Paderanga v. Buissan
REITERATIONFacts
The Antecedents: Petitioner Jorge C. Paderanga and private respondent Elumba Industries Company entered into an oral contract of lease in 1973 for a commercial space in Ozamiz City, with rent paid monthly. The lease was for an indefinite period. Elumba Industries utilized the space as a sales office. In 1977, Paderanga subdivided the leased premises by constructing a partition wall and took possession of one half, which private respondent disputes. Procedural History: On July 18, 1977, private respondent filed an action for damages and to fix the period of lease at five years before the Court of First Instance (CFI) of Zamboanga del Norte, Branch III, based in Dipolog City. Petitioner, a resident of Ozamiz City, moved for dismissal, arguing it was a real action that should have been filed in Misamis Occidental where the property is located. Respondent Judge Dimalanes B. Buissan denied the motion, holding the case involved contract enforcement without a question of ownership. Reconsideration was also denied, despite acknowledging the prayer for recovery of possession as incidental. The Petition: Petitioner filed a recourse, arguing that the action, seeking recovery of possession and fixing of lease period, was a real action and thus venue was improperly laid in Dipolog City.
Issue(s)
Whether the action filed by private respondent is a real action or a personal action for purposes of determining venue; and whether the respondent judge committed grave abuse of discretion in denying the motion to dismiss based on improper venue.
Ruling
The Petition is GRANTED. The Orders of November 6, 1978, and December 4, 1978, of respondent Judge Dimalanes B. Buissan are SET ASIDE. The branch of the Regional Trial Court of Dipolog City where Civil Case No. 2901 may be presently assigned is DIRECTED to DISMISS the case for improper venue. This decision is immediately executory.
Ratio Decidendi
On the issue of venue and classification of the action and grave abuse of discretion: The Court clarified the distinction between personal and real actions for venue purposes, noting that while an action in personam is binding only on the parties, it does not automatically make it a personal action for venue. The crucial determination is whether the action is personal or real. Personal actions seek recovery of personal property, enforcement of a contract, or damages, and may be filed where the defendant or plaintiff resides. Real actions, however, seek recovery of real property or affect title to real property, and must be filed where the property lies. Although the instant action is for damages arising from a breach of lease, it also prays for the fixing of the lease period at five years. If granted, private respondent would be entitled to remain in possession for another five years and recover the portion previously taken by the lessor. The Court found that recovery of possession, though not explicitly stated, was the necessary consequence of the prayer to fix the lease period for the entire premises. Therefore, the action was deemed a real action because its ultimate purpose involved the recovery of possession of real property. Consequently, venue was improperly laid in Dipolog City, as the property is located in Ozamiz City. The respondent judge's denial of the motion to dismiss constituted grave abuse of discretion amounting to lack or excess of jurisdiction.
Main Doctrine
An action for damages and to fix the period of a lease contract, which ultimately seeks the recovery of possession of a portion of the leased premises, is considered a real action and must be filed in the court having jurisdiction over the territory where the property lies.