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[CivPro] | [Venue)] 1

[JDesabelle]

DAVAO ABACA VS DOLE


[G.R. No. 134431] | [December 1, 2000] | [J. BUENA]

CASE SUMMARY: DAPCO leased its land to DOLE. In 1988, the Comprehensive Agrarian
Reform Law took effect. Among the lands covered by the law was the subject land. In
1995, DOLE stopped fulfilling its obligations as a lessee. It claimed that since the land
was covered by CARL, it became legally impossible for DAPCO to perform its obligation to
maintain the lessee in peaceful and adequate enjoyment of the things leased. Thus,
DOLE claimed that its obligation to pay DAPCO the rentals stipulated in the Lease
Agreements ceased.

SC reversed CAs decision and reinstated the complaint. Although the complaint was not
properly worded and additionally sought compliance with the lease agreement by
surrendering and delivering to DAPCO the land, together with all permanent and fixed
improvements thereon existing including standing crops and the fruits thereof", the
complaint is not a real action, but a personal one. What is being asserted was the rental
payment for the year 1995 and the succeeding annual rentals until the expiration of the
lease. The rules provide that venue for personal actions is in the place where the plaintiff
or any of the defendants or any of the defendants resides, at the election of the plaintiff.
Since DAPCO has its principal office in Manila, it cannot be said that DAPCO, in exercising
its option by filing the suit in Manila, committed a breach of the rules.

DOCTRINE:

FACTS
Petitioner Davao Abaca Plantation Company, Inc. (DAPCO) is the owner of the
land located in Davao. Respondent DOLE or its predecessor in interest has
been the lessee of the property since 1969 and has used the land for growing
export quality bananas
November 28, 1985 2 lease agreements were executed
o period for contracts was 10 years renewable for another 6 years at the sole
option of DOLE
o if no agreement is reached by the parties on the rental/other terms and
conditions of the lease at the end of the original period, DOLE shall be
automatically granted a grace period of 2 years within which to wind up its
operations on the land
1988 - Comprehensive Agrarian Reform Law (CARL) took effect
o CARL precludes early coverage of private land leased, held or
possessed by multinational corporations such as DOLE
December 9, 1992 - DOLE exercised its option and renewed the lease up to
December 31, 2000
Since DOLE had rights under the Lease Renewal Agreement which had to be
represented or protected in the DAR proceeding, DAPCO formally requested DOLE
to intervene in the said proceeding
DOLE told DAPCO that it chose not to intervene in the DAR proceeding:
o such intervention is unnecessary because CARL itself grants DOLE a 10-year
deferment by providing that DOLEs lease with DAPCO shall be respected
until its valid termination
o DOLEs right to deferment is already fully protected by Section 8(4) of the
CARL, and, accordingly, it does not need the deferment allowed under
Section 11 of the same law.
Section 72 mandates that DOLEs rights under the renewed/extended
lease contracts with DAPCO, Inc. should be respected whatever
happens;
o the DAR proceeding between DAPCO and another party cannot prejudice the
rights and privileges of DOLE under the lease renewal agreement since DOLE
is not a party thereto
Nevertheless, DOLE assured DAPCO that it will honor and faithfully comply
in good faith with its contracts and other obligations.
BUT in January 25, 1995 DOLE told DAPCO that
o the acts of the government in implementing CARL are already fait accompli
o the government's complete taking of the leased premises and
distribution of the same to another association made it legally
impossible for DAPCO to perform its obligation to maintain the
lessee in peaceful and adequate enjoyment of the things leased
o the actions of the government amount to caso fortuito
o DOLE's obligation to pay DAPCO the rentals stipulated in the Lease
Agreements ceased
March 15, 1995 DAPCO brought a complaint in the RTC against DOLE and
prayed that a TRO be issued
DOLE filed before CA a petition for certiorari and prohibition under Rule
65 and questioned the jurisdiction of RTC
CA dismissed DAPCOs complaint on the ground of wrong venue. MR also
denied.
o complaint is actually a real action, DAPCO's main objective being to
assert ownership and recover possession of the land in dispute
o venue lies not in Manila but in South Cotabato where the property in
dispute is located, pursuant to ROC Rule 4, Section 1, as amended
by Circular No. 13-95
Sec 1. Venue of real action. 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.
Hence, present petition.

PROCEDURE SUMMARY
Action Decision
DAPCO brought a complaint in the RTC
against DOLE and prayed that a TRO be
issued
[CivPro] | [Venue)] 3
[JDesabelle]

DOLE filed before CA a petition for


CA dismissed the complaint on the
certiorari and prohibition under Rule 65
ground of wrong venue
and questioned the jurisdiction of RTC
DAPCO filed MR CA denied
Present petition before SC SC granted. Complaint reinstated

ISSUE/RATIO
WON the dismissal of the complaint on the ground of wrong venue was proper
NO. The complaint is not a real action, but a personal one. What is being
asserted was the rental payment for the year 1995 and the succeeding annual
rentals until the expiration of the lease. The rules provide that venue for
personal actions is in the place where the plaintiff or any of the defendants or
any of the defendants resides, at the election of the plaintiff. Since DAPCO has
its principal office in Manila, DAPCO did not breach the rules in exercising its
option by filing the suit in Manila.
1. The complaint is not a real action, but a personal one. Thus, the application of
ROC Rule 4, Section 1 was improper.
a. DOLE argues that the complaint is an assertion and claim of ownership over the
land, subject of the lease
i. As Lessee, DOLE is stopped to deny lessor's title.
ii. The conclusive presumption embodied in ROC Rule 131, Section 2(b)
applies to DOLE and the estoppel does not depend on the validity of the
landlord's title.
1. Section 2(b): The tenant is not permitted to deny the title of his
landlord at the time of commencement of the relation of landlord
and tenant between them.

b. It cannot be said that the main objective of DAPCO in filing the


complaint is to recover the land leased to DOLE
i. DAPCO neither denied the fact that the lands were subjected to the CARP
c. What is being asserted was the rental payment for the year 1995 and
the succeeding annual rentals until the expiration of the lease.
i. DAPCO is enforcing the lease contract against DOLE
ii. A breach of contract is a cause of action either for specific performance or
recession of contracts.
d. The rules on venue at the time the complaint was filed governs. In this case,
the rules provide that venue for personal actions is in the place where
the plaintiff or any of the defendants or any of the defendants resides,
at the election of the plaintiff.
i. Since DAPCO has its principal office in Manila, it cannot be said
that DAPCO, in exercising its option by filing the suit in Manila,
committed a breach of the rules.
2. The complaint itself was not properly worded and additionally sought
compliance with the lease agreement by surrendering and delivering to DAPCO
the land, together with all permanent and fixed improvements thereon existing
including standing crops and the fruits thereof" which necessarily muddled the
issues, as to whether the action is real or a personal one.
3. As to whether or not DOLE is no longer liable for rental payments for the year 1995
because of the expired lease agreement: issue must be properly proved before the
court.
4. As to whether or not DOLE was bound by the terms of the lease and is liable for
damages: should be discussed and settled by trial court in accordance with the
evidence submitted by both parties
5. As to whether or not DAPCO no longer owns the subject property so that DOLE has no
more obligation to pay rent: the issue of ownership is subject of another litigation
between petitioner and the farmer-beneficiaries, and DAR

DECISION
CA decision REVERSED and SET ASIDE
DAPCOs complaint REINSTATED