Rule 4

VENUE OF ACTIONS

1. Q: Define venue.
A: VENUE is the place, or the geographical area where an action is to be filed
and tried. In civil cases, it relates only to the place of the suit and not to the
jurisdiction of the court. (Manila Railroad Company vs. Attorney General, 20
Phil. 523)

2. Venue not a matter of substantive law

Venue is procedural and not substantive. In civil cases, venue is not a matter
of jurisdiction. (Heirs of Pedro Lopez vs. de Castro, 324 SCRA 591 [2000]). Venue
becomes jurisdictional only in a criminal case. In the latter case, where the
information is filed in a place where the offense was not committed, the
information may be quashed for lack of jurisdiction over the offense charged.
(Sec. 3, R 117) This is not so in a civil case where improper venue is not
equivalent to lack of jurisdiction. Because it is merely procedural, the parties can
waive the venue of a case.

3. Venue v. jurisdiction in civil actions-

a. jurisdiction is the authority to hear and try a case while venue is the place
where the case is to be tried and heard;
b. jurisdiction is a matter of substantive law because it defines and vests power
or authority while venue is procedural or part of the manner of hearing and
trying a case;
c. Jurisdiction establishes a relation between the court and the subject matter or
nature of the action while venue links the relation between the parties; and
d. Jurisdiction is fixed by law and cannot be conferred by the parties while venue
can be agreed upon by the parties or waived (Mendiola v. CA 677 SCRA 27, 50-
51)

When jurisdiction and venue coincide-

In CRIMINAL CASES because venue is jurisdictional as it constitutes territorial
jurisdiction. But in civil cases, jurisdiction and venue are two different things.
They do not coincide.

4. Means of waiving venue:

1. failure to object via motion to dismiss;
2. affirmative relief sought in the court where the case is filed even if venue is
improper;
3. failure to allege as an affirmative defense in an answer;
JBD 95
 4. voluntary submission to the court where the case is filed;
5. laches

5. Dismissal based on improper venue not motu propio-

1. The trial court cannot motu proprio dismiss a case on the ground of
improper venue. The court may motu proprio dismiss an action in case of
lack of jurisdiction over the subject matter, litis pendencia, res judicata and
prescription, but not for improper venue. (Rudolf Lietz Holdings, Inc. v.
Register of Deeds of Paranaque City, 344 SCRA 68; Universal Robina Corp.
v. Lim GR 154338, Oct. 5, 2007)
2. Unless and until the defendant objects to the venue in a motion to dismiss,
the venue cannot be truly said to be improperly laid, because the venue
although technically wrong may be acceptable to the parties for whose
convenience the rules on venue have been devised. The trial court cannot
preempt the defendant’s prerogative to object to the improper laying of the
venue by motu proprio dismissing the case. (Dacuycoy v. IAC 195 SCRA
641)

6. Exception (When court may motu proprio dismiss based on improper

venue)-

The court may dismiss on improper venue, at its instance, in an action

covered by the rules on summary procedure. Under these rules, the court
may motu proprio dismiss a case from an examination of the allegations of the
complaint and such evidence as may be attached thereto on any of the
grounds apparent therefrom. The dismissal may be made outright, which
means that the court may do so without need of waiting for the filing of a
motion to dismiss. (Sec. 4, Rules on Summary Procedure)

7. How venue is determined

As said before, in order to know the venue of a particular action, the initial
step is to determine if the action is personal or real.

If it is personal, the venue is transitory hence, the venue is the residence of the
plaintiff or the defendant at the option of the plaintiff. If the defendant is a non-
resident, the venue is the residence of the plaintiff or where the non-resident
defendant may be found, at the election of the plaintiff.(Sec. 3)

If the action is real, the venue is local hence, the venue is the place where the
real property involved, or any portion thereof, is situated (Sec. 1). However,
when the defendant is a non-resident and is not found in the Philippines, and
the action affects the personal status of the plaintiff, or any property of the
defendant located in the Philippines, the venue is the residence of the plaintiff
or where the property or any portion thereof is situated. (Sec. 3)

JBD 96
8. Venue in REAL ACTIONS

Section 1. Venue of real actions. Actions

affecting title to or possession of real property,
or interest therein, shall be commenced and tried
in the proper court which has jurisdiction over the
area wherein the real property involved, or a
portion thereof, is situated.
Forcible entry and detainer actions shall be
commenced and tried in the municipal trial court of
the municipality or city wherein the real property
involved, or a portion thereof, is situated. (1[a],
2[a]a)

Q: Why does the law say “tried in the proper court?”

A: It is because proper court can be the MTC or the RTC, depending on the
assessed value of the property.

In real actions, the venue is the placed where the real property or any
portion thereof is located or local.
If the property is located at the boundaries of two places: file the case in either
place at the option of the plaintiff.

When the case involves two properties located in two different places:
1. if the properties are the object of the same transaction, file it in any of the
two places; and
2. if they are the subjects of two distinct transactions, separate actions should
be filed in each place unless properly joined.

8. Venue in PERSONAL ACTIONS-

Sec. 2. Venue of personal actions. All other

actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs
resides, or where the defendant or any of the
principal defendants resides, or in the case of a
non-resident defendant where he may be found, at
the election of the plaintiff. (2[b]a)

Venue of personal actions:

1.Where the plaintiff or any of the principal plaintiffs resides;
2. where the defendant or any of the principal defendants resides; or
3. in case of a non-resident defendant but found in the Philippines, in the
place where he may be found.
Note: All at the election of the plaintiff.

JBD 97
 Now, suppose, there are four (4) plaintiffs and 4 defendants and the 4
plaintiffs reside in 4 different cities or municipalities. So there are 8 choices for
venue because the law says, “where the plaintiff or any of the principal plaintiffs
or where the defendant or any of the principal defendants reside…”

NOTE that the rule refers to PRINCIPAL PLAINTIFF, and PRINCIPAL

DEFENDANT. This is because there is such a thing as a nominal defendant and
nominal plaintiff..

EXAMPLE of a nominal party: When a party wants to file a case to annul an

execution sale or to annul a levy, normally it impleads the sheriff as party. But
the sheriff is not the principal party but is only a NOMINAL PARTY. So, the
residence of the sheriff is not considered the sheriff being a nominal party only.

This is the original concept of forum shopping which is legitimate but had
later been abused. That is why there is a SC case where Justice Panganiban cited
the history of forum shopping entitled FIRST PHILIPPINE INTERNATIONAL
BANK vs. CA (252 SCRA 259), January 24, 1996)

How to distinguish real from personal action

There are instances when it is easy to distinguish whether the action is real or
personal and there are also instances when it is difficult.

EXAMPLE: An action for annulment of a contract of sale or rescission of

contract of sale of real property. Generally, an action for annulment or rescission
is a personal action. But suppose, I will file a complaint to annul or rescind a
contract or a deed of sale over a parcel of land which we made one year ago
which land is situated in Mandaue City and the purpose of my action is to
recover the ownership of that land is this a real or personal action?
It is a real action because the primary object of the suit is to recover the
ownership of real property. It seems to be personal but in reality it is a real
action. So, the venue is governed by Section 2.

But there are also actions, which appear to be real but in reality, are personal
actions. Like what happened in the case of

LA TONDEÑA DISTILLERS INC vs. PONFERRADA

264 SCRA 540 [1996]

FACTS: A entered into a contract where she committed herself to sell

her land to B. A even placed a lis pendens on the property but later she
backed out. So B will file a case against A for specific performance to
compel her to sign the deed of sale.

ISSUE: Is this real or personal action?

JBD 98
 HELD: It is a PERSONAL ACTION because you are not questioning
my ownership. Here, the plaintiff recognizes that the defendant is still
the owner, which is the reason why he is still filing the case to compel
him to sell.
Thus, it should be filed at the residence of the parties. “The complaint
is one for specific performance with damages. Private respondents do
not claim ownership of the lot but in fact recognized title of defendants
by annotating a notice of lis pendens. In one case, a similar complaint for
specific performance with damages involving real property, was held to
be a personal action, which may be filed in the proper court where the
party resides. Not being an action involving title to or ownership of real
property, venue, in this case, was not improperly laid before the RTC of
Bacolod City.” (Adamos vs. Tuazon 25 SCRA 30 [1968])

Q: Where several or alternative reliefs are sought in an action, and the reliefs
prayed for are real and personal, how is venue determined?
A: Where several or alternative reliefs are prayed for in the complaint, the
nature of the action as real or personal is determined by the primary object of
the suit or by the nature of the principal claim. Thus, where the purpose is to
nullify the title to real property, the venue of the action is in the province where
the property lies, notwithstanding the alternative relief sought, recovery of
damages, which is predicated upon a declaration of nullity of the title. (Navarro
vs. Lucero, 100 Phil. 146)

Where a lessee seeks to establish his right to the hacienda, which was
subsequently sold, for the purpose of gathering the crops thereon, it is
unnecessary to decide whether the crops are real or personal property, because
the principal claim is recovery of possession of land so that he may gather the
fruits thereof. (LTC vs. Macadaeg, 57 O.G. 3317)

Now, going back to Section 2.

RESIDENCE OF THE PARTIES

Where is the residence of the parties? Because residence in law could mean
DOMICILE OR LEGAL RESIDENCE, it could be ACTUAL OR PHYSICAL
RESIDENCE.

With the exception of only one case, the words ‘residence’ and ‘venue’ have
been uniformly interpreted by the SC to mean ACTUAL or PHYSICAL
RESIDENCE not legal domicile. Alright, there are so many cases already: CO vs.
CA (70 SCRA 296); FULE vs. CA (14 SCRA 189); HERNANDEZ vs. RURAL
BANK OF THE PHIL (81 SCRA 75); RAYMOND vs. CA (166 SCRA 50);
ESCUERTE vs. CA (193 3CRA 54).

JBD 99
 EXCEPT for one case decided way back in 1956 – the case of

CORRE vs. CORRE

100 Phil 221

FACTS: An American who resides in San Francisco who came to the

Philippines rented an apartment in Manila to sue his wife who is a
Filipina. The wife is from Mindanao. And then the American husband
filed the case in Manila because he rented an apartment in Manila.

HELD: You are not a resident of Manila. Your residence is in San

Francisco – that is your domicile. So that is to compel the American to
file the case in the residence of the wife rather than the wife going to
Manila.

So the case of CORRE is the only exception where the SC said, “residence
means domicile.” All the rest, physical! In the case of CORRE, maybe the SC
there was just trying to help the Filipina. If we will interpret the rule on venue as
physical, it is the Filipina who will be inconvenienced.

RESIDENCE OF A CORPORATION

Under Rule 1, a corporation can sue and be sued. But what is the residence of
a corporation? Under the corporation law, the residence of a corporation is the
place where its head or main office is situated.

CLAVECILLA RADIO SYSTEM vs. ANTILLON

19 SCRA 39 [1967]

FACTS: Clavecilla was sued in Cagayan de Oro City. Clavecilla

questioned the venue because its head office is in Manila. The plaintiff
argued that it can be sued in Cagayan de Oro because it has a branch
there.

ISSUE: Is a corporation, a resident of any city or province wherein it

has an office or branch?

HELD: NO. Any person, whether natural or juridical, can only have
one residence. Therefore, a corporation cannot be allowed to file
personal actions in a place other than its principal place of business
unless such a place is also the residence of a co-plaintiff or defendant.

The ruling in the case of ANTILLON was reiterated in the 1993 case of
YOUNG AUTO SUPPLY CO. vs. COURT OF APPEALS (223 SCRA 670)

JBD 100
 Because the law said “where the plaintiff or any of the principal plaintiffs” so,
if the corporation is suing with someone from Cebu City, even if its head office is
in Manila, the corporation can file in Cebu City because of the residence of my
co-plaintiff or the residence of the defendant. But outside of that, a corporation
cannot sue outside of its head office because its residence is there. That is the case
of YOUNG AUTO SUPPLY.

“OR IN THE CASE OF A NON-RESIDENT DEFENDANT- WHERE HE MAY BE

FOUND”

Suppose the defendant is not residing here in the Philippines but is just on
vacation and you want to sue him. What is now the point of reference?

Did you notice the phrase “or in the case of a non-resident defendant where
he may be found.” Now what does that mean? It means to say that the defendant
is not actually residing in the Philippines but he is temporarily around because
he is found in the Philippines.

Example is a balikbayan who is still on vacation.

PROBLEM: Suppose a Filipino who is already residing abroad decided to

come back this Christmas for a vacation. When he landed at the Manila Domestic
Airport, you met him as your friend and the first thing he requested you is if he
could borrow some pesos because his money is in dollars. He borrowed from
you P15,000.00 promising to pay in a week’s time.. One week later, still he has
not paid you and obviously it seems he will not pay you. So you decided to sue
him while he is around to collect, where is the venue of the action?
A: The law says, generally where the plaintiff resides or where the defendant
resides. The trouble is, the defendant has no residence here because he is already
residing abroad. But he is temporarily here in the Philippines.
You can sue him where he may be found. If he decides to stay in Cebu, that is
where the proper venue rather his permanent residence. So where he may be
found is the alternative venue. The phrase “where he may be found” means where
he may be found here in the Philippines for a non-resident defendant but
temporarily staying in the Philippines.

Q: Suppose a defendant is a non-resident and he is not even here. Like for

example, your neighbor borrowed money from you and the nest thing you heard
is that he left the country. He has already migrated to the states. Of course you
know his address there. Can you sue him in the Philippine court, a defendant
who is no longer residing here and is not found in the Philippines?
A: NO, you cannot. Charge it to experience.

Q: Why can you not sue a person not residing here in the Philippines and is
not found here in the first place?

JBD 101
 A: There is no way for Philippine courts to acquire jurisdiction over his
person. Otherwise, he will not be bound by the decision.

But in our discussion on the element of jurisdiction: subject matter, person, res
and issues, I told you that the res or the thing in dispute is important because
sometimes it takes the place of jurisdiction over the person of the defendant. So
even if the Philippine court cannot acquire jurisdiction over the person of the
defendant but the subject of the controversy (res) is in the Philippines, then the
non-resident defendant can also be sued in the Philippines. The court can now
acquire jurisdiction over the res, subject and since the res is here, the judgment
can be enforced. It is not a useless judgment anymore.

EXAMPLE: He is there but he is the owner of a piece of land here. I want to

file a case to recover ownership over the land here in the Philippines.
Q: Can I sue the non-resident defendant?
A: YES under Section 3. Even if the person is abroad, the res of the property in
dispute is here and if he loses the case the judgment can be enforced – transfer
the property to you. So it is not a useless judgment. That is what Section 3 is all
about.

9. Venue of actions against non-residents affecting the personal status of the

plaintiff; actions affecting property in the Philippines of a non-resident or in
rem and quasi-in-rem cases-

Sec. 3. Venue of actions against nonresidents. -

If any of the defendants does not reside and is not
found in the Philippines, and the action affects
the personal status of the plaintiff, or any
property of said defendant located in the
Philippines, the action may be commenced and tried
in the court of the place where the plaintiff
resides, or where the property or any portion
thereof is situated or found, (2[c]a)

Q: What is the difference between the non-resident defendant in Section 2 and

the non-resident defendant in Section 3?
A: In Section 2, the non-resident defendant may be found in the Philippines.
But in Section 3, he does not reside and is not found in the Philippines. So,
physically, he is not around.

Venue of ordinary civil actions against non-residents:

1. Non-resident but found in the Philippines;
a.) for personal actions, where the plaintiff resides or where he may be found
at the election of the plaintiff;
b.) for real actions, where the property is located.

2. Non-resident not found in the Philippines

JBD 102
 An action may be filed only when:

1.) The action affects the personal status of the plaintiff and venue is the
place where the plaintiff resides; or
2.) The action affects the property or any portion thereof of said defendants
is located here in the Philippines, and venue is the place where the
property or any portion thereof is located.

ACTION THAT AFFECTS THE PERSONAL STATUS OF THE PLAINTIFF

EXAMPLE: A young child was abandoned by his illegitimate father who left
the Philippines for good. The son wants to file a case against the father for
compulsory recognition, at least to improve his status.

Q: Can the child file a case for compulsory acknowledgment here in the
Philippines against the father for compulsory acknowledgment?
A: YES because the action involves the personal status of the plaintiff. The res
is the status of the plaintiff who happens to be in the Philippines.

THE ACTION AFFECTS THE PROPERTY OR ANY PORTION THEREOF OF

SAID DEFENDANTS LOCATED HERE IN THE PHILIPPINES

Example: The defendant who is already abroad owns a piece of land located
here in the Philippines and I want to recover the ownership of the piece of land.

Q: What is the res?

A: The res is the land which is situated here in the Philippines. Therefore I can
sue that defendant even if he is there because the court can acquire jurisdiction
over the res.

In order to validly sue in the Philippine court, a defendant who is no longer

residing here and is no longer found here, the action must be:
1.) action in rem; or
2.) at least quasi-in rem.

In the examples given, if the action is for compulsory recognition, that is

actually an action in rem. In the suit, which involves a property here in the
Philippines, at least that is an action quasi-in rem.

But if the action is purely in personam, then there is no way by which you can
sue him. Example is an action to collect an unpaid loan.
Q: Where is now the proper venue of the action against the non-residents?
A: The law says where the plaintiff resides – action which affects the personal
status of defendants, where the property of the defendant located here in the
Philippines

JBD 103
Sec. 4. When rule not applicable. - This rule shall not
apply -
a)In those cases where a specific rule or law
provides otherwise; or
b)Where the parties have validly agreed in writing
before the filing of the action on the exclusive
venue thereof. (3a, 5a)

A.) IN THOSE CASES WHERE A SPECIFIC RULE OR LAW PROVIDES

OTHERWISE;

Q: What cases provide for venue of the action, which may be different from
what Rule 4 says?
A: The following:

1.) A civil action arising from LIBEL under Article 360 of the Revised Penal
Code.

Libel could give rise to a civil action for damages. It is considered under
the RPC as one of the independent civil actions. The criminal action for
libel shall be filed simultaneously or separately in the RTC of the:
a.) province or city where the libelous article is printed and first
published; or
b.) where any of the offended parties actually resides at the time of the
commission of the offense.
If one of the offended party is a public officer, whose office is in the City
of Manila at the time of the commission of the offense, the action shall be
filed (a) in the RTC of Manila, or (b) in the RTC of the province where he
held office at the time of the commission of the offense.

2.) Section 5 (4), Article VIII, 1987 Constitution – The SC may order a change of
venue or place of trial to avoid a miscarriage of justice as what happened in
the case of Mayor Sanchez.

B.) WHERE THE PARTIES HAVE VALIDLY AGREED IN WRITING BEFORE

THE FILING OF THE ACTION ON THE EXCLUSIVE VENUE THEREOF.

The parties may agree on a specific venue which could be in a place where
neither of them resides.
Take note that the stipulation must be:
(1) in writing;
(2) made before the filing of the action and
JBD 104
 3. exclusive or restrictive as to the venue.

While the first two rarely pose a problem, the third has been a source of
controversy in the past.

A stipulation that “any suit arising from this contract shall be filed only in
Quezon City” is exclusive in character and is clear enough to preclude the filing
of the case in any other place. In this case, the residences of the parties are not to
be considered in determining the venue of the action.

How about a stipulation that the “parties agree to sue and be sued in the
courts of Manila?”

POLYTRADE CORP. vs. BLANCO

30 SCRA 187

FACTS: C and J are both residing here in Cebu City. J borrowed

money from C, and executed a promissory note in favor of the latter
which says, “I promise to pay C the sum of P200,000 one year from
today. In case of a suit arising from this promissory note, the parties
agree to sue and be sued in the City of Manila.”
When the note matured, J did not pay so C filed a case to collect the
unpaid loan here in Cebu City but J challenged the venue on ground
that the venue is agreed upon which is Manila. According to C, the
venue is correct because both of us are residing here in Cebu City and
under Rule 4, the venue is where I reside or you reside, at my option.

ISSUE: Who is correct in this case?

HELD: Plaintiff is correct notwithstanding the stipulation. Why?

When the parties stipulated on the venue of the civil action, other than
those found in the Rule of Court, the stipulated venue is considered
merely as an ADDITION to where the parties reside. Unless the
stipulation contains RESTRICTIVE words, which shows the intention of
the parties to limit the place stipulated as the exclusive venue.

So in the second exception where there is an agreement in writing on the

exclusive venue, the word exclusive is very important as taken in the ruling in
POLYTRADE vs. BLANCO. So if the venue is not exclusive, Rule 4 still applies
and the stipulated venue is just an additional one.

Of course, there are stipulations where you can see clearly the intention of the
parties to limit the venue. But, sometimes there are stipulations in which it is
difficult to decipher the real intention of the parties whether exclusive or not.
Examples of clear stipulations which calls for the application of the POLYTRADE

JBD 105
ruling: in the City of Manila only or the suit shall be filed in the City of Manila and in
no other place.

The Polytrade doctrine was further applied in the case of Unimasters Conglomeration
Inc. v. CA 267 SCRA 759. In this case, it was ruled that a stipulation stating that “all
suits arising out of this Agreement shall be filed with/in the proper courts of Quezon
City,” is only permissive and does not limit the venue to the Quezon City courts. As
explained the said case:

“In other words, unless the parties made very clear, by employing categorical and
suitably limiting language, that they wish the venue of the 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. xxx There must be, to repeat, 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 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.”

However, there are cases in which you cannot find the word exclusive or the
word only, and yet the SC said it seems the intention of the parties to limit the
venue as exclusive as what happened in the 1994 case of

GESMUNDO vs. JRB REALTY CORP

234 SCRA 153

FACTS: This involves a lease contract, which contain a stipulation on

venue. Here is the language of the lease contract: “venue for all suits,
whether for breach hereof or damages or any cause between the LESSOR and
the LESSEE, and persons claiming under each, being the courts of appropriate
jurisdiction in Pasay City…”
In other words, if there is a case, they agreed to file it in the court of
Pasay City.

ISSUE: Is this intention of the parties to make Pasay City an exclusive

venue?

HELD: Pasay City is the exclusive venue. “It is true that in Polytrade
Corporation v. Blanco, a stipulation that ‘The parties agree to sue and be
sued in the City of Manila’ was held to merely provide an additional
forum in the absence of any qualifying or restrictive words. But here, by
laying in Pasay City the venue for all suits, the parties made it plain that
in no other place may they bring suit against each other for breach
contract or damages or any other cause between them and persons

JBD 106
 claiming under each of them.” In other words, the intention of the
parties is to make Pasay City the exclusive venue.

The following stipulations were likewise treated as merely permissive and did
not limit the venue:

a. Xxx The agreed venue for such action is Makati, Metro Manila, Philippines
(Mangila v. CA 435 Phil. 870).
b. “In case of litigation hereunder, venue shall be in the City Court or Court
of First Instance of Manila as the case may be for determination of any and
all questions arising thereunder.” (Phil. Bank of Communications v. Trazo,
GR 165500, Sug. 30, 2006)
c. “It is hereby agreed that in case of foreclosure of this mortgage under ACT
3135, as amended, and Presidential Decree No. 385, the auction sale shall
be held at the capital of the province, if the property is within the territorial
jurisdiction of the province concerned, or shall be held in the city, if the
property is within the territorial jurisdiction of the city
concerned”(Langkaan Realty Development, Inc. v. UCPB GR 139427, Dec.
8, 2000)
d. “All court litigation procedures shall be conducted in the appropriate
courts of Valenzuela City, Metro Manila” (Auction in Malinta, inc. v.
Luyaben GR 173979, Feb. 12, 2007)

Examples of words with restrictive meanings are: xxx “only”, “solely”,

“exclusively in this court”, “in no other court save –“, “particularly”, “nowhere
else but/except --, or words of equal import xxx” (Pacific Consultants
International Asia, Inc. v. Schonfeld, GR 166920 Feb. 19, 2007)

Cases like Hoechst, Inc. v. Torres, 83 SCRA 297 and Bautista v. de Borja 18 SCRA
474 and other rulings contrary to the Polytrade doctrine are deemed superseded
by current decisions on venue.

In Supena v. de la Rosa 334 Phil. 671, it was ruled that Hoechst had been
rendered obsolete by recent jurisprudence applying the doctrine enunciated in
Polytrade (Auction in Malinta Inc. v. Luyaben)

This conflict was resolved in the case of PHIL. BANKING vs. TENSUAN (228
SCRA 385) where the SC ruled that the ruling in BAUTISTA vs. DE BORJA and
HOECHST PHILS. vs. TORRES has been rendered obsolete by the POLYTRADE
ruling and subsequent cases reiterated it. So the ruling in POLYTRADE is the
correct ruling. Forget what the SC said in the abovementioned two cases.

In contracts of adhesion-
When stipulation would be contrary to public policy of making courts accessible
to all who may have need of their service

JBD 107
 SWEET LINES vs. TEVES
83 SCRA 361

FACTS: This is a Cagayan de Oro case which involves Sweet Lines, a

shipping company with the head office in Cebu. The respondent Teves
is the former City Fiscal of Davao City, former Mayor and became judge
of CFI of Cagayan de Oro City.
There was a group of passenger who rode on the Sweet Lines bound
for Cebu City. During the trip, they were given a crude treatment by the
officers of the vessel. When they came back in Cagayan de Oro City,
they filed a suit for damages against Sweet Lines. They file the case in
the former CFI, now RTC, of Cagayan de Oro City because the plaintiffs
are residents of Cagayan de Oro City.
Sweet Lines filed a motion to dismiss questioning the venue of the
action because in the ticket issued by Sweet Lines, it is stipulated that
“…in case of a civil action arising from the contract of carriage, the venue of
the action shall be the City of Cebu ONLY and in no other place.” So there is a
restrictive word. Obviously the lawyers of Sweet Lines knew about
Polytrade because they moved to dismiss the case citing this case.
Judge Teves denied the motion to dismiss the case despite the
stipulation. According to him, it is unfair. If I will dismiss the case based
on this stipulation, the aggrieved parties will be discouraged in going to
Cebu. It is very expensive and they will be inconvenienced. But, if the
case will go on in Cagayan de Oro, it will not inconvenienced Sweet
Lines because they have their branch office, their manager and their
own lawyer.

ISSUE: Whether or not Cagayan de Oro is the proper venue.

HELD: YES. Judge Teves was correct in not dismissing the case.
First of all, the stipulation is placed in the ticket. These people never
even bothered to read this. Nakalagay na iyan diyan eh. So either you
take it or you leave it. Therefore, the passengers did not have a hand in
preparing that stipulation. So the contract is a contract of adhesion.
Second, again for the sake of equity, to be fair that these poor people
will be compelled to go to Cebu to file a case there. They will be
discouraged. It is very expensive to go back and forth to Cebu. Whereas,
Sweet Lines has the resources, the means, the lawyers here in Cagayan
to litigate. Therefore, it would be inequitable to compel them or to apply
the stipulation there.

The ruling in SWEET LINES is an exception to POLYTRADE despite the

exclusive stipulation. The SC said that the refusal of the court to apply it is
correct. There is no grave abuse of discretion on the part of Judge Teves.

JBD 108
 ARQUERO vs. FLOJO
168 SCRA 54
FACTS: Arquero here is lawyer and the municipal mayor of the
municipality of Sta. Teresita, Cagayan Valley. He sent a telegram
through the RCPI branch in Cagayan addressed to a Congressman in
stating: I will go there to Manila, I will see you in your office on this
particular date.
When he went to the office of the congressman after a few days, who
was mad at him telling him “So you are here to ask for a favor for your own
but your telegram was charged collect! Arquero was stunned and
embarrassed because he paid for the telegram.
Upon his return to Cagayan, he filed an action for damages against
RCPI. But in the RCPI telegraph form, there is a stipulation that “venue
of any action shall be the court of Quezon City alone and in no other courts.”
So the venue is restrictive and RCPI filed a motion to dismiss citing as
ground improper venue.
The trial court granted the motion. Arquero went to the SC citing the
case of SWEET LINES where despite the fact of a restrictive stipulation,
SC refused to apply the POLYTRADE ruling.

HELD. The ruling in Sweet Lines vs. Teves does not apply. You are
bound by the stipulation. Why? You are a lawyer so you know the
implication of the stipulation signed.

Contracts of adhesion therefore, might be occasionally struck down

only if there was a showing that the dominant bargaining party left the
weaker party without any choice as to “be completely deprived of an
opportunity to bargain effectively” (Prieto v. CA, 673 SCRA 371).

Authority of the Supreme Court in relation to venue-

Sec. 5[4]4, Art. VIII of the Constitution allows the Supreme Court to order a
change of venue. And because said provision does not distinguish then it applies
to criminal as well as civil actions.

Reviewer
Venue
Venue defined - the place where the action is triable, whether real or personal. Relates to
place of trial. Touches more of convenience of the parties rather than the substance of the
case. Procedural and not substantive.

1. Venue versus Jurisdiction

1. Venue – locality or place where the suit may be had. Relates to jurisdiction over the
person rather than subject matter. Provisions relating to venue establish a relation
between plaintiff and defendant.
2. Jurisdiction – power of the court to decide the case on the merits.
JBD 109
Provisions on jurisdiction establish a relation between the court and the subject matter.
A court cannot motu proprio dismiss a complaint on the ground of improper venue since
improper venue may be WAIVED for failure to object to it (Decoycoy vs. IAC, 195
SCRA 641 [1991]).
2. Venue of real actions (Rule 4, Sec. 1 )
Court which has jurisdiction over area where property or any part thereof is located.
Real actions – actions affecting title to or possession of real property, or interest therein.
Examples:
a. recovery of possession
b. partition or condemnation
c. foreclosure of mortgage
d. annulment or rescission of sale of real property (actually for recovery)
Forcible entry and detainer are real actions, regardless of amount of damages involved.
N.B. But venue may be changed and transferred to another place by agreement of the
parties, and such agreement is valid and enforceable (Villanueva vs. Mosqueda, 115
SCRA 904 [1982]).

3. Venue of personal actions (Rule 4, Sec. 2)

Where plaintiff or any of principal plaintiffs reside, or where defendant or any of the
principal defendants resides, or in the case of a non-resident defendant, where he may be
found, at the election of the plaintiff.
Meaning of residence – ACTUAL RESIDENCE or place of abode, which may not
necessarily be his legal residence or domicile, provided he resides therein with continuity
and consistency. Must be more than temporary.

Personal action – where plaintiff seeks the recovery of personal property, enforcement
of contract or recovery of damages.

4. Venue of actions against non-residents (Rule 4, Sec. 3)

What is the venue of actions against nonresident defendant who is not found in the
Philippines?
1. If action affects PERSONAL STATUS of plaintiff, such as a legal personal relationship
which is not temporary nor terminable at the mere will of the parties (annulment of
marriage, recognition of a natural child) – venue is the court of place where PLANTIFF
RESIDES.
While the court acquires jurisdiction over person of defendant, it does not preclude the
court from rendering valid judgment over the issue regarding the personal status of
plaintiff in relation to defendant.
This is an action quasi in rem.

2. If action affects any PROPERTY of defendant located in the Philippines – venue is the
court in the area where PROPERTY or portion thereof is SITUATED.
While court acquires no jurisdiction over person of defendant, valid judgment may be
rendered against the property which is the one impleaded and is the subject of judicial
power (ex. where plaintiff is already in possession of a lien sought to be enforced or by
attachment of the property).
This is an action in rem.

5. When the Rule on Venue Does not Apply (Rule 4, Sec. 4)

JBD 110
1. Where a specific rule or law provides otherwise.
Example: An offended party who is at the same time a public official can only institute an
action for damages arising from libel in two venues: (a) the place where he holds office
(if private individual, where he resided at the time of the commission of the offense) and
(b) the place where the alleged libelous articles were printed and first published. N.B.
applies also to the criminal case.
a. Unless and until the defendant OBJECTS to venue in a motion to dismiss prior to a
responsive pleading, venue cannot truly be said to have been improperly laid.
b. A motion to dismiss belatedly filed could no longer deprive the trial court of
jurisdiction to hear and decide the civil action for damages. Improper venue may be
waived and such waiver may occur by laches.
c. Objections to venue in such actions may be waived as it does not relate to jurisdiction
over the subject matter but rather over the person. Laying of venue is PROCEDURAL
and not substantive (Diaz vs. Adiong, 219 SCRA 631 (1993)
d. A court cannot motu proprio dismiss a complaint on the ground of improper venue
since improper venue may be WAIVED for failure to object to it (Dacoycoy vs. IAC ,
195 SCRA 641 [1991]).
NOTE: 1) Under Sec. 1 of Rule 16, objections to improper venue must be made in a
motion to dismiss before responsive pleading is filed. [Responsive pleading is one that
seeks affirmative relief and sets up defenses].
2) Improper venue (Sec. 1 (c) - that venue is improperly laid) may now be raised as an
AFFIRMATIVE DEFENSE in the answer if no motion to dismiss has been filed (Rule
16, Sec. 6).
3) Under the old rule, when improper venue is not objected to in a motion to dismiss, it is
deemed WAIVED. This provision has been deleted in the new rule.
2. Where parties have validly agreed in writing before filing of the action on
exclusive venue thereof.

6. Effects of Stipulations on Venue

Provision that “We hereby expressly submit to the jurisdiction of the courts of
Valenzuela any legal action which may arise out of this promissory note” is
PERMISSIVE
stipulation only. It does not require the laying of venue in Valenzuela exclusively or
mandatorily. No qualifying or restrictive words like “must”, “only” or
“exclusively”. Hence no intent by parties to restrict the venue of actions arising out
of the promissory notes to the courts of Valenzuela only (Phil. Banking Corp. vs. Tensuan
, 228 SCRA 385 (1993} The case at bar involves petitioners’ mortgaged
real property located in Parañaque City over which respondent bank was
granted a special power to foreclose extra-judicially. Thus, by express provision of
Section 2, Act 3135, the sale can only be made in Parañaque City. The exclusive venue of
Makati City, as stipulated by the parties and sanctioned by Section 4, Rule 4 of the Rules
of Court, cannot be made to apply to the Petition for Extrajudicial Foreclosure filed by
respondent bank because the provisions of Rule 4 pertain to venue of actions, which an
extrajudicial foreclosure is not. (Sps. Ochoa vs. China Banking Corporation, G.R. No.
192877, March 23, 2011)
Complaint for unlawful detainer may be filed outside the municipality or city where the
real property is located, pursuant to the venue stipulation in the contract.
Maunlad Homes questioned the venue of Union Bank’s unlawful

JBD 111
detainer action which was filed in Makati City while the contested property is
located in Malolos, Bulacan. Citing Section 1, Rule 4 of the Rules of Court, Maunlad
Homes claimed that the unlawful detainer action should have been filed with the
municipal trial court of the municipality or city where the real property involved is
situated. Union Bank, on the other hand, justified the filing of the complaint with the
MeTC of Makati City on the venue stipulation in the contract which states that "the venue
of all suits and actions arising out of or in connection with this Contract to Sell shall be at
Makati City."
While Section 1, Rule 4 of the Rules of Court states that ejectment actions shall be filed
in "the municipal trial court of the municipality or city wherein the real property involved
x x x is situated," Section 4 of the same Rule provides that the rule shall not apply "where
the parties have validly agreed in writing before the filing of the action on the
exclusive venue thereof.” (Union Bank of the Philippines vs. Maunlad Homes Inc.,
G.R. No. 190071, August 15, 2012)

TO SUMMARIZE:
Waiver of improper venue may be made through:
1. express waiver – through written agreement.
2. implied waiver – through failure to seasonably object to improper venue in a motion
to
dismiss or answer
Improper venue may be questioned through:
1. motion to dismiss (Rule 16, Sec. 1(c))
- if denied, file with the higher court a petition for prohibition with prayer for TRO and
preliminary injunction, as lower court has no power to enforce its orders in said case, the
same being outside the territorial jurisdiction of the judge before whom it was filed.
2. affirmative defense in answer (Rule 16, Sec. 6).

JBD 112