14) Cabutihan vs. Landcenter Construction
14) Cabutihan vs. Landcenter Construction
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1.
REMEDIAL LAW; CIVIL PROCEDURE; VENUE OF ACTIONS; RULE; BREACH OF
CONTRACT GIVES RISE TO A CAUSE OF ACTION FOR SPECIFIC PERFORMANCE OR FOR
RESCISSION; CASE AT BAR. Sections 1 and 2, Rule 4 of the Rules of Court provide an
answer to the issue of venue. Actions affecting title to or possession of real property or an
interest therein (real actions), shall be commenced and tried in the proper court that has
territorial jurisdiction over the area where the real property is situated. On the other hand,
all other actions, (personal actions) shall be commenced and tried in the proper courts
where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of
the principal defendants resides. In the present case, petitioner seeks payment of her
services in accordance with the undertaking the parties signed. Breach of contract gives
rise to a cause of action for speci c performance or for rescission. If petitioner had led
an action in rem for the conveyance of real property, the dismissal of the case would have
been proper on the ground of lack of cause of action.
2.
ID.; ID.; CIVIL ACTIONS; PARTIES; MISJOINDER AND NON-JOINDER OF PARTIES
NOT A GROUND FOR DISMISSAL OF AN ACTION; REASON; NECESSARY PARTIES; NONINCLUSION THEREOF DOES NOT PREVENT THE COURT FROM PROCEEDING WITH THE
ACTION; CASE AT BAR. Neither a misjoinder nor a non-joinder of parties is a ground for
the dismissal of an action. Parties may be dropped or added by order of the court, on
motion of any party or on the court's own initiative at any stage of the action. The RTC
should have ordered the joinder of such party, and noncompliance with the said order
would have been ground for dismissal of the action. Although the Complaint prayed for the
conveyance of the whole 36.5 percent claim without impleading the companions of
petitioner as party-litigants, the RTC could have separately proceeded with the case as far
as her 20 percent share in the claim was concerned, independent of the other 16.5 percent.
This fact means that her companions are not indispensable parties without whom no nal
determination can be had. At best, they are mere necessary parties who ought to be
impleaded for a complete determination or settlement of the claim subject of the action.
The non-inclusion of a necessary party does not prevent the court from proceeding with
the action, and the judgment rendered therein shall be without prejudice to the rights of
such party.
3.
ID.; ID.; DOCKET FEES; ASSESSED VALUE OF REAL ESTATE, SUBJECT OF AN
ACTION, NOT CONSIDERED IN THE COMPUTATION THEREOF WHERE ACTION IS NOT
CAPABLE OF PECUNIARY ESTIMATION; CASE AT BAR. Petitioner insists that the value
of the real property, which was the subject of the contract, has nothing to do with the
determination of the correct docket or ling fees. The RTC ruled that although the amount
of damages sought had not been speci ed in the body of the Complaint, one can infer
from the assessed value of the disputed land that it would amount to P50 million. Hence,
when compared to this gure, the P210 paid as docket fees would appear paltry. We hold
that the trial court and respondent used technicalities to avoid the resolution of the case
and to tri e with the law. True, Section 5, Rule 141 of the Rules of Court requires that the
assessed value of the real estate, subject of an action, should be considered in computing
the ling fees. But the Court has already clari ed that the Rule does not apply to an action
for speci c performance, which is classi ed as an action not capable of pecuniary
estimation.
4.
ID.; ID.; ID.; PAYMENT THEREOF WITHIN REASONABLE TIME, ALLOWED BUT IN NO
CASE BEYOND REGLEMENTARY PERIOD. Besides, if during the course of the trial,
petitioner's 20 percent claim on the Fourth Estate Subdivision can no longer be satis ed
and the payment of its monetary equivalent is the only solution left, Sunlife Insurance
Of ce, Ltd . v. Asuncion holds as follows: "Where the ling of the initiatory pleading is not
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accompanied by payment of the docket fee, the court may allow payment of the fee within
a reasonable time but in no case beyond the applicable prescriptive or reglementary
period."
DECISION
PANGANIBAN , J :
p
Breach of contract gives rise to a cause of action for speci c performance or for
rescission. A suit for such breach is not capable of pecuniary estimation; hence, the
assessed value of the real estate, subject of the said action, should not be considered in
computing the ling fees. Neither a misjoinder nor a non-joinder of parties is a ground for
dismissal of an action, because parties may be dropped or added at any stage of the
proceedings.
The Case
Before us is a Petition for Review on Certiorari under Rule 45, assailing the Orders dated
September 8, 2000 and November 21, 2000, promulgated by the Regional Trial Court
(RTC) of Pasig City, Branch 263. 1 The first assailed Order disposed as follows:
"WHEREFORE, foregoing premises considered, this Court hereby resolves to
dismiss the instant complaint." 2
The Facts
Culled from the pleadings, the facts of this case are as follows.
On December 3, 1996, herein respondent Landcenter Construction & Development
Corporation, represented by Wilfredo B. Maghuyop entered into an Agreement 4 with
Petitioner Rebecca Cabutihan. The Agreement stipulates:
"WHEREAS, [respondent corporation], . . . is the absolute owner, . . . of a parcel of
land situated at Kay-biga, Paraaque, Metro Manila covered under Transfer
Certi cate of Title No. (S-30409) (partially cancelled by TCT Nos. 110001 to
110239) and particularly described as follows:
'A parcel of land (Plan Psu-80206, Case No. 290, G.L.R.O. Record No.
2291), situated in the Barrio of Kay-biga, Municipality of Paraaque,
Province of Rizal. Bounded on the NE., by properties of Eulogio Cruz and
Isidro Alano; on the E., by property of Justo Bernardo; on the SE., by
properties of Marcelo Nofuente and Lorenzo Molera; on the SW., by
properties of Higino and Pedro P. Lopez; on the W., by property of Odon
Rodriguez; and on the NW., by properties of Evaristo de los Santos and
Pastor Leonardo . . . ; containing an area of ONE HUNDRED SEVEN
THOUSAND AND FORTY SEVEN (107,047) SQUARE METERS, more or
less.'
"WHEREAS, [respondent corporation] decided to engage the assistance of
[petitioner] and . . . herein called the FACILITATOR for the purpose of facilitating
and arranging the recovery of the property in question, as well as the nancing of
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Armed with Board Resolution No. 01, Series of 1997, 6 which had authorized her to
represent the corporation, Luz Baylon Ponce entered into a February 11, 1997 Deed of
Undertaking with a group composed of petitioner, Wenifredo P. Forro, Nicanor Radan Sr.
and Atty. Prospero A. Anave. The Deed states the following:
"WHEREAS, the UNDERTAKER [respondent corporation] solicited, engaged and
hereby voluntarily acknowledges the assistance of certain persons, in recovering,
arranging and nancing the undertaking up to completion/consummation of the
same;
"WHEREAS, the UNDERTAKER freely, voluntarily, unconditionally and irrevocably
agreed, committed and undertook to compensate . . . said persons, in the manner,
specified hereinbelow;
"WHEREFORE, considering the foregoing premises, and the mutual covenants of
the parties, the UNDERTAKER hereby unconditionally and irrevocably [c]ommit[s]
and [u]ndertake[s], as follows:
"1.
To pay or compensate the following persons, based on the gross area of
the afore-described parcel of land or gross proceeds of the sale thereof, as the
case may be, to wit:
Rebecca T. Cabutihan
20%
Wenifredo P. Forro
10%
4%
2.5%
36.5%
"2.
Execute a Deed of Assignment unto and in favor of each of the persons
above-mentioned corresponding to their respective shares in the subject parcel of
land or in the proceeds thereof;
"3.
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An action for speci c performance with damages was led by petitioner on October 14,
1999 before the RTC of Pasig City, Branch 263. She alleged:
"[6.]
[Petitioner] accomplished her undertakings under the subject Agreement
and the Undertaking. So in a letter dated 18 April 1997, . . . , [respondent
corporation] was informed accordingly thereof. Simultaneously, [petitioner]
demanded upon [respondent corporation] to execute the corresponding Deed of
Assignment of the lots in the subject property, as compensation for the services
rendered in favor of the [respondent corporation]. The subject letter was duly
received and acknowledged receipt, by then Acting Corporate Secretary of the
[respondent corporation].
"[7.]
[Respondent corporation] failed and refused to act on . . . said demand of
[petitioner]. Hence, [she] sent a letter dated May 8, 1997, to the Register of Deeds
for Paraaque, to inform . . . said Office of . . . [her] claim . . . ;
"[8.]
. . . [T]he subject property was already transferred to and registered in the
name of [respondent corporation] under Transfer Certi cate of Title No. -123917-,
of the Registry of Deeds for Paraaque City . . . ;
xxx xxx xxx
"[10.]
With . . . said title of the property now in the possession of the
[respondent corporation], [petitioner] is apprehensive that the more that [she] will
not be able to obtain from [respondent corporation], compliance with the
aforestated Agreement and Undertaking, to the extreme detriment and prejudice
of [petitioner] and her group, . . . ;
xxx xxx xxx
"[12.]
Then in a letter, 8 dated 10 September 1999, [petitioner] through counsel
sent to [respondent corporation] a Formal Demand, to comply with its obligation .
. . but . . . [respondent corporation] did not heed the demand. . . . ." 9
Petitioner prayed, inter alia, that respondent corporation be ordered to execute the
appropriate document assigning, conveying, transferring and delivering the particular lots
in her favor. The lots represented compensation for the undertakings she performed and
accomplished, as embodied in the Agreement.
Respondent then filed a Motion to Dismiss, alleging the following:
"5.
Because of the troubled situation obtaining at the management level of
[respondent corporation], the sale between [respondent corporation] and PCIB
regarding the Fourth Estate Subdivision was not registered with the Register of
Deeds of ce, although [respondent corporation] continued holding the deed of
sale over the Fourth Estate Subdivision.
"6.
A group of persons led by one Wilfredo Maghuyop, including herein
[petitioner], Wenifredo Forro, Nicanor Radan, and others, taking advantage of the
management mess at [respondent corporation], tried to grab ownership of the
[respondent corporation], and with use of fraud, cheat, misrepresentation and
theft of vital documents from the of ce of [respondent corporation], succeeded in
ling with the Securities and Exchange Commission false papers and documents
purporting to show that the Articles of Incorporation of [respondent corporation]
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In the Motion, respondent sought the dismissal of the Complaint on the grounds of (1)
improper venue, (2) lack of jurisdiction over the subject matter, and (3) nonpayment of the
proper docket fees. Specifically, it contended:
"8.
"(b)
In other words, the present case led by [petitioner] is for her recovery
(and for her companions) of 36.5% of [respondent corporation's] land (Fourth
Estate Subdivision) or her interest therein. . . . therefore, . . . the present case led .
. . is a real action or an action in rem.
"(c)
. . . [Following] Section 1, Rule 4 of the Rules of Court, as amended . . . the
present case should have been led by [petitioner] with the proper court in
Paraaque City which has jurisdiction over the . . . Fourth Estate Subdivision
because said subdivision is situated in Paraaque City. Since [petitioner] led the
present case with this . . . [c]ourt in Pasig City, she chose a wrong venue . . . .
xxx xxx xxx
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claim
"9.
That the [c]ourt has no jurisdiction over the subject matter of the
xxx xxx xxx
"(c)
. . . Wenifredo P. Forro, Nicanor Radan, Sr. and Atty. Prospero A. Anave
are not named as plaintiffs in the complaint. [Petitioner] . . . is not named as
representative of Forro, Radan and Anave by virtue of a Special Power of Attorney
or other formal written authority. According to the Rules, where the action is
allowed to be prosecuted or defended by a representative or someone acting in a
duciary capacity, the bene ciary shall be included in the title of the case and
shall be deemed to be the real party in interest (Sec. 3, Rule 3, Rules of Court, as
amended . . . ).
xxx xxx xxx
"10.
That a condition precedent for
complied with
Furthermore, the action was led only by petitioner. There was no allegation that she had
been authorized by Forro, Radan and Anave to represent their respective shares in the
compensation.
Finally, since this case was an action in rem, it was imperative for petitioner to pay the
appropriate docket or ling fees equivalent to the pecuniary value of her claim, a duty she
failed to discharge. Consequently, following Manchester Development Corp. v. Court of
Appeals, 1 3 the trial court never acquired jurisdiction over the case.
Hence, this Petition. 1 4
Issues
In her Memorandum, petitioner phrases the issue in this wise:
"Whether or not the dismissal of the [C]omplaint was in accordance with the
pertinent law and jurisprudence on the matter." 1 5
She argues that the RTC erred in dismissing her Complaint on the grounds of (1) improper
venue, (2) non-joinder of necessary parties, and (3) non-payment of proper docket fees.
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First Issue:
Proper Venue
Maintaining that the action is in personam, not in rem, petitioner alleges that the venue was
properly laid. The fact that "she ultimately sought the conveyance of real property" not
located in the territorial jurisdiction of the RTC of Pasig is, she claims, an anticipated
consequence and beyond the cause for which the action was instituted.
On the other hand, the RTC ruled that since the primary objective of petitioner was to
recover real property even though her Complaint was for speci c performance and
damages her action should have been instituted in the trial court where the property was
situated, in accordance with Commodities Storage & Ice Plant Corp. v. Court of Appeals. 1 6
We agree with petitioner. Sections 1 and 2, Rule 4 of the Rules of Court provide an answer
to the issue of venue. 1 7 Actions affecting title to or possession of real property or an
interest therein (real actions), shall be commenced and tried in the proper court that has
territorial jurisdiction over the area where the real property is situated. On the other hand,
all other actions, (personal actions) shall be commenced and tried in the proper courts
where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of
the principal defendants resides.
I n Commodities Storage cited earlier, petitioner spouses obtained a loan secured by a
mortgage over their land and ice plant in Sta. Maria, Bulacan. Because they had failed to
pay the loan, the mortgage was foreclosed and the ice plant auctioned. Before the RTC of
Manila, they sued the bank for damages and for the xing of the redemption period. Since
the spouses ultimately sought redemption of the mortgaged property, the action affected
the mortgage debtor's title to the foreclosed property; hence, it was a real action. 1 8 Where
the action affects title to the property, it should be instituted in the trial court where the
property is situated. 1 9
I n National Steel Corp. v. Court of Appeals , 2 0 the Court held that "an action in which
petitioner seeks the execution of a deed of sale of a parcel of land in his favor . . . has been
held to be for the recovery of the real property and not for speci c performance since his
primary objective is to regain the ownership and possession of the parcel of land."
However, in La Tondea Distillers, Inc. v. Ponferrada , 2 1 private respondents led an action
for speci c performance with damages before the RTC of Bacolod City. The defendants
allegedly reneged on their contract to sell to them a parcel of land located in Bago City a
piece of property which the latter sold to petitioner while the case was pending before the
said RTC. Private respondent did not claim ownership but, by annotating a notice of lis
pendens on the title, recognized defendants' ownership thereof. This Court ruled that the
venue had properly been laid in the RTC of Bacolod, even if the property was situated in
Bago.
In Siasoco v. Court of Appeals , 2 2 private respondent led a case for speci c performance
with damages before the RTC of Quezon City. It alleged that after it accepted the offer of
petitioners, they sold to a third person several parcels of land located in Montalban, Rizal.
The Supreme Court sustained the trial court's order allowing an amendment of the original
Complaint for speci c performance with damages. Contrary to petitioners' position that
the RTC of Quezon City had no jurisdiction over the case, as the subject lots were located
in Montalban, Rizal, the said RTC had jurisdiction over the original Complaint. The Court
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reiterated the rule that a case for speci c performance with damages is a personal action
which may be filed in a court where any of the parties reside.
A close scrutiny of National Steel and Ruiz reveals that the prayers for the execution of a
Deed of Sale were not in any way connected to a contract, like the Undertaking in this case.
Hence, even if there were prayers for the execution of a deed of sale, the actions led in the
said cases were not for specific performance.
In the present case, petitioner seeks payment of her services in accordance with the
undertaking the parties signed. Breach of contract gives rise to a cause of action for
speci c performance or for rescission. 2 3 If petitioner had led an action in rem for the
conveyance of real property, the dismissal of the case would have been proper on the
ground of lack of cause of action.
Second Issue:
Non-Joinder of Proper Parties
Petitioner claims that she was duly authorized and empowered to represent the members
of her group and to prosecute their claims on their behalf via a Special Power of Attorney
executed by Forro, Radan and Anave. Besides, she argues that the omission of her
companions as plaintiffs did not prevent the RTC from proceeding with the action,
because whatever judgment would be rendered would be without prejudice to their rights.
In the alternative, she avers that the trial court may add or drop a party or parties at any
stage of the action and on such terms as are just.
The RTC ruled that there was no allegation anywhere in the records that petitioner had
been authorized to represent Forro, Radan and Anave, who were real parties-in-interest
with respect to their respective shares of the 36.5 percent claim. Such being the case, the
trial court never acquired jurisdiction over the subject matter of their claims.
Again, we side with petitioner. Neither a misjoinder nor a non-joinder of parties is a ground
for the dismissal of an action. Parties may be dropped or added by order of the court, on
motion of any party or on the court's own initiative at any stage of the action. 2 4 The RTC
should have ordered the joinder of such party, and noncompliance with the said order
would have been ground for dismissal of the action.
Although the Complaint prayed for the conveyance of the whole 36.5 percent claim without
impleading the companions of petitioner as party-litigants, the RTC could have separately
proceeded with the case as far as her 20 percent share in the claim was concerned,
independent of the other 16.5 percent. This fact means that her companions are not
indispensable parties without whom no nal determination can be had. 2 5 At best, they are
mere necessary parties who ought to be impleaded for a complete determination or
settlement of the claim subject of the action. 2 6 The non-inclusion of a necessary party
does not prevent the court from proceeding with the action, and the judgment rendered
therein shall be without prejudice to the rights of such party. 2 7
Third Issue:
Correct Docket Fees
Petitioner insists that the value of the real property, which was the subject of the contract,
has nothing to do with the determination of the correct docket or filing fees.
The RTC ruled that although the amount of damages sought had not been speci ed in the
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body of the Complaint, one can infer from the assessed value of the disputed land that it
would amount to P50 million. Hence, when compared to this gure, the P210 paid as
docket fees would appear paltry.
We hold that the trial court and respondent used technicalities to avoid the resolution of
the case and to tri e with the law. True, Section 5, Rule 141 of the Rules of Court requires
that the assessed value of the real estate, subject of an action, should be considered in
computing the ling fees. But the Court has already clari ed that the Rule does not apply
to an action for speci c performance, 2 8 which is classi ed as an action not capable of
pecuniary estimation. 2 9
Besides, if during the course of the trial, petitioner's 20 percent claim on the Fourth Estate
Subdivision can no longer be satis ed and the payment of its monetary equivalent is the
only solution left, Sunlife Insurance Of ce, Ltd. v. Asuncion 3 0 holds as follows: "Where the
ling of the initiatory pleading is not accompanied by payment of the docket fee, the court
may allow payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period."
WHEREFORE, the Petition is hereby GRANTED, and the assailed Orders REVERSED and SET
ASIDE. The case is REMANDED to the court of origin which is ordered to PROCEED with
deliberate speed in disposing of the case. No costs.
TAECSD
SO ORDERED.
1.
2.
Rollo, p. 16.
3.
Ibid., p. 17.
4.
5.
6.
7.
8.
Letter signed by Atty. Prospero A. Anave (Annex "J") rollo, pp. 67-68.
9.
10.
11.
12.
Commodities Storage & Ice Plant Corp. v. Court of Appeals , 274 SCRA 439, June 19,
1997.
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13.
14.
15.
16.
17.
"SEC. 1.
Venue of real actions. Actions affecting title to or possession of real
property, or interest therein, shall be commenced and tried in the proper court which has
jurisdiction over the area wherein the real property involved, or a portion thereof, is
situated."
xxx xxx xxx
"SEC. 2.
Venue of personal actions. All other actions may be commenced and tried
where the plaintiff or any of the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff."
18.
Commodities Storage & Ice Plant Corp. v. Court of Appeals, supra, p. 450.
19.
Ibid., p. 451.
20.
21.
22.
23.
Art. 1165 & 1191 of the Civil Code; Davao Abaca Plantation Company, Inc. v. Dole
Philippines, Inc., 346 SCRA 682, 688, December 1, 2000. See also Villamil v. Court of
Appeals, 208 SCRA 643, 650-651, May 8, 1992; Robleza v. Court of Appeals , 174 SCRA
354, 363, June 28, 1989.
24.
25.
26.
8, Rule 3 of the Rules of Court, provides: "SEC. 8. Necessary party . A necessary party
is one who is not indispensable but who ought to be joined as a party if complete relief
is to be accorded as to those already parties, or for a complete determination or
settlement of the claim subject of the action."
27.
Agro Conglomerates, Inc. v. Court of Appeals, 348 SCRA 450, 460, December 18, 2000.
28.
Ayala Corporation v. Madayag, 181 SCRA 687, 689, January 30, 1990.
29.
Amorganda v. Court of Appeals, 166 SCRA 203, 211, September 30, 1988.
30.
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