Cabutihan vs.

Landcenter

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 Kay-biga, 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 Cabutihan’s group (includes Forro,
Radan, and Anave). The deed states the ff important points:
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.

PROCEDURAL HISTORY:

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 corporation’s 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

ISSUES:
1. Whether or not the RTC erred in dismissing her complaint based on the three grounds (venue, parties, and
filing fees) – YES.

RULING:

VENUE ISSUE
• 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.
• 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 court’s 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.

PETITION GRANTED.