G.R. No. 166837 ; November 27, 2006
LIGAYA S. ORBETA, represented by her Atty.-In-Fact, RUBEN S. ORBETA, JR., Petitioner, vs. RUBEN P. ORBETA and ANITA B. WOLCOTT, Respondents.

FACTS

Petitioner Ligaya Orbeta and respondent Ruben Orbeta are estranged spouses and co-owners of a parcel of land in Pililla, Rizal. Ligaya discovered that during her absence abroad, Ruben obtained a loan from respondent Anita Wolcott using the property as collateral via a Deed of Mortgage dated January 6, 2003. Alleging her signature was forged and she never consented, Ligaya filed a Complaint for Annulment of Deed of Mortgage with Damages in the Regional Trial Court (RTC) of Las Piñas City, where Wolcott resides.
Respondents moved to dismiss, arguing the action was a real action affecting title to real property, which under procedural rules must be filed where the property is situated (Pililla, Rizal). They also cited the requirement for prior family compromise under the Civil Code. Petitioner opposed, contending the action was personal, seeking annulment based on forgery and lack of consent, and that the family compromise rule was inapplicable to Wolcott, a non-family member. The RTC dismissed the complaint on grounds of improper venue, characterizing it as a real action.

ISSUE

Whether the Complaint for Annulment of Deed of Mortgage with Damages is a real action or a personal action, which determines proper venue.

RULING

The Supreme Court ruled the action is personal, reversing the RTC. Under Section 1, Rule 4 of the Rules of Court, a real action affects title to, possession of, or an interest in real property, requiring filing where the property is located. A personal action, which includes all other actions, may be filed where the plaintiff or defendant resides.
The Court applied the precedent in Hernandez v. Rural Bank of Lucena, Inc., where an action to cancel a real estate mortgage was deemed personal when no foreclosure occurred and the mortgagors remained in possession. Similarly, here, the mortgaged property had not been foreclosed; title and possession remained with the co-owners. The primary relief sought was annulment of the deed due to alleged forgery and lack of consent, not recovery of title or possession.
The Court also cited Chua v. Total Office Products and Services (Topros), Inc., which held that an action to annul a loan and its accessory mortgage is personal. The allegations of forgery and absence of consent mirror the instant case. Since the action is personal, proper venue under Section 2, Rule 4 is Las Piñas City, where respondent Wolcott resides. The family compromise issue was not reached, as venue was improperly dismissed. The case was remanded for further proceedings.