Corporation leased ground floor units 964 and 966 and second floor unit 963 of a building owned by the Manila Downtown YMCA on Benavidez Street, Binondo, Manila. Remington used the combined areas of the ground floor units as a hardware store, offices, and display shops for its steel products, and as a passageway to the second floor unit, which served as a staff room for its Manila sales force.

On February 27, 1997, YMCA formally terminated the lease over second floor unit 963 and gave Remington until March 31, 1997 to vacate. Remington responded by filing a case for the Fixing of Lease Period over unit 963 with the MeTC-Manila on March 24, 1997. YMCA countered with an action for Unlawful Detainer involving the same unit on April 8, 1997. The two cases were consolidated before MeTC-Branch 26, which on August 11, 1998 extended the lease period on unit 963 for three years and dismissed YMCA's ejectment complaint. On March 15, 2000, RTC-Branch 30, acting as appellate court, granted Remington a five-year extension and ordered YMCA to provide a two-meter passageway between units 964 and 966. YMCA appealed to the CA, which on September 19, 2003 upheld the lower courts' authority to fix the extension but ordered Remington to vacate, noting the lease was no longer tenable and Remington had transferred to its own building.

During the pendency of the unit 963 cases, Remington filed a Petition for Consignation of Rentals for ground floor units 964 and 966, alleging YMCA refused to receive rentals. On June 23, 1998, Remington filed a Formal Surrender of the Leased Premises, opting to surrender possession of the ground floor units effective July 1, 1998 and tendering two checks to cover all past rentals due. YMCA filed a No Objection to the turnover on June 25, 1998, and on July 9, 1998, MeTC-Branch 24 declared the consignation case closed. Remington, however, continued to use the ground floor units as a passageway to the second floor unit, kept the premises padlocked, and failed to give YMCA the keys.

YMCA thereafter filed two separate unlawful detainer complaints to evict Remington from ground floor units 964 and 966, docketed as Civil Case Nos. 168629-CV and 168628-CV. YMCA contended that Remington did not surrender the units but padlocked the doors, refused to surrender the keys, and failed to pay rent. Remington countered that it had vacated and surrendered the units on July 1, 1998, and that it locked the doors only as an act of self-preservation because YMCA refused to heed the court's order to provide a passageway to the second floor unit. Both MeTC branches separately ordered Remington to vacate and pay reasonable rent and attorney's fees. On appeal, both RTC branches reversed the MeTC decisions and dismissed the complaints.

YMCA filed separate petitions for review in the CA. The CA dismissed outright the petition involving unit 964 (CA-G.R. SP No. 74292) on January 16, 2003, on the ground that William Golangco, the signatory to the Verification and Certification of Non-Forum Shopping, failed to show proof of authority. YMCA filed a motion for reconsideration, appending a Secretary's Certificate dated December 26, 2002 executed by YMCA's Corporate Secretary, attesting that on December 13, 2002—prior to the filing of the petition on December 27, 2002—the Board of Directors had authorized Golangco to prepare and file the petition. The CA denied the motion on July 29, 2003, citing Spouses Melo vs. Court of Appeals for the rule that subsequent compliance cannot excuse initial failure to comply with the certification requirement.

• No Requirement for Simultaneous Authority Proof: YMCA argued that the rules do not require that the filing of the Verification and Certification of Non-Forum Shopping should include therewith the authorization of the person signing the same.
• Melo Inapplicable: YMCA maintained that Spouses Melo vs. Court of Appeals does not apply because it involved the total failure to append to the petition a Verification and Certification of Non-Forum Shopping, unlike the present case in which the certification was timely filed.
• Late Submission Not Fatal: YMCA argued that recent jurisprudence, while upholding the need to present the authority of the signatory when the party is a corporation, emphasizes that late submission of such proof is not fatal.

• Authority Required at Filing: Remington contended that YMCA was required at the time of filing its petition to show that the person signing the Verification and Certification of Non-Forum Shopping on its behalf had proper authority to do so.
• Subsequent Compliance Encourages Non-Compliance: Remington argued that allowing subsequent compliance would encourage parties to make light of the requirements of petitions for review.

• Certification of Non-Forum Shopping: Whether the CA erred in dismissing outright YMCA's petition for failure to attach proof of authority of the signatory to the Verification and Certification of Non-Forum Shopping, and whether the subsequent submission of a Secretary's Certificate cured the defect.
• Stare Decisis: Whether the final Resolution dated August 31, 2007 in G.R. No. 171858 involving unit 966 should govern the present case involving unit 964.

• Certification of Non-Forum Shopping: Yes. The CA erred in dismissing the petition outright. Substantial compliance was achieved when YMCA attached a Secretary's Certificate to its motion for reconsideration, attesting that the signatory had been authorized by the Board of Directors prior to the filing of the petition.
• Stare Decisis: Yes. The final Resolution dated August 31, 2007 in G.R. No. 171858 is binding and applicable to the present case under the doctrine of stare decisis, the facts being substantially the same and the parties identical, the only difference being the unit involved.

• Certification of Non-Forum Shopping: The Court drew a distinction between non-compliance with verification and non-compliance with the certification of non-forum shopping. While lack of verification does not necessarily render a pleading fatally defective and may be corrected or dispensed with in the interest of justice, the lack of certification of non-forum shopping is generally not curable by subsequent submission. However, jurisprudence instructs that the rule may be relaxed on grounds of substantial compliance or special circumstances. The Court traced a consistent line of authority—Shipside Incorporated vs. Court of Appeals, Havtor Management Philippines Inc. vs. NLRC, General Milling Corporation vs. NLRC, and numerous subsequent decisions—where belated submission of a Secretary's Certificate or board resolution in a motion for reconsideration was deemed substantial compliance, provided there was no attempt to ignore prescribed procedural requirements. The critical distinction from Spouses Melo vs. Court of Appeals was that Melo involved total failure to append the certification itself, whereas YMCA timely filed the certification but merely failed to submit proof of the signatory's authority. The Secretary's Certificate showed that Golangco had been authorized on December 13, 2002, prior to the petition's filing on December 27, 2002. The CA's reliance on Melo was therefore misplaced, and the mandatory requirement must not be interpreted so literally as to defeat its objective.

• Stare Decisis: Ordinarily, the Court would remand the case to the CA for disposition on the merits. The particular circumstances, however, prevented this. During the pendency of the present petition, the Court had rendered a final and executory Resolution dated August 31, 2007 in G.R. No. 171858 involving unit 966. That resolution held that Remington's constructive delivery of the premises did not amount to effective transfer of possession to YMCA because the premises remained padlocked and YMCA was never given the keys, and ordered Remington to pay ₱11,000.00 monthly from July 1, 1998 until March 12, 2004 as reasonable compensation. The facts of both cases were substantially the same—same parties, same building, same circumstances of padlocking and withholding keys—the only difference being the unit number. Under the doctrine of stare decisis et non quieta movere, when the Court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same. The doctrine is based on the legal principle or rule involved, not on the judgment, and in this sense differs from res judicata. The Court was duty-bound to apply the previous final ruling to the instant case.

• Substantial Compliance with Certification of Non-Forum Shopping — While the certification of non-forum shopping is mandatory and generally not curable by subsequent submission, the rule may be relaxed on grounds of substantial compliance or special circumstances. Where a corporate petitioner timely files the verification and certification but fails to attach proof of the signatory's authority, belated submission of a Secretary's Certificate in a motion for reconsideration—showing that the board authorization was granted prior to the petition's filing—constitutes substantial compliance. This is distinguished from total failure to file the certification itself, which remains fatal. The Court applied this doctrine by reversing the CA's outright dismissal, finding that YMCA's subsequent submission of a Secretary's Certificate dated December 26, 2002, attesting to board authorization granted on December 13, 2002—prior to the petition's filing on December 27, 2002—constituted substantial compliance.

• Stare Decisis et Non Quieta Movere — When the Supreme Court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same, even though the parties may be different. The doctrine is based on the legal principle or rule involved, not on the judgment, and in this sense differs from res judicata, which is based on the judgment. The doctrine is grounded on the necessity for securing certainty and stability of judicial decisions. Applied here, the final and executory Resolution dated August 31, 2007 in G.R. No. 171858 involving unit 966 governed the present case involving unit 964 because the facts were substantially the same and the parties identical.

• Constructive Delivery of Leased Premises — Filing of a Formal Surrender of Leased Premises and actual emptying of the premises constitute constructive delivery of possession. However, constructive delivery does not produce the effect of actual delivery if the lessor cannot take control of the premises without impediment. To effectively return the thing leased, the lessee must place it at the disposal of the lessor, return the keys, and leave no sub-lessees or other persons in the property; otherwise, the lessee continues to be liable for rents. This principle, established in G.R. No. 171858, was applied to the present case via stare decisis.

• "A distinction must be made between non-compliance with the requirements for Verification and Certification of Non-Forum Shopping. As to Verification, non-compliance therewith does not necessarily render the pleading fatally defective; hence, the court may order its correction if verification is lacking, or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the Rules may be dispensed with in order that the ends of justice may thereby be served. On the other hand, the lack of certification of non-forum shopping is generally not curable by the submission thereof after the filing of the petition." — This passage articulates the differing consequences of non-compliance with verification versus certification of non-forum shopping, framing the analytical framework within which the substantial compliance doctrine operates.

• "While the requirement of the certificate of non-forum shopping is mandatory, nonetheless the requirement must not be interpreted too literally as to defeat the objective of preventing the undesirable practice of forum shopping." — This states the ratio decidendi for relaxing procedural rules in favor of substantial compliance, balancing mandatory requirements against the underlying purpose of the rule.

• "The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions." — This defines the doctrinal basis for applying the final resolution in G.R. No. 171858 to the present case, distinguishing stare decisis from res judicata by anchoring it on the legal principle rather than the judgment.

• Spouses Melo vs. Court of Appeals, 376 Phil. 204 (1999) — Distinguished. Involved total failure to append a verification and certification of non-forum shopping to the petition, unlike the present case where the certification was timely filed but proof of the signatory's authority was belatedly submitted. The CA's reliance on this case was held to be misplaced.

• Shipside Incorporated vs. Court of Appeals, 404 Phil. 981 (2001) — Followed as controlling precedent. Established that subsequent submission of a Secretary's Certificate in a motion for reconsideration, showing prior board authorization of the signatory, constitutes substantial compliance justifying giving due course to the petition.

• Havtor Management Philippines Inc. vs. NLRC, 423 Phil. 509 (2001) — Followed. Acknowledged substantial compliance when the lacking Secretary's Certificate was submitted as an attachment to a motion for reconsideration seeking reversal of the dismissal.

• General Milling Corporation vs. NLRC, 442 Phil. 425 (2002) — Followed. Deemed substantial compliance the belated attachment of a board resolution to a motion for reconsideration, noting no attempt to ignore prescribed procedural requirements.

• Remington Industrial Sales Corporation vs. Chinese Young Men's Christian Association of the Philippine Islands, G.R. No. 171858, Aug. 31, 2007 — Applied as binding precedent under stare decisis. The final and executory resolution therein, involving unit 966 with substantially identical facts and the same parties, governed the present case involving unit 964.

• Section 1, Rule 42, Rules of Court — Requires that a petition for review filed with the CA be a verified petition. The Court noted this mandatory requirement applies to corporations as well as natural persons, since the Rules make no distinction.

• Section 2, Rule 42, Rules of Court — Requires that the petitioner submit together with the petition a certification under oath of non-forum shopping, stating that no other action involving the same issues has been commenced and undertaking to inform the court of any similar action filed thereafter. The Court held that while mandatory, the requirement may be relaxed under the doctrine of substantial compliance.

• Section 3, Rule 42, Rules of Court — Provides that failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for dismissal. The Court found that the CA erred in applying this provision to dismiss the petition outright where substantial compliance had been achieved.

• Section 17, Rule 70, Rules of Court — Authorizes the trial court to award reasonable compensation for the use and occupation of leased premises after the same is duly proved. Applied via stare decisis from G.R. No. 171858, where the Court fixed reasonable compensation at ₱11,000.00 monthly, equitably reduced from the stipulated rent of ₱22,531.00 in view of the premises being used only as a passageway and both parties' mutual negligence.

Tinga, Chico-Nazario, Nachura, and Reyes, JJ. (Reyes concurred in lieu of Justice Consuelo Ynares-Santiago per Special Order No. 497 dated March 14, 2008).