GR 31095; (June, 1976) (Digest)
G.R. No. L-31095 June 18, 1976
JOSE M. HERNANDEZ, petitioner, vs. DEVELOPMENT BANK OF THE PHILIPPINES and COURT OF FIRST INSTANCE OF BATANGAS, LIPA CITY BRANCH, respondents.
FACTS
Petitioner Jose M. Hernandez, a retired employee of the Development Bank of the Philippines (DBP), was awarded a house and lot in Quezon City in 1964. In 1968, after receiving the statement of account, he tendered full payment via a cashier’s check. However, DBP returned the check and unilaterally cancelled the award, citing his retirement and other policy grounds. Hernandez protested and demanded restoration of his rights, but DBP refused.
Consequently, Hernandez filed a complaint in the Court of First Instance (CFI) of Batangas, seeking annulment of the cancellation and restoration of his rights under the award. DBP moved to dismiss on grounds of improper venue, arguing the action affected title to real property in Quezon City and thus must be filed there. The CFI of Batangas granted the motion to dismiss, prompting Hernandez to elevate the case via petition for review.
ISSUE
Whether the action filed by Hernandez is a real action requiring venue at the location of the property, or a personal action that may be filed at his residence in Batangas.
RULING
The Supreme Court ruled that the action is personal, not real; therefore, venue was properly laid in Batangas. The legal logic hinges on the nature of the action as determined by the allegations and prayer of the complaint. A real action is one for recovery of title to or possession of real property. A personal action is one for the enforcement of contractual rights or recovery of damages.
The Court scrutinized Hernandez’s complaint and found it sought the annulment of DBP’s cancellation of the award. He did not claim present ownership or seek recovery of possession of the Quezon City property. Instead, he recognized DBP’s title and sought to compel DBP to honor the award as a valid, subsisting contract and to accept his proffered payment. His cause of action was essentially for specific performance of a contractual obligation arising from the award, coupled with a declaration of its validity. This character aligns with the personal action described in Adamus vs. J.M. Tuason & Co., Inc., which distinguished actions to compel execution of a contract from actions directly asserting title or possession. Since it was a personal action, Section 2(b), Rule 4 of the Rules of Court (now Section 2, Rule 4 of the 1997 Rules) allowed Hernandez to file it where he resided. The order of dismissal was set aside, and the case was remanded for proceedings on the merits.