G.R. No. 207153 - Development Bank of the Philippines vs. Monsanto Co.

Davao Abaca Plantation Company, Inc. (DAPCO) is a corporation organized under Philippine law with its principal office in Manila.
DOLE Philippines, Inc. (DOLE) is also a Philippine corporation, engaged in activities including the cultivation of export-quality bananas.
DAPCO is the registered owner of a large parcel of land located in Carmen, Province of Davao, as evidenced by Original Certificate of Title No. P-1920, covering approximately 1,023.81 hectares.

In 1985, two Lease Agreements were executed covering a total of 1,004 hectares of DAPCO’s land, with a ten-year lease period from February 7, 1984 to February 7, 1994 and an option to renew for six years.
It was agreed that if no new rental or other terms were agreed upon at the end of the original lease period, DOLE would be granted an automatic grace period of two additional years (until February 7, 1996) to wind up operations.
On December 9, 1992, DOLE exercised its sole option to renew the lease, extending it up to December 31, 2000, as confirmed in the Lease Renewal Agreement (Annex “C”).

After the enactment of the CARL in 1988, the Department of Agrarian Reform (DAR) initially deferred subjecting the leased land to agrarian reform, only later to reverse the decision.
DOLE argued that, under CARL provisions, the lease contract was to be respected, and its rights were further protected by specific sections of the law, including a 10-year deferment.
Both parties acknowledged that the subject property was covered by the agrarian reform program, though questions regarding the effects on the lease and contractual obligations remained.

In December 1993 and January 1994, DAPCO sought to have DOLE intervene in DAR proceedings to protect DOLE’s rights under the lease, but DOLE declined to participate formally.
DOLE, in subsequent letters (including those dated January 25, 1995, and January 6, 1995), shifted its legal stance by arguing that government acts under Republic Act 6657 (CARL) had rendered compliance with the lease impracticable.
DAPCO, on January 18, 1995, reaffirmed its commitment to honor the lease agreements and demanded DOLE’s strict compliance, including the payment of base rental and accounting for production.

On March 15, 1995, DAPCO filed a complaint in the Regional Trial Court of Manila asserting a breach of the lease contracts and seeking various forms of relief, including a temporary restraining order and eventual damages.
The complaint notably encompassed multiple causes of action asserting that DOLE had deviated from its obligation to abide by the terms of the lease agreements.
In particular, DAPCO’s claim focused on enforcing DOLE’s duty to pay the 1995 base rental and subsequent rentals, along with demanding performance of contractual obligations regarding possession and maintenance of the leased premises.

DOLE filed a petition for certiorari and prohibition with the Court of Appeals (CA), challenging the jurisdiction of the trial court, notably on the basis of improper venue.
The CA decided that the nature of DAPCO’s complaint, being a real action or one aimed primarily at recovering possession of the property, should have been filed in South Cotabato (where the property is located) rather than Manila.
The CA dismissed the complaint on the ground of wrong venue and prohibited further action by the trial court except to hear DOLE’s compulsory counterclaim on the merits.

DAPCO subsequently moved for reconsideration, assailing the CA decision dismissing its complaint on jurisdictional and venue grounds.
The Supreme Court determined that the true nature of DAPCO’s suit was centered on contractual obligations (i.e., the lease) and the enforcement thereof, rather than a real action merely to recover possession of the land.
The Court held that issues of ownership and the impact of CARL on the lease should be resolved at trial, and that the complaint could be sustained pending a full evidentiary discussion.

Whether DAPCO’s complaint is fundamentally a real action for the recovery of possession of land or a personal action aimed at enforcing the lease contract.
Whether the reliefs sought — including rental payments, performance of contractual obligations, and damages — are proper under a breach of contract claim.

Whether the Regional Trial Court of Manila was the proper forum for the filing of the complaint, given the contention regarding the location of the leased property.
Whether DAPCO’s choice of venue, based on its principal office being in Manila and the nature of the action as personal, is permissible under the rules governing venue for personal actions.

How the implementation of CARL affects the enforceability and interpretation of the lease agreements.
Whether DOLE’s arguments concerning government acts, forced expropriation, and the concept of caso fortuito can relieve it of its contractual obligations.

To what extent DOLE, as the lessee, is prevented by estoppel from denying DAPCO’s title or its claim to enforce the lease.
The proper interpretation of obligations under the lease renewal and whether the alleged expiration of the lease absolves DOLE from rental payments for 1995 and beyond.