EMILIO EMNACE vs. COURT OF APPEALS, ESTATE OF VICENTE TABANAO, SHERWIN TABANAO, VICENTE WILLIAM TABANAO, JANETTE TABANAO DEPOSOY, VICENTA MAY TABANAO VARELA, ROSELA TABANAO and VINCENT TABANAO

G.R. No. 126334      November 23, 2001

FACTS

Petitioner Emilio Emnace, Vicente Tabanao and Jacinto Divinagracia were partners in a business concern known as Ma. Nelma Fishing Industry.  Sometime in January of 1986, they decided to dissolve their partnership and executed an agreement of partition and distribution of the partnership properties among them, consequent to Jacinto Divinagracia's withdrawal from the partnership. Among the assets to be distributed were 5 fishing boats, 6 vehicles, 2 parcels of land located at Sto. Niño and Talisay, Negros Occidental, and cash deposits in the local branches of the Bank of the Philippine Islands and Prudential Bank.

Throughout the existence of the partnership, and even after Vicente Tabanao's untimely demise, petitioner failed to submit to Tabanao's heirs any statement of assets and liabilities of the partnership, and to render an accounting of the partnership's finances. Consequently, Tabanao' s heirs, respondents herein, filed against petitioner an action for accounting, payment of shares, division of assets and damages. Petitioner filed a motion to dismiss the complaint on the grounds of improper venue, lack of jurisdiction over the nature of the action or suit, and lack of capacity of the estate of Tabanao to sue.

The trial court denied the motion to dismiss. It held that venue was properly laid because, while realties were involved, the action was directed against a particular person on the basis of his personal liability. Finally, the trial court held that the heirs of Tabanao had a right to sue in their own names, in view of the provision of Article 777 of the Civil Code, which states that the rights to the succession are transmitted from the moment of the death of the decedent. Petitioner filed a petition for certiorari before the Court of Appeals which was dismissed.

ISSUE

1.       Whether the venue was improperly laid since the action is a real action involving a parcel of land that is located outside the territorial jurisdiction of the court a quo

2.       Whether the surviving spouse of Vicente Tabanao has legal capacity to sue since she was never appointed as administratrix or executrix of his estate

RULING

1.       No. The records indubitably show that respondents are asking that the assets of the partnership be accounted for, sold and distributed according to the agreement of the partners. The fact that two of the assets of the partnership are parcels of land does not materially change the nature of the action. It is an action in personam because it is an action against a person, namely, petitioner, on the basis of his personal liability and not an action in rem where the action is against the thing itself instead of against the person.  In fact, it is only incidental that part of the assets of the partnership under liquidation happen to be parcels of land.

It also seeks the enforcement of, and petitioner's compliance with, the contract that the partners executed to formalize the partnership's dissolution, as well as to implement the liquidation and partition of the partnership's assets. Clearly, it is a personal action that, in effect, claims a debt from petitioner and seeks the performance of a personal duty on his part. In fine, respondents' complaint seeking the liquidation and partition of the assets of the partnership with damages is a personal action which may be filed in the proper court where any of the parties reside. As it is, venue in this case was properly laid and the trial court correctly ruled so.

2. Yes. The surviving spouse does not need to be appointed as executrix or administratrix of the estate before she can file the action. She and her children are complainants in their own right as successors of Vicente Tabanao. From the very moment of Vicente Tabanao's death, his rights insofar as the partnership was concerned were transmitted to his heirs, for rights to the succession are transmitted from the moment of death of the decedent. Whatever claims and rights Vicente Tabanao had against the partnership and petitioner were transmitted to respondents by operation of law, more particularly by succession, which is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance of a person are transmitted. Moreover, respondents became owners of their respective hereditary shares from the moment Vicente Tabanao died.