The Sangguniang Panlalawigan has passed a measure authorizing the provincial prosecutor to represent the province of Catanduanes in a civil case filed by the operator of Center Mall over the alleged unilateral termination of its lease contract.
The resolution sponsored by PBM Arnel B. Turado was okayed unanimously after Governor Patrick Alain T. Azanza requested the provincial board for the authorization of the prosecutor in the absence of a provincial legal officer.
In Civil Case No. 11778 for specific performance and damages filed before the Regional Trial Court of Legazpi City, the Center Mall operator – Wholegrain, Inc. – accused the provincial government of Catanduanes as represented by Gov. Azanza and Acting Provincial Treasurer Erme T. Tablante for breaching the Contract of Lease and Supplemental Contract of Lease with Wholegrain by unlawfully and unilaterally terminating the contracts, demanding rental payments and other charges that are not provided for in the contracts, and improperly and unjustifiably making unauthorized demands to Wholegrain to vacate the Virac Youth Center Mall at Sta. Cruz, Virac.
Records show that the complainant entered into a contract of lease with the provincial government on Nov. 4, 2010 over the commercial property for a term of 25 years at a monthly rental of P374,666.65.
Then on April 22, 2013, both parties executed a supplemental lease contract expanding the leased area to include a portion of the 3rd floor, with an adjusted monthly rental of P550,000.00.
Both contracts were approved and authorized by the SP through Resolution No. 130-2010 and 044-2013 granting authority to then Gov. Joseph C. Cua to enter into the contracts.
On Nov. 4, 2018, the SP passed Resolution No. 339-2018 approving the proposed amendment of the lease to expand the leased area to include the entire 3rd floor, increase the monthly rental to P618,540.00, and impose a 25% surcharge and 2% monthly interest for late payments.
Wholegrain stated that it consistently made the payments as they fall due while operating, maintaining and improving the premises as a commercial center.
In 2025, it said, the provincial government under a new governor began disputing the lease and started taking adverse actions against Wholegrain.
On July 15, 2025, the company received a letter from Tablante demanding payment of P2.4 million representing unpaid advance rental, security deposit adjustment, rental underpayment, inclusive of 2% monthly penalty and 25% surcharge.
After another letter was received from the treasurer, Wholegrain replied to clarify that the alleged additional security deposit resulted from a good-faith oversight of both parties and asked that the provincial government accept its payment for the security deposit amounting to P862,413.33.
However, on Sept. 9, 2025, Azanza issued a notice of termination for breach of contract, citing as grounds Wholegrain’s failure to pay the P2.4 million and the claim that the rental rate under the lease is grossly disadvantageous to the government for being lower than the supposed rental rate under the Provincial Revenue Code.
Even before the termination letter was received by Wholegrain, it said it demonstrated good faith by informing the PGC that it had deposited the P2.4 million payment in the LGU’s account.
Despite several meetings regarding the lease, the company claimed the PGC never showed openness in resolving the issues and was set on terminating the lease right from the start.
Its counsel sent a letter to the PLGU on Dec. 3, 2025, raising several points: that the advance rental payments were already applied and consumed after the turnover of the leased premises in 2015; the delay in the payment of additional security deposit was a good faith oversight; there is no legal basis for penalties regarding security deposits; the rental rates are excluded from coverage of the Provincial Revenue Code and authorized by the SP; increasing the rental rate to P1.4 million a month on offers by other interested tenants requires the PGC to provide Wholegrain in writing the terms of any third-party offer and prohibits PGV from accepting new offers during the term of the current lease until it expires; and, the supplemental contract requires both parties to resort to earnest negotiations, meditation, and arbitration before taking legal action or terminating the lease.
It stressed that the proper authority to approve or revoke the lease contracts lies with the SP, not the provincial governor, and terminating the contract without an SP resolution would violate the Local Government Code.
At the same time, the PGC sent another letter demanding that Wholegrain immediately pay an alleged lease deficiency amounting to P74.3 million.
In social media posts, Wholegrain stated, Gov. Azanza declared the lease contracts as “cancelled” and “anomalous”; claimed that the current company management might just be a “dummy”; and said he is seriously entertaining the offer of LCC to take over the lease.
It said Azanza’s refusal is baffling and unjustifiable in the light of the SP’s issuance of Resolution Np. 1198-2025 confirming and affirming the validity and binding effect of the lease contracts.
The governor’s statements in a radio program put Wholegrain and its operation of the leased premises in a bad light, the complaint filed by Aquende Aniag Que Dumlao & De Vera Law stated.
It prayed that the Court direct the defendant officials of the provincial government to honor and comply with the terms and conditions of the lease contracts and order Azanza and Tablante to pay P1 million as moral damages, P1 million as exemplary damages and P1 million as attorney’s fees, and to pay the costs of the suit.