G.R. No. 234499.  June 6, 2018.

*
 
RUDY L. RACPAN, petitioner,  vs.  SHARON BARROGA-
HAIGH, respondent.

Remedial Law; Civil Procedure; Venue; Rule 4 of the Rules of

Court provides the rules on the situs for bringing real and personal
actions.—By weight of jurisprudence, the nature of an action is
determined by the allegations in the complaint. In turn, the
nature of the action determines its proper venue. Rule 4 of the
Rules of Court provides the rules on the  situs  for bringing real
and personal actions.
Same; Same; Same; Actions; “Real Action” and “Personal
Action,” Distinguished.—The Court delineated the basic
distinction between a real and a personal action and their
respective venues in  Bank of the Philippine Islands v.
Hontanosas, Jr., 737 Phil. 38 (2014), stating that: The
determinants of whether an action is of a real or a personal
nature have been fixed by the  Rules of Court  and relevant
jurisprudence. According to Section 1, Rule 4 of the  Rules of
Court, a real action is one that affects title to or possession of real 

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*  THIRD DIVISION.

 
 
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596 SUPREME COURT REPORTS ANNOTATED

Racpan vs. Barroga-Haigh

property, or an interest therein. Such action is to be commenced and

tried in the proper court having jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated, which explains
why the action is also referred to as a local action. In contrast, the Rules
of Court declares all other actions as personal actions. Such actions may
include those brought for the recovery of personal property, or for the
enforcement of some contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an injury to the person or
property. The venue of a personal action is the place 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 nonresident
defendant where he may be found, at the election of the plaintiff, for
which reason the action is considered a transitory one.

Same; Same; Same; Personal Actions; In Chua v. Total Office

Products and Services (Topros), Inc., 471 SCRA 500 (2005), the
Supreme Court (SC) ruled that where the action is not intended for
the recovery of real property but solely for the annulment of a
contract, it is a personal action that may be filed in the court
where the plaintiff or the respondent resides.—What determines
the venue of a case is the primary objective for the filing of the
case. On one hand, if the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of
damages, his complaint is a personal action that may be filed in
the place of residence of either party. On the other hand, if the
plaintiff seeks the recovery of real property, or if the action affects
title to real property or for the recovery of possession, or for
partition or condemnation of, or foreclosure of mortgage on, real
property, then the complaint is a real action that must be brought
before the court where the real property is located. Thus, in Chua
v. Total Office Products and Services (Topros), Inc., 471 SCRA 500
(2005), this Court ruled that where the action is not intended for
the recovery of real property but solely for the annulment of a
contract, it is a personal action that may be filed in the court
where the plaintiff or the respondent resides.
Same; Same; Barangay Conciliation; As for petitioner’s failure
to resort to barangay conciliation, Section 412 of the Local
Government Code (LGC) provides that parties may go directly to
court where the action is coupled with provisional remedies.—As
for petitioner’s failure to resort to barangay conciliation, Section
412 of the Local

 
 

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Racpan vs. Barroga-Haigh

Government Code (LGC) provides that parties may go

directly to court where the action is coupled with provisional
remedies: SEC. 412. Conciliation.—(a) Precondition to filing of
complaint in court.—No complaint, petition, action, or proceeding
involving any matter within the authority of the lupon shall be
filed or instituted directly in court or any other government office
for adjudication, unless there has been a confrontation between
the parties before the lupon chairman or the pangkat, and that no
conciliation or settlement has been reached as certified by the
lupon secretary or pangkat secretary as attested to by the lupon
chairman or pangkat chairman or unless the settlement has been
repudiated by the parties thereto. (b) Where parties may go
directly to court.—The parties may go directly to court in the
following instances: (1) Where the accused is under detention; (2)
Where a person has otherwise been deprived of personal liberty
calling for habeas corpus proceedings; (3) Where actions are
coupled with provisional remedies such as preliminary
injunction, attachment, delivery of personal property, and
support pendente lite; and (4) Where the action may otherwise be
barred by the statute of limitations. (c) Conciliation among
members of indigenous cultural communities.—The customs and
traditions of indigenous cultural communities shall be applied in
settling disputes between members of the cultural communities.
While there is no dispute herein that the present case was never
referred to the Barangay Lupon for conciliation before petitioner
instituted Civil Case No. 34, 742-2012, there is likewise no
quibbling that his Complaint was coupled with a prayer for the
issuance of a preliminary injunction. Hence, it falls among the
exceptions to the rule requiring the referral to barangay
conciliation.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
   Into, Pantojan, Feliciano-Braceros & Ong-Chang Law
Offices for petitioner.
     Cariaga Law Offices for respondent.

 
 
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598 SUPREME COURT REPORTS ANNOTATED

Racpan vs. Barroga-Haigh

VELASCO, JR.,  J.:

 
Nature of the Case
 
This treats of the Petition for Review on Certiorari
under Rule 45 of the Rules of Court, assailing the February
13, 2017 Decision1 and August 17, 2017 Resolution2 of the
Court of Appeals (CA) in C.A.-G.R. CV No. 04034-MIN.
Said rulings affirmed the dismissal of the petitioner’s
complaint for improper venue and failure to comply with a
condition precedent to its filing.
 
Factual Antecedents
 
Petitioner Rudy Racpan filed a Complaint “For
Declaration For Nullity of Deed of Sale with Right to
Repurchase & Attorney’s Fees”3  before the Regional Trial
Court of Davao City, Branch 11 (RTC-Davao). In his
Complaint, which was docketed as Civil Case No. 34, 742-
2012, petitioner alleged that after his wife’s death on
November 12, 2011, he instructed their daughter to
arrange his wife’s important documents. In so doing, their
daughter discovered a  Deed of Sale with Right to
Purchase  dated March 29, 2011. The Deed of Sale was
purportedly signed by him and his late wife and appeared
to convey to respondent Sharon Barroga-Haigh a real
property registered in his name under TCT No. T-142-
2011009374 and located in Bo. Tuganay, Municipality of
Carmen, Province of Davao del Norte.4  Petitioner
maintained that the Deed of Sale was falsified and
fictitious as he never signed any contract, not even any
special power of attorney, for the sale or convey-

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1  Penned by Associate Justice Oscar V. Badelles and concurred in by

Associate Justices Romulo V. Borja and Ronaldo B. Martin, Rollo, pp. 48-
53.
2  Id., at pp. 55-56.
3  Id., at pp. 74-85.
4  Id., at p. 88.

 
 
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ance of the property which is still in his possession. Thus,

he prayed for the declaration of the Deed of Sale’s nullity.
In her Answer with Compulsory Counterclaim,5
respondent contended, by way of affirmative defense, that
the venue of the Complaint was improperly laid and that
the filing of the case lacks the mandatory requirement of
Barangay Clearance. Subsequently, respondent filed a
motion for preliminary hearing on her affirmative defenses.
Acting on the motion, the RTC-Davao set the case for
preliminary hearing and thereafter issued an Order dated
September 18, 20136 dismissing the petitioner’s Complaint
as follows:

WHEREFORE, in view of the foregoing, the present case is

hereby ORDERED DISMISSED for being improperly filed before
the Regional Trial Court of Davao City and for failure to comply
with a condition precedent prior to its filing.
SO ORDERED.7

 
Petitioner moved for the RTC-Davao to reconsider8  its
Order dismissing the complaint but the trial court
remained steadfast and denied his motion in its June 19,
2004 Order.9  Hence, the petitioner came to the CA on
appeal.10
 
Ruling of the Court of Appeals
 
As stated at the outset hereof, the appellate court
affirmed the dismissal of the petitioner’s Complaint as
follows:

_______________

5   Id., at pp. 104-110.

6   Id., at pp. 116-117.
7   Id., at pp. 85, 117. Penned by Presiding Judge Virginia Hofi-leña
Europa.
8   Id., at pp. 118-128.
9   Id., at p. 129.
10  Id., at pp. 130-131.

 
 

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Racpan vs. Barroga-Haigh

WHEREFORE, the order dated September 18, 2013 of

the Regional Trial Court, Branch 11, Davao City in Civil
Case No. 34,742-12 is AFFIRMED.
 SO ORDERED.11

The CA explained that petitioner’s Complaint is a real

action as it wants the court to abrogate and nullify
whatever right or claim the respondent might have on the
property subject of the Deed of Sale. Hence, for the
appellate court, Section 1, Rule 4 of the Rules of Court is
applicable. Under this Rule, real actions shall be
commenced and tried in the proper court which has
jurisdiction over the area wherein the real property
involved is situated. As the property involved is located in
Bo. Tuganay, Municipality of Carmen, Province of Davao
del Norte, the appellate court held that the Complaint
should have been lodged with the RTC of Davao del Norte
and not the RTC-Davao.
Further, the CA found that the petitioner’s prayer for
the issuance of a writ of preliminary injunction is a mere
ploy to avoid the requirement of a barangay conciliation, as
a mere annotation of a notice of lis pendens would achieve
the same effect without having to undergo trial or post a
bond.
In a Resolution dated August 17, 201712 the CA stood its
ground by denying the petitioner’s Motion for
Reconsideration.13
Hence, the petitioner’s present recourse, it being his
contention that the Complaint he interposed with the RTC-
Davao is a personal action. He maintains that his
Complaint is not concerned with title to or possession of
real property, as in fact, no transfer of possession or title of
the real property to the respondent has occurred.14 For the
petitioner, the Com-

_______________

11  Id., at p. 53.
12  Id., at pp. 55-56.
13  Id., at pp. 58-72.
14  Id., at pp. 29-30.

 
 
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Racpan vs. Barroga-Haigh
plaint’s venue was properly laid in Davao City where both
he and the respondent reside.
Petitioner likewise reiterated that, as his Complaint was
coupled with a prayer for the issuance of a writ of
preliminary injunction, it is exempt from barangay
conciliation proceedings.
 
Issue
 
The main and decisive issue for resolution is whether
the CA erred in affirming the dismissal of the petitioner’s
Complaint.
 
Our Ruling
 
The petition is impressed with merit.
 
The venue was properly
laid as the complaint was
a personal action.
 
By weight of jurisprudence, the nature of an action is
determined by the allegations in the complaint. In turn, the
nature of the action determines its proper venue. Rule 4 of
the Rules of Court provides the rules on the situs for
bringing real and personal actions, viz.:

Rule 4
VENUE OF ACTIONS
 
Section  1.  Venue of real actions.—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.
Forcible entry and detainer actions shall be commenced
and tried in the municipal trial court of the mu-

 
 
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602 SUPREME COURT REPORTS ANNOTATED

Racpan vs. Barroga-Haigh

nicipality or city wherein the real property involved, or a

portion thereof, is situated.
 Section  2.  Venue of personal actions.—All other 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
nonresident defendant where he may be found, at the
election of the plaintiff.

 
Expounding on the foregoing provisions, the Court
delineated the basic distinction between a real and a
personal action and their respective venues in Bank of the
Philippine Islands v. Hontanosas, Jr.,15 stating that:

The determinants of whether an action is of a real or a

personal nature have been fixed by the Rules of Court  and
relevant jurisprudence. According to Section 1, Rule 4 of
the Rules of Court, a real action is one that affects title to or
possession of real property, or an interest therein. Such
action is to be commenced and tried in the proper court
having jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated, which explains
why the action is also referred to as a local action. In
contrast, the  Rules of Court  declares  all other actions  as
personal actions. Such actions may include those brought
for the recovery of personal property, or for the enforcement
of some contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an injury to
the person or property. The venue of a personal action is the
place 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 nonresident
defendant where he may be found, at the election of the
plaintiff, for which reason the action is considered a
transitory one.

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15  737 Phil. 38 (2014).

 
 
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Racpan vs. Barroga-Haigh

Otherwise stated, what determines the venue of a case

is the primary objective for the filing of the case.16 On one
hand, if the plaintiff seeks the recovery of personal
property, the enforcement of a contract or the recovery of
damages, his complaint is a personal action that may be
filed in the place of residence of either party. On the other
hand, if the plaintiff seeks the recovery of real property, or
if the action affects title to real property or for the recovery
of possession, or for partition or condemnation of, or
foreclosure of mortgage on, real property, then the
complaint is a real action that must be brought before the
court where the real property is located. Thus, in Chua v.
Total Office Products and Services (Topros), Inc.,17 this
Court ruled that where the action is not intended for the
recovery of real property but solely for the annulment of a
contract, it is a personal action that may be filed in the
court where the plaintiff or the respondent resides. It held:

Well-settled is the rule that an action to annul a contract

of loan and its accessory real estate mortgage is a personal
action. In a personal action, the plaintiff seeks the recovery
of personal property, the  enforcement of a contract  or the
recovery of damages. In contrast, in a real action, the
plaintiff seeks the recovery of real property, or, as indicated
in Section 2(a), Rule 4 of the then Rules of Court, a real
action is an action affecting title to real property or for
the recovery of possession, or for partition, or condemnation
of, or foreclosure of mortgage on, real property.

_______________

16  Latorre v. Latorre, 631 Phil. 88; 617 SCRA 88 (2010); citing Gochan
v. Gochan, 423 Phil. 491, 501; 372 SCRA 256, 263-264 (2001) and Olympic
Mines and Development Corp. v. Platinum Group Metals Corporation, G.R.
Nos. 178188, 180674, 181141 & 183527, May 8, 2009, 587 SCRA 624;
Golden Arches Development Corporation v. St. Francis Square Holdings,
Inc., 655 Phil. 221; 640 SCRA 227 (2011).
17   508 Phil. 490; 471 SCRA 500 (2005); also cited in Bank of the
Philippine Islands v. Hontanosas, Jr., supra note 15.

 
 
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Racpan vs. Barroga-Haigh

In the Pascual case, relied upon by petitioner, the

contract of sale of the fishpond was assailed as fictitious for
 lack of consideration. We held that there being no contract
to begin with, there is nothing to annul. Hence, we deemed
the action for annulment of the said fictitious contract
therein as one constituting a real action for the recovery of
the fishpond subject thereof.
We cannot, however, apply the foregoing doctrine to the
instant case. Note that in Pascual, title to and possession of
the subject fishpond had already passed to the vendee.
There was, therefore, a need to recover the said fishpond.
But in the instant case, ownership of the parcels of land
subject of the questioned real estate mortgage was
never transferred to petitioner, but remained with
TOPROS. Thus, no real action for the recovery of real
property is involved. This being the case, TOPROS’
action for annulment of the contracts of loan and real
estate mortgage remains a personal action. (emphasis
supplied)

 
In the Complaint filed with the court a quo, petitioner
sought the nullification of the Deed of Sale with Right to
Repurchase on the strength of this claim: he did not sign
the same nor did he execute any special power of attorney
in favor of his late wife to do so in his behalf.18 But, as
there was no allegation that the possession and title
to the property have been transferred to respondent,
nowhere in the Complaint did petitioner allege or
pray for the recovery or reconveyance of the real
property. Pertinent parts of the Complaint read thus:

4.  Plaintiff was married to Ma. Lucila B. Racpan on 20

December 1978. The latter died on 13 November 2011 at
Oroville, California. . .
5.  Plaintiff Racpan purchased a property from his
brother Lorezo L. Racpan formerly covered by Transfer 

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18  Rollo, p. 76.

 
 
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Racpan vs. Barroga-Haigh
 Certificate of Title No. T-189893 and located at Carmen, Davao del
Norte and the said property is now covered by Transfer
Certificate of Title No. T-142-2011009374. Hereto attached and
marked as Annex “B” is a copy of the Transfer Certificate of
Title No. T-142-2011009374 registered under the name of
plaintiff Rudy L. Racpan. Also attached and marked as Annex
“C” is the tax declaration of the subject property to prove that
plaintiff is the owner of the same.
6.  Plaintiff’s wife died at Oroville, California on 12
November 2011. However, her remains were returned to
Davao City, Philippines. Nonetheless, it was the daughter
of the plaintiff in the person of Lani Racpan who arrived
first in Davao City.
xxxx
8.  On 12 December 2011, plaintiff’s daughter showed to
him the subject deed of sale with right to repurchase dated
29 March 2011. Plaintiff was surprised because he did not
know or has NO knowledge of the said deed of sale with
right to repurchase. When plaintiff navigated the Deed
of Sale, he was surprised because his signature
appearing on the same is COMPLETELY FALSIFIED.
...
8.a  Moreover, plaintiff did not also execute any
special power of attorney in favour of his deceased
wife authoring the latter to [sell] the subject
property to the defendant.
8.b  On the other hand, the subject property is
registered under the name of plaintiff Rudy Racpan
and NOT TO SPOUSES Racpan. The words “married to
Ma. Lucila B. Racpan” only signified the civil status of
plaintiff to the latter.
xxxx
9.d  Evidently, from the foregoing the (alleged)
subject deed of sale with right to repurchase is NULL
AND VOID as the same contains the falsified
signature of the herein plaintiff.

 
 
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xxxx
11.  Plaintiff before and during the time of the execution
of the subject Deed of Sale with Right to Repurchase dated
 29 March 2011 NEVER MET defendant Saigh. It was only
sometime in December 7 or 8, 2011 that he met defendant
Saigh during the wake of his wife wherein he was
introduced to the former by Orly Gabriel.
12.  To date, plaintiff is in possession of the subject
property. However, his daughter has been receiving text
message from defendant requiring him to settle the said
alleged obligation of his deceased wife to her.19

Evidently, as the Complaint was not concerned with the

title to or recovery of the real property, it was a personal
action. Thus, Davao City, where both the petitioner and
the respondent reside is the proper venue for the
complaint. The appellate court therefore committed a
reversible error in affirming the trial court’s dismissal of
the case for improper venue.
 
The Complaint was ex-
empted from Barangay

Conciliation Proceedings

 
As for petitioner’s failure to resort
to  barangay  conciliation, Section 412 of the Local
Government Code (LGC) provides that parties may go
directly to court where the action is coupled with
provisional remedies:

SEC.  412.  Conciliation.—(a)  Precondition to filing of

complaint in court.—No complaint, petition, action, or
proceeding involving any matter within the authority of
the lupon shall be filed or instituted directly in court or any
other government office for adjudication, unless there has
been a confrontation between the parties before 

_______________

19  Id., at pp. 75-80; emphasis supplied.

 
 
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the lupon chairman or the pangkat, and that no conciliation or

settlement has been reached as certified by the lupon secretary or
pangkat secretary as attested to by the lupon chairman or pangkat
 chairman or unless the settlement has been repudiated by the
parties thereto.
(b)  Where parties may go directly to court.—The parties
may go directly to court in the following instances:
(1)  Where the accused is under detention;
(2)  Where a person has otherwise been deprived of
personal liberty calling for habeas corpus proceedings;
(3)  Where actions are coupled with provisional
remedies such as preliminary injunction, attachment,
delivery of personal property, and support pendente lite; and
(4)  Where the action may otherwise be barred by the
statute of limitations.
(c)  Conciliation among members of indigenous cultural
communities.—The customs and traditions of indigenous
cultural communities shall be applied in settling disputes
between members of the cultural communities.

 
While there is no dispute herein that the present case
was never referred to the Barangay Lupon for conciliation
before petitioner instituted Civil Case No. 34, 742-2012,
there is likewise no quibbling that his Complaint was
coupled with a prayer for the issuance of a preliminary
injunction.20 Hence, it falls among the exceptions to the
rule requiring the referral to barangay conciliation.
As good faith is always presumed,21  in the absence of
proof of improper motive on the part of the petitioner, the
Court cannot countenance the appellate court’s assumption
that

_______________

20  Id., at pp. 83-84.

21   Escritor, Jr. v. Intermediate Appellate Court, 239 Phil. 563; 155
SCRA 577 (1987).

 
 
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Racpan vs. Barroga-Haigh

petitioner was solely intent on evading the requirements of

the LGC in applying for a preliminary injunction. This
Court cannot sustain a dismissal of an action on account of
an unproven assertion of bad faith.
 WHEREFORE, the petition is GRANTED. The
February 13, 2017 Decision and August 17, 2017 Resolution
of the Court of Appeals in C.A.­-G.R. CV No. 04034-MIN, as
well as the Orders dated September 18, 2013 and June 19,
2004 of the Regional Trial Court of Davao City, Branch 11,
in Civil Case No. 34, 742-2012 are REVERSED and SET
ASIDE. Civil Case No. 34, 742-2012 is hereby ordered
REINSTA-TED. The RTC is ordered to proceed with
dispatch in the disposition of the mentioned case.
SO ORDERED.

Bersamin, Leonen, Martires and Gesmundo, JJ.,

concur.

Petition granted, judgment and resolution reversed and

set aside. Civil Case reinstated.

The venue for personal actions shall — as a general rule

— lie with the court which has jurisdiction where the
plaintiff or the defendant resides, at the election of the
plaintiff. As an exception, parties may, through a written
instrument, restrict the filing of said actions in a certain
exclusive venue. (Ley Construction and Development
Corporation vs. Sedano, 837 SCRA 632 [2017])

 
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