Ejectment and Sublease Violations: Service of Notices and Counsel of Record Rules

In a dispute over leased property in Las Piñas, the Supreme Court clarified important rules on how court notices must be served and when a lessee's arrangement with a third party amounts to a prohibited sublease. The case of Soriano v. Soriano (G.R. No. 130348, September 3, 2007) offers practical guidance for landlords, tenants, and lawyers on procedural deadlines and the validity of contracts.

The Facts of the Case

In 1981, spouses Antero and Virginia Soriano leased a 420-square-meter property to spouses Miguel Jr. and Julieta Soriano for 20 years. The lease contract contained a clear prohibition: the lessees could not sublease or assign the property without the written consent of the lessors.

In 1993, the lessors discovered that the lessees had allegedly subleased portions of the property to third parties, including Marilou Del Castillo, a beauty parlor, a photography shop, an auto supply dealer, and a money changer. The lessors sent a notice to vacate and later filed an ejectment complaint.

The lessees denied any sublease, claiming instead that they had entered into "joint venture agreements" with the third parties. They also presented a Joint Venture Agreement with Del Castillo, but the National Bureau of Investigation found her signature on that document to be a forgery.

The Procedural Issue: Service of Notices

After the Metropolitan Trial Court and the Regional Trial Court ruled against the lessees, their counsel of record, Rico & Associates Law Office, received a copy of the RTC's denial of their motion for reconsideration on June 2, 1997. However, one of the lessees, Atty. Miguel Soriano Jr., who had appeared in some proceedings and signed pleadings, received his own copy on May 28, 1997.

The Court of Appeals dismissed the lessees' appeal as filed out of time, counting the period from May 28. The Supreme Court reversed this ruling, holding that when a party is represented by counsel, notices must be served on the counsel of record. Service upon the client or any other lawyer—even one who appeared in certain proceedings—does not start the running of the reglementary period.

The Court emphasized that Atty. Soriano never formally entered his appearance as collaborating counsel, and the pleadings he signed were in behalf of Rico & Associates. The notice sent to him was the only court process sent to his residence address, confirming that the law firm was the recognized counsel of record.

The Substantive Issue: What Constitutes a Sublease

On the merits, the Court found that a valid contract of sublease existed between the lessees and Del Castillo. Even though the signatures of the witnesses and notary public on the sublease contract were forged, the signatures of the contracting parties themselves—Julieta Soriano and Del Castillo—were genuine.

The Court explained that a contract is perfected by the consent of the parties. The signatures of witnesses and a notary public are not required for a contract's validity between the parties; they are necessary only to make the contract binding on third parties. Since the lessees did not allege that their own signatures or Del Castillo's were forged, the sublease stood as valid.

The Court's Ruling

The Supreme Court denied the lessees' petition, affirming the decisions of the lower courts. The lessees had violated the prohibition on subleasing without the lessors' consent, justifying their ejectment.

The Court also noted that the lessees' appeal raised questions of fact, which are generally not reviewable in a petition for review on certiorari under Rule 45 of the Rules of Court. The Court found no exception to the rule that warranted a review of the factual findings of the three lower courts.

Practical Takeaways

• Service of court notices must be made on the counsel of record. If a party is represented by a lawyer, notices sent to the party himself or to another lawyer who has not formally entered an appearance may not start the running of appeal periods.
• A contract is valid between the parties once they consent. Forged signatures of witnesses or a notary public do not invalidate a contract if the parties' own signatures are genuine.
• Lease contracts with sublease prohibitions are enforceable. Lessees who sublease without the lessors' written consent risk ejectment.
• Labeling an arrangement as a "joint venture" does not change its true nature. Courts will look at the substance of the agreement and the evidence presented.
• In appeals to the Supreme Court, only questions of law may be raised. Factual findings of lower courts are generally conclusive and binding.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.