[08] GO V.

UCPB FACTS:
1. Petitioner Jimmy T. Go and Alberto T. Looyuko are co-owners of Noah’s Ark
G.R. NO. 156187 | NOV. 11, 2004 | Real v. Personal Action | Dee International, Noah’s Ark Sugar Carriers, Noah’s Ark Sugar Truckers, Noah’s
Ark Sugar Repacker, Noah’s Ark Sugar Insurers, Noah’s Ark Sugar Terminal,
Petitioner: Jimmy T. Go
Noah’s Ark Sugar Building, and Noah’s Ark Sugar Refinery.
Respondents: United Coconut Planters Bank, Angelo V. Manahan, Francisco C. 2. Petitioners applied for an Omnibus Line accommodation with respondent
Zarate, Perlita A. Urbano And Atty. Edward Martin United Coconut Planters Bank (UCPB) in the amount of P900m and was
granted. The transaction was secured by Real Estate Mortgages over two
Recit-Ready: parcels of land located at Mandaluyong City.
Jimmy Go and Alberto Looyuko are co-owners of Noah’s Ark companies. They 3. The approved Omnibus Line accommodation granted to petitioner was
subsequently cancelled by UCPB. As a consequence, petitioner Jimmy T. Go
applied with and was granted a loan by UCPB for P900m. The loan was secured by
demanded from UCPB the return of the two (2) TCTs covered by Real Estate
a Real Estate Mortgage over two lands located in Mandaluyong City. UCPB,
Mortgages earlier executed.
however, subsequently cancelled the loan. As a result, Jimmy Go demanded the 4. UCPB refused to return the same and proceeded to have the two (2) pre-
return of the TCTs of the mortgaged lands. However, UCPB refused to return the signed Real Estate Mortgages notarized and caused the registration thereof
TCTs and, instead, it filed for an extrajudicial foreclosure sale of the REM for before the Registry of Deeds of Mandaluyong City.
nonpayment of obligation. Jimmy Go filed a complaint for the cancellation of the 5. UCPB then filed with the Office of the Clerk of Court and Ex-Officio Sheriff of
REM with the RTC Pasig. UCPB filed for a motion to dismiss on the ground that it Mandaluyong City an extrajudicial foreclosure of real estate mortgage for
nonpayment of the obligation secured by said mortgage. As a result, the
was filed in the wrong venue. The issue is whether the complaint for the
public auction sale of the mortgaged property was set.
cancellation of the REM is a real action or personal action for the purpose of 6. To protect his interest, petitioner Jimmy T. Go filed a complaint for
determining the venue for the complaint. The SC ruled that it is a real action and Cancellation of Real Estate Mortgage and damages, with prayer for
the complaint must be filed with the court that has jurisdiction over the place temporary restraining order and/or writ of preliminary injunction with the
where the property or any part thereof lies. Hence, the complaint should have been Regional Trial Court of Pasig City.
filed with the RTC of Mandaluyong where the properties were located and not with 7. Respondent UCPB, instead of filing an answer, filed a motion to dismiss on
the grounds that: 1) that the court has no jurisdiction over the case due to
RTC Pasig where Jimmy Go filed the complaint.
nonpayment of the proper filing and docket fees; 2) that the complaint was
filed in the wrong venue; 3) an indispensable party/real party in interest was
Doctrine: not impleaded and, therefore, the complaint states no cause of action; 4)
A real action is an action affecting title to or possession of real property, or interest that the complaint was improperly verified; and 5) that petitioner is guilty of
therein. These include partition or condemnation of, or foreclosure of mortgage on, forum shopping and submitted an insufficient and false certification of non-
real property. The venue for real actions is the same for regional trial courts and forum shopping.
municipal trial courts -- the court, which has territorial jurisdiction over the area 8. The trial court issued an order granting petitioner’s application for a writ of
where the real property or any part thereof lies. preliminary injunction. Correspondingly, the auction sale was enjoined.
9. The trial court denied  respondent bank’s motion to dismiss. A motion for
The cancellation of the real estate mortgage is a real action, considering that a real reconsideration was filed, but the same was likewise denied.
estate mortgage is a real right and a real property by itself. An action for 10. Respondent bank questioned said orders before the Court of Appeals
cancellation of real estate mortgage is necessarily an action affecting the title to alleging that the trial court acted without or in excess of jurisdiction or with
grave abuse of discretion in issuing an order denying the motion to dismiss
the property. It is, therefore, a real action.
and the motion for reconsideration thereof.
11. The Court of Appeals set aside the Orders issued by the trial court and property sold to the highest bidder at the sale, an action to annul the foreclosure
directed the trial court to dismiss the case on the ground of improper venue. sale is necessarily an action affecting the title of the property sold. It is therefore
12. Petitioner filed a motion for reconsideration, but it was denied. Hence, this a real action, which should be commenced and tried in the province where the
petition for review on certiorari. property or part thereof lies. Moreover, in a relatively recent case, it was
13. Petitioner in this case contends that a case for cancellation of mortgage is a succinctly stated that the prayer for the nullification of the mortgage is a prayer
personal action and since he resides at Pasig City, venue was properly laid affecting real property, hence, is a real action.
therein.
In sum, the cancellation of the real estate mortgage, subject of the instant
ISSUES: petition, is a real action, considering that a real estate mortgage is a real right
Whether the petitioner’s complaint for cancellation of real estate mortgage is a and a real property by itself. An action for cancellation of real estate mortgage is
personal or real action for the purpose of determining venue. (Real Action) necessarily an action affecting the title to the property. It is, therefore, a real
action, which should be commenced and tried in Mandaluyong City, the place
where the subject property lies, and not in Pasig City.
RATIO:
Petitioner’s complaint for cancellation of real estate mortgage is a real action,
which must be filed in the court that has territorial jurisdiction where the property
or any part thereof lies.

In a real action, the plaintiff seeks the recovery of real property. As provided for
in Section 1, Rule 4, a real action is an action affecting title to or possession of
real property, or interest therein. These include partition or condemnation of, or
foreclosure of mortgage on, real property. The venue for real actions is the same
for regional trial courts and municipal trial courts -- the court which has territorial
jurisdiction over the area where the real property or any part thereof lies.

Personal action is one brought for the recovery of personal property, 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 for personal actions is likewise the same for the regional and
municipal trial courts -- the court of the place where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, at the election of the plaintiff, as indicated in Section 2 of
Rule 4.

It is quite clear then that the controlling factor in determining venue for cases of
the above nature is the primary objective for which said cases are filed.

In a long line of cases, the Court held that an action for nullification of the
mortgage documents and foreclosure of the mortgaged property is a real action
that affects the title to the property. Thus, venue of the real action is before the
court having jurisdiction over the territory in which the property lies. Since an
extrajudicial foreclosure of real property results in a conveyance of the title of the