G.R. No. L-27145 November 29, 1968
MARIQUITA LUNA, plaintiff-appellant, vs. GERONIMO CARANDANG, defendant-appellee.

FACTS

On March 6, 1962, Mariquita Luna (lessor) and Geronimo Carandang (lessee) entered into a 10-year contract of lease for a 158.7713-hectare agricultural land in Calapan, Oriental Mindoro. The annual rent was P4,500 for the first five years and P5,000 yearly from January 1967. The lessee failed to pay the rent in full during the first two years, accumulating unpaid rents of P4,156.63 as of March 26, 1964. On May 26, 1964, the lessor filed an action in the Court of First Instance (CFI) of Batangas for rescission of the contract and damages, based on the lessee’s failure to pay rent. The CFI ruled in favor of the plaintiff, granting rescission and damages for unpaid and future rents, but declined to order the defendant to vacate the leased premises, holding that it lacked jurisdiction because the land was situated in Calapan, Oriental Mindoro. The plaintiff appealed to the Supreme Court on questions of law.

ISSUE

1. Whether the CFI of Batangas had jurisdiction to order the defendant to vacate the leased land located in Calapan, Oriental Mindoro.
2. Whether the plaintiff is entitled to payment of the stipulated rent from January 1967 until the land is returned, following rescission.

RULING

1. Yes, the CFI of Batangas had jurisdiction to order the defendant to vacate the leased premises. The Supreme Court held that:
– A CFI has jurisdiction over suits involving title to or possession of real property anywhere in the Philippines, subject to venue rules.
– Rule 4, Section 2 of the Rules of Court, which requires actions involving real property to be filed in the province where the land lies, is a rule on venue that may be waived expressly or impliedly. The defendant impliedly waived improper venue by answering and proceeding to trial without objection.
– Rescission of a contract of lease necessarily requires the return of the leased property to the lessor. Since the CFI had jurisdiction over the rescission case and the defendant waived improper venue, it could properly order the defendant to vacate and return the land.
– The contractual stipulation granting the CFI of Batangas “exclusive jurisdiction” was void, as jurisdiction is conferred by law and cannot be contracted. However, the CFI of Batangas had jurisdiction under the law, and venue was waived.
2. No, the plaintiff is not entitled to payment of the stipulated rent from January 1967 onward as part of the rescission decree. The Supreme Court held that:
– Rescission and performance are incompatible. Ordering payment of the stipulated rent (P5,000 annually from January 1967) would amount to enforcing performance, which is inconsistent with rescission.
– In an action for rescission under Article 1659 of the Civil Code, the court must decree rescission upon demand and has no discretion to grant the lessee additional time for performance.
– The damages awarded to the plaintiff should consist of:
a. Unpaid rents from January 1, 1962, to the filing of the action on May 26, 1964 (P4,156.63 with legal interest).
b. Reasonable rental value from May 26, 1964, until the land is vacated and returned, fixed at P4,500 per year.
DISPOSITIVE PORTION:
The judgment of the lower court granting rescission was affirmed with modifications:
1. The appellee (Carandang) is ordered to vacate and return the leased premises to the appellant (Luna).
2. The appellee is ordered to pay the appellant unpaid rents from January 1, 1962, to May 26, 1964 (P4,156.63 with legal interest) and P4,500 annually as reasonable rental value from May 26, 1964, until the land is vacated and returned.
Costs against the appellee.