THIRD DIVISION

G.R. No. 130991             March 11, 2004

DIMO REALTY & DEVELOPMENT, INC. AND LUZ M. DIZON, petitioners,
vs.
LEONARDO P. DIMACULANGAN, respondent.


D E C I S I O N


SANDOVAL-GUTIERREZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated March 20, 1997 and the Resolution2 dated October 10, 1997, both rendered by the Court of Appeals in CA-G.R. SP No. 40963, "Dimo Realty & Development Inc., and Spouses Gregorio and Luz Mojares Dizon vs. Hon. Pedro T. Santiago, Presiding Judge of the Regional Trial Court (RTC) of Quezon City, Branch 101, and Leonardo P. Dimaculangan".

The factual antecedents as borne by the records are:

On February 14, 1995, Leonardo P. Dimaculangan, respondent, filed with the Regional Trial Court, Branch 96, Quezon City, a complaint for specific performance against Dimo Realty & Development, Inc. (Dimo Realty) and spouses Gregorio and Luz Mojares Dizon, petitioners, docketed as Civil Case No. Q95-23006.

The complaint alleges that sometime in 1967 to 1968, petitioners engaged the services of respondent as geodetic surveyor to subdivide (into subdivision lots) two (2) parcels of land situated in Barrio Namuco, Rosario, Batangas covered by Transfer Certificate of Titles (TCT) Nos. T-25972 and T-24294 of the Registry of Deeds of that province. As payment for respondent’s services, petitioner agreed to give him one (1) subdivision lot (Lot 19, Block 17 covered by TCT No. T-25972) at Villa Luz Subdivision and pay him P9,200.00 in cash. After the completion of respondent’s work, petitioners paid him P9,200.00 in installments and delivered to him possession of the lot. However, despite respondent’s demands, petitioners failed to deliver the title of the lot, prompting him to file with the RTC a complaint for specific performance and damages.

Instead of filing an answer, petitioners, on March 27, 1995, filed a motion to dismiss the complaint on the following grounds: (1) the cause of action has prescribed or is barred by the statute of limitations; (2) venue was improperly laid considering that the trial court has no jurisdiction over the subject property situated in Batangas; (3) the claim is unenforceable under the provisions of the statute of frauds; and (3) the complaint fails to state a sufficient cause of action.

On June 27, 1995, the trial court issued an Order dismissing the complaint for improper venue.

Respondent then filed a motion for reconsideration with motion for inhibition.

In an Order dated July 11, 1995, the trial court granted the motion for inhibition, hence, the case was re-raffled to Branch 101 of the same RTC at Quezon City. On August 21, 1995, this Branch issued an Order granting respondent’s motion for reconsideration of the Order dismissing the complaint, thus:

"A close scrutiny of the allegations in the complaint indubitably show that the above-captioned case is one for specific performance, and therefore, a personal action. The complaint seeks not the recovery of the lot as plaintiff is already in possession thereof, but the peaceful delivery of the title covering said lot. Even assuming for the sake of argument that plaintiff likewise seeks the recovery of real property, this is, however, merely an incident to the principal personal action which is for the enforcement of the agreement between the parties.

"Hence, the above-captioned case being a personal action, the court in the place where the plaintiff resides, i.e. Quezon City, is the proper venue of the action.

"WHEREFORE, premises considered, the Motion for Reconsideration filed by the plaintiff being impressed with merit is hereby GRANTED.

"SO ORDERED."

From the said Order, petitioners filed a motion for reconsideration.

Meanwhile, petitioner Dimo Realty filed with the Municipal Trial Court (MTC) at Rosario, Batangas two (2) separate complaints for unlawful detainer and forcible entry against Jose Matibag and spouses Benjamin and Zenaida Dela Roca (lot buyers), docketed as Civil Cases Nos. 796 and 797, respectively. This prompted respondent to file with the trial court (Branch 101) a motion for issuance of a temporary restraining order (TRO) and a preliminary injunction against petitioner Dimo Realty and the MTC of Rosario, Batangas. Acting thereon, the trial court, in an Order dated October 2, 1995, issued a TRO and subsequently, a writ of preliminary injunction enjoining petitioner and the MTC "from proceeding with Civil Cases Nos. 796 and 797 pending hearing x x x."

Immediately, petitioners filed with the trial court a motion to lift the TRO and the writ of preliminary injunction and an urgent motion for inhibition, but were denied in an Order dated October 20, 1995.

On October 30, 1995, petitioners filed consolidated motions for reconsideration and for resolution but were denied in an Order dated June 5, 1995. In the same Order, the trial court set the case for pre-trial on July 3, 1996.

As a consequence, on June 18, 1996, petitioners filed with the Court of Appeals a petition for certiorari, prohibition and mandamus (with prayer for issuance of a writ of preliminary injunction) seeking (1) to nullify the trial court’s Order dated August 21, 1995 granting respondent’s motion for reconsideration; Order of October 20, 1995 denying petitioners’ motion to lift the TRO and the writ of preliminary injunction and motion for inhibition; and Order dated June 5, 1996 denying petitioners’ consolidated motions for reconsideration and for resolution; (2) to prohibit the trial court from hearing Civil Case No. Q95-23006; and (3) to dismiss the complaint for improper venue.

On March 20, 1997, the Appellate Court rendered a Decision, the dispositive portion of which reads:

"WHEREFORE, the following orders are hereby ordered PARTIALLY NULLIFIED:

1. October 20, 1995 Order – only insofar as it ordered the issuance of the temporary restraining order, and subsequently, the preliminary injunction;

2. June 5, 1996 Order – only insofar as it ordered the setting of the case for pre-trial;

"Consequently, as an incident to item number 2 above, the respondent judge is hereby ordered to DESIST from further proceedings with Civil Case Q 95-23006, except to ISSUE an order directing the petitioners herein to file their answer to the complaint. Until then, or after such time for filing the answer has expired, the respondent judge may not as yet proceed with the case.

"On the other hand, the rest of the petitioners’ prayers are hereby ordered DENIED for lack of merit.

"SO ORDERED."

The Court of Appeals ratiocinated as follows:

"After a careful study of the orders assailed in this petition, we conclude that the respondent judge did not commit any grave abuse of discretion insofar as the order dated August 21, 1995 is concerned. Thus, we agree with his findings that the case filed by Dimaculangan is a personal action involving as it does the mere delivery of the title to Lot 19, Block 17, which he, undisputably, already holds possession thereof. It does not, in any way, involve the issue of ownership over the particular property, as this is not disputed by the petitioners, that the same property belongs to Dimaculangan.

"In an attempt to put in issue the ownership over the particular property, the petitioners continuously rely on the doctrine in the case of Espineli v. Santiago. In Espineli, the issue is, who as between Mrs. Ramirez, on the one hand, and the Espinelis on the other, has a better right to the aforementioned Lot 34. Clearly, the ownership over the property has been put in issue. However, in the case at bar, the petitioners do not deny the fact that Dimaculangan is already in possession of the property. Thus, Espineli is somewhat misplaced. The case at bar is one for specific performance for the delivery of the title to the property. As such, it is a personal action. Consequently, venue has been property laid in the court of Quezon City, it being the residence of Dimaculangan.

"Likewise, we do not find any grave abuse of discretion on the part of the respondent judge when he issued the October 20, 1995 Order, at least insofar as the issue of inhibition is concerned.

"Verily, a judge may, in the exercise of his sound discretion, inhibit himself voluntarily from sitting in a case, but it should be based on good, sound or ethical grounds, or for just and valid reasons. It is not enough that a party throws some tenuous allegations of partiality at the judge. No less than imperative is that it is the judge’s sacred duty to administer justice without fear or favor.

"However, we find that insofar as he ordered the issuance of a preliminary injunction in the October 20, 1995 Order, the respondent judge exceeded his jurisdiction. It must be noted that the injunction was directed against DIMO Realty and any other persons acting in their behalf, as well as the MTC, Rosario, Batangas, Fourth Judicial Region, enjoining and restraining them from proceeding with Civil Cases 796 and 797 pending before the MTC, Rosario, Batangas, Fourth Judicial Region, pending hearing and resolution on whether a preliminary injunction should issue. On the other hand, the regional trial court where the judge sits is located in Quezon City, and as such, properly belongs to the National Capital Judicial Region. This being the case, it is clear that the respondent judge has exceeded his jurisdiction because an injunction issued by him may only be enforced in any part of the region. Consequently, the temporary restraining order, and subsequently, the preliminary injunction issued by the respondent judge are hereby ordered nullified, having been issued in excess of his jurisdiction.

"But such error of the respondent judge does not necessarily warrant his inhibition in the case. At most, it is only correctible by certiorari, as in this particular petition.

"Similarly, we do not find grave abuse of discretion on the part of the respondent judge insofar as he denied in his Order of June 5, 1996, the Motion for Reconsideration filed by the spouses and DIMO Realty. As we mentioned in the earlier part of this decision, we agree with the findings of the respondent judge insofar as it ruled that the case filed by Dimaculangan is a personal action. Hence, the respondent judge did not commit any grave abuse of discretion when it denied the Motion for Reconsideration. We therefore uphold the validity of this Order.

"With regard to the order of the respondent judge setting the case for pre-trial, we find that the same was issued in grave abuse of his discretion. We agree with the observation made by the petitioner that the issues have not yet been joined as the petitioners herein have not yet filed an answer. On this score, the writs prayed for must be granted. The respondent judge must order the petitioners herein to file their answer. Until then, or after such time for filing the answer has expired, the respondent judge may not as yet proceed with the case."

From the said Decision, both parties filed their motions for reconsideration but were denied.

Hence, this petition for review on certiorari.

For our resolution are the twin issues of whether the Court of Appeals erred (1) in holding that respondent’s complaint is a personal action; and (2) in sustaining the trial court’s Order denying petitioners’ motion for inhibition.

Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff’s cause of action. In Deltaventures Resources, Inc. vs. Cabato,3 we held:

"Jurisdiction over the subject matter is determined upon the allegations made in the complaint, irrespective of whether the plaintiff is entitled or not entitled to recover upon the claim asserted therein – a matter resolved only after and as a result of the trial."

The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.4

Let us examine respondent’s allegations in his complaint. The pertinent allegations are quoted as follows:

"x x x

"2. Sometime in 1967 to 1968, the services of plaintiff as geodetic surveyor was hired by the defendants to subdivide into subdivision lots parcels of lands located at Rosario, Batangas, in the name of defendant spouses which is covered by TCT T-25972 of the Registry of Deeds of Batangas and TCT T-24294 in the name of Ruperto Rodelas x x x:

x x x

"3. It was the agreement of the parties that plaintiff’s services will be paid with one (1) lot of the subdivision now called VILLA LUZ SUBDIVISION and originally covered by TCT T-25972, designated as Lot 19, Block 17 of the subdivision plan plus the additional amount of P9,200.00 to be paid in cash with the understanding that upon accomplishment of the subdivision plan and full payment of the agreed price, the corresponding title to said lot already transferred in the name of the plaintiff be delivered to the plaintiff.

x x x

"4. On several occasions from 1968 to 1975, plaintiff paid the additional amount of P9,200.00 by installments.

x x x

"5. Plaintiff has been making verbal demands upon defendants, every now and then, for the delivery of the title to Lot 19, Block 17 of the subdivision already named VILLA LUZ SUBDIVISION but defendant spouses have been giving the plaintiff a runaround.

x x x

"8. Verbal demands have been made upon defendants to deliver the title of the lot in question but defendants refused and continued to refuse to deliver said lot to the plaintiff without any valid reason at all.

x x x."

From the above allegations, it can easily be discerned that respondent is asserting that petitioners violated the contract of services by refusing to deliver the title of the subject lot to him and is thus demanding that they comply with their obligation.

It bears emphasis that respondent does not allege in his complaint that he is seeking to recover the lot from petitioners. This is because he has been in possession thereof. In fact, petitioner Dimo Realty even filed with the MTC of Rosario, Batangas two (2) separate complaints for unlawful detainer and forcible entry against respondent’s buyers. It is thus clear that what is being claimed by respondent is simply the delivery of the title to him as payment for his services.

It follows that the complaint below is not a real action, but a personal action.

Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure, as amended, provide:

"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.

x x x.

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 non-resident defendant where he may be found, at the election of the plaintiff." 5

Considering that respondent’s complaint, being one for specific performance, we agree with the Court of Appeals that the venue is in the RTC of Quezon City since respondent (then plaintiff) resides at No. 8 Cavite Street, West Avenue, Quezon City.

Petitioners further claim that the Appellate Court should not have sustained the trial court’s denial of petitioners’ motion for inhibition.

Suffice it to state that whether judges should inhibit themselves from a case rests on their own "sound discretion." Otherwise stated, inhibition partakes of voluntariness on the part of the judges themselves. This Court has to be shown acts or conduct of the judge clearly indicative of arbitrariness or prejudice before the latter can be branded the stigma of being biased or partial.6 In a catena of cases, we held that "bias and prejudice, to be considered valid reasons for the voluntary inhibition of judges, must be proved with clear and convincing evidence. Bare allegations of partiality and prejudgment will not suffice. These cannot be presumed, especially if weighed against the sacred obligation of judges whose oaths of office require them to administer justice without respect to person and to do equal right to the poor and the rich."7

Here, petitioners merely alleged the arbitrary issuance of a temporary restraining order without however showing bias or prejudice on the part of the trial judge. In fact, the Court of Appeals held that "such error of the respondent judge does not necessarily warrant his inhibition in the case."

WHEREFORE, the petition is DENIED. The assailed Decision dated March 20, 1997 and the Resolution dated October 10, 1997 of the Court of Appeals in CA G.R. SP No. 40963 are hereby AFFIRMED.

Costs against petitioners.

SO ORDERED.

Vitug, (Chairman), Corona, and Carpio-Morales, JJ., concur.


Footnotes

1 Annex "A", Petition, Rollo at 26-34.

2 Annex "B", id. at 46.

3 G.R. No. 118216, March 9, 2000, 327 SCRA 521, 528, citing Multinational Village Homeowners Ass., Inc. vs. CA, 203 SCRA 104 (1991); Gochan vs. Young, 354 SCRA 207 (2001).

4 Intestate Estate of Alexander T. Ty vs. Court of Appeals, G.R. No. 112872, April 19, 2001, 356 SCRA 661, 666-667, citing Serdoncillo vs. Benolirano, 297 SCRA 448 (1998); Tamano vs. Ortiz, 291 SCRA 584 (1998); and Citibank, N.A. vs. Court of Appeals, 299 SCRA 390 (1998).

5 While the complaint was filed on February 14, 1995, the 1997 Rules of Civil Procedure, as amended, not the Revised Rules of Court, applies considering that remedial laws have retroactive effect (Zulueta vs. Asia Brewery, Inc., G.R. No. 138137, March 8, 2001, 354 SCRA 100).

6 Extended Explanation of J. Panganiban in Estrada vs. Desierto, G.R. Nos. 146710-15, March 2, 2001, 353 SCRA 452, 581, citing Gabol vs. Riodique, 65 SCRA 505 (1975).

7 Ibid. at 582-583, citing Go vs. CA, 221 SCRA 397 (1993); People vs. CA, 309 SCRA 705 (1999); and Soriano vs. Angeles, 339 SCRA (2000).


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