Case Digest (G.R. No. L-48117)
Facts:
Petitioner Tenorio and respondents Lagdameo entered into a Subdivision Contract** dated October 7, 1956, executed in Gumaca, Quezon, under which Tenorio would develop and subdivide the land for sale while the owners would retain title and receive forty percent of gross receipts, subject to Tenorio’s performance obligations on roads, utilities, drainage, taxes, and accounting.
On September 9, 1977, respondents filed Civil Case No. 23788 for accounting, breach of contract, and damages with termination and delivery/turnover of Torrens titles, contracts of sale, and records, alleging Tenorio failed to comply with the required improvements, payments, and accounting. The trial court deferred resolving Tenorio’s Motion to Dismiss and later denied reconsideration, prompting this petition.
Issues:
- Whether respondents’ action was a real action or a personal action for purposes of venue.
Ruling:
The Court ruled that the action was a real action and ordered the assailed orders set aside.
The Court dismissed the complaint for improper venue, holding that venue properly lay in Quezon Province where the land was situated, and assessed costs against respondents.
Ratio:
The Court held that although respondents did not expressly pray for recovery of possession, rescission or termination of the subdivision contract and the consequent demand for delivery and turnover of the property and Torrens titles necessarily involved possession.
The Court further explained that damages were merely incidental and flowed from respondents’ interests in the land, so permitting suit in a forum other than where the land lies would sanction an abuse of the right to litigate and defeat the purpose of venue rules.
Doctrine:
- When a complaint alleges breach of a contract and seeks its rescission or resolution with return or delivery of the property, the case is treated as an action for recovery of possession and is governed by venue where the land is situated.
- Venue rules are designed for convenience and to prevent conflicting rulings on ownership and possession; blatant evasion of the proper venue for real actions is not sanctioned.
- De Jesus v. Coloso and Punsalan, Jr. v. Vda. de Lacsamana were applied in treating such contract-termination suits as real actions for venue purposes.
- The Court relied on Lim v. Argel in emphasizing that evasion of proper venue for real actions constitutes a manipulatory abuse of the right to litigate.