Racpan v. Barroga-Haigh
REITERATIONFacts
The Antecedents: Petitioner Rudy Racpan filed a complaint seeking the declaration of nullity of a Deed of Sale with Right to Repurchase, alleging that his signature and that of his deceased wife on the document were falsified. The deed purportedly conveyed a real property registered in his name to respondent Sharon Barroga-Haigh. Petitioner maintained that he never signed the deed nor any special power of attorney authorizing its execution, and that he remained in possession of the property. Respondent, in her answer, raised affirmative defenses of improper venue and failure to comply with a condition precedent, specifically the requirement of a barangay conciliation. Procedural History: The Regional Trial Court (RTC) of Davao City, Branch 11, dismissed petitioner's complaint based on respondent's affirmative defenses. The RTC found that the venue was improperly laid and that the condition precedent of barangay conciliation was not met. Petitioner's motion for reconsideration was denied. On appeal, the Court of Appeals (CA) affirmed the RTC's dismissal, holding that the action was a real action and thus should have been filed in the province where the property is located, and that the prayer for preliminary injunction was a mere ploy to avoid barangay conciliation. The Petition: Petitioner filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, arguing that the CA erred in affirming the dismissal. He contended that his complaint was a personal action, not a real action, because it did not seek recovery of title or possession of the property, but merely the annulment of a falsified deed. Therefore, he argued, the venue was properly laid in Davao City where both parties reside. Petitioner also asserted that his complaint was exempt from the barangay conciliation requirement because it was coupled with a prayer for a preliminary injunction, as provided by Section 412(b)(3) of the Local Government Code.
Issue(s)
Whether the Court of Appeals erred in affirming the dismissal of the petitioner's Complaint, specifically regarding the nature of the action as personal or real. Whether the petitioner's failure to undergo barangay conciliation proceedings warrants the dismissal of his Complaint. Whether the inclusion of a prayer for preliminary injunction exempts the petitioner from barangay conciliation, and whether the petitioner acted in bad faith.
Ruling
The petition is impressed with merit. The February 13, 2017 Decision and August 17, 2017 Resolution of the Court of Appeals, as well as the Orders dated September 18, 2013 and June 19, 2004 of the Regional Trial Court of Davao City, Branch 11, are REVERSED and SET ASIDE. Civil Case No. 34, 742-2012 is ordered REINSTATED, and the RTC is ordered to proceed with dispatch in the disposition of the case.
Ratio Decidendi
On whether the Complaint is a personal action: The Supreme Court held that the nature of an action is determined by the allegations in the complaint, which in turn determines its proper venue. Citing Section 1, Rule 4 of the Rules of Court, a real action affects title to or possession of real property, while Section 2 of the same Rule states that all other actions are personal actions. The Court clarified that what determines the venue is the primary objective for filing the case. In the present case, the petitioner sought the nullification of the Deed of Sale with Right to Repurchase based on the claim that his signature was falsified and that he did not execute any special power of attorney. Crucially, there was no allegation that the possession and title to the property had been transferred to the respondent, nor did the Complaint pray for the recovery or reconveyance of the real property. Therefore, the action was not concerned with title to or recovery of the real property, making it a personal action. As a personal action, the venue was properly laid in Davao City, where both the petitioner and the respondent reside, as provided under Section 2, Rule 4 of the Rules of Court. The Court distinguished this from cases where the action directly seeks recovery of real property or affects its title or possession. On exemption from Barangay Conciliation: The Supreme Court found that the petitioner's Complaint was exempted from the requirement of barangay conciliation. Section 412(b)(3) of the Local Government Code provides that parties may go directly to court when actions are coupled with provisional remedies such as preliminary injunction. The petitioner's Complaint included a prayer for the issuance of a preliminary injunction. Therefore, it fell within the exceptions to the rule requiring referral to barangay conciliation. On good faith and the prayer for preliminary injunction: The Court further stated that good faith is always presumed, and in the absence of proof of improper motive, it cannot countenance the assumption that the petitioner was solely intent on evading the requirements of the Local Government Code by applying for a preliminary injunction. The dismissal of an action on account of an unproven assertion of bad faith cannot be sustained.
Main Doctrine
An action for the nullification of a deed of sale, where there is no allegation that possession and title to the property have been transferred to the respondent and no prayer for recovery or reconveyance, is a personal action, and thus the venue is the place of residence of either party. Furthermore, an action coupled with a prayer for a provisional remedy, such as a preliminary injunction, is exempted from the requirement of barangay conciliation.