Poh Toh Buddhist Association of the Philippines, Inc. vs. Sy

A corporate act revoking tolerance and demanding vacatur must come from the corporation's legitimate board; where a prior SC pronouncement recognizes the Favis group as the existing board pending judicial determination, that group's authority to terminate the occupant's authority is upheld.

PTBAP, Inc. is the registered owner of a Baguio City parcel covered by Transfer Certificate of Title No. T-6546, on which a Buddhist temple stands. The registered owner is a corporation, and the dispute concerns which group of trustees may act for it in relation to the property.

PTBAP, Inc. held Transfer Certificate of Title No. T-6546 over a parcel in Baguio City, where a Buddhist temple stood. Sometime in 2009, PTBAP, Inc. appointed respondent Cristina Sy, a resident monk, to oversee the maintenance and operations of the subject property, with full authority to decide and act on all matters concerning it. In 2014, PTBAP, Inc. discovered that Sy had authorized respondent Margie Lim Macalalad to operate a dormitory on the subject property under the name "Paramita Dormitory." It was further revealed that Sy had failed to remit donations collected from temple patrons. Consequently, PTBAP, Inc.'s board of trustees terminated Sy's appointment and ordered Sy and all persons claiming title under her to vacate the premises of the subject property.

Disagreeing, Sy formed a breakaway faction, the Sy group, which issued a board resolution purportedly appointing Sy as officer-in-charge/administrator of the subject property. In turn, PTBAP, Inc., through its current board of trustees that included Benjamin G. Favis, challenged the legitimacy of the Sy group before the Securities and Exchange Commission, which ultimately led to the cancellation of the Sy group's registration. From then on, PTBAP, Inc., acting through the group led by Favis, issued a final demand upon Sy and Macalalad to vacate and surrender possession of the subject property. Despite receipt of the demand, Sy and Macalalad refused to comply. Consequently, on August 29, 2017, PTBAP, Inc., through Favis, instituted a Complaint for unlawful detainer before the Municipal Trial Court in Cities.

Sy and Macalalad acknowledged receipt of PTBAP, Inc.'s notice to vacate. However, they refused to comply, asserting that the notice emanated from the Favis group, which they claimed lacked authority over the subject property. Sy insisted that her authority as caretaker was derived not from the Favis group but from one Conchita Mercader and noted by a certain Master Dao Yuan. Sy further asserted that she was reappointed as the overall caretaker and manager of the subject property by PTBAP, Inc.'s legitimate board of trustees, as stated in its latest board resolution signed by the group of Jose Ocampo. As such, the Favis group had no legal standing to issue the notice to vacate. According to Sy and Macalalad, the Favis group falsified documents submitted to the SEC and initiated several unfounded complaints against Sy to harass her. They emphasized that these complaints were ultimately dismissed, thereby reinforcing their claim that the notice to vacate was issued by the Favis group without lawful authority.

The MTCC found that PTBAP, Inc. proved its status as owner of the subject property, that it had granted Sy authority to possess the same as a caretaker, and that it subsequently served upon her a notice to vacate and surrender possession of the subject property. The MTCC further noted that the notice was duly received by Sy, yet she unduly refused to comply. The RTC noted that the Favis group had submitted evidence of its prior status as the temporarily recognized governing body of PTBAP, Inc. in several cases, notably in a case decided by the Supreme Court.

• Authority to Issue Notice: Respondents countered that the notice to vacate emanated from the Favis group, which lacked authority over the subject property; Sy claimed her authority as caretaker came not from the Favis group but from Conchita Mercader and was noted by Master Dao Yuan.
• Legitimacy of the Board: Respondents maintained that Sy was reappointed as overall caretaker and manager by PTBAP, Inc.'s legitimate board of trustees under the Ocampo group, so the Favis group had no legal standing to issue the notice.
• Falsification and Harassment: Respondents asserted that the Favis group falsified documents submitted to the SEC and initiated unfounded complaints against Sy, which were dismissed, reinforcing their claim that the notice was issued without lawful authority.
• Scope of Prior Ruling: Respondents contended that the pronouncement in G.R. No. 233236 was limited solely to the specific unlawful detainer case involved and was therefore inapplicable to the present controversy.

• Unlawful Detainer — Authority of the Favis Group: Whether the CA committed reversible error in not finding that petitioner, through the Favis group, successfully proved its right to eject respondent Sy from the subject property summarily.

• Unlawful Detainer — Authority of the Favis Group: Yes. The CA erred. The Favis group is recognized as the existing board of PTBAP, Inc. and thus authorized to terminate Sy's authority to occupy the subject property. The records establish the elements of unlawful detainer: initial possession by tolerance, illegal possession after notice, continued deprivation, and filing within one year from demand.

• Unlawful Detainer — Authority of the Favis Group: The petitioner's ownership of the subject property is not disputed. However, the SC emphasized that ownership alone is not determinative of the right of possession. The owner of real property is entitled to possession as an attribute of ownership, and the holder of a Torrens Title is the rightful owner entitled to possession; but even a legal owner cannot simply oust a party in peaceable quiet possession through a summary action for ejectment without establishing by a preponderance of evidence the essential requisites of the action. A complaint sufficiently proves a cause of action for unlawful detainer if it satisfies four elements: (1) initially, possession of the property by the defendant was by contract with or by tolerance of the plaintiff; (2) eventually, such possession became illegal upon notice by the plaintiff to the defendant of the termination of the latter's right of possession; (3) from then on, the defendant remained in possession and deprived the plaintiff of the enjoyment; and (4) within one year from the last demand on the defendant to vacate, the plaintiff instituted the complaint for ejectment. The records established that Sy's possession was initially allowed by tolerance of PTBAP, Inc.; without PTBAP, Inc.'s knowledge and consent, Sy allowed Macalalad to operate a dormitory on the premises; when PTBAP, Inc., through the Favis group, sent a demand to vacate, respondents refused to comply; and the Favis group, on behalf of PTBAP, Inc., filed the unlawful detainer action within one year from the date of demand. The only remaining question was whether the Favis group possessed the requisite authority to revoke the tolerance previously extended to Sy. A corporation, as a juridical entity, may act only through its board of directors or trustees, which exercises almost all corporate powers, lays down corporate business policies, and is responsible for management efficiency. The general rule is that, absent authority from the board, no person, not even its officers, can validly bind a corporation; conversely, an act not authorized by the legitimate board of trustees will not bind the corporation. In G.R. No. 233236, Poh Toh Buddhist Association of the Philippines, as represented by Rosa Lim Co vs. Hon. Cornejo-Tomacruz, the SC had already declared that unless and until there is a ruling from a proper court that the Go group has been replaced by the Lim group, the authority of the former to represent PTBA, Inc. in the unlawful detainer case is presumed to continue. The Go group referred to in the earlier Poh Toh case is the same group to which Favis belongs. The RTC explained that the record shows that the Favis group is led by its Board of Trustees Chairman Dorian Chua, and that in several suits in the City of Manila, PTBAP, Inc. brought actions as plaintiff represented by a group called the group of Vicente Go, which is the same as the Chua group and the Favis group in this case; in said cases, the Go group, and consequently the Chua group and the Favis group, was recognized even by the Supreme Court as having lawfully instituted the suits for and on behalf of PTBAP, Inc. even pending determination of which between the two contending groups constituted the governing Board of Trustees. Respondents' contention that the pronouncement in G.R. No. 233236 is limited solely to the specific unlawful detainer case therein involved is untenable; the ruling cannot be read in isolation but must be understood considering the principle it established concerning representation and authority of the Favis group pending judicial determination of the legitimate governing board. As the SC recently elucidated in Estate of Bueno vs. Justice Peralta, Jr., courts may take judicial notice of pronouncements in other causes due to their relevance to the matter at hand, including to determine whether a previous ruling is applicable in the case under consideration. For this purpose, the SC ruled that the Favis group is recognized as the existing board of the petitioner and is thus authorized to terminate respondent Sy's authority to occupy the subject property. Consequently, the CA Decision and Resolution were reversed and set aside, and the RTC Decision was reinstated.

• Unlawful Detainer Requisites — A complaint sufficiently proves a cause of action for unlawful detainer if it satisfies four elements: (1) initial possession by the defendant was by contract with or by tolerance of the plaintiff; (2) possession became illegal upon notice by the plaintiff terminating the defendant's right of possession; (3) the defendant remained in possession and deprived the plaintiff of enjoyment; and (4) the plaintiff instituted the complaint within one year from the last demand to vacate. The SC applied these elements to Sy, whose initial possession was by PTBAP, Inc.'s tolerance, became illegal after demand, continued despite refusal, and was met with a complaint filed within one year from demand.
• Ownership Not Determinative in Ejectment — The owner of real property is entitled to possession as an attribute of ownership, and a Torrens title holder is the rightful owner entitled to possession; but even a legal owner cannot simply oust a party in peaceable quiet possession through a summary ejectment action without establishing by preponderance of evidence the essential requisites of the action. The SC used this to frame the inquiry beyond PTBAP, Inc.'s undisputed ownership and into the unlawful detainer requisites and the Favis group's authority.
• Corporate Authority Through the Board — A corporation, as a juridical entity, acts only through its board of directors or trustees, which exercises almost all corporate powers, lays down business policies, and is responsible for management efficiency. The general rule is that, absent board authority, no person, not even corporate officers, can validly bind the corporation; conversely, an act not authorized by the legitimate board of trustees will not bind the corporation. The SC applied this to require that the demand to vacate come from the legitimate board, then recognized the Favis group as that board for this purpose.
• Recognition of the Favis Group Pending Board Determination — In G.R. No. 233236, the SC had declared that unless and until a proper court rules that the Go group has been replaced by the Lim group, the authority of the former to represent PTBA, Inc. in the unlawful detainer case is presumed to continue. The SC treated the Go group as the same group to which Favis belongs and ruled that the Favis group is recognized as the existing board of PTBAP, Inc., authorized to terminate Sy's authority to occupy the subject property.
• Judicial Notice of Prior Pronouncements — Courts may take judicial notice of proceedings in other causes because of their close connection with the matter in controversy, including to determine whether a previous ruling is applicable in the case under consideration. The SC relied on this to apply the pronouncement in G.R. No. 233236 to the present unlawful detainer case despite respondents' claim that it was limited to the specific case involved.

• "even a legal owner of the subject property cannot simply oust a party who is in peaceable quiet possession thereof through a summary action for ejectment, without having established by a preponderance of evidence the essential requisites of the action." — The SC acknowledges ownership but requires proof of the ejectment requisites; it rejects a summary ouster based on title alone.
• "A complaint sufficiently proves a cause of action for unlawful detainer if it satisfies the following elements: (1) initially, possession of the property by the defendant was by contract with or by tolerance of the plaintiff; (2) eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the latter's right of possession; (3) from then on, the defendant remained in possession of the property and deprived the plaintiff of the enjoyment; and (4) within one year from the last demand on defendant to vacate the property, the plaintiff instituted the complaint for ejectment." — This sets out the four requisites the SC applied to Sy's possession.
• "Unless and until there is a ruling from a proper court that the Go group has been replaced by the Lim group, the authority of the former to represent the PTBA, Inc. in the unlawful detainer case is presumed to continue." — The SC applies this prior ruling to treat the Favis group as the recognized existing board.
• "the Favis group is recognized as the existing board of the petitioner and is thus authorized to terminate respondent Sy's authority to occupy the subject property." — This is the core ruling that resolves the authority question and justifies reinstating the RTC decision.

• Javelosa vs. Tapus, 835 Phil. 576 (2018) — Cited for the principle that the owner of real property is entitled to possession as an attribute of ownership and that a Torrens title holder is entitled to possession.
• Nabo vs. Buenviaje, 887 Phil. 678 (2020) — Relied on for the rule that even a legal owner cannot oust a party in peaceable quiet possession through summary ejectment without proving the essential requisites, and for the four elements of unlawful detainer.
• Cebu Mactan Members Center, Inc. vs. Tsukahara, 610 Phil. 586 (2009) — Cited for the rule that a corporation acts through its board of directors or trustees and that, absent board authority, no person, not even its officers, can validly bind the corporation.
• University of Mindanao, Inc. vs. Bangko Sentral ng Pilipinas, et al., 776 Phil. 401 (2016) — Cited for the converse rule that an act not authorized by the legitimate board of trustees will not bind the corporation.
• Poh Toh Buddhist Association of the Philippines, as represented by Rosa Lim Co vs. Hon. Cornejo-Tomacruz, G.R. No. 233236, October 9, 2017 — Controlling precedent applied by the SC; it held that the Go group's authority to represent PTBA, Inc. in the unlawful detainer case is presumed to continue unless a proper court rules it has been replaced by the Lim group, and the SC treated the Go group as the same as the Favis group.
• Estate of Bueno vs. Justice Peralta, Jr., 927 Phil. 136 (2022) — Relied on for the principle that courts may take judicial notice of pronouncements in other causes due to their close connection with the matter at hand, including to determine whether a previous ruling is applicable.
• Tiburcio vs. People's Homesite & Housing Corporation — Cited in Estate of Bueno for the recognition that courts may take judicial notice of proceedings in other causes because of their close connection with the matter in controversy.

• Rule 45, Rules of Court — The petition was filed under Rule 45 as a Petition for Review on Certiorari; the SC resolved it by granting the petition, reversing the CA, and reinstating the RTC decision.