CABUTIHAN vs.

LANDCENTER CONSTRUCTION (AJG)

GR No. 146594 | June 10, 2002
Petitioner: Rebecca T. Cabutihan
Respondent: Landcenter Construction and Development Corporation
Doctrine about Venue: Actions affecting title to or possession of real property or an
interest therein shall be commenced and tried in the proper court that has territorial
jurisdiction over the area where the real property is situated, while all aother actions
(personal actions) shall be commenced and tried in the proper courts where the plaintiff /
defendant resides. (NOTE: There are other doctrines in this case, such as Parties to the Case)
Panganiban, J.:
Factual Antecedence
Cabutihan and Landcenter entered into an agreement. The agreement stipulates the
ff:
o That Landcenter is the absolute owner of a parcel of land situated at Kaybiga, Paranaque, Manila.
o Petitioner will facilitate and arrange the recovery of such property, as well as
the financing of such undertakings necessary in connection thereto, including
the necessary steps in relation to squatters presently occupying it and
legitimate buyers of lots thereof.
o Petitioner shall be entitled to 20% of the total area of the property recovered.
Luz Ponce, authorized by the corporation, entered into a deed of undertaking with
Cabutihans group (includes Forro, Radan, and Anave). The deed states the ff
important points:
o That the undertaker commits to compensate Cabutihan, Forro, Radan, and
Anave 20%, 10%, 4%, and 2.5%,respectively, of the gross area of the land.
An action for specific performance with damages was filed by petitioner before the
Regional Trial Court of Pasig City (IMPORTANT NOTE: The property is in Paranaque. It
was NOT stated in the case where the petitioner resides, or where the respondent
resides. So Pasig City is the place of residence of either petitioner or respondent),
alleging that:
o Petitioner accomplished her undertakings. She also demanded upon the
corporation to execute the corresponding Deed of Assignment of the lots.
o Respondent failed and refused to act on such demand. The TCT was also
transferred into the corporations name, thus petitioner is apprehensive that
the more that she will not obtain from the respondent corporation, to the
detriment and prejudice of her group.
Petitioner prayed that respondent corporation be ordered to execute the appropriate
document assigning, conveying, transferring, and delivering the particular lots in her
favour. The lots represented compensation for the undertakings she
performed and accomplished.
Respondent filed a motion to dismiss, alleging that:
o
The venue is improperly laid because since petitioner seeks to recover
property, then the case is an action in rem which should be filed in Paranaque
(VENUE doctrine)
o The court has no jurisdiction over the subject matter because Forro, Radan,
and Anave are not named as plaintiffs, and petitioner is not named/does not

possess a special power of attorney as representative of those other three

(PARTIES doctrine)
o Filing fees are not properly filed.
RTC agreed with all the contentions of the respondent, hence this petition

Issue/Held
1 Whether or not the RTC erred in dismissing her complaint based on the three grounds
(venue, parties, and filing fees) YES.
Dispositive Portion: 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. (RTC > SC >
Remand to RTC)
Rationale
VENUE ISSUE
Petitioner alleges that the venuie 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.
Sections 1 and 2, Rule 4 of the Rules of Court provide an answer to the issue of
venue.[17] 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.
RTC relied on the following cases, which is not related to the cause of action in this
case because it is not in any way connected to a contract, like the Undertaking in this
case:
o Commodities Storage vs. CA Spouses sought for redemption of the
mortgaged property. Should be instituted where the property is located.
o National Steel Corp vs. CA Petitioner seeks the execution of a deed of sale of
a parcel of land in his favour is an action in rem because the primary objective
is to regain ownership of the land.
In La Tondena Distillers vs. Ponferrada and Siasoco vs. CA, the SC held that an
action for specific performance with damages is a personal action which
may be filed in a court where any of the parties reside.
In this case, petitioner filed an action for specific performance with damages. She
seeks payment of her services in accordance with a contract (the Undertaking).
Breach of contract gives rise to a cause of action for specific performance or for
rescission.
PARTIES ISSUE
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 courts own initiative at any stage of the action. The RTC should have

ordered the joinder of such party, and non-compliance with the said order would have
been ground for dismissal of the action.
Non-inclusion of a necessary party does not prevent the court from proceeding with
the action. RTC could have separately proceeded with the case as far as her 20%
share in the claim was concerned.
DOCKET FEES ISSUE
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 filing
fees. But the Court has already clarified that the Rule does not apply to an action for
specific performance, which is classified as an action not capable of pecuniary
estimation.