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FIRST DIVISION

G.R. No. L-49475 September 28, 1993

JORGE C. PADERANGA, Petitioner, vs. Hon. DIMALANES B. BUISSAN, Presiding Judge, Court of First Instance of Zamboanga del Norte, Branch III and ELUMBA INDUSTRIES COMPANY, represented by its General Manager, JOSE J. ELUMBA, Respondents.

BELLOSILLO, J.:

We are called upon in this case to determine the proper venue of an action to fix the period of a contract of lease which, in the main, also prays for damages.chanroblesvirtualawlibrarychanrobles virtual law library

Sometime in 1973, petitioner JORGE C. PADERANGA and private respondent ELUMBA INDUSTRIES COMPANY, a partnership represented by its General Manager JOSE J. ELUMBA, entered into an oral contract of lease for the use of a commercial space within a building owned by petition in Ozamiz City. ¹The lease was for an indefinite period although the rent of P150.00 per month was paid on a month-to-month basis. ELUMBA INDUSTRIES COMPANY utilized the area under lease as the Sales Office of Allied Air Freight in Ozamiz City.chanroblesvirtualawlibrarychanrobles virtual law library

On 4 April 1977, PADERANGA subdivided the leased premises into two (2) by constructing a partition wall in between. He then took possession of the other half, which repossession was said to have been undertaken with the acquiescence of the local manager of ELUMBA, ² although private respondent maintains that this is not the case. ³ At any rate, the validity of the repossession is not here in issue.chanroblesvirtualawlibrarychanrobles virtual law library

On 18 July 1977, private respondent instituted an action for damages ⁴ which, at the same time, prayed for the fixing of the period of lease at five (5) years, before the then court of First Instance of Zamboanga del Norte based in Dipolog City. ⁵ Petitioner, a resident of Ozamiz City, moved for its dismissal contending that the action was a real action which should have been filed with the Court of First Instance of Misamis Occidental stationed in Ozamiz City where the property in question was situated.chanroblesvirtualawlibrarychanrobles virtual law library

On 6 November 1978, respondent Judge Dimalanes B. Buissan denied the Motion to Dismiss and held that Civil Case No. 2901 merely involved the enforcement of the contract of lease, and while affecting a portion of real property, there was no question of ownership raised. ⁶ Hence, venue was properly laid.chanroblesvirtualawlibrarychanrobles virtual law library

Petitioner pleaded for reconsideration of the order denying his Motion to Dismiss. He contended that while the action did not involve a question of ownership, it was nevertheless seeking recovery of possession; thus, it was a real action which, consequently, must be filed in Ozamiz City. ⁷chanrobles virtual law library

On 4 December 1978, respondent judge denied reconsideration. ⁸ While admitting that Civil Case No. 2901 did pray for recovery of possession, he nonetheless ruled that this matter was not the main issue at hand; neither was the question of ownership raised. Not satisfied, petitioner instituted the present recourse.chanroblesvirtualawlibrarychanrobles virtual law library

PADERANGA argues that inasmuch as ELUMBA seeks to recover possession of the portion surrendered to him by the local manager of private respondent, as well as to fix the period of lease at five (5) years, Dipolog City could not be the proper venue of the action. it being a real action, venue is laid in the court having jurisdiction over the territory in which the property lies.chanroblesvirtualawlibrarychanrobles virtual law library

ELUMBA counters that the present action is chiefly for damages arising from an alleged breach in the lease contract; hence, the issue of recovery of possession is merely incidental. ELUMBA further argues that the action is one in personam and not in rem. Therefore venue may be laid in the place where plaintiff or defendant resides at the option of plaintiff.chanroblesvirtualawlibrarychanrobles virtual law library

Private respondent appears to be confused over the difference between personal and real actions vis-a-vis actions in personam and in rem. The former determines venue; the latter, the binding effect of a decision the court may render over the party, whether impleaded or not.chanroblesvirtualawlibrarychanrobles virtual law library

In the case before us, it is indubitable that the action instituted by private respondent against petitioner affects the parties alone, not the whole world. Hence, it is an action in personam, i.e., any judgment therein is binding only upon the parties properly impleaded. ⁹ However, this does not automatically mean that the action for damages and to fix the period of the lease contract is also a personal action. For, a personal action may not at the same time be an action in rem. In Hernandez v. Rural Bank of Lucena, Inc., ¹⁰ we held thus -

In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a contract or the recovery of damages. In a real action, the plaintiff seeks the recovery of real property, or, as indicated in section 2(a) of Rule 4, a real action is an action affecting title to real property or for the recovery of possession, or for partition or condemnation of, or foreclosure of a mortgage on, real property.chanroblesvirtualawlibrarychanrobles virtual law library

An action in personam is an action against a person on the basis of his personal liability, while an action in rem is an action against the thing itself, instead of against the person. Hence, a real action may at the same time be an action in personam and not necessarily an action in rem.

Consequently, the distinction between an action in personam and an action in rem for purposes of determining venue is irrelevant. Instead, it is imperative to find out if the action filed is a personal action or real action. After all, personal actions may be instituted in the Regional Trial Court (then Court of First Instance) where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. ¹¹ On the other hand, real actions should be brought before the Regional Trial Court having jurisdiction over the territory in which the subject property or part thereof lies. ¹²chanrobles virtual law library

While the instant action is for damages arising from alleged breach of the lease contract, it likewise prays for the fixing of the period of lease at five (5) years. If found meritorious, private respondent will be entitled to remain not only as lessee for another five (5) years but also to the recovery of the portion earlier taken from him as well. This is because the leased premises under the original contract was the whole commercial space itself and not just the subdivided portion thereof.chanroblesvirtualawlibrarychanrobles virtual law library

While it may be that the instant complaint does not explicitly pray for recovery of possession, such is the necessary consequence thereof. ¹³ The instant action therefore does not operate to efface the fundamental and prime objective of the nature of the case which is to recover the one-half portion repossessed by the lessor, herein petitioner. ¹⁴ Indeed, where the ultimate purpose of an action involves title to or seeks recovery of possession, partition or condemnation of, or foreclosure of mortgage on, real property, ¹⁵ such an action must be deemed a real action and must perforce be commenced and tried in the province where the property or any part thereof lies.chanroblesvirtualawlibrarychanrobles virtual law library

Respondent judge, therefore, in denying petitioner's Motion to Dismiss gravely abused his discretion amounting to lack or excess of jurisdiction.chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, the Petition for Prohibition is GRANTED. The Orders of 6 November 1978 and 4 December 1978 of respondent Judge Dimalanes B. Buissan are SET ASIDE. The branch of the Regional Trial Court of Dipolog City where Civil Case No. 2901 may be presently assigned is DIRECTED to DISMISS the case for improper venue. This decision is immediately executory.chanroblesvirtualawlibrarychanrobles virtual law library

Costs against private respondent ELUMBA INDUSTRIES COMPANY.chanroblesvirtualawlibrarychanrobles virtual law library

SO ORDERED.

Griño-Aquino, J., is on leave.

Endnotes:

1 Amended Petition, p. 4; Rollo, p. 78.chanrobles virtual law library

2 Motion to Dismiss, p. 4; Annex "D", Amended Petition.chanrobles virtual law library

3 Complaint, p. 3; Annex "C", Amended Petition.chanrobles virtual law library

4 Docketed as Civil Case No. 2901. Private respondent seeks the following amounts as damages: (a) P100,000.00 as moral damages; (b) P50,000.00 as exemplary damages; (c) P5,000.00 as attorney's fees and, (d) P1,000.00 as costs of suit.chanrobles virtual law library

5 Raffled to Branch III.chanrobles virtual law library

6 CFI Order, 6 November 1978; Rollo, p. 67.chanrobles virtual law library

7 Motion for Reconsideration, p. 1; Rollo, p. 68.chanrobles virtual law library

8 CFI Order, 4 December 1978; Rollo, p. 72.chanrobles virtual law library

9 Ching v. Court of Appeals, G.R. No. 59731, 11 January 1990, 181 SCRA 9.chanrobles virtual law library

10 No. L-29791, 10 January 1978, 81 SCRA 75, 84-85.chanrobles virtual law library

11 Fortune Motors (Phils.), Inc. v. Court of Appeals, G.R. No. 76431, 16 October 1989, 178 SCRA 565, citing Sec. 1, Rule 4, Revised Rules of Court.chanrobles virtual law library

12. Carandang v. Court of Appeals, No. L-44932, 15 April 1988, 160 SCRA 266.chanrobles virtual law library

13 Tenorio v. Paño, No. L-48117, November 1986, 146 SCRA 74.chanrobles virtual law library

14 Punsalan, Jr. v. Vda. de Lacsamana, G.R. No. 55729, 28 March 1983, 121 SCRA 331.chanrobles virtual law library

15 Sec. 2, par. (a), Rule 4, Revised Rules of Court.