G.R. No. 49475 - Paderanga vs. Buissan

Case Summary (G.R. No. 49475)

Factual Background

In 1973, JORGE C. PADERANGA and ELUMBA INDUSTRIES COMPANY entered into an oral lease of a commercial space owned by petitioner in Ozamiz City. Rent was P150.00 per month, paid monthly, and the lease had no fixed term. ELUMBA INDUSTRIES COMPANY used the premises as the Sales Office of Allied Air Freight in Ozamiz City. On 4 April 1977, petitioner subdivided the leased space by erecting a partition and took possession of one-half. Petitioner asserted that the repossession occurred with the acquiescence of the local manager of private respondent; private respondent denied such acquiescence. The record states that the validity of the repossession was not before the Court in the petition for prohibition.

Trial Court Proceedings

On 18 July 1977, ELUMBA INDUSTRIES COMPANY filed Civil Case No. 2901 in the Court of First Instance of Zamboanga del Norte at Dipolog City, praying for damages and for the fixing of the lease period at five years. JORGE C. PADERANGA, a resident of Ozamiz City, moved to dismiss for improper venue, contending that the action was a real action affecting real property and should have been filed in the Court of First Instance of Misamis Occidental stationed in Ozamiz City where the property lies. On 6 November 1978, HON. DIMALANES B. BUISSAN denied the motion, ruling that the complaint involved enforcement of a contract and did not raise a question of ownership. Petitioner moved for reconsideration, arguing that the action sought recovery of possession and therefore was a real action; on 4 December 1978 the trial judge denied reconsideration. Petitioner then filed a petition for prohibition in the Supreme Court.

The Parties' Contentions

JORGE C. PADERANGA argued that because ELUMBA INDUSTRIES COMPANY sought to recover possession of the portion repossessed by the lessor and sought a five-year lease term, the action was fundamentally a real action. Petitioner maintained that venue therefore lay in the court having jurisdiction over the locality of the property, namely Ozamiz City. ELUMBA INDUSTRIES COMPANY contended that the case was chiefly an action for damages for breach of lease and that any claim for possession was incidental. Private respondent treated the case as an action in personam, arguing that venue could be laid in Dipolog City at the plaintiff’s election because the dispute was between the parties.

Legal Distinctions Applied

The Court observed that action in personam and action in rem describe the binding effect of a judgment and are distinct from the classification of actions as personal action or real action, which determine venue. The Court relied on Hernandez v. Rural Bank of Lucena, Inc. for the following propositions: a personal action seeks enforcement of a contract, recovery of personal property, or recovery of damages; a real action seeks recovery of real property, or involves title or recovery of possession, partition, condemnation, or foreclosure on real property. The Court reiterated that venue for personal actions is proper where the defendant or plaintiff resides or may be found, at the election of the plaintiff (Sec. 1, Rule 4), whereas real actions must be brought in the Regional Trial Court having jurisdiction over the territory in which the subject property or any part thereof lies (Sec. 2, par. (a), Rule 4, Revised Rules of Court).

Court's Analysis

The Court accepted that ELUMBA INDUSTRIES COMPANY’s complaint sought damages for breach of the lease and the judicial fixing of the lease term at five years. The Court reasoned that, if the prayer to fix the lease term succeeded, private respondent would be entitled to remain as lessee for another five years and to recover the portion taken by petitioner, because the original lease covered the whole commercial space and not merely a subdivided part. The Court found that recovery of possession was the necessary and inevitable consequence of the principal relief sought. Relying on precedents such as Tenorio v. Pano and Punsalan, Jr. v. Vda. de Lacsamana, the Court held that when the ultimate purpose of an action involves title to or recovery of possession of real property, the action must be deemed a real action, notwithstanding other incidental personal claims.

Ruling and Disposition

The Court concluded that the trial judge committed grave abuse of discretion amounting to lack or excess of jurisdiction in denying petitioner’s motion to dismiss. The petition for prohibition was granted. The orders of 6 November 1978 and 4 December 1978 of HON. DIMALANES B. BUISSAN were set aside. The branch of the Regional Trial Court of Dipolog City where Civil Case No. 2901 was assigned was directed to dismiss the case for impr

Case Syllabus (G.R. No. 49475)

Parties and Procedural Posture

JORGE C. PADERANGA was the petitioner who sought prohibition against the trial court orders denying his motion to dismiss for improper venue.
HON. DIMALANES B. BUISSAN, PRESIDING JUDGE, COURT OF FIRST INSTANCE OF ZAMBOANGA DEL NORTE, BRANCH III was the respondent judge whose orders were assailed.
ELUMBA INDUSTRIES COMPANY, REPRESENTED BY ITS GENERAL MANAGER, JOSE J. ELUMBA was the private respondent and plaintiff in Civil Case No. 2901.
Private respondent instituted Civil Case No. 2901 in the Court of First Instance of Zamboanga del Norte based in Dipolog City, Branch III, praying for damages and for the fixing of the period of an oral lease.
The petition for prohibition challenged the Orders of 6 November 1978 and 4 December 1978 denying petitioner’s Motion to Dismiss for improper venue.

Key Facts

JORGE C. PADERANGA and ELUMBA INDUSTRIES COMPANY entered into an oral lease in 1973 for an indefinite period of a commercial space in petitioner’s building in Ozamiz City.
The lease required monthly rent of P150.00 and the leased area was used as the Sales Office of Allied Air Freight in Ozamiz City.
On 4 April 1977, petitioner subdivided the leased premises by constructing a partition wall and took possession of one half of the space.
Petitioner asserted that the repossession occurred with the acquiescence of private respondent’s local manager, while private respondent denied such acquiescence.
On 18 July 1977, ELUMBA INDUSTRIES COMPANY filed an action seeking P100,000.00 as moral damages, P50,000.00 as exemplary damages, P5,000.00 as attorney’s fees, P1,000.00 as costs of suit, and the fixing of the lease period at five years.

Procedural History

Petitioner moved to dismiss the complaint for improper venue on the ground that the action was a real action and should have been filed in the Court of First Instance of Misamis Occidental stationed in Ozamiz City where the property lay.
On 6 November 1978, respondent judge denied the Motion to Dismiss, ruling that the case merely involved enforcement of the lease contract and did not raise a question of ownership.
Petitioner filed a Motion for Reconsideration contending that the action sought recovery of possession and was therefore a real action, and respondent judge denied reconsideration on 4 December 1978.
Petitioner then filed the present petition for prohibition to challenge the trial court’s denial of his Motion to Dismiss for improper venue.

Issues Presented

Whether the action filed as Civil Case No.