G.R. No. 155736 . March 31, 2005
Spouses Danilo and Cristina Decena, Petitioners, vs. Spouses Pedro and Valeria Piquero, Respondents.

FACTS

Petitioners Spouses Decena owned a property in Parañaque. They sold it to respondent Spouses Piquero via a Memorandum of Agreement (MOA) for a price payable in installments via postdated checks. The respondents took possession. The MOA stipulated that if two checks were dishonored, the respondents were obliged to reconvey the property. Alleging that the first two checks were dishonored and not replaced, the petitioners filed a Complaint in the RTC of Malolos, Bulacan, where they resided. They sought annulment/rescission of the MOA, recovery of possession of the property, and various damages, declaring the property’s value at ₱6.9 million.
The respondents moved to dismiss on grounds of improper venue and lack of jurisdiction. They argued the action was a real action affecting title and possession of real property, which under the rules must be filed where the property is located—Parañaque City, not Bulacan. The petitioners opposed, contending their action for damages was personal and could be joined with the real action for recovery of possession under Section 5(c), Rule 2 of the Rules of Court, allowing filing in Bulacan where one cause of action (for damages) could be entertained.

ISSUE

Whether venue was properly laid in the RTC of Malolos, Bulacan.

RULING

No, venue was improperly laid. The Supreme Court ruled that Section 5(c), Rule 2 on joinder of causes of action was inapplicable. The petitioners had only one cause of action: the respondents’ breach of the MOA by failing to pay the first two installments, which entitled the petitioners to rescind the contract and recover possession of the property. The claims for damages—compensation for use, moral, and exemplary damages—were merely incidental or consequential to this single primary cause of action for breach, not independent causes of action themselves.
Consequently, the entire action was characterized as a real action, as it primarily affected title to and possession of real property. Under Section 1, Rule 4 of the Rules of Court, real actions must be commenced in the proper court of the place where the property is situated. Since the property was located in Parañaque City, the complaint should have been filed there. The RTC of Malolos, Bulacan, therefore, had no jurisdiction over the subject matter of the action. The trial court correctly dismissed the complaint for improper venue. The petition was denied.