Paper Industries Corp. v. Samson
REITERATIONFacts
The Antecedents: Petitioner Paper Industries Corporation of the Philippines (PICOP) filed a complaint for injunction and damages against respondents Jose Samson and Benjamin Barrera. PICOP alleged that the respondents unlawfully entered, trespassed, and encroached upon portions of PICOP's pulpwood and timber concession located in Surigao del Sur and Agusan. Respondents allegedly felled trees and removed logs from an area of 857 hectares, causing damages to PICOP amounting to P10,600.00 as of May 31, 1965. Despite demands, respondents continued their operations. Procedural History: Respondents filed a joint answer and a motion to dismiss, asserting that they were mere employees of Lope A. Coñate, the concessionaire, and that the action, being personal, should have been filed in Agusan or Rizal (residence of parties). PICOP opposed the motion, arguing the action was for injunction and recovery of possession, thus real and venue should be where the property is located. The court initially granted PICOP's application for a writ of preliminary injunction. Subsequently, a new presiding judge issued an order granting the motion to dismiss on the ground of improper venue. A motion for reconsideration was denied. The Petition: PICOP filed a petition for certiorari, claiming grave abuse of discretion by the respondent court in dismissing its complaint on the ground of improper venue.
Issue(s)
Whether the action for injunction and damages to protect timber concession rights is a real or personal action for purposes of determining venue. Whether the defendants are deemed to have waived their objection to improper venue by participating in the preliminary injunction proceedings.
Ruling
The Supreme Court set aside the order of dismissal and remanded the case to the respondent court for further proceedings. The Court ruled that the action was a real action and venue was properly laid in Surigao del Sur. The Court also noted that the respondents waived their objection to venue by proceeding to trial without first securing a ruling on their motion to dismiss.
Ratio Decidendi
On Issue 1: The Court ruled that the action is a real action. It distinguished between personal actions, which are founded on 'privity of contract,' and real actions, which are founded on 'privity of estate.' Because PICOP sought to recover its rights to the concession and stop illegal encroachment on specific land, the action falls under Section 2, Rule 4 of the Rules of Court as an action for 'recovery of possession' of real property. The claim for damages was considered a mere incident to the principal claim and did not change the nature of the suit. The Court also noted that under the Judiciary Act of 1948 and Rule 58, a CFI cannot enjoin acts occurring outside its territorial boundaries; thus, filing in Surigao del Sur was correct because the illegal acts were being committed there. On Issue 2: The Court held that the defendants waived any objection to venue. By proceeding to trial on the issue of the preliminary injunction, cross-examining PICOP's witnesses, and adducing their own evidence without first insisting on a ruling on their motion to dismiss, the defendants impliedly submitted to the court's jurisdiction. Citing Pangasinan Transportation Co., v. Yatco, the Court emphasized that venue is a matter of procedural convenience that can be waived. The introduction of evidence and the filing of an answer and opposition without securing a prior ruling on the venue challenge constitutes 'waiver of venue, pure and simple.' Thus, the subsequent dismissal by the trial court after such participation was an error.
Main Doctrine
An action for recovery of possession of real property, including claims for damages incidental thereto, is a real action that must be commenced and tried in the province where the property or any part thereof lies. The court's authority to issue an injunction is limited to acts within its territorial jurisdiction, making venue proper in the location of the property.