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Regulus Development, Inc. vs. Dela Cruz

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Regulus Development, Inc. vs. Dela Cruz

Case Title and Citation

Regulus Development, Inc., petitioner, vs. Antonio Dela Cruz, respondent.
G.R. No. 198172, January 25, 2016
Supreme Court - Second Division
Ponente: Justice Brion

Facts

  • Regulus Development, Inc. owns San Juan Apartments in Pasay City; Antonio Dela Cruz leased two units (Unit 2002-A and Unit 2002-B) in 1993 and 1994; lease contracts provided a one-month term with automatic renewals unless terminated by written notice.
  • Petitioner terminated the leases via a letter; Dela Cruz refused to vacate. Petitioner filed a complaint for ejectment before the MTC of Pasay City on May 1, 2001.
  • The MTC ruled in petitioner’s favor, ordering Dela Cruz to vacate and to pay rentals due until vacatur. Dela Cruz appealed to the RTC. While appealing, he consigned monthly rentals to the RTC due to petitioner’s refusal to accept payments.
  • The RTC affirmed the MTC decision. Dela Cruz filed a petition for review on certiorari before the CA (CA-G.R. SP No. 69504), which dismissed the ejectment case; the dismissal became final on March 19, 2003.
  • Petitioner moved to withdraw funds deposited by Dela Cruz (rental deposits) and the RTC granted the motion on July 25, 2003; the motion for reconsideration was denied on November 28, 2003. A writ of execution was issued on December 18, 2003.
  • CA-G.R. SP No. 81277 affirmed RTC orders allowing withdrawal of deposits. Dela Cruz filed CA-G.R. SP No. 171429; this Court denied the petition for insufficiency in form on June 7, 2006.
  • Execution proceedings continued: an alias writ of execution was issued on April 26, 2007, permitting withdrawal of rentals and bond values; the petitioner sought satisfaction of the judgment by levying on real property (TCT No. 136829). A public auction was held on November 4, 2008, where the petitioner was the highest bidder.
  • Dela Cruz redeemed the property on January 7, 2010. The RTC granted the petitioner’s motion to release funds; the CA later issued a decision on November 23, 2010 reversing and setting aside RTC’s levies on the real property, holding that RTC had no jurisdiction to levy on real property in this context.
  • Petitioner challenged the CA ruling in CA-G.R. SP No. 105290; the CA’s decision was the subject of the petition for certiorari now before the Court.

Issues

  1. Did the RTC have jurisdiction to levy on the respondent’s real property?
  2. Is the petition moot and academic due to the respondent’s redemption and the subsequent sale of the property?

Ruling

  1. Yes — The RTC had jurisdiction to levy on the respondent’s real property.
  2. No — The petition is not moot and academic; the jurisdictional issue remains justiciable and may be reviewed notwithstanding redemption.

Reasoning / Ratio Decidendi

  • The levy on real property was issued by the RTC in the exercise of its equity jurisdiction, separate from its appellate jurisdiction over the ejectment case. The RTC’s June 30, 2008 order to levy on the respondent’s real property was anchored to earlier RTC orders issued July 25, 2003 under equity powers, not to the appellate determination of ejectment.
  • The appellate court’s view that the RTC lacked jurisdiction to levy real property misapplied the distinction between equity jurisdiction and appellate jurisdiction. Execution of equity orders can proceed in the court of origin, as authorized by Rule 39, Section 1, and related provisions (execution upon judgments or final orders and means to carry jurisdiction into effect).
  • Even if the ejectment case had been dismissed and the underlying suit effectively terminated, the RTC remained empowered to issue and enforce equity-based orders to restore justice and prevent unjust enrichment. The CA’s determination that the levy was outside the RTC’s authority was therefore erroneous.
  • The petition for review on certiorari was not moot. A case or issue is moot and academic only when it ceases to present a justiciable controversy. Here, the jurisdictional issue persists and is capable of repetition yet evading judicial review, thus justiciable.
  • Notarial defects in the Verification or Forum Shopping Certification are not fatal to the petition (substantial compliance and absence of prejudice to the adverse party). However, the core issue here concerns jurisdiction and the RTC’s authority to levy under equity, which remains a live dispute.

Doctrine / Legal Principle

  • Equity jurisdiction vs. appellate jurisdiction are distinct; equity powers may authorize restitution and enforcement independent of appellate outcomes.
  • Execution upon judgments or final orders is generally in the court of origin; the court of origin retains jurisdiction to issue and enforce execution.
  • Jurisdiction is conferred by law and cannot be waived by the parties; issues of jurisdiction may be raised and reviewed even on appeal.
  • Notarial defects in verification and forum shopping certifications may be curable or non-jurisdictional if substantial compliance exists; technical defects should not defeat substantial justice.

Disposition

  • The petition for review on certiorari is GRANTED. The Court of Appeals’ November 23, 2010 decision and August 10, 2011 resolution in CA-G.R. SP No. 105290 are REVERSED and SET ASIDE.
  • The RTC’s June 30, 2008 and August 26, 2008 orders directing the levy of the respondent’s real property are REINSTATED.
  • Costs against the respondent, Antonio Dela Cruz.

Concurring / Dissenting Opinions

  • None reported as separate opinions. The decision is authored by Justice Brion and joined by Justices Carpio, Del Castillo, Mendoza, and Leonen, with the usual concurring notation.

Significance / Notes

  • Clarifies that RTC equity orders to enforce obligations arising from lease arrangements may be executed against real property, independent of the ejectment case’s status.
  • Reaffirms the separation between equity powers and appellate jurisdiction in the context of execution.
  • Confirms that execution matters may proceed in the court of origin, even when underlying cases on appeal have concluded unfavorably.
  • Highlights that minor defects in Verification or Forum Shopping Certificates do not automatically invalidate petitions if substantial compliance exists.
Civil Procedure Remedial Law
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