"x x x.
The sole issue presented for our review is the proper characterization of the nature of the action filed by petitioner, i.e.,whether her Complaint for Annulment of Deed of Mortgage with Damages is a real action or a personal action.
A real action, under Sec. 1, Rule 4 of the Rules of Court, is one that affects title to or possession of real property, or an interest therein. Such actions should 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. All other actions are personal and 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.
We agree with petitioner that the case of Hernandez v. Rural Bank of Lucena is applicable. That case was primarily an action to compel the mortgagee bank to accept payment of the mortgage debt and to release the mortgage. No foreclosure of mortgage took place and the plaintiffs remained in possession of the mortgaged lot. The Court ruled that an action for cancellation of a real estate mortgage is a personal action since it is not expressly included in the enumeration found in Sec. 2(a), Rule 4 of the Revised Rules of Court.
Similarly, the property subject of the Deed of Mortgage in this case has not been foreclosed. There is no indication that respondent Ruben Orbeta has defaulted in the payment of the loan secured by the mortgage on the subject property.Petitioner even asserts, without objection from respondents, that the title to the property is still in her and respondent RubenOrbetas names and that they are still in possession of the property.
The recent case of Chua v. Total Office Products and Services (Topros), Inc., penned by Associate Justice Leonardo A. Quisumbing, also provides a proper precedent. In that case, respondent filed a complaint for the declaration of nullity of a loan contract for lack of consent and consideration. It contended that the purported loan and real estate mortgage contracts were fictitious since it never authorized anybody to enter into said transactions and that the complaint remained a personal action even if it will necessarily affect the accessory real estate mortgage.
The allegations of respondent in that case strikingly resemble petitioners arguments in this case. Notably, petitioner herein also seeks the annulment of the Deed of Mortgage executed by the respondents on the grounds that she never gave her consent to the execution of the deed and that her signature thereon was forged.
Given this similarity in factual milieu, we cannot but apply the Courts ruling in Chua v. Total Office Products and Services (Topros), Inc. that an action to annul a contract of loan and its accessory real estate mortgage is a personal action. In accordance with Sec. 2, Rule 4 of the Rules of Court, Las Pinas City, where respondent Wolcott resides, is the proper venue of the Complaint for Annulment of Deed of Mortgage with Damages.
x x x."
LIGAYA S. ORBETA, representted by her Atty.-In-Fact, RUBEN S. ORBETA, JR., - versus - RUBEN P. ORBETA and ANITA B. WOLCOTT, G.R. No. 166837, November 27, 2006