Case Summary (G.R. No. 155736)
Factual Background
The petitioners owned a parcel of land with a house therein in Paranaque, Metro Manila, registered as Transfer Certificate of Title No. 134391 issued February 24, 1998. On September 7, 1997, the petitioners and the respondents executed a Memorandum of Agreement by which the petitioners sold the property to the respondents for P940,250.00 payable in six installments through postdated checks. The respondents took possession of the property immediately. The MOA provided that the petitioners would transfer title upon execution but contained a condition that if two of the postdated checks were dishonored the respondents would reconvey the property to the petitioners.
Complaint Filed and Reliefs Sought
On May 17, 1999, the petitioners, then residents of Malolos, Bulacan, filed a complaint in the RTC of Malolos seeking annulment or rescission of the MOA, recovery of possession of the property and damages. The petitioners alleged that the first two postdated checks were dishonored and were not replaced despite demands. The complaint prayed for rescission of the MOA, immediate vacation and turnover of the property, monthly reasonable compensation of P10,000.00 from October 1, 1997 until turnover, moral and exemplary damages of P200,000.00 each, P250,000.00 attorneys’ fees and litigation expenses, and costs of suit. The petitioners attached copies of the MOA and TCT No. 134391 and averred the property was valued at P6,900,000.00.
Motion to Dismiss for Improper Venue and Trial Court Response
The respondents moved to dismiss for improper venue and lack of jurisdiction over the property, contending that the principal action was a real action affecting title or possession and therefore should have been filed in the RTC of Paranaque City where the property is located. The petitioners opposed, asserting that their claims for damages and attorneys’ fees were personal actions and thus properly venued in Bulacan where they resided, and that their claim for recovery of possession could be joined under Section 5(c), Rule 2 of the Rules of Court. The trial court initially denied the motion to dismiss by Order dated February 9, 2000, finding that Section 5(c), Rule 2 was applicable.
Reconsideration and Dismissal by the Trial Court
The respondents filed a motion for reconsideration. On October 16, 2001, the trial court granted reconsideration and ordered dismissal of the complaint. The court ruled that the petitioners’ principal action was a real action concerning possession of real property and that the proper venue was Paranaque City. Because the petitioners had filed in Bulacan, the court concluded it lacked jurisdiction over the subject matter and dismissed the case.
Issue Presented to the Supreme Court
The sole issue before the Supreme Court was whether venue was properly laid in the RTC of Malolos, Bulacan, and whether Section 5, Rule 2 — specifically Section 5(c), Rule 2 — permitted joinder of the petitioners’ personal and real claims such that the RTC of Malolos could retain the action.
Legal Principles on Cause of Action and Joinder
The Court recited that a cause of action comprises (1) existence of the plaintiff’s legal right, (2) a correlative legal duty of the defendant, and (3) an act or omission violating that right. The Court emphasized that causes of action are to be discerned from the facts alleged and not from the prayer for relief. Joinder of causes of action unites two or more demands in one complaint and requires inquiry whether distinct primary rights or subjects of controversy are alleged. The Court cited tests for plurality of causes: whether more than one primary right and wrong appear, whether recovery on one ground would bar recovery on another, whether the same evidence supports the different counts, and whether separate actions could be maintained for separate relief.
Application of the Law to the Present Case
Applying those principles, the Court found that the petitioners pleaded a single cause of action: breach of the MOA by the respondents’ failure to pay the first two installments and to reconvey possession of the real property and the house thereon. The claims for interim reasonable compensation, moral and exemplary damages, and attorneys’ fees were incidental remedies flowing from the principal wrong and were not independent causes of action. Because only one primary right was asserted, Section 5(c), Rule 2 did not authorize joinder of a separate personal cause to confer venue in Bulacan.
Venue for Actions Affecting Real Property
The Court held that the petitioners’ action for rescission of the MOA and recovery of possession was a real action. Pursuant to Section 1, Rule 4 of th
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Case Syllabus (G.R. No. 155736)
Parties and Procedural Posture
- Spouses Danilo and Cristina Decena were the plaintiffs and petitioners who owned the subject parcel of land and house and who filed the complaint in the Regional Trial Court of Malolos, Bulacan.
- Spouses Pedro and Valeria Piquero were the vendees who executed the Memorandum of Agreement with the petitioners and took possession of the property.
- The petitioners sought annulment or rescission of the sale, recovery of possession, and various damages and costs in the trial court and thereafter sought relief from the higher court after dismissal of their complaint.
Key Factual Allegations
- The parties executed a Memorandum of Agreement (MOA) on September 7, 1997 by which the petitioners sold the property to the respondents for P940,250.00 payable in six installments by postdated checks.
- The respondents immediately took possession of the property and the MOA contained a proviso that reconveyance to the petitioners would occur if two of the postdated checks were dishonored.
- The petitioners alleged that the first two postdated checks were dishonored, that the respondents failed to replace them with cash despite demand, and that the respondents refused to reconvey or vacate the property.
- The petitioners valued the subject property at P6,900,000.00 and appended the MOA and Transfer Certificate of Title No. 134391 to their complaint.
Agreements and Terms
- The MOA obligated the petitioners to transfer title upon execution and conditioned reconveyance on dishonor of two postdated checks by the respondents.
- The transaction was evidenced by possession by the respondents and by the appended Transfer Certificate of Title No. 134391.
Causes of Action
- The petitioners alleged a single primary cause of action for breach of the MOA giving rise to a claim for rescission and recovery of possession of the real property.
- The petitioners also sought incidental remedies consisting of monthly compensation of P10,000.00, moral damages of P200,000.00, exemplary damages of P200,000.00, attorney’s fees of P250,000.00, and costs of suit.
Procedural History
- The petitioners filed their complaint on May 17, 1999 in the Regional Trial Court of Malolos, Bulacan, which case was initially raffled to Branch 13 and later re-raffled to Branch 10.
- The respondents moved to dismiss for improper venue and