Republic of the Philippines On May 25, 1983, before summons could be served on private
SUPREME COURT respondent as defendant therein, the RTC Executive Judge
Manila
THIRD DIVISION
G.R. No. 74854 April 2, 1991
JESUS DACOYCOY, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, HON.
ANTONIO V. BENEDICTO, Executive Judge, Regional Trial
Court, Branch LXXI, Antipolo, Rizal, and RUFINO DE
GUZMAN, respondents.
Ramon V. Sison for petitioner.
Public Attorney's Office for private respondent.
FERNAN, C.J.:
May the trial court motu proprio dismiss a complaint on the
ground of improper venue? This is the issue confronting the
Court in the case at bar.
On March 22, 1983, petitioner Jesus Dacoycoy, a resident of
Balanti, Cainta, Rizal, filed before the Regional Trial Court,
Branch LXXI, Antipolo, Rizal, a complaint against private
respondent Rufino de Guzman praying for the annulment of
two (2) deeds of sale involving a parcel of riceland situated in
Barrio Estanza, Lingayen, Pangasinan, the surrender of the
produce thereof and damages for private respondent's refusal
to have said deeds of sale set aside upon petitioner's demand.
issued an order requiring counsel for petitioner to confer with
respondent trial judge on the matter of venue. After said
conference, the trial court dismissed the complaint on the
ground of improper venue. It found, based on the allegations
of the complaint, that petitioner's action is a real action as it
sought not only the annulment of the aforestated deeds of sale
but also the recovery of ownership of the subject parcel of
riceland located in Estanza, Lingayen, Pangasinan, which is
outside the territorial jurisdiction of the trial court.
Petitioner appealed to the Intermediate Appellate Court, now
Court of Appeals, which in its decision of April 11,
1986, affirmed the order of dismissal of his complaint.
1
In this petition for review, petitioner faults the appellate court in
affirming what he calls an equally erroneous finding of the trial
court that the venue was improperly laid when the defendant,
now private respondent, has not even answered the complaint
nor waived the venue. 2
Petitioner claims that the right to question the venue of an
action belongs solely to the defendant and that the court or its
magistrate does not possess the authority to confront the
plaintiff and tell him that the venue was improperly laid, as
venue is waivable. In other words, petitioner asserts, without
the defendant objecting that the venue was improperly laid, the
trial court is powerless to dismiss the case motu proprio.
Private respondent, on the other hand, maintains that the
dismissal of petitioner's complaint is proper because the same
can "readily be assessed as (a) real action." He asserts that
"every court of justice before whom a civil case is lodged is not
even obliged to wait for the defendant to raise that venue was
improperly laid. The court can take judicial notice and motu
proprio dismiss a suit clearly denominated as real action and
improperly filed before it. . . . the location of the subject parcel
of land is controlling pursuant to Sec. 2, par. (a), Rule 4 of the
New Rules of Court . . . 3
We grant the petition.
The motu proprio dismissal of petitioner's complaint by
respondent trial court on the ground of improper venue is plain
error, obviously attributable to its inability to distinguish
between jurisdiction and venue.
Questions or issues relating to venue of actions are basically
governed by Rule 4 of the Revised Rules of Court. It is said
that the laying of venue is procedural rather than substantive.
It relates to the jurisdiction of the court over the person rather
than the subject matter. Provisions relating to venue establish
a relation between the plaintiff and the defendant and not
between the court and the subject matter. Venue relates to trial
not to jurisdiction, touches more of the convenience of the
parties rather than the substance of the case. 4 the plaintiff Jesus Dacoycoy, now petitioner, the moment he
Jurisdiction treats of the power of the court to decide a case on
the merits; while venue deals on the locality, the place where
the suit may be had. 5
In Luna vs. Carandang, involving an action instituted before
6
the then Court of First Instance of Batangas for rescission of a
lease contract over a parcel of agricultural land located in
Calapan, Oriental Mindoro, which complaint said trial court
dismissed for lack of jurisdiction over the leased land, we
emphasized:
(1) A Court of First Instance has jurisdiction over suits
involving title to, or possession of, real estate wherever
situated in the Philippines, subject to the rules on
venue of actions (Manila Railroad Company vs.
Attorney General, etc., et al., 20 Phil. 523; Central
Azucarera de Tarlac vs. De Leon, et al., 56 Phil. 169;
Navarro vs. Aguila, et al., 66 Phil. 604; Lim Cay, et al.
vs. Del Rosario, etc., et al., 55 Phil. 692);
(2) Rule 4, Section 2, of the Rules of Court requiring
that an action involving real property shall be brought in
the Court of First Instance of the province where the
land lies is a rule on venue of actions, which may be
waived expressly or by implication.
In the instant case, even granting for a moment that the action
of petitioner is a real action, respondent trial court would still
have jurisdiction over the case, it being a regional trial court
vested with the exclusive original jurisdiction over "all civil
actions which involve the title to, or possession of, real
property, or any interest therein . . ." in accordance with
Section 19 (2) of Batas Pambansa Blg. 129. With respect to
the parties, there is no dispute that it acquired jurisdiction over
filed his complaint for annulment and damages. Respondent
trial court could have acquired jurisdiction over the defendant,
now private respondent, either by his voluntary appearance in
court and his submission to its authority, or by the coercive
power of legal process exercised over his person. 7
Although petitioner contends that on April 28, 1963, he
requested the City Sheriff of Olongapo City or his deputy to
serve the summons on defendant Rufino de Guzman at his
residence at 117 Irving St., Tapinac, Olongapo City, it does not
8
appear that said service had been properly effected or that
private respondent had appeared voluntarily in court or filed9
his answer to the complaint. At this stage, respondent trial
10
court should have required petitioner to exhaust the various
alternative modes of service of summons under Rule 14 of the
Rules of Court, i.e., personal service under Section 7,
substituted service under Section 8, or service by publication
under Section 16 when the address of the defendant is
unknown and cannot be ascertained by diligent inquiry.
Dismissing the complaint on the ground of improper venue is
certainly not the appropriate course of action at this stage of
the proceeding, particularly as venue, in inferior courts as well
as in the courts of first instance (now RTC), may be waived
expressly or impliedly. Where defendant fails to challenge
timely the venue in a motion to dismiss as provided by Section
4 of Rule 4 of the Rules of Court, and allows the trial to be held
and a decision to be rendered, he cannot on appeal or in a
special action be permitted to challenge belatedly the wrong
venue, which is deemed waived. 11
Thus, unless and until the defendant objects to the venue in a
motion to dismiss, the venue cannot be truly said to have been
improperly laid, as for all practical intents and purposes, the
venue, though technically wrong, may be acceptable to the
parties for whose convenience the rules on venue had been
devised. The trial court cannot pre-empt the defendant's
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 106847. March 5, 1993.
prerogative to object to the improper laying of the venue
by motu proprio dismissing the case.
Indeed, it was grossly erroneous for the trial court to have
taken a procedural short-cut by dismissing motu proprio the
complaint on the ground of improper venue without first
allowing the procedure outlined in the Rules of Court to take its
proper course. Although we are for the speedy and expeditious
resolution of cases, justice and fairness take primary
importance. The ends of justice require that respondent trial
court faithfully adhere to the rules of procedure to afford not
only the defendant, but the plaintiff as well, the right to be
heard on his cause.
WHEREFORE, in view of the foregoing, the decision of the
Intermediate Appellate Court, now Court of Appeals, dated
April 11, 1986, is hereby nullified and set aside. The complaint
filed by petitioner before the Regional Trial Court of Antipolo,
Branch LXXI is revived and reinstated. Respondent court is
enjoined to proceed therein in accordance with law.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.
PATRICIO P. DIAZ, petitioner, vs. JUDGE SANTOS B.
ADIONG, RTC, Br. 8, Marawi City, SULTAN MACORRO L.
MACUMBAL, SULTAN LINOG M. INDOL, MACABANGKIT
LANTO and MOHAMADALI ABEDIN, respondents.
Rex J.M.A. Fernandez for petitioner.
Mangurun B. Batuampar for respondents.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; VENUE OF LIBEL CASE
WHERE OFFENDED PARTY IS AN PUBLIC OFFICIAL.
From the provision of Article 360, third paragraph of the
Revised Penal Code as amended by R.A. 4363, it is clear that
an offended party who is at the same time a public official can
only institute an action arising from libel in two (2) venues: the
place where he holds office, and the place where the alleged
libelous articles were printed and first published.
2. ID.; ID.; IMPROPER VENUE; MUST BE RAISED IN A
NOTION TO DISMISS PRIOR TO A RESPONSIVE
PLEADING. Unless and until the defendant objects to the
venue in a motion to dismiss prior to a responsive pleading,
the venue cannot truly be said to have been improperly laid
since, for all practical intents and purposes, the venue though
technically wrong may yet be considered acceptable to the
parties for whose convenience the rules on venue had been
devised.
3. ID.; ID.; ID.; WAIVED IN CASE AT BAR BY FILING
ANSWER. Petitioner Diaz then, as defendant in the court
below, should have timely challenged the venue laid in Marawi
City in a motion to dismiss, pursuant to Sec. 4, Rule 4, of the
Rules of Court. Unfortunately, petitioner had already submitted
himself to the jurisdiction of the trial court when he filed his
Answer to the Complaint with Counterclaim. His motion to
dismiss was therefore belatedly filed and could no longer
deprive the trial court of jurisdiction to hear and decide the
instant civil action for damages. Well-settled is the rule that
improper venue may be waived and such waiver may occur by
laches. Sec. 1 of Rule 16 provides that objections to improper
venue must be made in a motion to dismiss before any
responsive pleading is filed. Responsive pleadings are those
which seek affirmative relief and set up defenses.
Consequently, having already submitted his person to the
jurisdiction of the trial court, petitioner may no longer object to
the venue which, although mandatory in the instant case, is
nevertheless waivable. As such, improper venue must be
seasonably raised, otherwise, it may be deemed waived.
4. ID.; ID.; ID.; RELATES TO TRIAL AND NOT TO
JURISDICTION. Indeed, the laying of venue is procedural
rather than substantive, relating as it does to jurisdiction of the
court over the person rather than the subject matter. Venue
relates to trial and not to jurisdiction.
DECISION
BELLOSILLO, J p:
VENUE in the instant civil action for damages arising from libel
was improperly laid; nonetheless, the trial court refused to
dismiss the complaint. Hence, this Petition for Certiorari, with
prayer for the issuance of a temporary restraining order,
assailing that order of denial 1 as well as the order denying
reconsideration. 2
The facts: On 16 July 1991, the Mindanao Kris, a newspaper
of general circulation in Cotabato City, published in its front
page the news article captioned "6-Point Complaint Filed vs.
Macumbal," and in its Publisher's Notes the editorial, "Toll of
Corruption," which exposed alleged anomalies by key officials
in the Regional Office of the Department of Environment and
Natural Resources. 3
On 22 July 1991, the public officers alluded to, namely, private
respondents Sultan Macorro L. Macumbal, Sultan Linog M.
Indol, Atty. Macabangkit M. Lanto and Atty. Mohamadali
Abedin, instituted separate criminal and civil complaints arising
from the libel before the City Prosecutor's Office and the
Regional Trial Court in Marawi City. The publisher-editor of the
Mindanao Kris, petitioner Patricio P. Diaz, and Mamala B.
Pagandaman, who executed a sworn statement attesting to
the alleged corruption, were named respondents in both
complaints. 4
On 2 September 1991, the City Prosecutor's Office dismissed
the criminal case thus 5
"WHEREFORE . . . this investigation in the light of Agbayani
vs. Sayo case finds that it has no jurisdiction to handle this
case and that the same be filed or instituted in Cotabato City
where complainant is officially holding office at the time
respondents caused the publication of the complained news
item in the Mindanao Kris in Cotabato City, for which reason it
is recommended that this charge be dropped for lack of
jurisdiction."
In the interim, the civil complaint for damages, docketed as
Civil Case No. 385-91 and raffled to Branch 10 of the Regional
Trial Court in Marawi City, was set for Pre-Trial Conference.
The defendants therein had already filed their respective
Answers with Counterclaim.
On 18 November 1991, petitioner Diaz moved for the
dismissal of the action for damages on the ground that the trial
court did not have jurisdiction over the subject matter. He
vehemently argued that the complaint should have been filed
in Cotabato City and not in Marawi City. 6
Pending action on the motion, the presiding judge of Branch
10 inhibited himself from the case which was thereafter
reraffled to the sala of respondent judge.
On 15 June 1991, respondent judge denied petitioner's Motion
to Dismiss for lack of merit. Diaz thereafter moved for
reconsideration of the order of denial. The motion was also
denied in the Order of 27 August 1991, prompting petitioner to
seek relief therefrom.
Petitioner Diaz contends that the civil action for damages
could not be rightfully filed in Marawi City as none of the
private respondents, who are all public officers, held office in
Marawi City; neither were the alleged libelous news items
published in that city. Consequently, it is petitioner's view that
the Regional Trial Court in Marawi City has no jurisdiction to
entertain the civil action for damages.
The petitioner is correct. Not one of the respondents then held
office in Marawi City: respondent Macumbal was the Regional
Director for Region XII of the DENR and held office in
Cotabato City; respondent Indol was the Provincial
Environment and Natural Resources Officer of Lanao del
Norte and held office in that province; respondent Lanto was a
consultant of the Secretary of the DENR and, as averred in the
complaint, was temporarily residing in Quezon City; and,
respondent Abedin was the Chief of the Legal Division of the
DENR Regional Office in Cotabato City. 7 Indeed, private
respondents do not deny that their main place of work was not
in Marawi City, although they had sub-offices therein.
Apparently, the claim of private respondents that they
maintained sub-offices in Marawi City is a mere afterthought,
considering that it was made following the dismissal of their
criminal complaint by the City Prosecutor of Marawi City.
Significantly, in their complaint in civil Case No. 385-91
respondents simply alleged that they were residents of Marawi
City, except for respondent Lanto who was then temporarily
residing in Quezon City, and that they were public officers,
nothing more. This averment is not enough to vest jurisdiction
upon the Regional Trial Court of Marawi City and may be
properly assailed in a motion to dismiss.
The Comment of private respondents that Lanto was at the
time of the commission of the offense actually holding office in
Marawi City as consultant of LASURECO can neither be given
credence because this is inconsistent with their allegation in
their complaint that respondent Lanto, as consultant of the
Secretary of the DENR, was temporarily residing in Quezon
City.
Moreover, it is admitted that the libelous articles were
published and printed in Cotabato City. Thus, respondents
were limited in their choice of venue for their action for
damages only to Cotabato City where Macumbal, Lanto and
Abedin had their office and Lanao del Norte where Indol
worked. Marawi City is not among those where venue can be
laid.
The third paragraph of Art. 360 of the Revised Penal Code, as
amended by R.A. No. 4363, specifically requires that
"The criminal and civil action for damages in cases of written
defamations as provided for in this chapter, shall be filed
simultaneously or separately with the Court of First Instance
(now Regional Trial Court) of the province or city where the
libelous article is printed and first published or where any of
the offended parties actually resides at the time of the
commission of the offense: Provided, however, that where one
of the offended parties is a public officer . . . (who) does not
hold office in the City of Manila, the action shall be filed in the
Court of First Instance (Regional Trial Court) of the province or
city where he held office at the time of the commission of the
offense or where the libelous article is printed and first
published and in case one of the the offended parties is a
private individual, the action shall be filed in the Court of First
Instance of the province or city where he actually resides at
the time of the commission of the offense or where the libelous
matter is printed and first published . . . . " (emphasis supplied)
From the foregoing provision, it is clear that an offended party
who is at the same time a public official can only institute an
action arising from libel in two (2) venues: the place where he
holds office, and the place where the alleged libelous articles
were printed and first published.
Private respondents thus appear to have misread the
provisions of Art. 360 of the Revised Penal Code, as
amended, when they filed their criminal and civil complaints in
Marawi City. They deemed as sufficient to vest jurisdiction
upon the Regional Trial Court of Marawi City the allegation that
"plaintiffs are all of legal age, all married, Government officials
by occupation and residents of Marawi City." 8 But they are
wrong.
Consequently, it is indubitable that venue was improperly laid.
However, unless and until the defendant objects to the venue
in a motion to dismiss prior to a responsive pleading, the
venue cannot truly be said to have been improperly laid since,
for all practical intents and purposes, the venue though
technically wrong may yet be considered acceptable to the
parties for whose convenience the rules on venue had been
devised. 9
Petitioner Diaz then, as defendant in the court below, should
have timely challenged the venue laid in Marawi City in a
motion to dismiss, pursuant to Sec. 4, Rule 4, of the Rules of
Court. Unfortunately, petitioner had already submitted himself
to the jurisdiction of the trial court when he filed his Answer to
the Complaint with Counterclaim. 10
His motion to dismiss was therefore belatedly filed and could
no longer deprive the trial court of jurisdiction to hear and
decide the instant civil action for damages. Well-settled is the
rule that improper venue may be waived and such waiver may
occur by laches. 11
Petitioner was obviously aware of this rule when he anchored
his motion to dismiss on lack of cause of action over the
subject matter, relying on this Court's ruling in Time, Inc. v.
Reyes. 12 Therein, We declared that the Court of First
Instance of Rizal was without jurisdiction to take cognizance of
Civil Case No. 10403 because the complainants held office in
Manila, not in Rizal, while the alleged libelous articles were
published abroad.
It may be noted that in Time, Inc. v. Reyes, the defendant
therein moved to dismiss the case without first submitting to
the jurisdiction of the lower court, which is not the case before
Us. More, venue in an action arising from libel is only
mandatory if it is not waived by defendant. Thus
"The rule is that where a statute creates a right and provides a
remedy for its enforcement, the remedy is exclusive; and
where it confers jurisdiction upon a particular court, that
jurisdiction is likewise exclusive, unless otherwise provided.
Hence, the venue provisions of Republic Act No. 4363 should
be deemed mandatory for the party bringing the action, unless
the question of venue should be waived by the defendant . . . .
" 13
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
Withal, objections to venue in civil actions arising from libel
may be waived; it does not, after all, involve a question of
jurisdiction. Indeed, the laying of venue is procedural rather
than substantive, relating as it does to jurisdiction of the court
over the person rather than the subject matter. 14 Venue
relates to trial and not to jurisdiction.
Finally, Sec. 1 of Rule 16 provides that objections to improper
venue must be made in a motion to dismiss before any
responsive pleading is filed. Responsive pleadings are those
which seek affirmative relief and set up defenses.
Consequently, having already submitted his person to the
jurisdiction of the trial court, petitioner may no longer object to
the venue which, although mandatory in the instant case, is
nevertheless waivable. As such, improper venue must be
seasonably raised, otherwise, it may be deemed waived.
WHEREFORE, for lack of merit, the Petition for Certiorari is
DISMISSED and the Temporary Restraining Order heretofore
issued is LIFTED.
This case is remanded to the court of origin for further
proceedings.
SO ORDERED.
Cruz, Grio-Aquino and Quiason, JJ ., concur.
G.R. No. 106920 December 10, 1993
PHILIPPINE BANKING CORPORATION, petitioner,
vs.
HON. SALVADOR S. TENSUAN, Judge of Regional Trial
Court of Makati, National Capital Judicial Region, Branch
146; CIRCLE FINANCIAL CORPORATION, AVELINO E.
DEATO, JR., MIGUEL F. VIOLAGO, BENJAMIN F.
SANTIAGO, SOCORRO R. GOMEZ, NERISSA T. GLORIA,
FILEMON C. MARQUEZ, DOMINGO SANTIAGO AND
HILARIO P. LOPEZ, respondents.
Tomargo, Luzano & Associates for petitioner.
Edgardo V. Cruz for private respondents.
FELICIANO, J.:
In this Petition for Review on Certiorari, petitioner asks us to
review and set aside the Order of Judge Salvador A. Tensuan
dated 3 August 1992, dismissing petitioner's complaint in Civil
Case No. 91-2220 entitled "Philippine Banking Corporation vs.
Circle Financial Corporation, et al."
Petitioner Philippine Banking Corporation (hereafter "Bank") is
a commercial banking corporation with principal office at
Makati, Metro Manila. Petitioner Bank instituted a complaint for
collection of a sum of money, with a prayer for preliminary
attachment, at the Regional Trial Court of Makati. It appears
from the allegations of the Bank's complaint that respondent
Circle Financial Co. (hereafter "Circle"), sometime in 1983 and
1984, through its representatives, obtained several loans
aggregating P1,000,000.00 from petitioner. Respondent Circle,
for value received, delivered to petitioner Bank four (4)
promissory notes, each of which contained the stipulation that:
I/We hereby expressly submit to the jurisdiction
of the courts of Valenzuela any legal action
which may arise out of this promissory note.
As security for the re-payment by respondent Circle of the
sums loaned by petitioner Bank, eight (8) individuals, who
were impleaded as defendants in the complaint namely,
Avelino Deato, Miguel Violago, Benjamin Santiago, Socorro
Gomez, Nerissa Gloria, Filemon Marquez, Domingo Santiago
and Hilario Lopez executed a Continuing Surety Agreement
and undertook to
pay jointly and severally respondent Circle's obligations. Only
five (5) out of eight (8) individual obligors are respondents in
present case, namely: Domingo Santiago, Hilario Lopez,
Avelino Deato, Benjamin P. Santiago and Socorro Gomez.
On their due dates, Circle failed to pay its obligations under
the promissory notes. Thereupon, petitioner Bank demanded
payment from the eight (8) individual sureties conformably with
their promises contained in the Continuing Surety Agreement;
the individual obligors, however, also failed to pay.
Petitioner moved for issuance of a writ of preliminary
attachment, alleging that respondent Circle had become
insolvent and had been placed under receivership by the
Central Bank. The trial judge granted the motion and issued a
writ of preliminary attachment. The sheriff's return indicated,
however, that no properties belonging to the respondent Circle
and the individual obligors could be found. Per sheriff's return, in a document "in case of any litigation
summons was served upon Domingo Santiago, 1 Hilario P. herefrom or in connection herewith" upon a
Lopez, 2 Avelino Deato, 3 Benjamin P. Santiago, 4 and Socorro rationale that had the parties intended to
Gomez. 5 The sheriff failed to serve summons on (a) Miguel Violago, reserve the right to choose venue under
who had died; (b) Nerissa T. Gloria 6 and Filemon Marquez, 7 whose Section 2 (b), Rule 4 of the Rules of Court, such
whereabouts were unknown; and (c) Circle, which had ceased to reservation should have been reflected in the
engage in business at the address given by petitioner and could not
document as against the rationale in Polytrade
be located.
Corporation vs. Blanco (30 SCRA 187) which
should allow choice of venue where an
A motion to dismiss was filed by the respondents (Circle and
actionable document does not set forth
the five [5] individual sureties served with summons) and
qualifying or restrictive words in point, and
averred that the venue of the action was improperly laid since
an agreement had fixed the venue of actions arising from the
In order to more clearly define the parameters
promissory notes in Valenzuela, Metro Manila, only.
of the rule on proper venue vis-a-vis a clear
Respondents called the trial court's attention to the stipulation
perception that a stipulation to "expressly
contained in the promissory note, quoted in limine.
submit to the jurisdiction of the Courts of
Valenzuela, Metro Manila" amount to
Acting upon respondent's motion, respondent Judge Tensuan
unequivocal agreement to sue and be sued in
issued the challenged Order which read as follows:
Valenzuela, Metro Manila.
Acting on defendant's motion to dismiss on
WHEREFORE, premises considered and
grounds of improper venue in relation with
finding the motion to be meritorious, same is
actionable promissory notes which stipulate that
hereby granted and the above-entitled case is
the parties "expressly submit to the jurisdiction
accordingly dismissed. Without pronouncement
of the Courts of Valenzuela, Metro Manila any
as to costs.
legal action which may arise", and,

SO ORDERED. 8
Finding said motion to be impressed with merit
consistent with
Petitioner moved for reconsideration of the above Order of the
Sec. 13, Rule 14 of the Rules of Court as well
trial court, without success.
as in line with the doctrinal rule in Bautista vs.
Hon. Juan de Borja, et al. (18 SCRA 474) that
Hence, this Petition.
the proper venue for an action is that stipulated
We consider that the Petition is meritorious.
It is settled in this jurisdiction that the parties, by written
agreement, may change or transfer the venue of an action
from one province to another. 9 We have many times sustained
the validity and enforceability of contractual stipulations concerning
venue, it is, of course, the tenor of their agreement which is of critical
relevance. The relevant task, in other words, is determining the intent
of the parties as manifested in the words employed by them and,
where such words are less than clear, in other recognized indicators
of the will of the contracting parties.
Petitioner Bank contends that the stipulation contained in the
promissory notes is merely an agreement to add the courts of
Valenzuela to the tribunals to which the parties may resort.
Petitioner thus insists that the venue stipulation set out in the
notes did not restrict or limit the permissible venue of actions
arising out of those notes to the courts of Valenzuela, to the
exclusion of all the other courts recourse to any one of which
is authorized or permitted under the Rules of Court. Thus,
venue was properly laid by petitioner Bank in the place where
its principal offices are located: i.e., Makati, Metropolitan
Manila.
A careful reading of the terms of the stipulation "I/We
hereby expressly submit to the jurisdiction of the courts of
Valenzuela any legal action which may arise out of this
promissory note" shows that the stipulation does not
require the laying of venue in Valenzuela exclusively or
mandatorily. The plain or ordinary import of the stipulation is
the authorizing of, or permission to bring, suit in Valenzuela;
there is not the slightest indication of an intent to bar suit in
other competent courts.
Permissive stipulations like the one here considered have
invariably received judicial approval and we have declared that
either of the parties is authorized to lay venue of an action in
the court named in the stipulation. The stipulation her
does not purport to deprive either party of it right to elect, or
option to have resort to, another competent court as expressly
permitted by Section 2(b) of Rule 4 of the Rules of Court,
should such party choose to initiate a suit. The stipulation here
merely operated to confer or confirm a right upon a party to
elect recourse to the courts of Valenzuela or, alternatively, to
go before any of the tribunals envisaged by the rules on
venue, i.e., the courts of Makati, Quezon City and Bulacan. 10

In principle, the stipulation on venue here involved must be

Private respondents, in opposition, aver that the words used in
distinguished from stipulations which purport
the stipulation here involved are clear and unambiguous. A
to require or compel the parties to lay venue of an action in a
promise to submit to the jurisdiction of a specific court, without
specified place, and in that particular place only. The latter
an express reservation of the right to resort to one or more of
type of venue stipulation must clearly indicate, through
the tribunals otherwise accessible under the Rules of Court, is
qualifying and restrictive words, that the parties deliberately
an agreement definitely fixing the permissible venue in only
intended to exclude causes or actions from the operation of
one place, i.e., Valenzuela, to the exclusion of other competent
the ordinary permissive rules on venue, 11 and that they intended
courts.
contractually to designate a specific venue to the exclusion of any
other court also competent and accessible to the parties under the The parties agree to sue and be sued in the
ordinary rules on the venue of actions. Stipulations of this courts of Manila
exclusionary nature may, under certain circumstances, be
characterized as unreasonable or as contrary to public policy 12 and, The Court, in upholding that stipulation and ruling that venue
accordingly, not judicially enforceable.
had been properly laid in the then Court of First Instance of
Bulacan (the place of defendant's residence), speaking
In practice, the task, as noted earlier, of this Court when
through Mr. Justice Sanchez, said:
confronted with issues of this kind is always basically that of
contract interpretation. In the case at bar, neither qualifying nor
. . . An accurate reading, however, of the
restrictive words (e.g., "must," "only" or "exclusively") were
stipulation, "The parties agree to sue and be
employed which could yield an intent on the part of the parties
sued in the Courts of Manila," does not
mandatorily to restrict the venue of actions arising out of the
preclude the filing of suits in the residence of
promissory notes to the courts of Valenzuela only. Private
plaintiff or defendant. The plain meaning is that
respondents suggest that the use of words "any legal action"
the parties merely consented to be sued in
expressed a supposed agreement to bar actions before any
Manila. Qualifying or restrictive words which
court other than a Valenzuela court. We do not agree, for we
would indicate that Manila and Manila alone is
see no necessary or customary connection between the words
the venue are totally absent therefrom. We
"any legal action" and an intent strictly to limit permissible
cannot read into that clause that plaintiff and
venue to the Valenzuela courts. Intent so to establish an
defendant bound themselves to file suits with
inflexible restriction of otherwise permissible venue to one
respect to the last two transactions in question
single place is not lightly to be presumed or inferred from
only or exclusively in Manila. For, that
stipulations which, like that here before us, include no
agreement did not change or transfer venue. It
qualifying or exclusionary terms. Express reservation of the
simply is permissive. The parties solely agreed
right to elect venue under the ordinary rules was, accordingly,
to add the courts of Manila as tribunals to which
unnecessary in the case at bar.
they may resort. They did not waive their right
to pursue remedy in the courts specifically
Such is the thrust of the great bulk of the caselaw of this Court
mentioned in Section 2 (b) of Rule
where this issue was directly raised and discussed.
4. Renuntiatio non praesumitir. 14 (Emphasis
supplied)
In Polytrade Corporation v. Blanco, 13 the stipulation on venue
there involved read:
In Nicolas v. Reparations Commission, 15 the stipulation on venue
provided that:
All legal actions arising out of this contract . . . may be brought
in and submitted to the jurisdiction of the proper courts in the
City of Manila. 16
This Court read the above stipulation as merely permissive,
relying upon and reinforcing Polytrade:
. . . the venue in personal actions is fixed for the
convenience of the plaintiff and his witnesses
and to promote the ends of justice. We cannot
conceive how the interests of justice may be
served by confining the situs of the action to
Manila, considering that the residences or
offices of all the parties, including the situs of
the acts sought to be restrained or required to
be done, are all within the territorial jurisdiction
of Rizal.
While the parties have agreed to submit their
dispute to the jurisdiction of the Manila
courts, there is nothing in the language
used . . . which clearly shows that the intention
of the parties was to limit the venue of the
action to the City of Manila only. Such
agreements should be construed reasonably
and should not be applied in such a manner
that it would work more to the inconvenience of
the parties without promoting the ends of
justice. 17 (Emphasis supplied)
In Lamis Enterprises v. Lagamon, 18 the promissory note sued on
had the following stipulation:
In case of litigation, jurisdiction shall be vested
in the courts of Davao City. 19
The collection suit was instituted in the then Court of First
Instance of Tagum, Davao. The Supreme Court rejected the
defense of improper venue and held:
. . . it is alleged that the proper venue for Civil
Case No. 1395 should be Davao City where the
plaintiff resides and as stipulated in the
promissory note dated February 26, 1979 and
in the chattel mortgage dated February 27,
1979. However, the respondent judge found
that Maningo has not only legal residence but
also physical and actual residence in Busaon,
Tagum, Davao and we are not inclined to
disturb this finding. Anent the claim that Davao
City had been stipulated as the venue, suffice it
to say that a stipulation as to venue does not
preclude the filing of suits in the residence of
plaintiff or defendant under Section 2(b), Rule
4, Rules of Court, in the absence of qualifying
or restrictive words in the agreement which
would indicate that the place named is the only
venue agreed upon by the parties. The
stipulation did not deprive Maningo of his right
to pursue remedy in the court specifically
mentioned in Section 2(b) of Rule 4, Rules of
Courts, Renuntiatio non
praesumitir. . . . 20 (Emphasis supplied)
In Western Minolco v. Court of Appeals, 21 the clause on venue
read:
The parties stipulate that the venue of the
actions referred to in Section 12.01 [Article XII
of the Agreement] shall be in the City of Manila.
reconcile with the line of cases beginning with Polytrade discussed
above. It is useful therefore to make clear that to the
extent Bautista and Hoechst Philippines are inconsistent
with Polytrade (an en banc decision later in time than Bautista) and
subsequent cases reiterating Polytrade, Bautista and Hoechst
Philippines have been rendered obsolete by the Polytrade line of
cases.

The initial action was commenced in the Court of First

We note, finally, that no one of the private respondents has
Instance of Baguio and Benguet. This Court took the occasion
claimed to have been put to undue hardship or inconvenience
to reiterate once more the Polytrade doctrine:
as a result of the institution of the action in Makati. Venue
relates to the trial and touches more upon the convenience of
. . . In any event, it is not entirely amiss to
the parties rather than upon the substance or merits of the
restate the doctrine that stipulations in a
case. 25
contract, which specify a definite place for the
institution of an action arising in connection
WHEREFORE, the Petition for Review on Certiorari is hereby
therewith, do not, as a rule, supersede the
GRANTED DUE COURSE and the Orders dated 3 August
general rules on the matter set out in Rule 4 of
1992 and 28 August 1992 of public respondent Judge
the Rules of Court, but should be construed
Salvador S. Tensuan are hereby REVERSED and SET ASIDE.
merely as an agreement on an additional
The case is hereby REMANDED to the court of origin for
forum, not as limiting venue to the specified
resolution on the merits, with all deliberate dispatch. No
place. 22 (Emphasis supplied)
pronouncements as to costs.
It is not necessary top pretend that the decisions of the
SO ORDERED.
Supreme Court have been absolutely consistent in this regard.
There have been a few decisions notably Bautista v. de
Bidin, Romero, Melo and Vitug, JJ., concur.
Borja 23 and Hoechst Philippines v. Torres 24 which are not easy to

EN BANC UNIMASTERS CONGLOMERATION,

INC., petitioner, vs. COURT OF
[G.R. No. 119657. February 7, 1997]
APPEALS and KUBOTA AGRI-
 MACHINERY PHILIPPINES,
INC., respondents.
DECISION
NARVASA, C.J.:
The appellate proceeding at bar turns upon the
interpretation of a stipulation in a contract governing
venue of actions thereunder arising.
On October 28, 1988 Kubota Agri-Machinery
Philippines, Inc. (hereafter, simply KUBOTA) and
Unimasters Conglomeration, Inc. (hereafter, simply
UNIMASTERS) entered into a "Dealership Agreement for
Sales and Services" of the former's products in Samar
and Leyte Provinces. The contract contained, among
[1]
others:
1) a stipulation reading: "** All suits arising out of this
Agreement shall be filed with / in the proper Courts of
Quezon City," and
2) a provision binding UNIMASTERS to obtain (as it
did in fact obtain) a credit line with Metropolitan Bank
and Trust Co.-Tacloban Branch in the amount
of P2,000,000.00 to answer for its obligations to
KUBOTA.
Some five years later, or more precisely on
December 24, 1993, UNIMASTERS filed an action in the
Regional Trial Court of Tacloban City against KUBOTA, a
certain Reynaldo Go, and Metropolitan Bank and Trust
Company-Tacloban Branch (hereafter, simply
METROBANK) for damages for breach of contract, and
injunction with prayer for temporary restraining order. The
action was docketed as Civil Case No. 93-12-241 and
assigned to Branch 6.
On the same day the Trial Court issued a restraining
order enjoining METROBANK from "authorizing or
effecting payment of any alleged obligation of **
(UNIMASTERS) to defendant ** KUBOTA arising out of
or in connection with purchases made by defendant Go
against the credit line caused to be established by **
(UNIMASTERS) for and in the amount of P2 million
covered by defendant METROBANK ** or by way of
charging ** (UNIMASTERS) for any amount paid and
released to defendant ** (KUBOTA) by the Head Office of
METROBANK in Makati, Metro-Manila **." The Court
also set the application for preliminary injunction for
hearing on January 10, 1994 at 8:30 o'clock in the
morning.
On January 4, 1994 KUBOTA filed two motions. One
prayed for dismissal of the case on the ground of
improper venue (said motion being set for hearing on
January 11, 1994). The other prayed for the transfer of
the injunction hearing to January 11, 1994 because its
counsel was not available on January 10 due to a prior
commitment before another court.
KUBOTA claims that notwithstanding that its motion
to transfer hearing had been granted, the Trial Court went
ahead with the hearing on the injunction incident on
January 10, 1994 during which it received the direct
testimony of UNIMASTERS' general manager, Wilford
Chan; that KUBOTA's counsel was "shocked" when he
learned of this on the morning of the 11th, but was
nonetheless instructed to proceed to cross-examine the
witness; that when said counsel remonstrated that this
was unfair, the Court reset the hearing to the afternoon of
that same day, at which time Wilford Chan was recalled
to the stand to repeat his direct testimony. It appears that
cross-examination of Chan was then undertaken by
KUBOTA's lawyer with the "express reservation that **
(KUBOTA was) not (thereby) waiving and/or abandoning
its motion to dismiss;" and that in the course of the cross-
examination, exhibits (numbered from 1 to 20) were
presented by said attorney who afterwards submitted a
memorandum in lieu of testimonial evidence. [2]
On January 13, 1994, the Trial Court handed down
an Order authorizing the issuance of the preliminary
injunction prayed for, upon a bond of P2,000,000.00.
And on February 3, 1994, the same Court promulgated
[3]
an Order denying KUBOTA's motion to dismiss. Said the
Court:
"The plaintiff UNIMASTERS Conglomeration
is holding its principal place of business in the
City of Tacloban while the defendant **
(KUBOTA) is holding its principal place of
business in Quezon City. The proper venue
therefore pursuant to Rules of Court would
either be Quezon City or Tacloban City at the
election of the plaintiff. Quezon City and Manila
(sic), as agreed upon by the parties in the
Dealership Agreement, are additional places
other than the place stated in the Rules of
Court. The filing, therefore, of this complaint in
the Regional Trial Court in Tacloban City is
proper."
Both orders were challenged as having been issued
with grave abuse of discretion by KUBOTA in a special
civil action of certiorari and prohibition filed with the Court
of Appeals, docketed as CA-G.R. SP No. 33234. It
contended, more particularly, that (1) the RTC had "no
jurisdiction to take cognizance of ** (UNIMASTERS')
action considering that venue was improperly laid," (2)
UNIMASTERS had in truth "failed to prove that it is
entitled to the ** writ of preliminary injunction;" and (3) the
RTC gravely erred "in denying the motion to dismiss."
The Appellate Court agreed with KUBOTA that -- in
line with the Rules of Court and this Court's relevant
[5]
rulings -- the stipulation respecting venue in its
[6]
Dealership Agreement with UNIMASTERS did in truth
limit the venue of all suits arising thereunder only and
exclusively to "the proper courts of Quezon City." The [7]
Court also held that the participation of KUBOTA's
counsel at the hearing on the injunction incident did not in
the premises operate as a waiver or abandonment of its
objection to venue; that assuming that KUBOTA's
standard printed invoices provided that the venue of
actions thereunder should be laid at the Court of the City
of Manila, this was inconsequential since such provision
would govern "suits or legal actions between petitioner
and its buyers" but not actions under the Dealership
Agreement between KUBOTA and UNIMASTERS, the
venue of which was controlled by paragraph No. 7
thereof; and that no impediment precludes issuance of a
TRO or injunctive writ by the Quezon City RTC against
METROBANK-Tacloban since the same "may be served
on the principal office of METROBANK in Makati and
would be binding on and enforceable against,
METROBANK branch in Tacloban."
After its motion for reconsideration of that decision
was turned down by the Court of Appeals, UNIMASTERS
appealed to this Court. Here, it ascribes to the Court of
[4]
Appeals several errors which it believes warrant reversal
of the verdict, namely:
[8]
1) "in concluding, contrary to decisions of this ** Court,
that the agreement on venue between petitioner
(UNIMASTERS) and private respondent (KUBOTA)
limited to the proper courts of Quezon City the venue of
any complaint filed arising from the dealership
agreement between ** (them);"
2) "in ignoring the rule settled in Philippine Banking
Corporation vs. Tensuan, that 'in the absence of
[9]
qualifying or restrictive words, venue stipulations in a
contract should be considered merely as agreement on
additional forum, not as limiting venue to the specified
place;" and in concluding, contrariwise, that the
agreement in the case at bar "was the same as the
agreement on venue in the Gesmundo case," and
therefore, the Gesmundo case was controlling; and
3) "in concluding, based solely on the self-serving
narration of ** (KUBOTA that its) participation in the
hearing for the issuance of a ** preliminary injunction
did not constitute waiver of its objection to venue."
 The issue last mentioned, of whether or not the
participation by the lawyer of KUBOTA at the injunction
hearing operated as a waiver of its objection to venue,
need not occupy the Court too long. The record shows
that when KUBOTA's counsel appeared before the Trial
Court in the morning of January 11, 1994 and was then
informed that he should cross-examine UNIMASTERS'
witness, who had testified the day before, said counsel
drew attention to the motion to dismiss on the ground of
improper venue and insistently attempted to argue the
matter and have it ruled upon at the time; and when the
Court made known its intention (a) "to (resolve first the)
issue (of) the injunction then rule on the motion to
dismiss," and (b) consequently its desire to forthwith
conclude the examination of the witness on the injunction
incident, and for that purpose reset the hearing in the
afternoon of that day, the 11th, so that the matter might
be resolved before the lapse of the temporary restraining
order on the 13th, KUBOTA's lawyer told the Court: "Your
Honor, we are not waiving our right to submit the Motion
to Dismiss." It is plain that under these circumstances,
[10]
no waiver or abandonment can be imputed to KUBOTA.
The essential question really is that posed in the first
and second assigned errors, i.e., what construction
should be placed on the stipulation in the Dealership
Agreement that "(a)ll suits arising out of this Agreement
shall be filed with/in the proper Courts of Quezon City."
Rule 4 of the Rules of Court sets forth the principles
generally governing the venue of actions, whether real or
personal, or involving persons who neither reside nor are
found in the Philippines or otherwise. Agreements on
venue are explicitly allowed. "By written agreement of the
parties the venue of an action may be changed or
transferred from one province to another." Parties may
[11]
by stipulation waive the legal venue and such waiver is
valid and effective being merely a personal privilege,
which is not contrary to public policy or prejudicial to third
persons. It is a general principle that a person may
renounce any right which the law gives unless such
renunciation would be against public policy. [12]
Written stipulations as to venue may be restrictive in
the sense that the suit may be filed only in the place
agreed upon, or merely permissive in that the parties
may file their suit not only in the place agreed upon but
also in the places fixed by law (Rule 4, specifically). As in
any other agreement, what is essential is the
ascertainment of the intention of the parties respecting
the matter.
Since convenience is the raison d'etre of the rules of
venue, it is easy to accept the proposition that normally,
[13]
venue stipulations should be deemed permissive merely,
and that interpretation should be adopted which most
serves the parties' convenience. In other words,
stipulations designating venues other than those
assigned by Rule 4 should be interpreted as designed to
make it more convenient for the parties to institute
actions arising from or in relation to their agreements;
that is to say, as simply adding to or expanding the
venues indicated in said Rule 4.
On the other hand, because restrictive stipulations
are in derogation of this general policy, the language of
the parties must be so clear and categorical as to leave
no doubt of their intention to limit the place or places, or
to fix places other than those indicated in Rule 4, for their
actions. This is easier said than done, however, as an
examination of precedents involving venue covenants will
immediately disclose.
In at least thirteen (13) cases, this Court construed
the venue stipulations involved as merely
permissive. These are:
1. Polytrade Corporation v. Blanco, decided in 1969.
In this case, the venue stipulation was as follows:
[14]
"The parties agree to sue and be sued in the Courts of
Manila."
This Court ruled that such a provision "does not
preclude the filing of suits in the residence of the
plaintiff or the defendant. The plain meaning is that the
parties merely consented to be sued in
Manila.Qualifying or restrictive words which would
indicate that Manila and Manila alone is the venue are
totally absent therefrom. It simply is permissive. The
parties solely agreed to add the courts of Manila as
tribunals to which they may resort. They did not waive
their right to pursue remedy in the courts specifically
mentioned in Section 2(b) of Rule 4."
The Polytrade doctrine was reiterated expressly or
implicitly in subsequent cases, numbering at least ten
(10).
2. Nicolas v. Reparations Commission, decided in 1975.
In this case, the stipulation on venue read:
[15]
"** (A)ll legal actions arising out of this contract **
may be brought in and submitted to the jurisdiction of
the proper courts in the City of Manila."
This Court declared that the stipulation does not clearly
show the intention of the parties to limit the venue of
the action to the City of Manila only. "It must be noted
that the venue in personal actions is fixed for the
convenience of the plaintiff and his witnesses and to
promote the ends of justice. We cannot conceive how
the interest of justice may be served by confining
the situs of the action to Manila, considering that the
residences or offices of all the parties, including
the situs of the acts sought to be restrained or required
to be done, are all within the territorial jurisdiction of
Rizal. ** Such agreements should be construed
reasonably and should not be applied in such a manner
that it would work more to the inconvenience of the
parties without promoting the ends of justice."
3. Lamis Ents. v. Lagamon, decided in 1981. Here, the
[16]
stipulation in the promissory note and the chattel
mortgage specifed Davao City as the venue.
The Court, again citing Polytrade, stated that the
provision "does not preclude the filing of suits in the
residence of plaintiff or defendant under Section 2(b),
Rule 4, Rules of Court, in the absence of qualifying or
restrictive words in the agreement which would indicate
that the place named is the only venue agreed upon by
the parties. The stipulation did not deprive ** (the
affected party) of his right to pursue remedy in the court
specifically mentioned in Section 2(b) of Rule 4, Rules
of Court. Renuntiato non praesumitur."
4. Capati v. Ocampo, decided in 1982. In this case, the
[17]
provision of the contract relative to venue was as
follows:
" ** (A)ll actions arising out, or relating to this contract
may be instituted in the Court of First Instance of the
City of Naga."
The Court ruled that the parties "did not agree to file
their suits solely and exclusively with the Court of First
Instance of Naga;" they "merely agreed to submit their
disputes to the said court without waiving their right to
seek recourse in the court specifically indicated in
Section 2 (b), Rule 4 of the Rules of Court."
5. Western Minolco v. Court of Appeals, decided in
1988. Here, the provision governing venue read:
[18]
"The parties stipulate that the venue of the actions
referred to in Section 12.01 shall be in the City of
Manila."
The court restated the doctrine that a stipulation in a
contract fixing a definite place for the institution of an
action arising in connection therewith, does not
ordinarily supersede the general rules set out in Rule 4,
and should be construed merely as an agreement on an
additional forum, not as limiting venue to the specified
place.
6. Moles v. Intermediate Appellate Court, decided in
1989. In this proceeding, the Sales Invoice of a
[19]
linotype machine stated that the proper venue should be
Iloilo.
This Court held that such an invoice was not the
contract of sale of the linotype machine in question;
consequently the printed provisions of the invoice could
not have been intended by the parties to govern the sale
of the machine, especially since said invoice was used
for other types of transactions. This Court said: "It is
obvious that a venue stipulation, in order to bind the
parties, must have been intelligently and deliberately
intended by them to exclude their case from the
reglementary rules on venue. Yet, even such intended
variance may not necessarily be given judicial approval,
as, for instance, where there are no restrictive or
qualifying words in the agreement indicating that venue
cannot be laid in any place other than that agreed upon
by the parties, and in contracts of adhesion."
7. Hongkong and Shanghai Banking Corp. v. Sherman,
decided in 1989. Here the stipulation on venue read:
[20]
" ** (T)his guarantee and all rights, obligations and
liabilities arising hereunder shall be construed and
determined under and may be enforced in accordance
with the laws of the Republic of Singapore. We hereby
agree that the Courts in Singapore shall have
jurisdiction over all disputes arising under this
guarantee **."
This Court held that due process dictates that the
stipulation be liberally construed. The parties did not
thereby stipulate that only the courts of Singapore, to
the exclusion of all the others, had jurisdiction. The
clause in question did not operate to divest Philippine
courts of jurisdiction.
8. Nasser v. Court of Appeals, decided in 1990, in
[21]
which the venue stipulation in the promissory notes in
question read:
" ** (A)ny action involving the enforcement of this
contract shall be brought within the City of Manila,
Philippines."
The Court's verdict was that such a provision does not
as a rule supersede the general rule set out in Rule 4 of
the Rules of Court, and should be construed merely as
an agreement on an additional forum, not as limiting
venue to the specified place.
9. Surigao Century Sawmill Co., Inc. v. Court of
Appeals, decided in 1993: In this case, the provision
[22]
concerning venue was contained in a contract of lease of
a barge, and read as follows:
" ** (A)ny disagreement or dispute arising out of the
lease shall be settled by the parties in the proper court in
the province of Surigao del Norte."
The venue provision was invoked in an action filed in
the Regional Trial Court of Manila to recover damages
arising out of marine subrogation based on a bill of
lading. This Court declared that since the action did not
refer to any disagreement or dispute arising out of the
contract of lease of the barge, the venue stipulation in
the latter did not apply; but that even assuming the
contract of lease to be applicable, a statement in a
contract as to venue does not preclude the filing of suits
at the election of the plaintiff where no qualifying or
restrictive words indicate that the agreed place alone
was the chosen venue.
10. Philippine Banking Corporation v. Hon. Salvador
Tensuan, etc., Circle Financial Corporation, et al.,
decided in 1993. Here, the stipulation on venue was
[23]
contained in promissory notes and read as follows:
"I/We hereby expressly submit to the jurisdiction of the
courts of Valenzuela any legal action which may arise
out of this promissory note."
This Court held the stipulation to be merely permissive
since it did not lay the venue in Valenzuela exclusively
or mandatorily. The plain or ordinary import of the
stipulation is the grant of authority or permission to
bring suit in Valenzuela; but there is not the slightest
indication of an intent to bar suit in other competent
courts. The Court stated that there is no necessary or
customary connection between the words "any legal
action" and an intent strictly to limit permissible venue
to the Valenzuela courts. Moreover, since the venue
stipulations include no qualifying or exclusionary terms,
express reservation of the right to elect venue under the
ordinary rules was unnecessary in the case at bar. The
Court made clear that "to the
extent Bautista and Hoechst Philippines are inconsistent
with Polytrade (an en banc decision later in time
than Bautista) and subsequent cases
reiterating Polytrade, Bautista and Hoechst
Philippines have been rendered obsolete by
the Polytrade line of cases."
11. Philippine Banking Corporation v. Hon. Salvador
Tensuan, etc., Brinell Metal Works Corp., et al., decided
in 1994: In this case the subject promissory notes
[24]
commonly contained a stipulation reading:
"I/we expressly submit to the jurisdiction of the courts
of Manila, any legal action which may arise out of this
promissory note."
the Court restated the rule in Polytrade that venue
stipulations in a contract, absent any qualifying or
restrictive words, should be considered merely as an
agreement on additional forum, not limiting venue to
the specified place. They are not exclusive, but rather,
permissive. For to restrict venue only to that place
stipulated in the agreement is a construction purely
based on technicality; on the contrary, the stipulation
should be liberally construed. The Court stated: "The
later cases of Lamis Ents v. Lagamon [108 SCRA
1981], Capati v. Ocampo [113 SCRA 794
[1982], Western Minolco v. Court of Appeals [167
SCRA 592 [1988], Moles v. Intermediate Appellate
Court [169 SCRA 777 [1989], Hongkong and Shanghai
Banking Corporation v. Sherman [176 SCRA
331], Nasser v. Court of Appeals [191 SCRA 783 [1990]
and just recently, Surigao Century Sawmill Co. v. Court
of Appeals [218 SCRA 619 [1993], all treaded the path
blazed by Polytrade. The conclusion to be drawn from
all these is that the more recent jurisprudence shall
properly be deemed modificatory of the old ones."
The lone dissent observed: "There is hardly any
question that a stipulation of contracts of adhesion,
fixing venue to a specified place only, is void for, in
such cases, there would appear to be no valid and free
waiver of the venue fixed by the Rules of
Courts. However, in cases where both parties freely and
voluntarily agree on a specified place to be the venue of
actions, if any, between them, then the only
considerations should be whether the waiver (of the
venue fixed by the Rules of Court) is against public
policy and whether the parties would suffer, by reason
of such waiver, undue hardship and inconvenience;
otherwise, such waiver of venue should be upheld as
binding on the parties. The waiver of venue in such
cases is sanctioned by the rules on jurisdiction."
Still other precedents adhered to the same principle.
12. Tantoco v. Court of Appeals, decided in 1977.
Here, the parties agreed in their sales contracts that
[25]
the courts of Manila shall have jurisdiction over any
legal action arising out of their transaction. This Court
held that the parties agreed merely to add the courts of
Manila as tribunals to which they may resort in the
event of suit, to those indicated by the law: the courts
either of Rizal, of which private respondent was a
resident, or of Bulacan, where petitioner resided.
13. Sweet Lines, Inc. v. Teves, promulgated in 1987. In
[26]
this case, a similar stipulation on venue, contained in the
shipping ticket issued by Sweet Lines, Inc. (as
Condition 14) --
" ** that any and all actions arising out or the condition
and provisions of this ticket, irrespective of where it is
issued, shall be filed in the competent courts in the City
of Cebu"
-- was declared unenforceable, being subversive of
public policy. The Court explained that the philosophy
on transfer of venue of actions is the convenience of the
plaintiffs as well as his witnesses and to promote the
ends of justice; and considering the expense and trouble
a passenger residing outside of Cebu City would incur
to prosecute a claim in the City of Cebu, he would most
probably decide not to file the action at all.
On the other hand, in the cases hereunder
mentioned, stipulations on venue were held to be
restrictive, or mandatory.
1. Bautista vs. De Borja, decided in 1966. In this case,
[27]
the contract provided that in case of any litigation
arising therefrom or in connection therewith, the venue
of the action shall be in the City of Manila.This Court
held that without either party reserving the right to
choose the venue of action as fixed by law, it can
reasonably be inferred that the parties intended to
definitely fix the venue of the action, in connection with
the contract sued upon in the proper courts of the City
of Manila only, notwithstanding that neither party is a
resident of Manila.
2. Gesmundo v. JRB Realty Corporation, decided in
1994. Here the lease contract declared that
[28]
" ** (V)enue for all suits, whether for breach hereof or
damages or any cause between the LESSOR and
LESSEE, and persons claiming under each, ** (shall be)
the courts of appropriate jurisdiction in Pasay City. . ."
This Court held that: "(t)he language used leaves no
room for interpretation. It clearly evinces the parties'
intent to limit to the 'courts of appropriate jurisdiction of
Pasay City' the venue for all suits between the lessor
and the lessee and those between parties claiming under
them. This means a waiver of their right to institute
action in the courts provided for in Rule 4, sec. 2(b)."
3. Hoechst Philippines, Inc. v. Torres, decided much
[29]
earlier, in 1978, involved a strikingly similar stipulation,
which read:
" ** (I)n case of any litigation arising out of this
agreement, the venue of any action shall be in the
competent courts of the Province of Rizal."
This Court held: "No further stipulations are necessary
to elicit the thought that both parties agreed that any
action by either of them would be filed only in the
competent courts of Rizal province exclusively."
4. Villanueva v. Mosqueda, decided in 1982. In this
[30]
case, it was stipulated that if the lessor violated the
contract of lease he could be sued in Manila, while if it
was the lessee who violated the contract, the lessee
could be sued in Masantol, Pampanga. This Court held
that there was an agreement concerning venue of action
and the parties were bound by their agreement. "The
agreement as to venue was not permissive but
mandatory."
5. Arquero v. Flojo, decided in 1988. The condition
[31]
respecting venue -- that any action against RCPI relative
to the transmittal of a telegram must be brought in the
courts of Quezon City alone -- was printed clearly in the
upper front portion of the form to be filled in by the
sender. This Court held that since neither party reserved
the right to choose the venue of action as fixed by
Section 2 [b], Rule 4, as is usually done if the parties
mean to retain the right of election so granted by Rule 4,
it can reasonably be inferred that the parties intended to
definitely fix the venue of action, in connection with the
written contract sued upon, in the courts of Quezon City
only.
An analysis of these precedents reaffirms and
emphasizes the soundness of the Polytrade principle. Of
the essence is the ascertainment of the parties' intention
in their agreement governing the venue of actions
between them. That ascertainment must be done
keeping in mind that convenience is the foundation of
venue regulations, and that that construction should be
adopted which most conduces thereto.Hence, the
invariable construction placed on venue stipulations is
that they do not negate but merely complement or add to
the codal standards of Rule 4 of the Rules of Court. In
other words, unless the parties make very clear, by
employing categorical and suitably limiting language,
that they wish the venue of actions between them to be
laid only and exclusively at a definite place, and to
disregard the prescriptions of Rule 4, agreements on
venue are not to be regarded as mandatory or restrictive,
but merely permissive, or complementary of said
rule. The fact that in their agreement the parties specify
only one of the venues mentioned in Rule 4, or fix a
place for their actions different from those specified by
said rule, does not, without more, suffice to characterize
the agreement as a restrictive one. There must, to repeat,
be accompanying language clearly and categorically
expressing their purpose and design that actions
between them be litigated only at the place named by
them, regardless of the general precepts of Rule 4; and
[32]
any doubt or uncertainty as to the parties' intentions
must be resolved against giving their agreement a
restrictive or mandatory aspect. Any other rule would
permit of individual, subjective judicial interpretations
without stable standards, which could well result in
precedents in hopeless inconsistency.
The record of the case at bar discloses that
UNIMASTERS has its principal place of business in
Tacloban City, and KUBOTA, in Quezon City. Under
Rule 4, the venue of any personal action between them
is "where the defendant or any of the defendants resides
or may be found, or where the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff." In
[33]
other words, Rule 4 gives UNIMASTERS the option to
sue KUBOTA for breach of contract in the Regional
Trial Court of either Tacloban City or Quezon City.
But the contract between them provides that " ** All
suits arising out of this Agreement shall be filed with/in
the proper Courts of Quezon City," without mention of
Tacloban City. The question is whether this stipulation
had the effect of effectively eliminating the latter as an
optional venue and limiting litigation between
UNIMASTERS and KUBOTA only and exclusively to
Quezon City.
In light of all the cases above surveyed, and the general
postulates distilled therefrom, the question should
receive a negative answer. Absent additional words and
expressions definitely and unmistakably denoting the
parties' desire and intention that actions between them
should be ventilated only at the place selected by them,
Quezon City -- or other contractual provisions clearly
evincing the same desire and intention -- the stipulation
should be construed, not as confining suits between the
parties only to that one place, Quezon City, but as
allowing suits either in Quezon City or Tacloban City, at
the option of the plaintiff (UNIMASTERS in this case).
One last word, respecting KUBOTA's theory that the
Regional Trial Court had "no jurisdiction to take
cognizance of ** (UNIMASTERS') action considering
that venue was improperly laid." This is not an accurate
statement of legal principle. It equates venue with
jurisdiction; but venue has nothing to do with
jurisdiction, except in criminal actions. This is
fundamental. The action at bar, for the recovery of
[34]
damages in an amount considerably in excess
of P20,000.00, is assuredly within the jurisdiction of a
Regional Trial Court. Assuming that venue were
[35]
improperly laid in the Court where the action was
instituted, the Tacloban City RTC, that would be a
procedural, not a jurisdictional impediment --
precluding ventilation of the case before that Court of
wrong venue notwithstanding that the subject matter is
within its jurisdiction. However, if the objection to
venue is waived by the failure to set it up in a motion to
dismiss, the RTC would proceed in perfectly regular
[36]
fashion if it then tried and decided the action.
THIRD DIVISION
This is true also of real actions. Thus, even if a case
"affecting title to, or for recovery of possession, or for
partition or condemnation of, or foreclosure of mortgage
on, real property" were commenced in a province or
[37]
city other than that "where the property or any part
thereof lies," if no objection is seasonably made in a
[38]
motion to dismiss, the objection is deemed waived, and
the Regional Trial Court would be acting entirely within
its competence and authority in proceeding to try and
decide the suit. [39]
WHEREFORE, the appealed judgment of the Court
of Appeals is REVERSED, the Order of the Regional Trial
Court of Tacloban City, Branch 6, dated February 3,
1994, is REINSTATED and AFFIRMED, and said Court is
DIRECTED to forthwith proceed with Civil Case No. 93-
12-241 in due course.
SO ORDERED.
Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno,
Vitug, Kapunan, Mendoza, Francisco, Hermosisima, Jr.
Panganiban, and Torres, Jr., JJ., concur.
Regalado, J., See concurring opinion.
[G.R. No. 125027. August 12, 2002]
ANITA MANGILA, petitioner, vs. COURT OF
APPEALS and LORETA
GUINA, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition fore review on certiorari under Rule
45 of the Rules of Court, seeking to set aside the
Decision of the Court of Appeals affirming the
[1]
Decision of the Regional Trial Court, Branch 108, Pasay
[2]
City. The trial court upheld the writ of attachment and the
declaration of default on petitioner while ordering her to
pay private respondent P109,376.95 plus 18 percent
interest per annum, 25 percent attorneys fees and costs
of suit.
The Facts
Petitioner Anita Mangila (petitioner for brevity) is an
exporter of sea foods and doing business under the
name and style of Seafoods Products. Private
respondent Loreta Guina (private respondent for brevity)
is the President and General Manager of Air Swift
International, a single registered proprietorship engaged
in the freight forwarding business.
Sometime in January 1988, petitioner contracted the
freight forwarding services of private respondent for
shipment of petitioners products, such as crabs, prawns
and assorted fishes, to Guam (USA) where petitioner
maintains an outlet. Petitioner agreed to pay private
respondent cash on delivery. Private respondents invoice
stipulates a charge of 18 percent interest per annum on
all overdue accounts. In case of suit, the same invoice
stipulates attorneys fees equivalent to 25 percent of the
amount due plus costs of suit. [3]
On the first shipment, petitioner requested for seven
days within which to pay private respondent. However,
for the next three shipments, March 17, 24 and 31, 1988,
petitioner failed to pay private respondent shipping
charges amounting to P109, 376.95. [4]
Despite several demands, petitioner never paid
private respondent. Thus, on June 10, 1988, private
respondent filed Civil Case No. 5875 before the Regional
Trial Court of Pasay City for collection of sum of money.
On August 1, 1988, the sheriff filed his Sheriffs
Return showing that summons was not served on
petitioner. A woman found at petitioners house informed
the sheriff that petitioner transferred her residence to Sto.
Nio, Guagua, Pampanga. The sheriff found out further
that petitioner had left the Philippines for Guam. [5]
 Thus, on September 13, 1988, construing petitioners
departure from the Philippines as done with intent to
defraud her creditors, private respondent filed a Motion
for Preliminary Attachment. On September 26, 1988, the
trial court issued an Order of Preliminary
Attachment against petitioner. The following day, the trial
[6]
court issued a Writ of Preliminary Attachment.
The trial court granted the request of its sheriff for
assistance from their counterparts in RTC, Pampanga.
Thus, on October 28, 1988, Sheriff Alfredo San Miguel of
RTC Pampanga served on petitioners household help in
San Fernando, Pampanga, the Notice of Levy with the
Order, Affidavit and Bond.[7]
On November 7, 1988, petitioner filed an Urgent
Motion to Discharge Attachment without submitting
[8]
herself to the jurisdiction of the trial court. She pointed
out that up to then, she had not been served a copy of
the Complaint and the summons. Hence, petitioner
claimed the court had not acquired jurisdiction over her
person.[9]
In the hearing of the Urgent Motion to Discharge
Attachment on November 11, 1988, private respondent
sought and was granted a re-setting to December 9,
1988. On that date, private respondents counsel did not
appear, so the Urgent Motion to Discharge Attachment
was deemed submitted for resolution. [10]
The trial court granted the Motion to Discharge
Attachment on January 13, 1989 upon filing of petitioners
counter-bond. The trial court, however, did not rule on the
question of jurisdiction and on the validity of the writ of
preliminary attachment.
On December 26, 1988, private respondent applied
for an alias summons, which the trial court issued on
January 19, 1989. It was only on January 26, 1989 that
[11]
summons was finally served on petitioner. [12]
On February 9, 1989, petitioner filed a Motion to
Dismiss the Complaint on the ground of improper venue.
Private respondents invoice for the freight forwarding
service stipulates that if court litigation becomes
necessary to enforce collection xxx the agreed venue for
such action is Makati, Metro Manila. Private respondent
[13]
filed an Opposition asserting that although Makati
appears as the stipulated venue, the same was merely
an inadvertence by the printing press whose general
manager executed an affidavit admitting such [14]
inadvertence. Moreover, private respondent claimed that
petitioner knew that private respondent was holding office
in Pasay City and not in Makati. The lower court, finding
[15]
credence in private respondents assertion, denied the
Motion to Dismiss and gave petitioner five days to file her
Answer. Petitioner filed a Motion for Reconsideration but
this too was denied.
 Petitioner filed her Answer on June 16, 1989,
[16]
maintaining her contention that the venue was improperly
laid.
On June 26, 1989, the trial court issued an Order
setting the pre-trial for July 18, 1989 at 8:30 a.m. and
requiring the parties to submit their pre-trial briefs.
Meanwhile, private respondent filed a Motion to Sell
Attached Properties but the trial court denied the motion.
On motion of petitioner, the trial court issued an
Order resetting the pre-trial from July 18, 1989 to August
24, 1989 at 8:30 a.m..
On August 24, 1989, the day of the pre-trial, the trial
court issued an Order terminating the pre-trial and
[17]
allowing the private respondent to present evidence ex-
parte on September 12, 1989 at 8:30 a.m.. The Order
stated that when the case was called for pre-trial at 8:31
a.m., only the counsel for private respondent appeared.
Upon the trial courts second call 20 minutes later,
petitioners counsel was still nowhere to be found. Thus,
upon motion of private respondent, the pre-trial was
considered terminated.
On September 12, 1989, petitioner filed her Motion
for Reconsideration of the Order terminating the pre-trial.
Petitioner explained that her counsel arrived 5 minutes
after the second call, as shown by the transcript of
stenographic notes, and was late because of heavy
traffic. Petitioner claims that the lower court erred in
allowing private respondent to present evidence ex-
parte since there was no Order considering the petitioner
as in default. Petitioner contends that the Order of August
24, 1989 did not state that petitioner was declared as in
default but still the court allowed private respondent to
present evidence ex-parte. [18]
On October 6, 1989, the trial court denied the Motion
for Reconsideration and scheduled the presentation of
private respondents evidence ex-parte on October 10,
1989.
On October 10, 1989, petitioner filed an Omnibus
Motion stating that the presentation of evidence ex-
parte should be suspended because there was no
declaration of petitioner as in default and petitioners
counsel was not absent, but merely late.
On October 18, 1989, the trial court denied the
Omnibus Motion. [19]
On November 20, 1989, the petitioner received a
copy of the Decision of November 10, 1989, ordering
petitioner to pay respondent P109,376.95 plus 18 percent
interest per annum, 25 percent attorneys fees and costs
of suit. Private respondent filed a Motion for Execution
Pending Appeal but the trial court denied the same.
The Ruling of the Court of Appeals
 On December 15, 1995, the Court of Appeals
rendered a decision affirming the decision of the trial
court. The Court of Appeals upheld the validity of the
issuance of the writ of attachment and sustained the filing
of the action in the RTC of Pasay. The Court of Appeals
also affirmed the declaration of default on petitioner and
concluded that the trial court did not commit any
reversible error.
Petitioner filed a Motion for Reconsideration on
January 5, 1996 but the Court of Appeals denied the
same in a Resolution dated May 20, 1996.
Hence, this petition.
The Issues
The issues raised by petitioner may be re-stated as
follows:
I.
WHETHER RESPONDENT COURT ERRED IN NOT
HOLDING THAT THE WRIT OF ATTACHMENT
WAS IMPROPERLY ISSUED AND SERVED;
II.
WHETHER THERE WAS A VALID DECLARATION
OF DEFAULT;
III.
WHETHER THERE WAS IMPROPER VENUE.
IV.
WHETHER RESPONDENT COURT ERRED IN
DECLARING THAT PETITIONER IS OBLIGED TO
PAY P109, 376.95, PLUS ATTORNEYS FEES. [20]
The Ruling of the Court
Improper Issuance and Service of Writ of Attachment
Petitioner ascribes several errors to the issuance and
implementation of the writ of attachment. Among
petitioners arguments are: first, there was no ground for
the issuance of the writ since the intent to defraud her
creditors had not been established; second, the value of
the properties levied exceeded the value of private
respondents claim. However, the crux of petitioners
arguments rests on the question of the validity of the writ
of attachment. Because of failure to serve summons on
her before or simultaneously with the writs
implementation, petitioner claims that the trial court had
not acquired jurisdiction over her person and thus the
service of the writ is void.
As a preliminary note, a distinction should be made
between issuance and implementation of the writ of
attachment. It is necessary to distinguish between the
two to determine when jurisdiction over the person of the
defendant should be acquired to validly implement the
writ. This distinction is crucial in resolving whether there
is merit in petitioners argument.
This Court has long settled the issue of when
jurisdiction over the person of the defendant should be
acquired in cases where a party resorts to provisional
remedies. A party to a suit may, at any time after filing the
complaint, avail of the provisional remedies under the
Rules of Court. Specifically, Rule 57 on preliminary
attachment speaks of the grant of the remedy at the
commencement of the action or at any time
thereafter. This phrase refers to the date of filing of the
[21]
complaint which is the moment that marks the
commencement of the action. The reference plainly is to
a time before summons is served on the defendant, or
even before summons issues.
In Davao Light & Power Co., Inc. v. Court of
Appeals, this Court clarified the actual time when
[22]
jurisdiction should be had:
It goes without saying that whatever be the acts done by
the Court prior to the acquisition of jurisdiction over the
person of defendant - issuance of summons, order of
attachment and writ of attachment - these do not and
cannot bind and affect the defendant until and unless
jurisdiction over his person is eventually obtained by
the court, either by service on him of summons or other
coercive process or his voluntary submission to the
courts authority. Hence, when the sheriff or other proper
officer commences implementation of the writ of
attachment, it is essential that he serve on the defendant
not only a copy of the applicants affidavit and
attachment bond, and of the order of attachment, as
explicitly required by Section 5 of Rule 57, but also
the summons addressed to said defendant as well as a
copy of the complaint xxx. (Emphasis supplied.)
Furthermore, we have held that the grant of the
provisional remedy of attachment involves three stages:
first, the court issues the order granting the application;
second, the writ of attachment issues pursuant to the
order granting the writ; and third, the writ is
implemented. For the initial two stages, it is not
necessary that jurisdiction over the person of the
defendant be first obtained. However, once the
implementation of the writ commences, the court must
have acquired jurisdiction over the defendant for without
such jurisdiction, the court has no power and authority to
act in any manner against the defendant. Any order
issuing from the Court will not bind the defendant.
[23]
In the instant case, the Writ of Preliminary
Attachment was issued on September 27, 1988 and
implemented on October 28, 1988. However, the alias
summons was served only on January 26, 1989 or
almost three months after the implementation of the
writ of attachment.
The trial court had the authority to issue the Writ of
Attachment on September 27 since a motion for its
issuance can be filed at the commencement of the
action. However, on the day the writ was implemented,
the trial court should have, previously or simultaneously
with the implementation of the writ, acquired jurisdiction
over the petitioner. Yet, as was shown in the records of
the case, the summons was actually served on petitioner
several months after the writ had been implemented.
Private respondent, nevertheless, claims that the
prior or contemporaneous service of summons
contemplated in Section 5 of Rule 57 provides for
exceptions. Among such exceptions are where the
summons could not be served personally or by
substituted service despite diligent efforts or where the
defendant is a resident temporarily absent therefrom x x
x. Private respondent asserts that when she commenced
this action, she tried to serve summons on petitioner but
the latter could not be located at her customary address
in Kamuning, Quezon City or at her new address in
Guagua, Pampanga. Furthermore, respondent claims
[24]
that petitioner was not even in Pampanga; rather, she
was in Guam purportedly on a business trip.
Private respondent never showed that she effected
substituted service on petitioner after her personal
service failed. Likewise, if it were true that private
respondent could not ascertain the whereabouts of
petitioner after a diligent inquiry, still she had some other
recourse under the Rules of Civil Procedure.
The rules provide for certain remedies in cases
where personal service could not be effected on a party.
Section 14, Rule 14 of the Rules of Court provides that
whenever the defendants whereabouts are unknown and
cannot be ascertained by diligent inquiry, service may, by
leave of court, be effected upon him by publication in a
newspaper of general circulation x x x. Thus, if petitioners
whereabouts could not be ascertained after the sheriff
had served the summons at her given address, then
respondent could have immediately asked the court for
service of summons by publication on petitioner. [25]
Moreover, as private respondent also claims that
petitioner was abroad at the time of the service of
summons, this made petitioner a resident who is
temporarily out of the country. This is the exact situation
contemplated in Section 16, Rule 14 of the Rules of
[26]
Civil Procedure, providing for service of summons by
publication.
In conclusion, we hold that the alias summons
belatedly served on petitioner cannot be deemed to have
cured the fatal defect in the enforcement of the writ. The
trial court cannot enforce such a coercive process on
petitioner without first obtaining jurisdiction over her
person. The preliminary writ of attachment must be
served after or simultaneous with the service of
summons on the defendant whether by personal service,
substituted service or by publication as warranted by the
circumstances of the case. The subsequent service of
[27]
summons does not confer a retroactive acquisition of
jurisdiction over her person because the law does not
allow for retroactivity of a belated service.
Improper Venue
Petitioner assails the filing of this case in the RTC of
Pasay and points to a provision in private respondents
invoice which contains the following:
3. If court litigation becomes necessary to enforce
collection, an additional equivalent (sic) to 25% of the
principal amount will be charged. The agreed venue for
such action is Makati, Metro Manila, Philippines. [28]
Based on this provision, petitioner contends that the
action should have been instituted in the RTC of Makati
and to do otherwise would be a ground for the dismissal
of the case.
We resolve to dismiss the case on the ground of
improper venue but not for the reason stated by
petitioner.
The Rules of Court provide that parties to an action
may agree in writing on the venue on which an action
should be brought. However, a mere stipulation on the
[29]
venue of an action is not enough to preclude parties from
bringing a case in other venues. The parties must be
[30]
able to show that such stipulation is exclusive. Thus,
absent words that show the parties intention to restrict
the filing of a suit in a particular place, courts will allow
the filing of a case in any venue, as long as jurisdictional
requirements are followed. Venue stipulations in a
contract, while considered valid and enforceable, do not
as a rule supersede the general rule set forth in Rule 4 of
the Revised Rules of Court. In the absence of qualifying
[31]
or restrictive words, they should be considered merely as
an agreement on additional forum, not as limiting venue
to the specified place. [32]
In the instant case, the stipulation does not limit the
venue exclusively to Makati. There are no qualifying or
restrictive words in the invoice that would evince the
intention of the parties that Makati is the only or exclusive
venue where the action could be instituted. We therefore
agree with private respondent that Makati is not the only
venue where this case could be filed.
 Nevertheless, we hold that Pasay is not the proper
venue for this case.
Under the 1997 Rules of Civil Procedure, the general
rule is venue in personal actions is where the defendant
or any of the defendants resides or may be found, or
where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff. The exception to this rule is
[33]
when the parties agree on an exclusive venue other than
the places mentioned in the rules. But, as we have
discussed, this exception is not applicable in this case.
Hence, following the general rule, the instant case may
be brought in the place of residence of the plaintiff or
defendant, at the election of the plaintiff (private
respondent herein).
In the instant case, the residence of private
respondent (plaintiff in the lower court) was not alleged in
the complaint. Rather, what was alleged was the postal
address of her sole proprietorship, Air Swift International.
It was only when private respondent testified in court,
after petitioner was declared in default, that she
mentioned her residence to be in Better Living
Subdivision, Paraaque City.
In the earlier case of Sy v. Tyson Enterprises, Inc.,
the reverse happened. The plaintiff in that case was
[34]
Tyson Enterprises, Inc., a corporation owned and
managed by Dominador Ti. The complaint, however, did
not allege the office or place of business of the
corporation, which was in Binondo, Manila. What was
alleged was the residence of Dominador Ti, who lived in
San Juan, Rizal. The case was filed in the Court of First
Instance of Rizal, Pasig. The Court there held that the
evident purpose of alleging the address of the
corporations president and manager was to justify the
filing of the suit in Rizal, Pasig instead of in Manila. Thus,
the Court ruled that there was no question that venue
was improperly laid in that case and held that the place of
business of Tyson Enterpises, Inc. is considered as its
residence for purposes of venue. Furthermore, the Court
held that the residence of its president is not the
residence of the corporation because a corporation has a
personality separate and distinct from that of its officers
and stockholders.
In the instant case, it was established in the lower
court that petitioner resides in San Fernando,
Pampanga while private respondent resides in
[35]
Paraaque City. However, this case was brought in
[36]
Pasay City, where the business of private respondent is
found. This would have been permissible had private
respondents business been a corporation, just like the
case in Sy v. Tyson Enterprises, Inc. However, as
admitted by private respondent in her Complaint in the
[37]
lower court, her business is a sole proprietorship, and as
such, does not have a separate juridical personality that
could enable it to file a suit in court. In fact, there is no
[38]
law authorizing sole proprietorships to file a suit in court.
[39]
 A sole proprietorship does not possess a juridical
personality separate and distinct from the personality of
the owner of the enterprise. The law merely recognizes
[40]
the existence of a sole proprietorship as a form of
business organization conducted for profit by a single
individual and requires its proprietor or owner to secure
licenses and permits, register its business name, and pay
taxes to the national government. The law does not vest
[41]
a separate legal personality on the sole proprietorship or
empower it to file or defend an action in court. [42]
Thus, not being vested with legal personality to file
this case, the sole proprietorship is not the plaintiff in this
case but rather Loreta Guina in her personal capacity. In
fact, the complaint in the lower court acknowledges in its
caption that the plaintiff and defendant are Loreta Guina
and Anita Mangila, respectively. The title of the petition
before us does not state, and rightly so, Anita
Mangila v. Air Swift International, but rather Anita
Mangila v. Loreta Guina. Logically then, it is the
residence of private respondent Guina,
the proprietor with the juridical personality, which should
be considered as one of the proper venues for this case.
All these considered, private respondent should have
filed this case either in San Fernando, Pampanga
(petitioners residence) or Paraaque (private respondents
residence). Since private respondent (complainant
below) filed this case in Pasay, we hold that the case
should be dismissed on the ground of improper venue.
Although petitioner filed an Urgent Motion to
Discharge Attachment in the lower court, petitioner
expressly stated that she was filing the motion without
submitting to the jurisdiction of the court. At that time,
petitioner had not been served the summons and a copy
of the complaint. Thereafter, petitioner timely filed a
[43]
Motion to Dismiss on the ground of improper venue.
[44]
Rule 16, Section 1 of the Rules of Court provides that a
motion to dismiss may be filed [W]ithin the time for but
before filing the answer to the complaint or pleading
asserting a claim. Petitioner even raised the issue of
improper venue in his Answer as a special and
[45]
affirmative defense. Petitioner also continued to raise the
issue of improper venue in her Petition for
Review before this Court. We thus hold that the
[46]
dismissal of this case on the ground of improper venue is
warranted.
The rules on venue, like other procedural rules, are
designed to insure a just and orderly administration of
justice or the impartial and evenhanded determination of
every action and proceeding. Obviously, this objective will
not be attained if the plaintiff is given unrestricted
freedom to choose where to file the complaint or petition.
[47]
We find no reason to rule on the other issues raised
by petitioner.
WHEREFORE, the petition is GRANTED on the
grounds of improper venue and invalidity of the service of
the writ of attachment. The decision of the Court of
Appeals and the order of respondent judge denying the
motion to dismiss are REVERSED and SET ASIDE. Civil
Case No. 5875 is hereby dismissed without prejudice to
refiling it in the proper venue. The attached properties of
petitioner are ordered returned to her immediately.
SO ORDERED.
Puno, (Chairman), and Panganiban, JJ., concur.
Sandoval-Gutierrez, J., on leave.

GOLDSTAR ELEVATORS,
THIRD DIVISION Promulgated:
PHILS., INC.,*
Respondent. October 24, 2005
HYATT ELEVATORS AND G.R. No. x -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
161026 -- -- -- -- -- -- -- -- -- -- -- -- x
ESCALATORS CORPORATION,
Petitioner, Present: DECISION
Panganiban, J.,
Chairman,
Sandoval-Gutierrez, PANGANIBAN, J.:
- versus - Corona,
Carpio Morales, and
Garcia, JJ
 W
Appeals (CA) in CA-GR SP No.
74319. The decretal portion of the
Decision reads as follows:
ell established in our jurisprudence WHEREFORE, in view of the
foregoing, the assailed Orders dated
is the rule that the residence of a May 27, 2002 and October 1, 2002 of
corporation is the place where its the RTC, Branch 213, Mandaluyong City
in Civil Case No. 99-600, are
principal office is located, as stated hereby SET ASIDE. The said case is
hereby ordered DISMISSED on the
in its Articles of Incorporation. ground of improper venue.[4]

The Case
The assailed Resolution denied
Before us is a Petition for petitioners Motion for
Review[1] on Certiorari, under Rule Reconsideration.
45 of the Rules of Court,
assailing the June 26, 2003 The Facts
Decision[2] and the November 27,
2003 Resolution[3] of the Court of

The relevant facts of the case
are summarized by the CA in this
wise:
Petitioner [herein Respondent]
Goldstar Elevator Philippines, Inc.
(GOLDSTAR for brevity) is a domestic
corporation primarily engaged in the
business of marketing, distributing,
selling, importing, installing, and
maintaining elevators and escalators,
with address at 6th Floor, Jacinta II
Building, 64 EDSA, Guadalupe, Makati
City.
On the other hand, private
respondent [herein petitioner] Hyatt
Elevators and Escalators Company
(HYATT for brevity) is a domestic
corporation similarly engaged in the
business of selling, installing and
maintaining/servicing elevators,
escalators and parking equipment, with
address at the 6th Floor, Dao I
Condominium, Salcedo St., Legaspi
Village, Makati, as stated in its Articles
of Incorporation.
On February 23, 1999, HYATT
filed a Complaint for unfair trade
practices and damages under Articles
19, 20 and 21 of the Civil Code of the
Philippines against LG Industrial
Systems Co. Ltd. (LGISC) and LG
International Corporation (LGIC),
alleging among others, that: in 1988, it
was appointed by LGIC and LGISC as
the exclusive distributor of LG elevators
and escalators in the Philippines under
a Distributorship Agreement; x x x
LGISC, in the latter part of 1996, made
a proposal to change the exclusive
distributorship agency to that of a joint
venture partnership; while it looked
forward to a healthy and fruitful
negotiation for a joint venture, however,
the various meetings it had with LGISC
and LGIC, through the latters
representatives, were conducted in
utmost bad faith and with malevolent
intentions; in the middle of the
negotiations, in order to put pressures
upon it, LGISC and LGIC terminated the
Exclusive Distributorship Agreement; x x
x [A]s a consequence, [HYATT]
suffered P120,000,000.00 as actual
damages, representing loss of earnings
and business
opportunities, P20,000,000.00 as
damages for its reputation and
goodwill, P1,000,000.00 as and by way
of exemplary damages,
and P500,000.00 as and by way of
attorneys fees.
On March 17, 1999, LGISC and
LGIC filed a Motion to Dismiss raising
the following grounds: (1) lack of
jurisdiction over the persons of
defendants, summons not having been
served on its resident agent; (2)
improper venue; and (3) failure to state
a cause of action. The [trial] court
denied the said motion in an Order
dated January 7, 2000.
On March 6, 2000, LGISC and
LGIC filed an Answer with Compulsory
Counterclaim ex abundante cautela.
Thereafter, they filed a Motion for
Reconsideration and to Expunge
Complaint which was denied.
On December 4, 2000, HYATT
filed a motion for leave of court to
amend the complaint, alleging that
subsequent to the filing of the complaint,
it learned that LGISC transferred all its
organization, assets and goodwill, as a
consequence of a joint venture
agreement with Otis Elevator Company
of the USA, to LG Otis Elevator
Company (LG OTIS, for brevity). Thus,
LGISC was to be substituted or changed
to LG OTIS, its successor-in-interest.
Likewise, the motion averred that x x x
GOLDSTAR was being utilized by LG
OTIS and LGIC in perpetrating their
unlawful and unjustified acts against
HYATT. Consequently, in order to afford
complete relief, GOLDSTAR was to be
additionally impleaded as a party-
defendant. Hence, in the Amended
Complaint, HYATT impleaded x x x
GOLDSTAR as a party-defendant, and
all references to LGISC were
correspondingly replaced with LG OTIS.
On December 18, 2000, LG OTIS
(LGISC) and LGIC filed their opposition
to HYATTs motion to amend the
complaint. It argued that: (1) the
inclusion of GOLDSTAR as party-
defendant would lead to a change in the
theory of the case since the latter took
no part in the negotiations which led to
the alleged unfair trade practices subject
of the case; and (b) HYATTs move to
amend the complaint at that time was
dilatory, considering that HYATT was
aware of the existence of GOLDSTAR
for almost two years before it sought its
inclusion as party-defendant.
On January 8, 2001, the [trial]
court admitted the Amended Complaint.
LG OTIS (LGISC) and LGIC filed a
motion for reconsideration thereto but
was similarly rebuffed on October 4,
2001.
On April 12, 2002, x x x
GOLDSTAR filed a Motion to Dismiss
the amended complaint, raising the
following grounds: (1) the venue was
improperly laid, as neither HYATT nor
defendants reside in Mandaluyong City,
where the original case was filed; and
(2) failure to state a cause of action
against [respondent], since the
amended complaint fails to allege with
certainty what specific ultimate acts x x
x Goldstar performed in violation of x x x
Hyatts rights. In the Order dated May
27, 2002, which is the main subject of
the present petition, the [trial] court
denied the motion to dismiss,
ratiocinating as follows:
Upon perusal of the factual
and legal arguments raised by
the movants-defendants, the
court finds that these are
substantially the same issues
posed by the then defendant
LG Industrial System Co.
particularly the matter dealing
[with] the issues of improper
venue, failure to state cause
of action as well as this courts
lack of jurisdiction. Under the
circumstances obtaining, the
court resolves to rule that the
complaint sufficiently states a
cause of action and that the
venue is properly laid. It is
significant to note that in the
amended complaint, the same
allegations are adopted as in
the original complaint with
respect to the Goldstar
Philippines to enable this
court to adjudicate a complete
determination or settlement of
the claim subject of the action
it appearing preliminarily as
sufficiently alleged in the
plaintiffs pleading that said
Goldstar Elevator Philippines
Inc., is being managed and
operated by the same Korean
officers of defendants LG-
OTIS Elevator Company and
LG International Corporation.
 On June 11, 2002, [Respondent]
GOLDSTAR filed a motion for amounting to grave abuse of
reconsideration thereto. On June 18,
2002, without waiving the grounds it discretion when the latter denied
raised in its motion to dismiss, [it] also
filed an Answer Ad Cautelam. On respondents Motion to Dismiss. The
October 1, 2002, [its] motion for
reconsideration was denied.
appellate court held that the venue
From the aforesaid Order denying
x x x Goldstars motion for was clearly improper, because none
reconsideration, it filed the x x x petition
for certiorari [before the CA] alleging of the litigants resided in
grave abuse of discretion amounting to
lack or excess of jurisdiction on the part Mandaluyong City, where the case
of the [trial] court in issuing the assailed
Orders dated May 27, 2002 and October was filed.
1, 2002.[5]

According to the appellate court,

Ruling of the Court of Appeals
since Makati was the principal place

The CA ruled that the trial court of business of both respondent and

had committed palpable error petitioner, as stated in the latters

Articles of Incorporation, that place
In its Memorandum, petitioner
was controlling for purposes of submits this sole issue for our
determining the proper venue. The consideration:

fact that petitioner had abandoned Whether or not the Court of

Appeals, in reversing the ruling of the
its principal office in Makati years Regional Trial Court, erred as a matter
of law and jurisprudence, as well as
prior to the filing of the original case committed grave abuse of discretion, in
holding that in the light of the peculiar
did not affect the venue where facts of this case, venue was improper[.]
[7]

personal actions could be

commenced and tried.

This Courts Ruling

Hence, this Petition.[6]
The Petition has no merit.

The Issue
Sole Issue:
Venue
 Corporations come under the latter
The resolution of this case rests in accordance with Article 44(3) of
upon a proper understanding of the Civil Code.[8]
Section 2 of Rule 4 of the 1997
Revised Rules of Court: Residence is the permanent
Sec. 2. Venue of personal home -- the place to which, whenever
actions. All other actions may be
commenced and tried where the plaintiff
absent for business or pleasure, one
or any of the principal plaintiff resides, or intends to return.[9] Residence is vital
where the defendant or any of the
principal defendant resides, or in the when dealing with venue.[10] A
case of a non-resident defendant where
he may be found, at the election of the corporation, however, has no
plaintiff. residence in the same sense in which
this term is applied to a natural
person. This is precisely the reason
Since both parties to this case
why the Court in Young Auto Supply
are corporations, there is a need to
Company v. Court of Appeals[11] ruled
clarify the meaning of residence. The
that for practical purposes, a
law recognizes two types of persons:
corporation is in a metaphysical
(1) natural and (2) juridical.
sense a resident of the place where
its principal office is located as
stated in the articles of
It now becomes apparent that
incorporation.[12] Even before this
the residence or domicile of a
ruling, it has already been
juridical person is fixed by the law
established that the residence of a
creating or recognizing it. Under
corporation is the place where its
Section 14(3) of the Corporation
principal office is established.[13]
Code, the place where the principal
office of the corporation is to be
This Court has also definitively
located is one of the required
ruled that for purposes of venue, the
contents of the articles of
term residence is synonymous with
incorporation, which shall be filed
domicile.[14] Correspondingly, the
with the Securities and Exchange
Civil Code provides:
Commission (SEC).
Art. 51. When the law creating or
recognizing them, or any other provision
does not fix the domicile of juridical In the present case, there is no
persons, the same shall be understood
to be the place where their legal question as to the residence of
representation is established or where
they exercise their principal functions.[15]
respondent. What needs to be
examined is that of petitioner. incorporation.[17] Jurisprudence has,
Admittedly,[16] the latters principal however, settled that the place
place of business is Makati, as where the principal office of a
indicated in its Articles of corporation is located, as stated in
Incorporation. Since the principal the articles, indeed establishes its
place of business of a corporation residence.[18] This ruling is important
determines its residence or domicile, in determining the venue of an action
then the place indicated in by or against a corporation,[19] as in
petitioners articles of incorporation the present case.
becomes controlling in determining
the venue for this case. Without merit is the argument of
petitioner that the locality stated in
Petitioner argues that the Rules its Articles of Incorporation does not
of Court do not provide that when conclusively indicate that its
the plaintiff is a corporation, the principal office is still in the same
complaint should be filed in the place. We agree with the appellate
location of its principal office as court in its observation that the
indicated in its articles of requirement to state in the articles
the place where the principal office petitioner, the fact remains that, in
of the corporation is to be located is law, the latters residence was still
not a meaningless requirement. That the place indicated in its Articles of
proviso would be rendered nugatory Incorporation. Further unacceptable
if corporations were to be allowed to is its faulty reasoning that the
simply disregard what is expressly ground for the CAs dismissal of its
stated in their Articles of Complaint was its failure to amend
Incorporation.[20] its Articles of Incorporation so as to
reflect its actual and present
Inconclusive are the bare principal office. The appellate court
allegations of petitioner that it had was clear enough in its ruling that
closed its Makati office and relocated the Complaint was dismissed
to Mandaluyong City, and that because the venue had been
respondent was well aware of those improperly laid, not because of the
circumstances. failure of petitioner to amend the
Assuming arguendo that they latters Articles of Incorporation.
transacted business with each other
in the Mandaluyong office of

Indeed, it is a legal truism that
the rules on the venue of personal
actions are fixed for the convenience
of the plaintiffs and their witnesses.
Equally settled, however,
principle that choosing the venue of
not that stated in its Articles of
Incorporation would indeed create
confusion and work untold
inconvenience. Enterprising litigants
may, out of some ulterior motives, easily
circumvent the rules on venue by the
simple expedient of closing old offices
and opening new ones in another place
is the that they may find well to suit their
needs.[23]

an action is not left to a plaintiffs

caprice; the matter is regulated by
the Rules of Court.[21] Allowing We find it necessary to remind
petitioners arguments may lead party litigants, especially
precisely to what this Court corporations, as follows:
was trying to avoid in Young Auto The rules on venue, like the other
procedural rules, are designed to insure
Supply Company v. CA:[22] the a just and orderly administration of
creation of confusion and untold justice or the impartial and evenhanded
determination of every action and
inconveniences to party litigants. proceeding. Obviously, this objective will
not be attained if the plaintiff is given
Thus enunciated the CA: unrestricted freedom to choose the court
where he may file his complaint or
x x x. To insist that the proper petition.
venue is the actual principal office and
 The choice of venue should not
be left to the plaintiffs whim or caprice. Resolution AFFIRMED. Costs
He may be impelled by some ulterior against petitioner.
motivation in choosing to file a case in a
particular court even if not allowed by
the rules on venue.[24]
SO ORDERED.

ARTEMIO V.
PANGANIBA
WHEREFORE, the Petition is N
Associate
hereby DENIED, and the assailed
Justice
Decision and Chairman,
Third Division

PUNO,
SECOND DIVISION
Chairman,

AUSTRIA-MARTINEZ,

- versus - CALLEJO, SR.

ARMAND NOCUM and G.R. No. 145022 TINGA, and
THE PHILIPPINE DAILY
INQUIRER, INC., CHICO-NAZARIO, JJ.
Present:
P e t i t i o n e r s,
 Rules of Civil Procedure are the
LUCIO TAN, Promulgated: decision[1] of the Court of Appeals dated 19

R e s p o n d e n t. April 2000 that affirmed the order of the

September 23,Regional
2005 Trial Court (RTC) of Makati City,
X------------------------------- Branch 56, in Civil Case No. 98-2288,
-------------------X dated 19 April 1999, admitting respondent
Lucio Tans Amended Complaint for
Damages for the alleged malicious and
defamatory imputations against him in two
DECISION
(2) articles of the Philippine Daily Inquirer,
and its Resolution[2] dated 15 September
2000 denying petitioners Armand Nocum
CHICO-NAZARIO, J.: and The Philippine Daily Inquirer, Inc.s
motion for reconsideration.

Assailed in a Petition for Review The antecedents are summarized by the

on Certiorari under Rule 45 of the 1997 Court of Appeals.

On September 27, 1998,
Lucio Tan filed a complaint against
reporter Armand Nocum, Capt.
Florendo Umali, ALPAP and Inquirer
with the Regional Trial Court of
Makati, docketed as Civil Case
No. 98-2288, seeking moral and
exemplary damages for the alleged
malicious and defamatory
imputations contained in a news
article.
INQUIRER and NOCUM filed their
joint answer, dated October 27,
1998, wherein they alleged
that: (1) the complaint failed to
state a cause of action; (2) the
defamatory statements alleged in
the complaint were general
conclusions without factual
premises; (3) the questioned news
report constituted fair and true
report on the matters of public
interest concerning a public figure
and therefore, was privileged in
nature; and (4) malice on their part
was negated by the publication in
the same article of plaintiffs or
PALs side of the dispute with the
pilots union.
ALPAP and UMALI likewise filed
their joint answer, dated October
31, 1998, and alleged therein
that: (1) the complaint stated no
cause of action; (2) venue was
improperly laid; and (3) plaintiff
Lucio Tan was not a real party in
interest. It appeared that the
complaint failed to state the
residence of the complainant at the
time of the alleged commission of
the offense and the place where
the libelous article was printed and
first published.
 Thus, the Regional Trial Court complaint and deemed set aside
of Makati issued an Order the previous order of dismissal,
dated February 10, 1999, supra, stating, inter alia, that:
dismissing the complaint without
prejudice on the ground of
improper venue. The mistake or
deficiency in the
original complaint
Aggrieved by the dismissal of appears now to have
the complaint, respondent Lucio been cured in the
Tan filed an Omnibus Motion Amended Complaint
dated February 24, 1999, seeking which can still be
reconsideration of the dismissal properly admitted,
and admission of the amended pursuant to Rule 10 of
complaint. In par. 2.01.1 of the the 1997 Rules of Civil
amended complaint, it is alleged Procedure, inasmuch as
that This article was printed and the Order of dismissal
first published in the City
is not yet final. Besides,
of Makati (p. 53, Rollo,CA-G.R. SP
there is no substantial
No. 55192), and in par. 2.04.1,
amendment in the
that This caricature was printed
Amended Complaint
and first published in the City
which would affect the
of Makati (p. 55, id.).
defendants defenses
The lower court, after having and their Answers. The
the case dismissed for improper Amendment is merely
venue, admitted the amended formal, contrary to the
 contention of the
On 19 April 2000, the Court of Appeals
defendants that it is
substantial. rendered its decision the dispositive
portion of which reads:

WHEREFORE, premises
considered, the petition is hereby
Dissatisfied, petitioners, together with DENIED DUE COURSE and
DISMISSED for lack of merit. The
defendants Capt. Florendo Umali and the
Order of the court a quo is hereby
Airline Pilots Association of the Philippines, AFFIRMED.

Inc. (ALPAP), appealed the RTC decision to

the Court of Appeals. Two petitions
for certiorari were filed, one filed by
petitioners which was docketed as CA-G.R.
The motions for reconsideration filed by
SP No. 55192, and the other by defendants
petitioners and by defendants Umali and
Umali and ALPAP which was docketed as
ALPAP were likewise denied in a resolution
CA-G.R. SP No. 54894. The two petitions
dated 15 September 2000.
were consolidated.
 Both petitioners and defendants
Umali and ALPAP appealed to this Court.
Under consideration is the petition for
review filed by petitioners.
On 11 December 2000, the Court
required respondent Tan to comment on
the petition filed by petitioners.[3]
Respondent filed his comment on 22
January 2001[4] to which petitioners filed a
reply on 26 April 2001.[5]
In a Manifestation filed on 19
February 2001, respondent stated that the
petition[6] filed by defendants Umali and
ALPAP has already been denied by the
Court in a resolution dated 17 January
2001.[7]
On 20 August 2003, the Court
resolved to give due course to the petition
and required the parties to submit their
respective memoranda within thirty (30)
days from notice.[8] Both petitioners and
respondent complied.[9]
Petitioners assigned the following as
errors:
A. THE COURT OF APPEALS THE LOWER
ERRED IN RULING (1) THAT THE COURT JURISDICTION OVER THE
LOWER COURT HAD CASE.[10]
JURISDICTION OVER THE CASE
(ON THE BASIS OF THE
ORIGINAL COMPLAINT)
NOTWITHSTANDING THE FACT
THAT THE LOWER COURT HAD
EARLIER DISMISSED THE
ORIGINAL COMPLAINT FOR ITS Petitioners state that Article 360 of
FAILURE TO CONFER
the Revised Penal Code vests jurisdiction
JURISDICTION UPON THJE
COURT; AND (2) THAT THE over all civil and criminal complaints for
AMENDED COMPLAINT WAS
libel on the RTC of the place: (1) where the
PROPERLY ALLOWED OR
ADMITTED BECAUSE libelous article was printed and first
THE LOWER COURT WAS NEVER
published; or (2) where the complainant, if
DIVESTED OF JURISDICTION
OVER THE CASE; a private person, resides; or (3) where the
complainant, if a public official, holds

B. THE COURT OF APPEALS office. They argue that since the original
ERRED IN NOT RULING THAT complaint only contained the office
THE ORIGINAL COMPLAINT OF
RESPONDENT WAS AMENDED address of respondent and not the latters
PURPOSELY TO CONFER UPON actual residence or the place where the
allegedly offending news reports were
printed and first published, the original
complaint, by reason of the deficiencies in
its allegations, failed to confer jurisdiction
on the lower court.
The question to be resolved is: Did
the lower court acquire jurisdiction over
the civil case upon the filing of the original
complaint for damages?
We rule in the affirmative.
It is settled that jurisdiction is conferred by law
based on the facts alleged in the complaint since the
latter comprises a concise statement of the ultimate
facts constituting the plaintiff's causes of action.[11] In
the case at bar, after examining the original complaint,
we find that the RTC acquired jurisdiction over the
case when the case was filed before it. From the
allegations thereof, respondents cause of action is for
damages arising from libel, the jurisdiction of which
is vested with the RTC. Article 360 of the Revised
Penal Code provides that it is a Court of First
Instance[12] that is specifically designated to try a libel
case.[13]
Petitioners are confusing jurisdiction with
venue. A former colleague, the Hon. Florenz D.
Regalado,[14] differentiated jurisdiction and venue as
follows: (a) Jurisdiction is the authority to hear and
determine a case; venue is the place where the case is
to be heard or tried; (b) Jurisdiction is a matter of
substantive law; venue, of procedural law; (c)
Jurisdiction establishes a relation between the court
and the subject matter; venue, a relation between
plaintiff and defendant, or petitioner and respondent;
and, (d) Jurisdiction is fixed by law and cannot be
conferred by the parties; venue may be conferred by
the act or agreement of the parties.
In the case at bar, the additional allegations in the
Amended Complaint that the article and the caricature
were printed and first published in the City
of Makati referred only to the question of venue and
not jurisdiction. These additional allegations would
neither confer jurisdiction on the RTC nor would
respondents failure to include the same in the original
complaint divest the lower court of its jurisdiction
over the case. Respondents failure to allege these
allegations gave the lower court the power, upon
motion by a party, to dismiss the complaint on the
ground that venue was not properly laid.
In Laquian v. Baltazar,[15] this Court
construed the term jurisdiction in Article
360 of the Revised Penal Code as referring
to the place where actions for libel shall be
filed or venue.
In Escribano v. Avila,[16] pursuant to
Republic Act No. 4363,[17] we laid down the
following rules on the venue of the criminal
and civil actions in written defamations.
1. General rule: The action may be
filed in the Court of First Instance of
the province or city where the
libelous article is printed and first
published or where any of the
offended parties actually resides at
the time of the commission of the
offense.
2. If the offended party is a public
officer with office in Manila at the
time the offense was committed,
the venue is Manila or the city or
province where the libelous article
is printed and first published.
3. Where an offended party is a
public official with office outside
of Manila, the venue is the province
or the city where he held office at
the time of the commission of the
offense or where the libelous article
is printed and first published.
4. If an offended party is a private
person, the venue is his place of
residence at the time of the
commission of the offense or where
the libelous article is printed and
first published.
The common feature of the
foregoing rules is that whether the
offended party is a public officer or
a private person, he has always the
option to file the action in the Court
of First Instance of the province or
city where the libelous article is
printed or first published.
We further restated[18] the rules on
venue in Article 360 as follows:
 1. Whether the offended
party is a public official or a private
person, the criminal action may be
filed in the Court of First Instance of
the province or city where the
libelous article is printed and first
published.
2. If the offended party is a
private individual, the criminal
action may also be filed in the
Court of First Instance of the
province where he actually resided
at the time of the commission of
the offense.
3. If the offended party is a
public officer whose office is
in Manila at the time of the
commission of the offense, the
action may be filed in the Court of
First Instance of Manila.
4. If the offended party is a
public officer holding office
outside of Manila, the action may
be filed in the Court of First
Instance of the province or city
where he held office at the time of
the commission of the offense.
We fully agree with the Court of Appeals
when it ruled:
We note that the amended
complaint or amendment to the
complaint was not intended to vest
jurisdiction to the lower court,
where originally it had none. The
amendment was merely to
establish the proper venue for the
action. It is a well-established rule
that venue has nothing to do with
jurisdiction, except in criminal
actions. Assuming that venue were
properly laid in the court where the
action was instituted, that would be
procedural, not a jurisdictional
impediment. In fact, in civil cases,
venue may be waived.
Consequently, by dismissing
the case on the ground of improper
venue, the lower court had
jurisdiction over the case.
Apparently, the herein petitioners
recognized this jurisdiction by filing
their answers to the
complaint, albeit, questioning the
propriety of venue, instead of a
motion to dismiss.
...
venue in CIVIL ACTIONS arising from libel
may be waived since they do not involve a
We so hold that dismissal of
the complaint by the lower court
was proper considering that the
complaint, indeed, on its face,
failed to allege neither the
residence of the complainant nor
the place where the libelous article
was printed and first published.
Nevertheless, before the finality of
the dismissal, the same may still
be amended as in fact the
amended complaint was admitted,
in view of the court a
quos jurisdiction, of which it was
never divested. In so doing, the
court acted properly and without
any grave abuse of discretion.[19]
It is elementary that objections to
question of jurisdiction. The laying of
venue is procedural rather than
Petitioners argument that the lower
substantive, relating as it does to
court has no jurisdiction over the case
jurisdiction of the court over the person
because respondent failed to allege the
rather than the subject matter. Venue
place where the libelous articles were
relates to trial and not to jurisdiction. [20]
It
printed and first published would have
is a procedural, not a jurisdictional, matter.
been tenable if the case filed were a
It relates to the place of trial or
criminal case. The failure of the original
geographical location in which an action or
complaint to contain such information
proceeding should be brought and not to
would be fatal because this fact involves
the jurisdiction of the court. [21]
It is meant
the issue of venue which goes into the
to provide convenience to the parties,
territorial jurisdiction of the court. This is
rather than restrict their access to the
not to be because the case before us is a
courts as it relates to the place of trial.
civil action where venue is not
[22]
In contrast, in CRIMINAL ACTIONS, it is
jurisdictional.
fundamental that venue is jurisdictional it
being an essential element of jurisdiction.
[23]
 The cases[24] cited by petitioners are
not applicable here. These cases involve
WHEREFORE, the foregoing
amendments on complaints that confer
considered, the decision of the Court of
jurisdiction on courts over which they
Appeals dated 19 April 2000 is
originally had none. This is not true in the
AFFIRMED in toto. No costs.
case at bar. As discussed above, the RTC
acquired jurisdiction over the subject
matter upon the filing of the original SO ORDERED.
complaint. It did not lose jurisdiction over
the same when it dismissed it on the
MINITA V. CHICO-NAZARIO
ground of improper venue. The
Associate Justice
amendment merely laid down the proper
venue of the case.
Republic of the Philippines SPS. RENATO & ANGELINA LANTIN, Petitioners,
SUPREME COURT vs.
Manila HON. JANE AURORA C. LANTION, Presiding Judge of the
Regional Trial Court of Lipa City, Fourth Judicial Region,
THIRD DIVISION Branch 13, PLANTERS DEVELOPMENT BANK,
ELIZABETH C. UMALI, ALICE PERCE, JELEN MOSCA,
G.R. No. 160053 August 28, 2006 REGISTER OF DEEDS FOR LIPA CITY, BATANGAS, THE
CLERK OF COURT and EX-OFFICIO SHERIFF OF THE
REGIONAL TRIAL COURT OF BATANGAS, Respondents.
DECISION
QUISUMBING, J.:
This is a petition for certiorari assailing the orders dated May
15, 20031 and September 15, 20032 in Civil Case No. 2002-
0555 issued by public respondent, Presiding Judge Jane
Aurora C. Lantion, of the Regional Trial Court (RTC) of Lipa
City, Batangas.
The facts of the case are as follows:
Petitioners Renato and Angelina Lantin took several peso and
dollar loans from respondent Planters Development Bank and
executed several real estate mortgages and promissory notes
to cover the loans. They defaulted on the payments so
respondent bank foreclosed the mortgaged lots. The
foreclosed properties, in partial satisfaction of petitioners debt,
were sold at a public auction where the respondent bank was
the winning bidder. On November 8, 2003, petitioners filed
against Planters Development Bank and its officers Elizabeth
Umali, Alice Perce and Jelen Mosca (private respondents), a
Complaint for Declaration of Nullity and/or Annulment of Sale
and/or Mortgage, Reconveyance, Discharge of Mortgage,
Accounting, Permanent Injunction, and Damages with the RTC
of Lipa City, Batangas. Petitioners alleged that only their peso
loans were covered by the mortgages and that these had
already been fully paid, hence, the mortgages should have
been discharged. They challenged the validity of the
foreclosure on the alleged non-payment of their dollar loans as
the mortgages did not cover those loans.
Private respondents moved to dismiss the complaint on the
ground of improper venue since the loan agreements
restricted the venue of any suit in Metro Manila.
On May 15, 2003, the respondent judge dismissed the case
for improper venue.
Petitioners sought reconsideration. They argued that the trial
court in effect prejudged the validity of the loan documents
because the trial court based its dismissal on a venue
stipulation provided in the agreement. The motion for
reconsideration was denied and the lower court held that the
previous order did not touch upon the validity of the loan
documents but merely ruled on the procedural issue of venue.
Petitioners now come before us alleging that:
I
THE HONORABLE JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN HOLDING THAT THE VENUE
STIPULATIONS IN THE "REAL ESTATE MORTGAGE" AND
"PROMISSORY NOTES" FALL WITHIN THE PURVIEW OF
SECTION 4(B) OF RULE 4 OF THE 1997 RULES OF CIVIL
PROCEDURE IN THAT IT LIMITED THE VENUE OF
ACTIONS TO A DEFINITE PLACE.
II
THE HONORABLE JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN NOT FINDING THAT THE MERE USE OF
THE WORD "EXCLUSIVELY" DOES NOT, BY ITSELF, MEAN
THAT SUCH STIPULATIONS AUTOMATICALLY PROVIDE
FOR AN "EXCLUSIVE VENUE", AS CONTEMPLATED BY
SECTION 4(B) OF RULE 4 OF THE 1997 RULES OF CIVIL
PROCEDURE, SPECIALLY WHEN THE TENOR OR
LANGUAGE OF THE ENTIRE VENUE STIPULATION
CLEARLY PROVIDES OTHERWISE.
III
THE HONORABLE JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN DISREGARDING THE FACT THAT
HEREIN PETITIONERS COMPLAINT INVOLVES SEVERAL
CAUSES OF ACTION WHICH
DO NOT ARISE SOLELY FROM THE "REAL ESTATE
MORTGAGE" AND "PROMISSORY NOTES" AND WHICH
OTHER CAUSES OF ACTION MAY BE FILED IN OTHER
VENUES UNDER SECTIONS 1 AND 2 OF RULE 4 OF THE
1997 RULES OF CIVIL PROCEDURE.
IV
THE HONORABLE JUDGE COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION IN DISREGARDING THE PRINCIPLE THAT
THE RULE ON VENUE OF ACTIONS IS ESTABLISHED FOR
THE CONVENIENCE OF THE PLAINTIFFS.3
The main issue in the present petition is whether respondent
judge committed grave abuse of discretion when she
dismissed the case for improper venue.
Petitioners contend that, since the validity of the loan
documents were squarely put in issue, necessarily this meant
also that the validity of the venue stipulation also was at issue.
Moreover, according to the petitioners, the venue stipulation in
the loan documents is not an exclusive venue stipulation under
Section 4(b) of Rule 4 of the 1997 Rules of Civil
Procedure.4 The venue in the loan agreement was not
specified with particularity. Besides, petitioners posit, the rule
on venue of action was established for the convenience of the
plaintiff, herein petitioners. Further, petitioners also contend
that since the complaint involves several causes of action
which did not arise solely from or connected with the loan
documents, the cited venue stipulation should not be made to
apply.
Private respondents counter that, in their complaint, petitioners
did not assail the loan documents, and the issue of validity
was merely petitioners afterthought to avoid being bound by
the venue stipulation. They also aver that the venue stipulation
was not contrary to the doctrine in Unimasters,5 which requires
that a venue stipulation employ categorical and suitably
limiting language to the effect that the parties agree that the
venue of actions between them should be laid only and
exclusively at a definite place. According to private
respondents, the language of the stipulation is clearly
exclusive.
At the outset, we must make clear that under Section 4 (b) of
Rule 4 of the 1997 Rules of Civil Procedure, the general rules
on venue of actions shall not apply where the parties, before
the filing of the action, have validly agreed in writing on an
exclusive venue. The mere stipulation on the venue of an
action, however, is not enough to preclude parties from
bringing a case in other venues. The parties must be able to
show that such stipulation is exclusive.6 In the absence of
qualifying or restrictive words, the stipulation should be
deemed as merely an agreement on an additional forum, not
as limiting venue to the specified place.7
The pertinent provisions of the several real estate mortgages
and promissory notes executed by the petitioner respectively
read as follows:
18. In the event of suit arising out of or in connection with this
mortgage and/or the promissory note/s secured by this
mortgage, the parties hereto agree to bring their causes of
auction (sic) exclusively in the proper court of Makati, Metro
Manila or at such other venue chosen by the Mortgagee, the
Mortgagor waiving for this purpose any other
venue.8 (Emphasis supplied.)
I/We further submit that the venue of any legal action arising
out of this note shall exclusively be at the proper court of
Metropolitan Manila, Philippines or any other venue chosen by
the BANK, waiving for this purpose any other venue provided
by the Rules of Court.9 (Emphasis supplied.)
Clearly, the words "exclusively" and "waiving for this purpose
any other venue" are restrictive and used advisedly to meet
the requirements.
Petitioners claim that effecting the exclusive venue stipulation
would be tantamount to a prejudgment on the validity of the
loan documents. We note however that in their complaint,
petitioners never assailed the validity of the mortgage
contracts securing their peso loans. They only assailed the
terms and coverage of the mortgage contracts. What
petitioners claimed is that their peso loans had already been
paid thus the mortgages should be discharged, and that the
mortgage contracts did not include their dollar loans. In our
view, since the issues of whether the mortgages should be
properly discharged and whether these also cover the dollar
loans, arose out of the said loan documents, the stipulation on
venue is also applicable thereto.
Considering all the circumstances in this controversy, we find
that the respondent judge did not commit grave abuse of
discretion, as the questioned orders were evidently in accord
with law and jurisprudence.
WHEREFORE, the petition is DISMISSED. The assailed
orders dated May 15, 2003 and September 15, 2003 of the
Regional Trial Court of Lipa City, Batangas, in Civil Case No.
2002-0555 are AFFIRMED.
Costs against petitioners.
SO ORDERED.
LEONARDO A. QUISUMBING
Associate Justice