G.R. No. L-30175 November 28, 1975
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. JOSE SAMSON, BENJAMIN BARRERA and the COURT OF FIRST INSTANCE OF SURIGAO DEL SUR, respondents.

FACTS

Petitioner Paper Industries Corporation of the Philippines (PICOP) filed a verified complaint for injunction and damages in the Court of First Instance of Surigao del Sur against respondents Jose Samson and Benjamin Barrera. PICOP alleged it was the licensee of a pulpwood and timber concession located in Surigao del Sur and Agusan. It claimed that respondents unlawfully entered, trespassed, and conducted logging operations within its concession area in Pamintigan, Mabtay, Malix, Surigao del Sur, felling trees and causing damages. PICOP prayed for a writ of preliminary injunction to restrain the operations and for payment of damages.
Respondents filed a joint answer, disputing the allegations and claiming they were mere employees of a third-party concessionaire, Lope A. Coñate. They subsequently filed a motion to dismiss on the ground of improper venue, contending the action was personal and should have been filed in Agusan or Rizal, the residences of the parties. Without securing a ruling on this motion, the parties proceeded to trial on the injunction issue. The court initially granted PICOP’s application for a preliminary injunction. Later, a new presiding judge granted the motion to dismiss based on improper venue, prompting PICOP’s petition for certiorari.

ISSUE

Whether the Court of First Instance committed grave abuse of discretion in dismissing the complaint on the ground of improper venue.

RULING

The Supreme Court ruled in the negative, setting aside the dismissal order. The determination of proper venue hinges on whether the action is real or personal. A personal action is founded on privity of contract, while a real action affects title to or recovery of possession of real property. Analyzing the complaint, the Court found no contractual privity between the parties. The action was principally for the recovery of possession of the concession area and to enjoin trespass and illegal logging thereon. The claim for damages was merely incidental to this principal relief.
Consequently, the action was real in nature. Under Section 2(a), Rule 4 of the Rules of Court, real actions shall be commenced and tried in the province where the property or any part thereof lies. Since the alleged encroachment and logging occurred within Surigao del Sur, venue was properly laid in its Court of First Instance. The Court cited Cayetano de la Cruz vs. El Seminario de la Archdioceses de Manila, which held that actions founded on privity of estate, not contract, are local and must be brought where the land lies.
Furthermore, the Court noted that respondents waived any objection to venue by proceeding to trial, cross-examining witnesses, and adducing evidence without first obtaining a ruling on their motion to dismiss. This conduct constituted a waiver, as established in Pangasinan Transportation Co. vs. Yatco. The case was remanded to the trial court for further proceedings.