Spouses Saraza v. Francisco

Facts:

The case stems from an amended complaint filed by the respondent against the petitioners, alleging in his complaint that on September 1, 1999, he and Fernando executed an Agreement for the latter’s sale of his 100-square meter share in a lot situated in Bangkal, Makati City, which at that time was still registered in the name of one Emilia Serafico. The initial amount was paid upon the Agreement’s execution, while the balance was to be paid on installments to PNB, to cover a loan of Spouses Saraza, Fernando’s parents, with the bank. A final deed of sale conveying the property was to be executed by Fernando upon full payment of the PNB loan.

It was also agreed upon that should the parties fail for any reason to transfer the subject property to the respondent’s name, Rosario and Fernando’s 136-sq m property and encumbered to PNB to secure the loan that was to be paid by the respondent shall be considered a collateral in favor of the respondent. Spouses Saraza signified their conformity to the Agreement. The respondent was also allowed to take immediate possession of the property through a contract of lease. The petitioners likewise furnished PNB with an Authority, allowing the respondent to pay their obligations to the PNB, to negotiate for a loan restructuring, to receive the owner’s duplicate copy the TCT upon full payment of the loan secured by its mortgage, and to perform such other acts as may be necessary in connection with the settlement of the loan.

When the remaining balance of the PNB loan reached ₱226,582.13, the respondent asked for the petitioners’ issuance of an SPA that would authorize him to receive from PNB the owner’s duplicate copy of the TCT upon full payment of the loan. The petitioners denied the request. Upon inquiry from PNB, the respondent found out that the petitioners had instead executed an Amended Authority, which provided that the owner’s copy of TCT should be returned to the mortgagors upon full payment of the loan. Spouses Saraza also caused the eviction of the respondent from the property. These prompted the respondent to institute the civil case for specific performance, sum of money and damages with the RTC of Imus, Cavite.

RTC ruled in favor of the respondent. Fernando questioned the RTC decision before the CA. The CA affirmed the RTC ruling. Fernando filed an MR but was denied by the CA. Hence, this petition for review on certiorari.

Issue:

Venue of an action for specific performance.

Held:

In National Steel Corporation v. Court of Appeals where the Court held that an action that seeks the execution of a deed of sale over a parcel of land is for recovery of real property, and not for specific performance, because the primary objective is to regain ownership and possession of the property. It was explained that the prayer in National Steel was not in any way connected to a contract that was previously executed by the party against whom the complaint was filed, unlike in Cabutihan where the parties had earlier executed an Undertaking for the property’s transfer, correctly giving rise to a cause of action either for specific performance or for rescission, as in this case.

Section 2, Rule 4 of the Rules of Court then governs the venue for the respondent’s action. It provides that personal 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." Considering the respondent’s statement in his complaint that he resides in Imus, Cavite,36 the filing of his case with the RTC of Imus was proper.