Orbeta v. Orbeta
REITERATIONFacts
The Antecedents: Petitioner Ligaya Orbeta and respondent Ruben Orbeta are lawfully married and co-owners of a parcel of land in Pililla, Rizal. Petitioner left for the United States in 1994. Upon her return on January 29, 2003, she discovered that her estranged husband obtained a loan from respondent Anita B. Wolcott, using the subject property as collateral. Petitioner claimed she never consented to the mortgage and her signature was forged, as she was not in the Philippines on January 6, 2003, the date of the deed's execution. Procedural History: Petitioner filed a Complaint for Annulment of Deed of Mortgage with Damages in the RTC of Las Piñas City. Respondents moved to dismiss, arguing improper venue (real action should be filed where the property is located) and violation of Article 222 of the Civil Code (failure to make earnest efforts toward compromise between family members). The RTC dismissed the complaint on the ground of improper venue. The Petition: Petitioner assails the RTC's dismissal, arguing that her complaint is a personal action for damages and not a real action affecting title or possession, as the deed of mortgage is void due to lack of consent and forgery. She contends that the venue should be based on the residence of the parties.
Issue(s)
Whether the Complaint for Annulment of Deed of Mortgage with Damages is a real action or a personal action. Whether the venue was properly laid in the RTC of Las Piñas City.
Ruling
The petition is GRANTED. The Order dated January 21, 2005 of the Regional Trial Court, Branch 255, Las Piñas City is SET ASIDE. The case is REMANDED to the trial court for further proceedings.
Ratio Decidendi
On whether the Complaint is a real or personal action: The Court held that an action to annul a contract of loan and its accessory real estate mortgage is a personal action. This is based on Section 1, Rule 4 of the Rules of Court, which defines real actions as those affecting title to or possession of real property, or an interest therein. The Court cited Hernandez v. Rural Bank of Lucena, Inc. and Chua v. Total Office Products and Services (Topros), Inc., both of which involved actions to annul mortgages where no foreclosure had taken place and the mortgagors remained in possession. In such cases, the action is considered personal because it does not directly affect the title or possession of the property but rather the validity of the mortgage contract itself. The Court noted that the property subject of the Deed of Mortgage in this case had not been foreclosed, and there was no indication of default, with the title remaining in the names of the petitioner and respondent Ruben Orbeta, and them still being in possession of the property. Therefore, the nullification of the deed of mortgage, as prayed for by the petitioner, partakes of the nature of a personal action. On whether the venue was properly laid: Since the action was characterized as personal, the venue provisions for personal actions under Section 2, Rule 4 of the Rules of Court apply. These provisions state that personal actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff. In this case, the petitioner resides in the United States, and respondent Wolcott resides in Las Piñas City. The Court found that Las Piñas City, where respondent Wolcott resides, is the proper venue for the Complaint for Annulment of Deed of Mortgage with Damages, as elected by the plaintiff.
Main Doctrine
An action to annul a contract of loan and its accessory real estate mortgage is a personal action, and thus the venue is determined by the residence of the plaintiff or defendant, not the location of the property.