GR 159669; (March, 2007) (Digest)
G.R. Nos. 159669 & 163521; March 12, 2007
United Overseas Bank Phils. (formerly Westmont Bank) vs. Rosemoor Mining & Development Corp. and Dra. Lourdes Pascual
FACTS
Rosemoor Mining obtained a credit facility from Westmont Bank (Bank), secured by a single real estate mortgage covering six parcels of land in Bulacan owned by Rosemoor and two parcels in Nueva Ecija owned by its president, Dr. Lourdes Pascual. Upon Rosemoor’s default, the Bank extrajudicially foreclosed both sets of properties. Rosemoor and Pascual filed a complaint for “Accounting, Specific Performance and Damages” against the Bank in the Regional Trial Court (RTC) of Manila, arguing improper venue for the foreclosure of the Nueva Ecija properties. The Bank moved to dismiss on grounds of improper venue and, later, forum-shopping, citing a separate petition filed by Rosemoor in the Malolos, Bulacan RTC concerning the foreclosure of the Bulacan properties. Both motions were denied by the Manila RTC.
ISSUE
The primary issue is whether the Manila RTC correctly assumed jurisdiction over the complaint, specifically concerning the propriety of venue and the existence of forum-shopping.
RULING
The Supreme Court ruled that the Manila RTC was an improper venue. The complaint, while framed as one for accounting and damages, was a real action because it ultimately sought to annul the foreclosure sale of the Nueva Ecija properties, an action affecting title to real estate. Under the Rules of Court, a real action must be filed in the province where the property is situated. Since the Nueva Ecija properties are located in Nueva Ecija, the Manila RTC had no jurisdiction. The Court rejected the argument that venue could be laid in Manila simply because the mortgage contract was executed there. The situs of the property controls for real actions.
Furthermore, the Court found no forum-shopping. The Malolos case involved the foreclosure of the Bulacan properties, while the Manila case pertained to the Nueva Ecija properties. Although stemming from the same loan transaction, the two actions involved different parcels of land, different owners (Rosemoor vs. Pascual), and distinct foreclosure sales. The rights asserted and reliefs prayed for were not identical, as a judgment in one would not constitute res judicata in the other. However, since the Manila case was dismissible on the ground of improper venue, the forum-shopping issue became moot. The Supreme Court granted the Bank’s petition and dismissed the complaint filed in the Manila RTC.