Hernandez v. Development Bank of the Philippines
REITERATIONFacts
The Antecedents: Petitioner Jose M. Hernandez, an employee of respondent Development Bank of the Philippines (DBP) for 21 years, was awarded a lot and house in DBP's Housing Project in Quezon City. After receiving a statement of account for the total purchase price, petitioner sent a cashier's check for full payment. However, DBP's Committee on Organization, Personnel and Facilities returned the check and cancelled the award, citing petitioner's retirement, his option to purchase status, the availability of housing for other employees, and that awarding it to him would not best serve the project's objective. Procedural History: Petitioner protested the cancellation and demanded restoration of his rights, but DBP refused. Petitioner then filed a complaint in the Court of First Instance (CFI) of Batangas, seeking annulment of the cancellation and restoration of his rights, contending he had acquired ownership and a vested right to the award. DBP filed a motion to dismiss based on improper venue, arguing that since the action affects title to real property in Quezon City, it should have been filed there. The CFI of Batangas sustained the motion to dismiss. The Petition: Petitioner seeks review of the CFI's order of dismissal, questioning the propriety of the venue.
Issue(s)
Whether the action to annul the cancellation of an award of a house and lot is a real action (triable at the situs of the property) or a personal action (triable at the residence of the parties).
Ruling
The order of dismissal appealed from is set aside and the case is remanded for further proceedings and disposition on the merits. No costs.
Ratio Decidendi
On Issue 1: The Supreme Court held that the action filed by Hernandez is a personal action rather than a real action. Under the Rules of Court, a real action is one brought for the specific recovery of land, tenements, or hereditaments, while a personal action is one brought for the enforcement of a contract or recovery of damages. The Court observed that Hernandez's complaint seeks the annulment of the cancellation of the lot award, not the recovery of possession or title, as he was already in possession or focusing on the recognition of the award's validity. Applying the distinction in Adamus v. J.M. Tuason & Co., Inc. (25 SCRA 529), the Court noted that when a plaintiff recognizes the defendant's title and merely seeks to compel the execution of a contract, the action is personal. Because the action does not directly involve title to or possession of the property, the petitioner correctly filed the case in the Court of First Instance of Batangas, where he resides. Therefore, the lower court erred in dismissing the case for improper venue based on the location of the property in Quezon City.
Main Doctrine
An action to annul the cancellation of an award of a house and lot, which seeks to compel the respondent to recognize the award as valid and subsisting and to accept payment, is a personal action, not a real action, and thus venue may be laid at the plaintiff's residence.