Decena vs. Piquero

An action for rescission of a contract of sale and recovery of possession of real property is a real action that must be filed where the property is located, and claims for damages incidental to the breach do not constitute separate causes of action that would allow joinder under Section 5(c), Rule 2 to lay venue in the plaintiffs' residence.

Spouses Decena owned a parcel of land with a house in Parañaque City. They executed a Memorandum of Agreement (MOA) with Spouses Piquero, selling the property for ₱940,250.00 payable in six postdated checks. The MOA required the Piqueros to reconvey the property to the Decenas if two checks were dishonored. The Piqueros took possession of the property upon execution of the MOA.

• The Agreement: Petitioners sold their Parañaque property to respondents for ₱940,250.00, payable via six postdated checks. The MOA stipulated that respondents must reconvey the property if two checks were dishonored. Respondents immediately took possession.
• The Breach: The first two checks issued by respondents were dishonored by the drawee bank. Despite demands, respondents failed to replace the dishonored checks with cash. Consequently, petitioners did not transfer the title to the respondents.
• The Complaint: Petitioners filed a complaint for annulment of the sale/MOA, recovery of possession, and damages in the RTC of Malolos, Bulacan, their place of residence. They sought rescission of the MOA, eviction of respondents, monthly compensation for unlawful use, moral and exemplary damages, and attorney's fees.

• Nature of the Action: Petitioners argued that their action for damages and attorney's fees is a personal action, properly filed in the RTC of Bulacan where they reside.
• Joinder of Causes of Action: Petitioners maintained that although the recovery of possession is a real action, it may be joined with personal causes of action under Section 5(c), Rule 2 of the Rules of Court, justifying venue in their residence.

• Improper Venue: Respondents countered that the principal action for rescission and recovery of possession is a real action that must be filed in Parañaque City where the property is located, not in Bulacan.
• Inapplicability of Section 5(c), Rule 2: Respondents argued that Section 5(c), Rule 2 applies only when causes of action pertain to different jurisdictions between first-level courts and the RTC, and does not apply to the mere joinder of real and personal actions for venue purposes.

• Venue: Whether venue was properly laid in the RTC of Malolos, Bulacan.
• Joinder of Causes of Action: Whether Section 5(c), Rule 2 of the Rules of Court allows the joinder of a real action and a personal action to lay venue in the plaintiffs' residence.

• Venue: Venue was improperly laid. The action for rescission of the MOA and recovery of possession is a real action, which under Section 1, Rule 4 of the Rules of Court must be commenced and tried in the court where the property is situated.
• Joinder of Causes of Action: Section 5(c), Rule 2 does not apply because petitioners have only one cause of action—the breach of the MOA. The claims for damages are merely incidental to this single cause of action and do not constitute independent or separate causes of action. A cause of action is determined by the facts alleged and the primary right violated, not by the variety of remedies or reliefs prayed for.

• Joinder of Causes of Action — The uniting of two or more demands or rights of action in a single complaint. Joinder exists when more than one primary right or subject of controversy is present. A single cause of action exists when the allegations show one primary right and one wrong, even if multiple remedies, incidental matters, or theories of recovery are set forth. Claims for damages incidental to a breach of contract do not constitute separate causes of action.
• Real Actions — Actions affecting title to or possession of real property, or interest therein. Such actions must be commenced and tried in the proper court having jurisdiction over the area where the real property involved, or a portion thereof, is situated.

• "A cause of action should not be confused with the remedies or reliefs prayed for. A cause of action is to be found in the facts alleged in the complaint and not in the prayer for relief. It is the substance and not the form that is controlling."
• "The claim for damages for reasonable compensation for the respondents’ use and occupation of the property, in the interim, as well as moral and exemplary damages suffered by the petitioners on account of the aforestated breach of contract of the respondents are merely incidental to the main cause of action, and are not independent or separate causes of action."

• Punsalan, Jr. v. Vda. de Lacsamana, G.R. No. L-55729, 28 March 1983, 121 SCRA 331 — Followed. Established that an action for rescission of sale and recovery of possession is a real action.
• Rebollido v. Court of Appeals, G.R. No. 81123, 28 February 1989, 170 SCRA 800 — Followed. Cited for the essential elements of a cause of action.

• Section 5(c), Rule 2, Rules of Court — Governs joinder of causes of action pertaining to different venues or jurisdictions. Held inapplicable because there was only one cause of action; incidental claims for damages do not create a separate cause of action.
• Section 1, Rule 4, Rules of Court — Prescribes the venue for real actions as the court having jurisdiction over the area where the property is situated. Applied to require filing in Parañaque City.
• Section 1(c), Rule 16, Rules of Court — Authorizes dismissal of an action on the ground of improper venue. Applied to affirm the trial court's dismissal.

Puno (Chairman), Austria-Martinez, Tinga, and Chico-Nazario.