Tenorio v. Paño
REITERATIONFacts
1. The Antecedents: Petitioner Briccio B. Tenorio, a developer, and respondents, owners of a parcel of land in Gumaca, Quezon Province, entered into a Subdivision Contract on October 7, 1956. Under this contract, Tenorio was granted full possession of the land to survey, subdivide, and sell lots after introducing required improvements, including specific road widths, water and electrical facilities, and an adequate drainage system, all at his expense. He was also responsible for real estate taxes and other impositions while the lots remained unsold. The owners retained title, with sales made in their names, reserved a specific area of the land, and were to receive 40% of the gross receipts from sales based on actual selling prices. 2. Procedural History: On September 9, 1977, the respondent-owners filed a complaint against Tenorio before the Court of First Instance of Rizal, Branch I, Quezon City, seeking an accounting, breach of contract, damages, and termination of the contract. They alleged that Tenorio failed to comply with his contractual obligations, including constructing the required improvements, paying taxes, and rendering a full accounting of sales to determine their share. Tenorio filed a Motion to Dismiss, arguing improper venue, lack of valid cause of action, and estoppel/laches. The respondent judge, in an Order dated January 26, 1978, deferred the resolution of the motion until trial on the merits, finding the grounds not indubitable. Tenorio's subsequent Motion for Reconsideration was denied by an Order dated March 20, 1978. 3. The Petition: This case is a petition for review on certiorari seeking to reverse the orders of the Court of First Instance of Rizal. The petitioner argues that the action filed by the respondent-owners is a real action, not a personal one as held by the lower court. He contends that the venue was improperly laid, as the property is located in Gumaca, Quezon Province, and the termination of the contract would necessarily involve the recovery of possession of the land and titles. The petitioner cites previous Supreme Court decisions in analogous cases to support his claim that the action should have been filed in the province where the property is situated, emphasizing that venue rules are dictated by convenience and to prevent conflicting decisions on ownership and possession.
Issue(s)
Whether the action for accounting, breach of contract, damages, and termination of contract is a real action or a personal action. Whether the venue was improperly laid.
Ruling
The assailed Orders are SET ASIDE, and the complaint is hereby DISMISSED on the ground of improper venue. Costs against private respondents.
Ratio Decidendi
On the issue of whether the action is real or personal: The Supreme Court held that the action brought by the respondent-owners is a real action. The Court reasoned that although the complaint did not explicitly pray for recovery of possession, such recovery is the necessary consequence of the cancellation or rescission of the Subdivision Contract. The termination of the contract would entail the delivery of possession of the land, specifically the unsold lots, to the private respondents, along with the Torrens Titles. Furthermore, the demand for damages, being merely incidental to the action, arises from the private respondents' interests in the land. Therefore, the proper venue should be laid in the province where the land is situated, which is Gumaca, Quezon Province. On the issue of improper venue: The Court found the petition impressed with merit, agreeing with the petitioner that the venue was improperly laid. The property in question is situated in Gumaca, Quezon Province, and the subdivision contract was also executed there. The Court reiterated its ruling in analogous cases, such as De Jesus v. Coloso and Punsalan, Jr. vs. Vda. de Lacsamana, which established that an action for rescission of a contract involving property, demanding the return of the property, is an action for the recovery of possession of land. Such actions must be filed where the property is situated, in accordance with Section 3 of Rule 5 of the Rules of Court. The Court emphasized that rules of venue are dictated by convenience and are designed to prevent conflicting decisions by different courts on issues of ownership and possession, and sanctioning an evasion of these rules would constitute a manipulatory abuse or perversion of the right to litigate.
Main Doctrine
An action for rescission of a subdivision contract, which necessitates the return of possession of the land and titles, is a real action that must be filed in the province where the property is situated.