Capati Vs Ocampo, 113 Scra 794 No. L-28742. April 30, 1982. VIRGILIO CAPATI, Plaintiff-Appellant, vs. DR. JESUS P. OCAMPO, Defendant-Appellee

CAPATI VS OCAMPO, 113 SCRA 794
No. L-28742. April 30, 1982.*

VIRGILIO CAPATI, plaintiff-appellant, vs. DR. JESUS P. OCAMPO, defendant-
appellee.
Statutory Construction; Words and Phrases; Word “may” permissive.—It is well settled
that the word “may” is merely permissive and operates to confer discretion upon a
party. Under ordinary circumstances, the term “may be” connotes possibility; it does
not connote certainty. “May” is an auxiliary verb indicating liberty, opportunity,
permission or possibility.
Same; Same; Remedial Law; Venue; Stipulation of the parties that all actions arising
or relating to their contract may be instituted in the CFI of the City of Naga, not
restrictive, but permissive, Venue of action in Pampanga CFI, where plaintiff resides,
properly laid; Case at bar.—We hold that the stipulation as to venue in the contract in
question is simply permissive. By the said stipulation, 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. Since the complaint has been filed in the Court of First Instance of Pampanga,
where the plaintiff resides, the venue of action is properly laid in accordance with
Section 2 (b), Rule 4 of the Rules of Court.
APPEAL from the order of the Court of First Instance of Pampanga.
The facts are stated in the opinion of the Court.

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* SECOND DIVISION
795
VOL. 113, APRIL 30, 1982

795
Capati vs. Ocampo
ESCOLIN, J.:
We set aside the order of the Court of First Instance of Pampanga in Civil Case No.
3188 which dismissed the plaintiff’s complaint on ground of improper venue.
Plaintiff Virgilio Capati, a resident of Bacolor, Pampanga, was the contractor of the
Feati Bank for the construction of its building in Iriga, Camarines Sur. On May 23,
1967, plaintiff entered into a sub-contract with the defendant Dr. Jesus Ocampo, a
resident of Naga City, whereby the latter, in consideration of the amount of P2,200.00,
undertook to construct the vault walls, exterior walls and columns of the said Feati
building in accordance with the specifications indicated therein. Defendant further
bound himself to complete said construction on or before June 5, 1967 and, to
emphasize this time frame for the completion of the construction job, defendant affixed
his signature below the following stipulation written in bold letters in the sub-contract:
“TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE ’67.”
Claiming that defendant finished the construction in question only on June 20, 1967,
plaintiff filed in the Court of First Instance of Pampanga an action for recovery of
consequential damages in the sum of P85,000.00 with interest, plus attorney’s fees
and costs. The complaint alleged inter alia that “due to the long unjustified delay
committed by defendant, in open violation of his express written agreement with
plaintiff, the latter has suffered great irreparable loss and damage x x x.”
Defendant filed a motion to dismiss the complaint on the ground that venue of action
was improperly laid. The motion was premised on the stipulation printed at the back
of the contract which reads:
“14. That all actions arising out, or relating to this contract may be instituted in the
Court of First Instance of the City of Naga.”
Plaintiff filed an opposition to the motion, claiming that their agreement to hold the
venue in the Court of First Instance of Naga City was merely optional to both
contracting
796
796
SUPREME COURT REPORTS ANNOTATED
Capati vs. Ocampo
parties. In support thereof, plaintiff cited the use of the word “may” in relation with the
institution of any action arising out of the contract.
The lower court, in resolving the motion to dismiss, ruled that “there was no sense in
providing the aforequoted stipulation, pursuant to Sec. 3 of Rule 4 of the Revised Rules
of Court, if after all, the parties are given the discretion or option of filing the action in
their respective residences,” and thereby ordered the dismissal of the complaint.
Hence, this appeal.
The rule on venue of personal actions cognizable by the courts of first instance is found
in Section 2 (b), Rule 4 of the Rules of Court, which provides that such “actions may
be commenced and tried 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 said section is qualified by the following provisions of Section 3 of the
same rule:
“By written agreement of the parties the venue of an action may be changed or
transferred from one province to another.”
Defendant stands firm on his contention that because of the afore-quoted covenant
contained in par. 14 of the contract, he cannot be sued in any court except the Court
of First Instance of Naga City. We are thus called upon to rule on the issue as to
whether the stipulation of the parties on venue is restrictive in the sense that any
litigation arising from the contract can be filed only in the court of Naga City, or merely
permissive in that the parties may submit their disputes not only in Naga City but also
in the court where the defendant or the plaintiff resides, at the election of the plaintiff,
as provided for by Section 2 (b), Rule 4 of the Rules of Court.
It is well settled that the word “may” is merely permissive and operates to confer
discretion upon a party. Under ordinary circumstances, the term “may be” connotes
possibility; it does not connote certainty. “May” is an auxiliary verb indicating liberty,
opportunity, permission or possibility.1
_______________
1 In Re: Hirsh’s Estate 5A. 2d 160, 163; 334 Pa. 172; Words & Phrases, permanent
edition, 26a.
797
VOL. 113, APRIL 30, 1982

797
Capati vs. Ocampo
In Nicolas vs. Reparations Commission2, a case involving the interpretation of a
stipulation as to venue along lines similar to the present one, it was held that the
agreement of the parties which provided that “all legal actions arising out of this
contract x x x may be brought in and submitted to the jurisdiction of the proper courts
in the City of Manila,” is not mandatory.
We hold that the stipulation as to venue in the contract in question is simply permissive.
By the said stipulation, 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.
Since the complaint has been filed in the Court of First Instance of Pampanga, where
the plaintiff resides, the venue of action is properly laid in accordance with Section 2
(b), Rule 4 of the Rules of Court.
WHEREFORE, the order appealed from is hereby set aside. Let the records be
returned to the court of origin for further proceedings. Costs against defendant-
appellee.
SO ORDERED.
Barredo (Chairman), Aquino, De Castro and Ericta, JJ., concur.
Concepcion Jr., J., On official leave.
Abad Santos, J., On official leave.
Order set aside.
Notes.—It is a dogma of procedural law that venue, inferior courts as well as in the
courts of first instance, may be waived expressly or impliedly. (Ocampo vs.
Domingo,38 SCRA 134.)
Venue of action is not left to caprice of plaintiff who must follow the rules laid down in
the Rules of Court. (Sulo ng Bayan, Inc. vs. Gregorio Araneta, Inc.,72 SCRA 348.)
To permit an inquiry outside the document itself would be to assume that the contract
does not show where it was executed (which was not true of the instant case) in which
event, sub-
_______________
2 64 SCRA 110.
798
798
Association of Rice & Corn Producers of the Philippines, Inc. vs. The National Land
Reform Council
paragraph 3 of the same Rule 4 would be applicable, to the effect that action should
be brought “in the municipality where the defendant or any of the defendants resides
or may be served with summons.” (Universal Insurance and Indemnity Co. vs.
Cansino, Jr.,42 SCRA 216.)
It is fundamental in the law governing venue of actions (Rule 4 of the Rules of Court)
that the situs for bringing real and personal civil actions are fixed by the rules to attain
the greatest convenience possible to the parties litigants by taking into consideration
the maximum accessibility to them of the courts of justice. (Koh vs. Court of Appeals,70
SCRA 298.) “Resides“ in the rules on venue on personal actions means the place of
abode, whether permanent or temporary, of the plaintiff or defendant as distinguished
from “domicile” which denotes a fixed permanent residence. (Dangwa Transportation
Co. vs. Sarmiento,75 SCRA 124.)
Venue is not a jurisdictional matter. (Tantoco vs. Court of Appeals,77 SCRA 225.)
Claims for damages against a bond in an alleged wrongful attachment must be
prosecuted in the court where the bond was filed. (Pioneer Insurance & Surety Corp.
vs. Hontanosas, 78 SCRA 447.)
An action on a loan of money must be brought at the place where the promissory notes
and chattel mortgages were executed as expressly stated. (Republic vs. Cuaycong, 9
SCRA 838.)
A writ of prohibition is the proper remedy where a trial court erroneously denies a
motion to dismiss based on improper venue. (Bautista vs. De Borja,18 SCRA 474.
Capati vs. Ocampo, 113 SCRA 794, No. L-28742 April 30, 1982
CLAVECILLA RADIO VS ANTILLON, 19 SCRA 379
No. L-22238. February 18, 1967.

CLAVECILLA RADIO SYSTEM, petitioner and appellant, vs. HON. AGUSTIN
ANTILLON, as City Judge of the Municipal Court of Cagayan de Oro City and
NEW CAGAYAN GROCERY, respondents and appellees.
Corporation Law; Domicile of a corporation.—The residence of a corporation is the

place where its principal office is established. It can be sued in that place, not in the
place where its branch office is located.
Actions; Venue; Venue of a tort action against a, corporation in inferior court.—Where
the action filed against a corpo-
380
380
Clavecilla Radio System vs. Antillon, et al.
ration in the inferior court is based on tort, it should be filed in the place where the
corporation has its principal office, not in the place where it has its branch office. To
allow an action against a corporation to be instituted in any place where a corporate
entity has its branch offices would create confusion and work untold inconvenience to
the corporation.
Same; When provision, “may be served with summons”, applies.—The phrase “may
be served with summons” in section 1, Rule 4 of the Revised Rules of Court does not
apply when the defendant resides in the Philippines, for, in such a case, he may be
sued only in the municipality of his residence, regardless of the place where he may
be found and served with summons.
Same; Plaintiff may not choose venue of action.—The laying of the venue of an action
is not left to plaintiff’s caprice because the matter is regulated by the Rules of Court.
APPEAL from an order of dismissal rendered by the Court of First Instance of Misamis
Oriental.

B.C. Padua for petitioner and appellant.
Pablo S. Reyes for respondents and appellees,
REGALA, J;:
This is an appeal from an order of the Court of First Instance of Misamis Oriental
dismissing the petition of the Clavecilla Radio System to prohibit the City Judge of
Cagayan de Oro from taking cognizance of Civil Case No. 1048 for damages.
It appears that on June 22, 1963, the New Cagayan Grocery filed a complaint against
the Clavecilla Radio System alleging, in effect, that on March 12, 1963, the following
message, addressed to the former, was filed at the latter’s Bacolod Branch Office for
transmittal thru its branch office at Cagayan de Oro:
“NECAGRO
CAGAYANDEORO (CLAVECILLA)
REURTEL WASHED NOT AVAILABLE REFINED TWENTY FIFTY IF AGREEABLE

SHALL SHIP LATER REPLY
POHANG"
The Cagayan de Oro branch office having received the said message omitted, in
delivering the same to the New Cagayan Grocery, the word “NOT" between the words
381
VOL. 19, FEBRUARY 18, 1967

381
“WASHED" and “AVAILABLE," thus changing entirely the contents and purport of the
same and causing the said addressee to suffer damages. After service of summons,
the Clavecilla Radio System filed a motion to dismiss the complaint on the grounds
that it states no cause of action and that the venue is improperly laid. The New
Cagayan Grocery interposed an opposition to which the Clavecilla Radio System filed
its rejoinder. Thereafter, the City Judge, on September 18, 1963, denied the motion to
dismiss for lack of merit and set the case for hearing.
Hence, the Clavecilla Radio System filed a petition for prohibition with preliminary
injunction with the Court of First Instance praying that the City Judge, Honorable
Agustin Antillon, be enjoined from further proceeding with the case on the ground of
improper venue. The respondents filed a motion to dismiss the petition but this was
opposed by the petitioner. Later, the motion was submitted for resolution on the
pleadings.
In dismissing the case, the lower court held that the Clavecilla Radio System may be
sued either in Manila where it has its principal office or in Cagayan de Oro City where
it may be served, as in fact it was served, with summons through the Manager of its
branch office in said city. In other words, the court upheld the authority of the city court
to take cognizance of the case.
In appealing, the Clavecilla Radio System contends that the suit against it should be
filed in Manila where it holds its principal office.
It is clear that the case for damages filed with the city court is based upon tort and not
upon a written contract. Section 1 of Rule 4 of the New Rules of Court, governing
venue of actions in inferior courts, provides in its paragraph (b) (3) that when “the
action is not upon a written contract, then in the municipality where the defendant or
any of the defendants resides or may be served with summons.” (Italics supplied)
Settled is the principle in corporation law that the residence of a corporation is the
place where its principal office is established. Since it is not disputed that the Clavecilla
Radio System has its principal office in Manila, it
382
382
follows that the suit against it may properly be filed in the City of Manila.
The appellee maintain, however, that with the filing of the action in Cagayan de Oro
City, venue was properly laid on the principle that the appellant may also be served
with summons in that city where it maintains a branch office. This Court has already
held in the case of Cohen vs. Benguet Commercial Co., Ltd., 34 Phil. 526; that the
term “may be served with summons” does not apply when the defendant resides in
the Philippines for, in such case, he may be sued only in the municipality of his
residence, regardless of the place where he may be f ound and served with summons.
As any other corporation, the Clavecilla Radio System maintains a residence which is
Manila in this case, and a person can have only one residence at a time (See Alcantara
vs. Secretary of the Interior, 61 Phil. 459; Evangelista vs. Santos, 86 Phil. 387), The
fact that it maintains branch offices in some parts of the country does not mean that it
can be sued in any of these places. To allow an action to be instituted in any place
where a corporate entity has its branch offices would create confusion and work untold
inconvenience to the corporation.
It is important to remember, as was stated by this Court in Evangelista vs. Santos, et
al., supra, that the laying of the venue of an action is not left to plaintiff s caprice
because the matter is regulated by the Rules of Court. Applying the provision of the
Rules of Court, the venue in this case was improperly laid.
The order appealed from is therefore reversed, but without prejudice to the filing of the
action in which the venue shall be laid properly. With costs against the respondents-
appellees.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez
and Castro, JJ., concur.
Order reversed.
Notes.—For purposes of venue, the term “residence” is synonymous with “domicile”
(Evangelista vs. Santos, 86 Phil. 386, 393; Corre vs. Corre, 100 Phil. 321).
“When the law creating or recognizing them, or any other provision does not fix the
domicile of juridical per
383

383
American Insurance Co. vs. Manila Port Service, et al.
sons, the same shall be understood to be the place where their legal representation is
established or where they exercise their principal functions” (Art. 51, New Civil Code).
An action in the Court of First Instance cannot be brought in the province where the
plaintiff and the defendant do not reside although the defendant may be found in that
province (Casilan vs. Tomassi, 90 Phil. 765). In one case the venue provisions were
liberally construed in favor of the plaintiff and against the defendant (Philippine Milling
Co. vs. Court of Appeals, 100 Phil. 566). Clavecilla Radio System vs. Antillon, et al.,
19 SCRA 379, No. L-22238 February 18, 1967
DACOYCOY VS CA, 195 SCRA 641
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.
Civil Procedure; Jurisdiction; Venue; 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.—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. 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.
Same; Same; Same; Where a defendant fails to challenge timely the venue in a motion
to dismiss, and allows the trial to be held and a decision to be rendered, he cannot
appeal or belatedly challenge the wrong venue.—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.
Same; Same; Same; Courts; Actions; Dismissal of; The trial court cannot pre-empt the
defendant’s prerogative to object to the improper laying of the venue by motu proprio
dismissing the case.—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,
_______________
* THIRD DIVISION.
642
642
Dacoycoy vs. Intermediate Appellate Court
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 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.
PETITION to review the decision of the then Intermediate Appellate Court. Gaviola,
Jr., J.

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.
On May 25, 1983, before summons could be served on private respondent as
defendant therein, the RTC Executive Judge 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
643
VOL. 195, APRIL 2, 1991

643
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, 1986,1 affirmed the order of dismissal of his complaint.
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. x x x the location of the subject parcel of land is
controlling pursuant to Sec. 2, par. (a), Rule 4 of the New Rules of Court x x x”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
_______________
1 Penned by Presiding Justice Ramon G. Gaviola, Jr. and concurred in by Associate

Justice Ma. Rosario Quetulio-Losa and Leonor Ines Luciano.
2 Page 4, Rollo.
3 p. 69, Rollo.
644
644
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
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,6 involving an action instituted before 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 x x x”
in accordance with Section 19 (2) of Batas Pambansa Blg. 129. With respect to the
_______________
4 Manila Railroad Co. vs. Attorney General, 20 Phil. 523.

5 67 C.J. 12.
6 G.R. No. L-27145, November 29, 1968, 26 SCRA 306.
645
VOL. 195, APRIL 2, 1991
645
parties, there is no dispute that it acquired jurisdiction over the plaintiff Jesus
Dacoycoy, now petitioner, the moment he 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,8 it does not appear that
said service had been properly effected or that private respondent had appeared
voluntarily in court9 or filed his answer to the complaint.10 At this stage, respondent
trial 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
_______________
7 Banco Espanol-Filipino vs. Palanca, 37 Phil. 921.

8 Page 3, Rollo.
9 Section 23, Rule 14, Rules of Court.
10 Section 6, Rule 6; Section 1, Rule 11, Rules of Court.
11 Ocampo vs. Domingo, 38 SCRA 134 (1971).
646
646
parties for whose convenience the rules on venue had been devised. The trial court
cannot pre-empt the defendant’s 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.
Decision nullified and set aside.
Note.—Venue is waived when the parties voluntarily submitted to the jurisdiction of
the court. A party cannot invoke the jurisdiction of a court to secure affirmative relief
against his opponent, and failing to obtain it, repudiate it. (Vda. de Suan vs. Cusi, Jr.,
125 SCRA 346.)
Dacoycoy vs. Intermediate Appellate Court, 195 SCRA 641, G.R. No. 74854 April 2,
1991
DIAZ VS ADIONG, 219 SCRA 631
G.R. No. 106847. March 5, 1993.*

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.
Remedial Law; Venue; 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.—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.
_________________
* FIRST DIVISION.
632
632
Diaz vs. Adiong
Same; Same; Same; 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.—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.
Same; Same; Same; Same; Well-settled is the rule that improper venue may be
waived and such waiver may occur by laches.—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.
Same; Same; Same; Same; Same; Objections to venue in civil actions arising from
libel may be waived, it does not after all involve a question of jurisdiction.—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. Venue relates to trial and not to jurisdiction.
Same; Same; Same; Same; Objections to improper venue must be made in a motion
to dismiss before any responsive pleading is filed.—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.
PETITION for certiorari of the decision of the Regional Trial Court of Marawi City,
Branch 8. Adiong, J.
Rex J.M.A. Fernandez for petitioner.
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633
Diaz vs. Adiong
Mangurun B. Batuampar for respondents.
BELLOSILLO, J.:
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 denial1 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
thus5—
"WHEREFORE x x x 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
________________
1 Petition, Annex "G".

2 Petition, Annex "H".
3 Rollo, p. 5.
4 Comment, Annex "A".
5 See Note 3.
634
634
Diaz vs. Adiong
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
_______________
6 Petition, Annex "C".

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635
Diaz vs. Adiong
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
________________
7 See Note 3, p. 11.

636
636
Diaz vs. Adiong
officer x x x (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 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 x x x x" (italics 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
_________________
8 See Note 3, p. 20.

9 Dacoycoy v. Intermediate Appellate Court, G.R. No. 74854 2 April 1991, 195 SCRA
641.
10 Comment, p. 7; Rollo, p. 26.
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637
Diaz vs. Adiong
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 x x x x"13
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.
_______________
11 Uriarte v. CFI of Negros Occidental, Nos. L-21938-39, 29 October 1970, 33 SCRA

252.
12 No. L-28882, 31 May 1971, 39 SCRA 303.
13 Id., p. 314.
14 Consolidated Bank and Trust Corporation v. Intermediate Appellate Court, G.R.
No. 75017, 3 June 1991, 198 SCRA 34.
638
638
Diaz vs. Adiong
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 (Chairman), Griño-Aquino and Quiason, JJ., concur.
Petition dismissed.
Note.—Venue stipulation in a contract do not as a rule supersede the general rule set
out in Rule 4 of the Rules of Court, they should be construed merely as agreement on
an additional forum, not as limiting venue to the specified place (Nasser vs. Court of
Appeals, 191 SCRA 783). Diaz vs. Adiong, 219 SCRA 631, G.R. No. 106847 March
5, 1993
ESUERTE VS CA, 193 SCRA 541
G.R. No. 53485. February 6, 1991.*

PATRIA ESUERTE and HERMINIA JAYME, petitioners, vs. HON. COURT OF
APPEALS (Eleventh Division), HON. RAFAEL T. MENDOZA, Judge, Branch VI,
Court of First Instance of Cebu and MA. BEVERLY TAN, respondents.
Civil Procedure; Actions; Venue; The option of the plaintiff in personal actions
cognizable by the Regional Trial Court is either the place where the defendant resides
or may be found or the place where the plaintiff resides.—The choice of venue for
personal actions cognizable by the Regional Trial Court is given to the plaintiff but not
to the plaintiff’s caprice because the matter is regulated by the Rules of Court (see
Clavecilla Radio System v. Antillon, 19 SCRA 379). The rule 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 (Sy v.
Tyson Enterprises Inc., 19 SCRA 367). The option of the plaintiff in personal actions
cognizable by the Regional Trial Court is either the place where the defendant resides
or may be found or the place where the plaintiff resides. If plaintiff opts for the latter,
he is limited to that place.
Same; Same; Same; Same; Venue of personal actions should be at the place of abode
or place where plaintiffs actually reside not in domicile or legal residence.—“Resides”
in the rules on venue on personal actions means the place of abode, whether
permanent or temporary, of the plaintiff or defendants as distinguished from “domicile”
which denotes a fixed permanent residence (Dangwa Transportation Co., Inc. v.
Sarmiento, G.R. No. L-22795, January 31, 1977, 75 SCRA
_______________
* FIRST DIVISION.
542
542
Esuerte vs. Court of Appeals
124). And, in Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L-29791, January 10,
1978, 81 SCRA 75), venue of personal actions should be at the place of abode or
place where plaintiffs actually reside, not in domicile or legal residence.
Administrative Law; Exhaustion of administrative remedies; The alleged need by
private respondent Tan to exhaust administrative remedies before filing the complaint
for damages does not apply to the instant case.—The second ground raised by
petitioners is devoid of merit. The alleged need by private respondent Tan to exhaust
administrative remedies before filing the complaint for damages does not apply to the
instant case. Private respondent as plaintiff in the civil Case for damages has no
administrative remedy available to her. It is true that the same incident complained of
in the administrative case filed by petitioners against Tan is the subject of the action
for damages filed by Tan against the petitioners in the trial court. However, the cause
of acton in the administrative case is different from that of the civil case for damages.
While the complainant in the administrative case may be a private person, it is the
government who is the aggrieved party and no award for damages may be granted in
favor of private persons. In the civil action for damages, the trial court’s concern is
whether or not damages, personal to the plaintiff, were caused by the acts of the
defendants. The civil action for damages can proceed notwithstanding the pendency
of the administrative action.
PETITION for certiorari to review the decision of the Court of Appeals.

Romeo B. Esuerte for petitioners.
Eleno V. Andales & Sisinio M. Andales for private respondent.
MEDIALDEA, J.:
This petition for certiorari with a prayer for preliminary injunction seeks to set aside the
decision of the Court of Appeals in CA G.R. No. SP-08999-R, involving the same
parties.
An action for damages was filed by private respondent Beverly Tan against herein
petitioners Patria Esuerte and Herminia Jayme with the Court of First Instance (now
Regional Trial Court) of Cebu and docketed as Civil Case No. R-17584. The claim for
damages arose from an incident involving the
543

543
parties and summarized by the Court of Appeals, as follows:
“x x x that on September 22, 23 and 27, 1978, private respondent Ma. Beverly Tan, a
Junior Resident Physician of Corazon Locsin-Montelibano Memorial Hospital, Bacolod
City, without any justifiable reason shouted at, humiliated and insulted the petitioner,
Patria Esuerte, Head Nurse, Medicare Department of the said hospital and as a result
of the said incident, said petitioner complained to the Chief of the Hospital, Dr. Teodoro
P. Motus, in writing. The other petitioner, Herminia Jayme, who was one of those who
were present at the time of the incident also sent a letter to the Chief of the Hospital,
Dr. Teodoro Motus, informing the latter of what she had witnessed. As a result thereof,
private respondent was advised to explain in writing by the Chief of the Hospital, but
private respondent instead of explaining only her side of the incident also complained
against the petitioners. The Discipline and Grievance Committee, Corazon Locsin-
Montelibano Memorial Hospital, conducted a fact-finding investigation and later, the
Chief of the Hospital, Dr. Teodoro P. Motus, issued a resolution dated November 8,
1978, transmitting the records of the case to the Regional Health Office, No. 6, Jaro,
Iloilo City for appropriate action; x x x.” (pp. 91-92, Rollo)
Esuerte and Jayme filed a motion to dismiss the complaint on the ground of improper
venue and for being premature for failure of Tan to exhaust administrative remedies.
On January 2, 1979, the trial court denied the motion to dismiss. The motion for
reconsideration of the denial was likewise denied by the court on February 16, 1979.
Esuerte and Jayme filed a petition for certiorari and prohibition with a prayer for
preliminary injunction with the Court of Appeals. On September 18, 1979, the petition
was dismissed without pronouncement as to costs. The motion for reconsideration of
the decision was likewise denied for lack of merit on February 18, 1980.
The following reasons were advanced by petitioners for the allowance of this petition:
1) The Court of Appeals committed gross error and grave abuse of discretion when it
dismissed the petition despite petitioners’ overwhelming evidence showing that the
venue of private respondent’s action (Civil Case No. R-17584) was improperly laid.
2) The Court of Appeals committed gross error and grave abuse
544
544
of discretion when it dismissed the petition despite petitioners’ overwhelming evidence
showing that the filing of Civil Case No. R-17584 is premature due to non-exhaustion
of administrative remedies.
It is the contention of petitioners that the proper venue of the action filed by Tan should
be Bacolod City and not Cebu City. At the time of the filing of her action in court, Tan
was actually residing and may be found in Bacolod City. In fact, in her “Statement of
Assets and Liabilities,” submitted by Tan to her employer, the Corazon Locsin
Montelibano Memorial Hospital, she declared that she is a resident of FRAYU
INTERIOR, 6th Street, Bacolod City.
Section 2(b), Rule 4 of the Rules of Court provides:
“Sec. 2. Venue in Courts of First Instance.—
“x x x
“(b) Personal Actions.—All other actions may be commenced and tried where the
defendants 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 choice of venue for personal actions cognizable by the Regional Trial Court is
given to the plaintiff but not to the plaintiff’s caprice because the matter is regulated by
the Rules of Court (see Clavecilla Radio System v. Antillon, 19 SCRA 379). The rule
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 (Sy v. Tyson Enterprises Inc., 19 SCRA 367). The option of the plaintiff
in personal actions cognizable by the Regional Trial Court is either the place where
the defendant resides or may be found or the place where the plaintiff resides. If
plaintiff opts for the latter, he is limited to that place.
“Resides” in the rules on venue on personal actions means the place of abode,
whether permanent or temporary, of the plaintiff or defendants as distinguished from
“domicile” which denotes a fixed permanent residence (Dangwa Transportation Co.,
Inc. v. Sarmiento, G.R. No. L-22795, January 31, 1977, 75 SCRA 124). And, in
Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L-29791, January 10, 1978, 81
SCRA 75), venue of personal actions should be at the place of abode or place where
545

545
plaintiffs actually reside, not in domicile or legal residence.
In Koh v. CA, L-40428, December 17, 1975, 70 SCRA 298; 305, We ruled:
“Applying the foregoing observation to the present case, We are fully convinced that
private respondent Coloma’s protestations of domicile in San Nicolas, Ilocos Norte,
based on his manifested intention to return there after the retirement of his wife from
government service to justify his bringing of an action for damages against petitioner
in the C.F.I. of Ilocos Norte, is entirely of no moment since what is of paramount
importance is where he actually resided or where he may be found at the time he
brought the action, to comply substantially with the requirements of Sec. 2(b) of Rule
4, Rules of Court, on venue of personal actions. x x x.”
As perspicaciously observed by Justice Moreland, the purpose of procedure is not to
restrict the court’s jurisdiction over the subject matter but to give it effective facility “in
righteous action,” “to facilitate and promote the administration of justice” or to insure
“just judgments” by means of a fair hearing. If the objective is not achieved, then “the
administration of justice becomes incomplete and unsatisfactory and lays itself open
to criticism.” (Manila Railroad Co. v. Attorney General, 20 Phil. 523, 530). There is no
question that private respondent as plaintiff in
the Civil Case is a legal resident of Cebu City. Her parents live there. However, it
cannot also be denied that at the time of her filing of the complaint against petitioners,
she was a temporary resident of Bacolod City. She was then employed with the
Corazon Locsin Montelibano Memorial Hospital, Bacolod City, as resident physician.
Moreover, the acts complained of were committed in Bacolod City. The private
respondents were all residents of Bacolod City at the time of the bringing of the action.
Though Tan’s employment was only temporary there was no showing when this
employment will end. Justice would be better served if the complaint were heard and
tried in Bacolod City where all the parties resided.
The second ground raised by petitioners is devoid of merit. The alleged need by private
respondent Tan to exhaust administrative remedies before filing the complaint for
damages does not apply to the instant case. Private respondent as plaintiff in
546
546
the civil Case for damages has no administrative remedy available to her. It is true that
the same incident complained of in the administrative case filed by petitioners against
Tan is the subject of the action for damages filed by Tan against the petitioners in the
trial court. However, the cause of acton in the administrative case is different from that
of the civil case for damages. While the complainant in the administrative case may
be a private person, it is the government who is the aggrieved party and no award for
damages may be granted in favor of private persons. In the civil action for damages,
the trial court’s concern is whether or not damages, personal to the plaintiff, were
caused by the acts of the defendants. The civil action for damages can proceed
notwithstanding the pendency of the administrative action.
WHEREFORE, the position is GRANTED. The questioned decision of the Court of
Appeals is SET ASIDE. Civil Case No. R-17584 is DISMISSED for improper venue.
SO ORDERED.
Narvasa (Chairman), Cruz, Gancayco and Griño-Aquino, JJ., concur.
Petition granted; decision set aside.
Note.—Real actions must be instituted in the Court of First Instance (now RTC) of the
province where the property or part thereof lies. (Fortune Motors Phils. Inc. vs. Court
of Appeals, 178 SCRA 564.)
Esuerte vs. Court of Appeals, 193 SCRA 541, G.R. No. 53485 February 6, 1991
FORTUNE MOTORS PHILS INC VS CA, 178 SCRA 564
G.R. No. 76431. October 16, 1989.*

FORTUNE MOTORS, (PHILS.), INC., petitioner, vs. THE HONORABLE COURT OF
APPEALS, METROPOLITAN BANK and TRUST COMPANY, respondents.
Actions; Venue; Nature of a Real Action.—In a real action, the plaintiff seeks the
recovery of real property, or as indicated in Sec. 2 (a) of Rule 4, a real action is an
action affecting title to real property, or for the recovery of possession, or for the
partition or condemnation of, or foreclosure of a mortgage on real property.
Same; Same; Real actions must be instituted in the Court of First Instance of the
province where the property or any part thereof lies.—Real actions or actions affecting
title to, or for the recovery of possession, or for the partition or condemnation of, or
foreclosure of mortgage on real property, must be instituted in the Court of First
Instance of the province where the property or any part thereof lies.
Same; Same; Venue in case of personal actions.—Personal actions upon the other
hand, may be instituted in the Court of First Instance 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.
Same; Same; Primary objective and nature of an action for annulment or rescission of
contract is to recover real property.—A prayer for annulment or rescission of contract
does not operate to efface the true objectives and nature of the action which is to
recover real property.
Same; Same; Same; An action for the annulment or rescission of a sale of real
property does not operate to efface the fundamental and prime objective and nature
of the case which is to recover said real
_______________
* SECOND DIVISION.
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565
Fortune Motors, (Phils.), Inc. vs. Court of Appeals
property.—While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and his claim
for damages are closely intertwined with the issue of ownership of the building which,
under the law, is considered immovable property, the recovery of which is petitioner’s
primary objective. The prevalent doctrine is that an action for the annulment or
rescission of a sale of real property does not operate to efface the fundamental and
prime objective and nature of the case, which is to recover said real property. It is a
real action. Respondent Court, therefore, did not err in dismissing the case on the
ground of improper venue (Sec. 2, Rule 4) which was timely raised.
Same; Same; Same; Same; An action to annul the foreclosure sale is necessarily an
action affecting the title of the property sold. It is therefore a real action which should
be commenced and tried in the province where the property or part thereof lies.—
Thus, as aptly decided by the Court of Appeals in a decision penned by then Court of
Appeals Associate Justice now Associate Justice of the Supreme Court Carolina C.
Griño-Aquino, the pertinent portion reads: “Since an extra-judicial foreclosure of real
property results in a conveyance of the title of the property sold to the highest bidder
at the sale, an action to annul the foreclosure sale is necessarily an action affecting
the title of the property sold. It is therefore a real action which should be commenced
and tried in the province where the property or part thereof lies.”
PETITION for certiorari to review the decision and resolution of the Court of Appeals.

Quirante & Associates Law Office for petitioner.
Bautista, Cruz & Associates Law Offices for private respondent.
PARAS, J.:
This is a petition for review on certiorari seeking the reversal of: (a) the July 30, 1986
decision of the Court of Appeals in AC-G.R. SP No. 09255 entitled “Metropolitan Bank
& Trust Co. v. Hon. Herminio C. Mariano, et al.” dismissing Civil Case No. 85-33218
entitled “Fortune Motors (Phils.) Inc. v. Metropolitan Bank & Trust Co.” filed in the
Regional Trial Court of Manila, Branch IV for improper venue and (b) the resolution
dated
566
566
October 30, 1986 denying petitioner’s motion for reconsideration.
The undisputed facts of the case are as follows:
On March 29, 1982 up to January 6, 1984, private respondent Metropolitan Bank
extended various loans to petitioner Fortune Motors in the total sum of P32,500,000.00
(according to the borrower; or P34,150,000.00 according to the Bank) which loan was
secured by a real estate mortgage on the Fortune building and lot in Makati, Rizal.
(Rollo, pp. 60-62)
Due to financial difficulties and the onslaught of economic recession, the petitioner
was not able to pay the loan which became due. (Rollo, p. 62)
For failure of the petitioner to pay the loans, the respondent bank initiated extrajudicial
foreclosure proceedings. After notices were served, posted, and published, the
mortgaged property was sold at public auction for the price of P47,899,264.91 to
mortgagee Bank as the highest bidder. (Rollo, p. 11)
The sheriff’s certificate of sale was registered on October 24, 1984 with the one-year
redemption period to expire on October 24, 1985. (Rollo, p. 12)
On October 21, 1985, three days before the expiration of the redemption period,
petitioner Fortune Motors filed a complaint for annulment of the extrajudicial
foreclosure sale alleging that the foreclosure was premature because its obligation to
the Bank was not yet due, the publication of the notice of sale was incomplete, there
was no public auction, and the price for which the property was sold was “shockingly
low”. (Rollo, pp. 60-68)
Before summons could be served private respondent Bank filed a motion to dismiss
the complaint on the ground that the venue of the action was improperly laid in Manila
for the realty covered by the real estate mortgage is situated in Makati, therefore the
action to annul the foreclosure sale should be filed in the Regional Trial Court of
Makati. (Rollo, pp. 67-71-A)
The motion was opposed by petitioner Fortune Motors alleging that its action “is a
personal action” and that “the issue is the validity of the extrajudicial foreclosure
proceedings” so that it may have a new one year period to redeem. (Rollo, pp. 72-73)
On January 8, 1986 an order was issued by the lower court reserving the resolution of
the Bank’s motion to dismiss until after the trial on the merits as the grounds relied
upon by the
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567
defendant were not clear and indubitable. (Rollo, p. 81)
The Bank filed a motion for reconsideration of the order dated January 8, 1986 but it
was denied by the lower court in its order dated May 28, 1986. (Rollo, Annex “L” pp.
93-96; Annex “N” p. 99)
On June 11, 1986 the respondent Bank filed a petition for certiorari and prohibition in
the Court of Appeals. (Rollo, Annex “O” pp. 100-115)
And on July 30, 1986, a decision was issued by the Court of Appeals, the dispositive
part of which reads as follows:
“WHEREFORE, the petition for certiorari and prohibition is granted. The complaint in
the Civil Case No. 85-33218 is dismissed without prejudice to its being filed in the
proper venue. Costs against the private respondent.”
SO ORDERED. (Rollo, p. 15)
A motion for reconsideration was filed on August 11, 1986 on the said decision and on
October 30, 1986 a resolution was issued denying such motion for reconsideration.
(Rollo, Annex “O” pp. 121-123; Annex “S” p. 129)
Hence, the petition for review on certiorari.
On June 10, 1987 the Court gave due course to the petition, required the parties to file
their respective memoranda within twenty (20) days from the notice hereof, and pay
deposit for costs in the amount of P80.40.
Both parties have filed their respective memoranda, and the case was submitted for
Court’s resolution in the resolution dated December 14, 1987. (Rollo, Metrobank’s
Memorandum pp. 45-59; petitioner’s memorandum pp. 130-136; Res. p. 138)
The only issue in this case is whether petitioner’s action for annulment of the real
estate mortgage extrajudicial foreclosure sale of Fortune Building is a personal action
or a real action for venue purposes.
In a real action, the plaintiff seeks the recovery of real property, or as indicated in Sec.
2 (a) of Rule 4, a real action is an action affecting title to real property, or for the
recovery of possession, or for the partition or condemnation of, or foreclosure of a
mortgage on real property. (Comments on the Rules of Court by Moran, Vol. I, p. 122)
568
568
Real actions or actions affecting title to, or for the recovery of possession, or for the
partition or condemnation of, or foreclosure of mortgage on real property, must be
instituted in the Court of First Instance of the province where the property or any part
thereof lies. (Enriquez v. Macadaeg, 84 Phil. 674, 1949; Garchitorena v. Register of
Deeds, 101 Phil. 1207, 1957)
Personal actions upon the other hand, may be instituted in the Court of First Instance
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 (Sec. 1, Rule 4,
Revised Rules of Court).
A prayer for annulment or rescission of contract does not operate to efface the true
objectives and nature of the action which is to recover real property. (Inton, et al., v.
Quintan, 81 Phil. 97, 1948)
An action for the annulment or rescission of a sale of real property is a real action. Its
prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760,
1954)
An action to annul a real estate mortgage foreclosure sale is no different from an action
to annul a private sale of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950)
While it is true that petitioner does not directly seek the recovery of title or possession
of the property in question, his action for annulment of sale and his claim for damages
are closely intertwined with the issue of ownership of the building which, under the
law, is considered immovable property, the recovery of which is petitioner’s primary
objective. The prevalent doctrine is that an action for the annulment or rescission of a
sale of real property does not operate to efface the fundamental and prime objective
and nature of the case, which is to recover said real property. It is a real action.
Respondent Court, therefore, did not err in dismissing the case on the ground of
improper venue (Sec. 2, Rule 4) which was timely raised (Sec. 1, Rule 16). (Punzalan,
Jr. v. Vda. de Lacsamana, 121 SCRA 336, [1983]).
Thus, as aptly decided by the Court of Appeals in a decision penned by then Court of
Appeals Associate Justice now Associate Justice of the Supreme Court Carolina C.
Griño-Aquino, the pertinent portion reads: “Since an extrajudicial foreclosure of real
property results in a conveyance of the title of the property
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VOL. 178, OCTOBER 16, 1989

569
Royal Crown Internationale vs. NLRC
sold to the highest bidder at the sale, an action to annul the foreclosure sale is
necessarily an action affecting the title of the property sold. It is therefore a real action
which should be commenced and tried in the province where the property or part
thereof lies.”
PREMISES CONSIDERED, the instant petition is DENIED for lack of merit and the
assailed decision of the respondent Court of Appeals is AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairman), Padilla, Sarmiento and Regalado, JJ., concur.
Petition denied; decision affirmed.
Notes.—Venue of action over property located in Gumaca, Quezon Province is
Quezon Province. (Tenorio vs. Paño, 146 SCRA 74.)
Rules of venue are constituted to forestall conflicting decisions by different Courts as
to the issue of ownership and possession. (Tenorio vs. Paño, 146 SCRA 74.) Fortune
Motors, (Phils.), Inc. vs. Court of Appeals, 178 SCRA 564, G.R. No. 76431 October
16, 1989
HERNANDEZ VS DBP, 71 SCRA 290
No. L-31095. June 18, 1976.*

JOSE M. HERNANDEZ, petitioner, vs. DEVELOPMENT BANK OF THE
PHILIPPINES and COURT OF FIRST INSTANCE OF BATANGAS, LIPA CITY
BRANCH respondents.
Venue of action; Jurisdiction; Action to annul cancellation of award of house and lot is
a personal action, not a real action. It may be brought in the court of the province
where petitioner resides.—A close scrutiny of the essence of the petitioner’s complaint
in the court a quo would readily show that he seeks the annulment of the cancellation
of the award of the Quezon City lot and house in his favor originally given him by
respondent DBP x x x The Court agrees that petitioner’s action is not a real but a
personal action. As correctly insisted by petitioner, his action is one to declare null and
void the cancellation of the lot and house in his favor which does not involve title and
ownership over said properties but seeks to compel respondent to recognize that the
award is valid and subsisting one which it cannot arbitrarily and unilaterally cancel and
accordingly to accept the proffered payment in full which it had rejected and returned
to petitioner. Such action is a personal action which may be properly brought by
petition in his residence (Batangas City).
PETITION to review the order of the Court of First Instance of Batangas, Lipa City
Branch.
___________________
* FIRST DIVISION.
291
VOL. 71, JUNE 18, 1976

291
Hernandez vs. Development Bank of the Phil.
Tomas Yumol for petitioners.
Graciano V. Sebastian for respondent Development Bank of the Philippines.
MARTIN, J.:
This is a case which involves the question of proper venue in a real action.
Petitioner Jose M. Hernandez was an employee of private respondent Development
Bank of the Philippines in its Legal Department for twenty-one (21) years until his
retirement on February 28, 1966 due to illness. On August 12, 1964, in due recognition
of his unqualified service as Assistant Attorney in its Legal Department, the private
respondent awarded to the petitioner a lot, identified as Lot No. 15, Block No. W-21,
in the private respondent’s Housing Project at No. 1 West Avenue, Quezon City,
containing an area of 810 square meters with a Type E house. On August 31, 1968,
after the petitioner received from the private respondent’s Housing Project Committee
a statement of account of the purchase price of the said lot and house in the total
amount of P21,034.56, payable on a monthly amortization of P153.32 for a term of
fifteen (15) years, he sent to the said Committee a Cashier’s Check No. 77089 CC,
dated October 21, 1968, issued by the Philippine Banking Corporation in the name of
his wife in the sum of P21,500.00 to cover the cash and full payment of the purchase
price of the lot and house awarded to him. However, more than a week thereafter, or
on October 29, 1968, the Chief Accountant and Comptroller of the private respondent
returned to the petitioner the aforementioned check, informing him that the private
respondent, through its Committee on Organization, Personnel and Facilities, had
cancelled the award of the lot and house previously awarded to him on the following
grounds: (1) that he has already retired; (2) that he has only an option to purchase
said house and lot; (3) that there are a big number of employees who have no houses
or lots; (4) that he has been given his retirement gratuity; and (5) that the awarding of
the aforementioned house and lot to an employee of the private respondent would
better subserve the objective of its Housing
292
292
Project. Petitioner protested against the cancellation of the award of the house and lot
in his favor and demanded from private respondent the restoration of all his rights to
said award. However, private respondent refused.
On May 15, 1969 the petitioner filed a complaint in the Court of First Instance of
Batangas against the private respondent seeking the annulment of the cancellation of
the award of the lot and house in his favor and the restoration of all his rights thereto.
He contends that the cancellation of said award was unwarranted and illegal for he
has already become the owner of said house and lot by virtue of said award on August
12, 1964 and has acquired a vested right thereto, which cannot be unilaterally
cancelled without his consent; that he had requested the private respondent to restore
to him all his rights to said award but the latter refused and failed and still refuses and
fails to comply with said request.
Private respondent filed a motion to dismiss the complaint on the ground of improper
venue, contending that since the petitioner’s action affects the title to a house and lot
situated in Quezon City, the same should have been commenced in the Court of First
Instance of Quezon City where the real property is located and not in the Court of First
Instance of Batangas wjiere petitioner resides. On July 24, 1969, the respondent Court
sustained the motion to dismiss filed by private respondent on the ground of improper
venue.
Hence, the instant petition to review the order of respondent Court.
The only issue in this petition is whether the action of the petitioner was properly filed
in the Court of First Instance of Batangas. It is a well settled rule that venue of actions
or, more appropriately, the county where the action is triable1 depends to a great
extent on the nature of the action to be filed, whether it is real or personal.2 A real
action is one brought for the specific recovery of land, tenements, or hereditaments.3
A personal action is one brought for the recovery of personal property, for the
enforcement of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an
__________________
1 56 Am. Jur. 4
2 Gavierez vs. Sanchez, et al., 94 Phil. 760.
3 Linscott vs. Fuller. 57 Mo. 406; 1 C.J. 933.
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VOL. 71, JUNE 18, 1976
293
injury to the person or property.4 Under Section 2, Rule 4 of the Rules of Court,
“actions affecting title to, or for recovery of possession, or for partition, or
condemnation of, or foreclosure of mortgage on real property, shall be commenced
and tried in the province where the property or any part thereof lies. All other actions
may be commenced and tried 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.
A close scrutiny of the essence of the petitioner’s complaint in the court a quo would
readily show that he seeks the annulment of the cancellation of the award of the
Quezon City lot and house in his favor originally given him by respondent DBP in
recognition of his twenty-one years of service in its Legal Department, in pursuance of
his contention that he had acquired a vested right to the award which cannot be
unilaterally cancelled by respondent without his consent.
The Court agrees that petitioner’s action is not a real but a personal action. As correctly
insisted by petitioner, his action is one to declare null and void the cancellation of the
lot and house in his favor which does not involve title and ownership over said
properties but seeks to compel respondent to recognize that the award is a valid and
subsisting one which it cannot arbitrarily and unilaterally cancel and accordingly to
accept the proffered payment in full which it had rejected and returned to petitioner.
Such an action is a personal action which may be properly brought by petitioner in his
residence, as held in the case of Adamos vs. J.M. Tuason & Co., Inc.5 where this
Court speaking through former Chief Justice Querube C. Makalintal distinguished the
case from an earlier line of J.M. Tuaxon & Co., Inc. cases involving lot purchasers
from the Deudors6, as follows:
“xxx xxx xxx. All the allegations as well as the prayer in the complaint show that this is
not a real but a personal action—to compel the defendants to execute the
corresponding purchase contracts in favor of the plaintiffs and to pay damages. The
plaintiffs do not claim
_________________
4 31 C.J. 932
5 25 SCRA 529, 534 (Oct. 14, 1968).
6 See Ruiz vs. J. M. Tuason & Co., Inc., 7 SCRA 202 (Jan. 31, 1963); Torres vs. J. M.
Tuason & Co., Inc., 12 SCRA 174.
294
294
ownership of the lots in question: they recognize the title of the defendant J.M. Tuason
& Co., Inc. They do not ask that possession be delivered to them, for they allege to be
in possession. The case cited by the defendants (Abao, et al. vs. J. M. Tuason & Co.,
Inc. G.R. No. L-16796, Jan. 30, 1962) is therefore not in point. In that case, as stated
by this Court in its decision, the ‘plaintiffs’ action is predicated on the theory that they
are ‘occupants, landholders,’ and ‘most’ of them ‘owners by purchase’ of the
residential lots in question; that, in consequence of the compromise agreement
adverted to above, between the Deudors and defendant corporations, the latter had
acknowledged the right and title of the Deudors in and to said lots; and hence, the right
and title of the plaintiffs, as successors-in-interest of the Deudors; that, by entering
into said agreement, defendant corporations had, also, waived their right to invoke the
indefeasibility of the Torrens title in favor of J. M. Tuason & Co., Inc.; and that
defendants have no right, therefore, to oust plaintiffs from the lots respectively
occupied by them and which they claim to be entitled to hold. Obviously, this action
affects, therefore, not only the possession of real property, but, also, the title thereto.
Accordingly, it should have been instituted in the Court of First Instance of the Province
of Rizal in which said property is situated (Section 3, Rule 5 of the Rules of Court).”
WHEREFORE, the order of dismissal appealed from is set aside and the case is
remanded for further proceedings and disposition on the merits. No costs.
Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma, JJ., concur.
Order set aside and case remanded to the court for further proceedings.
Notes.—A suit against an officer of the government by a private party which would
result in a charge or financial liability must be regarded as a suit against the
government itself, and cannot prosper or be entertained by the court except with the
consent of said government. (Isberto vs. Raquiza, 67 SCRA 116).
If the action is founded on privity of contract between the parties, the action, whether
for a debt or covenant, is transitory. But if there is no privity of contract and the action
is founded on privity of estate only, such a covenant that runs
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VOL. 71, JUNE 18, 1976

295
Miranda vs. Court of Appeals
with the land in the hands of the remote grantees, makes the action local and must be
brought in the country wherein the land lies. (Paper Industries Corp. of the Phil. vs.
Samson, 68 SCRA 224).
An action to rescind a contract and recover possession of a hacienda is a real action
which must be instituted in the Court of First Instance of the province where the land
is situated. (De Jesus vs. Colosa, 1 SCRA 272). Hernandez vs. Development Bank of
the Phil., 71 SCRA 290, No. L-31095 June 18, 1976
LIZARES VS CALUAG, 4 SCRA 746
No. L-17699. March 30, 1962.

DR. ANTONIO A. LIZARES, INC., petitioner, vs. HON. HERMOGENES CALUAG,
as Judge of the Court of First Instance of Quezon City, and FLAVIANO CACNIO,
respondents.
Actions; Venue; Action to compel acceptance of tender of payment for real property
as a step to establish title thereto.— An action praying that defendant be ordered "to
accept the payment being made" by plaintiff for the lot which the latter contracted to
buy on installment basis from the former, to pay plaintiff compensatory damages and
attorney's fees and to enjoin defendant and his agents from repossessing the lot in
question, is one that affects title to land under section 3 ? of R ul of the Rules of
Court, and "shall be commenced and tried in the province where the property or any
part thereof lies," be-cause, although the immediate remedy is to compel the
defendant to accept the tender of payment allegedly made, it is obvious that this relief
is merely the first step to establish plaintiff's title to real property.
APPEAL by certiorari from a decision of the Court of Appeals.
Ramon C. Aquino for petitioner.
Paulino Carreon for respondents.
CONCEPCION, J.:
Appeal by certiorari from a decision of the Court of Appeals dismissing the petition of
Dr. Antonio A. Lizares & Co., Inc., for a writ of prohibition, with cost against said
petitioner.
On or about June 14, 1960, Flaviano Cacnio instituted Civil Case No. Q-5197 of the
Court of First Instance of Rizal, Quezon City Branch, against said petitioner. In his
complaint, Cacnio alleged that on April 20, 1955, he bought from petitioner, on
installment, Lot 4, Block 1 , the Sinkang Subdivision in Bacolod City, making therefor
747
VOL. 4, MARCH 30, 1962

747
Dr. Antonio A. Lizares, Inc. vs. Caluag
a down payment of P1,206, the balance of P10,858 to be paid in ten (10) yearly
installments of P1,085.80 each, with interest thereon at the rate of 6% per annum; that
on March 25, 1960, Cacnio received from petitioner a letter demanding payment of
P7,324.69, representing arrears in the payment of installments up to April 20, 1960,
plus "regular and overdue" interest, as well as "land taxes up to 70% of 1960"; that the
sum then due from Cacnio by way of arrears amounted only to P5,824.69, he having
paid P1,500 to petitioner "sometime in 1958"; that in view of the aforementioned
demand of petitioner, Cacnio sent thereto a check for P5,824.69, dated May 26, 1960,
drawn by one Antonino Bernardo in favor of said petitioner, in payment of the amount
due from Cacnio by way of arrears; that "without legal and equitable grounds" therefor,
petitioner returned said check and "refused the tender of payment" af orementioned;
that by reason of said illegal act of petitioner, Cacnio is entitled to compensatory
damages in the sum of P5,000, plus P2,000 by way of attorney's fees, Cacnio having
been constrained to engage the services of counsel and bring the action; and that
petitioner "is doing, threatens, or is about to do, or is procuring or suffering to be done
some act in violation of" Cacnio's rights respecting the subject of the action, viz. the
repossession of the lot bought by" the latter, who, accordingly, prayed that petitioner
be ordered "to accept the payment being made" by him (Cacnio) and to pay him
P5,000 as compensatory damages and P2,000 as attorney's fees, and that, upon the
filing of a bond to be fixed by the court, a writ of preliminary injunction enjoinin
petitioner and its agents or representatives from repossessing the lot adverted to
above be issued. Said writ of preliminary injunction was issued on June 16, 1960.
On July 5, 1960, petitioner moved to dismiss the complaint upon the ground that
"venue is improperly laid," for the action affects the title to or possession of real
property located in Bacolod City, which was the subject matter of a contract, between
petitioner and Cacnio, made in said City The motion having been denied by the Court
of First Instance of Rizal, Quezon City Branch, by an order of July 9, 1960, upon the
ground that the action was
748
748
Dr. Antonio A. Lizares, Inc. vs. Caluag
in personam, petitioner filed with the Court of Appeals a petition, which was docketed
as Civil Case CA-G.R. No. 28013-R, praying that said order be set aside and that a
writ of prohibition be issued commanding respondent Hon. Hermogenes Caluag, as
Judge of said Court, to desist from taking cognizance of said Civil Case No. Q-5197.
In due course, the Court of Appeals rendered a decision on October 27, 1960,
dismissing said petition. Hence, this appeal by certiorari taken by petitioner herein.
The issue is whether or not the main case falls under section 3 of Rule 5 of the Rules
of Court., reading.
"Actions affecting title to, or for recovery of possession, or for partition or condemnation
of, or foreclosure of mortgage on, real property, shall be commenced and tried in the
province where the property or any part thereof lies."
The Court of Appeals and the Court of First Instance of Rizal, Quezon City Branch,
held that Civil Case No. Q-5197 of the latter court is an action in personam, and that,
as such, it does not fall within the purview of said section 3, and was properly instituted
in the court of first instance of the province in which Cacnio, as plaintiff in said case,
resided, pursuant to section 1 of said rule 5.
We are unable to share such view. Although the immediate remedy sought by Cacnio
is to compel petitioner to accept the tender of payment allegedly made by the former,
it is obvious that this relief is merely the first step to establish Cacnio's title to the real
property adverted to above. Moreover, Cacnio's complaint is a means resorted to by
him in order that he could retain the possession of said property. In short, venue in the
main case was improperly laid and the Court of First Instance of Rizal, Quezon City
Branch, should have granted the motion to dismiss.
WHEREFORE, the decision appealed from is hereby reversed and another one shall
be entered directing respondent Judge to desist from taking further cognizance of Civil
Case No. Q-5197 of said court, with costs against respondent Flaviano Cacnio. It is
so ordered.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Barrera, Paredes and Dizon,
JJ., concur. Dr. Antonio A. Lizares, Inc. vs. Caluag, 4 SCRA 746, No. L-17699 March
30, 1962
SWEET LINES VS TEVES, 83 SCRA 361
G.R. No. L-37750 May 19, 1978

SWEET LINES, INC., petitioner,
vs.
HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII,
LEOVIGILDO TANDOG, JR., and ROGELIO TIRO, respondents.
Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano for petitioner.
Leovigildo Vallar for private respondents.
SANTOS, J.:
This is an original action for Prohibition with Pre Injunction filed October 3, 1973 to
restrain respondent Judge from proceeding further with Civil Case No. 4091, entitled
Leovigildo D. Tandog, Jr. and Rogelio Tiro v. Sweet Lines, Inc." after he denied
petitioner's Motion to Dismiss the complaint, and the Motion for Reconsideration of
said order. 1
Briefly, the facts of record follow. Private respondents Atty. Leovigildo Tandog and
Rogelio Tiro, a contractor by professions, bought tickets Nos. 0011736 and 011737
for Voyage 90 on December 31, 1971 at the branch office of petitioner, a shipping
company transporting inter-island passengers and cargoes, at Cagayan de Oro City.
Respondents were to board petitioner's vessel, M/S "Sweet Hope" bound for
Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding
to Bohol, since many passengers were bound for Surigao, private respondents per
advice, went to the branch office for proper relocation to M/S "Sweet Town". Because
the said vessel was already filled to capacity, they were forced to agree "to hide at the
cargo section to avoid inspection of the officers of the Philippine Coastguard." Private
respondents alleged that they were, during the trip," "exposed to the scorching heat of
the sun and the dust coming from the ship's cargo of corn grits," and that the tickets
they bought at Cagayan de Oro City for Tagbilaran were not honored and they were
constrained to pay for other tickets. In view thereof, private respondents sued
petitioner for damages and for breach of contract of carriage in the alleged sum of
P10,000.00 before respondents Court of First Instance of Misamis Oriental. 2
Petitioner moved to dismiss the complaint on the ground of improper venue. This
motion was premised on the condition printed at the back of the tickets, i.e., Condition
No. 14, which reads:
14. It is hereby agreed and understood that any and all actions arising out of the
conditions and provisions of this ticket, irrespective of where it is issued, shall be filed
in the competent courts in the City of Cebu. 3
The motion was denied by the trial court. 4 Petitioner moved to reconnsider the order
of denial, but no avail. 5 Hence, this instant petition for prohibition for preliminary
injunction, 'alleging that the respondent judge has departed from the accepted and
usual course of judicial preoceeding" and "had acted without or in excess or in error
of his jurisdicton or in gross abuse of discretion. 6
In Our resolution of November 20, 1973, We restrained respondent Judge from
proceeding further with the case and required respondent to comment. 7 On January
18, 1974, We gave due course to the petition and required respondent to answer. 8
Thereafter, the parties submitted their respesctive memoranda in support of their
respective contentions. 9
Presented thus for Our resolution is a question is aquestion which, to all appearances,
is one of first impression, to wit — Is Condition No. 14 printed at the back of the
petitioner's passage tickets purchased by private respondents, which limits the venue
of actions arising from the contract of carriage to theCourt of First Instance of Cebu,
valid and enforceable? Otherwise stated, may a common carrier engaged in inter-
island shipping stipulate thru condition printed at the back of passage tickets to its
vessels that any and all actions arising out of the ocntract of carriage should be filed
only in a particular province or city, in this case the City of Cebu, to the exclusion of all
others?
Petitioner contends thaty Condition No. 14 is valid and enforceable, since private
respndents acceded to tit when they purchased passage tickets at its Cagayan de Oro
branch office and took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol
— that the condition of the venue of actions in the City of Cebu is proper since venue
may be validly waived, citing cases; 10 that is an effective waiver of venue, valid and
binding as such, since it is printed in bold and capital letters and not in fine print and
merely assigns the place where the action sing from the contract is institution likewise
citing cases; 11 and that condition No. 14 is unequivocal and mandatory, the words
and phrases "any and all", "irrespective of where it is issued," and "shag" leave no
doubt that the intention of Condition No. 14 is to fix the venue in the City of Cebu, to
the exclusion of other places; that the orders of the respondent Judge are an
unwarranted departure from established jurisprudence governing the case; and that
he acted without or in excess of his jurisdiction in is the orders complained of. 12
On the other hand, private respondents claim that Condition No. 14 is not valid, that
the same is not an essential element of the contract of carriage, being in itself a
different agreement which requires the mutual consent of the parties to it; that they
had no say in its preparation, the existence of which they could not refuse, hence, they
had no choice but to pay for the tickets and to avail of petitioner's shipping facilities
out of necessity; that the carrier "has been exacting too much from the public by
inserting impositions in the passage tickets too burdensome to bear," that the condition
which was printed in fine letters is an imposition on the riding public and does not bind
respondents, citing cases; 13 that while venue 6f actions may be transferred from one
province to another, such arrangement requires the "written agreement of the parties",
not to be imposed unilaterally; and that assuming that the condition is valid, it is not
exclusive and does not, therefore, exclude the filing of the action in Misamis Oriental,
14
There is no question that there was a valid contract of carriage entered into by
petitioner and private respondents and that the passage tickets, upon which the latter
based their complaint, are the best evidence thereof. All the essential elements of a
valid contract, i.e., consent, cause or consideration and object, are present. As held in
Peralta de Guerrero, et al. v. Madrigal Shipping Co., Inc., 15
It is a matter of common knowledge that whenever a passenger boards a ship for
transportation from one place to another he is issued a ticket by the shipper which has
all the elements of a written contract, Namely: (1) the consent of the contracting parties
manifested by the fact that the passenger boards the ship and the shipper consents
or accepts him in the ship for transportation; (2) cause or consideration which is the
fare paid by the passenger as stated in the ticket; (3) object, which is the transportation
of the passenger from the place of departure to the place of destination which are
stated in the ticket.
It should be borne in mind, however, that with respect to the fourteen (14) conditions
— one of which is "Condition No. 14" which is in issue in this case — printed at the
back of the passage tickets, these are commonly known as "contracts of adhesion,"
the validity and/or enforceability of which will have to be determined by the peculiar
circumstances obtaining in each case and the nature of the conditions or terms sought
to be enforced. For, "(W)hile generally, stipulations in a contract come about after
deliberate drafting by the parties thereto, ... there are certain contracts almost all the
provisions of which have been drafted only by one party, usually a corporation. Such
contracts are called contracts of adhesion, because the only participation of the party
is the signing of his signature or his 'adhesion' thereto. Insurance contracts, bills of
lading, contracts of make of lots on the installment plan fall into this category" 16
By the peculiar circumstances under which contracts of adhesion are entered into —
namely, that it is drafted only by one party, usually the corporation, and is sought to
be accepted or adhered to by the other party, in this instance the passengers, private
respondents, who cannot change the same and who are thus made to adhere thereto
on the "take it or leave it" basis — certain guidelines in the determination of their
validity and/or enforceability have been formulated in order to that justice and fan play
characterize the relationship of the contracting parties. Thus, this Court speaking
through Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance Co.,
17 and later through Justice Fernando in Fieldman Insurance v. Vargas, 18 held —
The courts cannot ignore that nowadays, monopolies, cartels and concentration of
capital endowed with overwhelm economic power, manage to impose upon parties d
with them y prepared 'agreements' that the weaker party may not change one whit his
participation in the 'agreement' being reduced to the alternative 'to take it or leave it,'
labelled since Raymond Saleilles 'contracts by adherence' (contracts d' adhesion) in
contrast to those entered into by parties bargaining on an equal footing. Such contracts
(of which policies of insurance and international bill of lading are prime examples)
obviously cap for greater strictness and vigilance on the part of the courts of justice
with a view to protecting the weaker party from abuses and imposition, and prevent
their becoming traps for the unwary.
To the same effect and import, and, in recognition of the character of contracts of this
kind, the protection of the disadvantaged is expressly enjoined by the New Civil Code
—
In all contractual property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance indigence, mental
weakness, tender age and other handicap, the courts must be vigilant for his
protection. 19
Considered in the light Of the foregoing norms and in the context Of circumstances
Prevailing in the inter-island ship. ping industry in the country today, We find and hold
that Condition No. 14 printed at the back of the passage tickets should be held as void
and unenforceable for the following reasons first, under circumstances obligation in
the inter-island ship. ping industry, it is not just and fair to bind passengers to the terms
of the conditions printed at the back of the passage tickets, on which Condition No. 14
is Printed in fine letters, and second, Condition No. 14 subverts the public policy on
transfer of venue of proceedings of this nature, since the same will prejudice rights
and interests of innumerable passengers in different s of the country who, under
Condition No. 14, will have to file suits against petitioner only in the City of Cebu.
1. It is a matter of public knowledge, of which We can take judicial notice, that there is
a dearth of and acute shortage in inter- island vessels plying between the country's
several islands, and the facilities they offer leave much to be desired. Thus, even under
ordinary circumstances, the piers are congested with passengers and their cargo
waiting to be transported. The conditions are even worse at peak and/or the rainy
seasons, when Passengers literally scramble to whatever accommodations may be
availed of, even through circuitous routes, and/or at the risk of their safety — their
immediate concern, for the moment, being to be able to board vessels with the hope
of reaching their destinations. The schedules are — as often as not if not more so —
delayed or altered. This was precisely the experience of private respondents when
they were relocated to M/S "Sweet Town" from M/S "Sweet Hope" and then any to the
scorching heat of the sun and the dust coming from the ship's cargo of corn grits, "
because even the latter was filed to capacity.
Under these circumstances, it is hardly just and proper to expect the passengers to
examine their tickets received from crowded/congested counters, more often than not
during rush hours, for conditions that may be printed much charge them with having
consented to the conditions, so printed, especially if there are a number of such
conditions m fine print, as in this case. 20
Again, it should be noted that Condition No. 14 was prepared solely at the ms of the
petitioner, respondents had no say in its preparation. Neither did the latter have the
opportunity to take the into account prior to the purpose chase of their tickets. For,
unlike the small print provisions of contracts — the common example of contracts of
adherence — which are entered into by the insured in his awareness of said
conditions, since the insured is afforded the op to and co the same, passengers of
inter-island v do not have the same chance, since their alleged adhesion is presumed
only from the fact that they purpose chased the tickets.
It should also be stressed that slapping companies are franchise holders of certificates
of public convenience and therefore, posses a virtual monopoly over the business of
transporting passengers between the ports covered by their franchise. This being so,
shipping companies, like petitioner, engaged in inter-island shipping, have a virtual
monopoly of the business of transporting passengers and may thus dictate their terms
of passage, leaving passengers with no choice but to buy their tickets and avail of their
vessels and facilities. Finally, judicial notice may be taken of the fact that the bulk of
those who board these inter-island vested come from the low-income groups and are
less literate, and who have little or no choice but to avail of petitioner's vessels.
2. Condition No. 14 is subversive of public policy on transfers of venue of actions. For,
although venue may be changed or transferred from one province to another by
agreement of the parties in writing t to Rule 4, Section 3, of the Rules of Court, such
an agreement will not be held valid where it practically negates the action of the
claimants, such as the private respondents herein. The philosophy underlying the
provisions on transfer of venue of actions is the convenience of the plaintiffs as well
as his witnesses and to promote 21 the ends of justice. 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. The
condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand,
petitioner has branches or offices in the respective ports of call of its vessels and can
afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis
Oriental, as was done in the instant case, will not cause inconvenience to, much less
prejudice, petitioner.
Public policy is ". . . that principle of the law which holds that no subject or citizen can
lawfully do that which has a tendency to be injurious to the public or against the public
good ... 22 Under this principle" ... freedom of contract or private dealing is restricted
by law for the good of the public. 23 Clearly, Condition No. 14, if enforced, will be
subversive of the public good or interest, since it will frustrate in meritorious cases,
actions of passenger cants outside of Cebu City, thus placing petitioner company at a
decided advantage over said persons, who may have perfectly legitimate claims
against it. The said condition should, therefore, be declared void and unenforceable,
as contrary to public policy — to make the courts accessible to all who may have need
of their services.
WHEREFORE, the petition for prohibition is DISMISS. ED. The restraining order
issued on November 20, 1973, is hereby LIFTED and SET ASIDE. Costs against
petitioner.
Fernando (Chairman), Aquino, Concepcion, Jr., JJ., concur.
Antonio, J., reserves his vote.
UNIMASTERS CONGLOMERATE INC VS CA, 267 SCRA 759
G.R. No. 119657. February 7, 1997.*

UNIMASTERS CONGLOMERATION, INC., petitioner, vs. COURT OF APPEALS
and KUBOTA AGRI-MACHINERY PHILIPPINES, INC., respondents.
Remedial Law; Action; Venue; Parties may 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.—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 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.
Same; Same; Same; Written stipulations as to venue may be restrictive or merely
permissive.—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.
Same; Same; Same; Venue stipulations should be deemed permissive merely, and
that interpretation should be adopted which most serves the parties’ convenience.—
Since convenience is the raison d’etre of the rules of venue, it is easy to accept the
proposition that normally, 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
_______________
* EN BANC.
760
760
Unimasters Conglomeration, Inc. vs. Court of Appeals
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.
Same; Same; Same; 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.—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 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.
Same; Same; Same; 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.—
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
761

761
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 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).
Same; Same; Same; Jurisdiction; Venue has nothing to do with jurisdiction except in
criminal actions.—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 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 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 fashion if it then tried and decided the action.
762
762
REGALADO, J.: Concurring Opinion:
Remedial Law; Action; Venue; Jurisdiction; The rule is that if the parties to a contract
merely agree on the venue of any case arising therefrom, in addition to or aside from
the legal venue provided by the Rules of Court or the law, that stipulation is merely
permissive.—Summarized, the rule is that if the parties to a contract merely agree on
the venue of any case arising therefrom, in addition to or aside from the legal venue
provided therefor by the Rules of Court or the law, that stipulation is merely permissive
and the parties may choose to observe the same or insist on the alternative venues in
the Rules or the law.
PETITION for review on certiorari of a decision of the Court of Appeals.

Sebastian, Liganor, Galinato & Tierra for petitioner.
Farcon, Gabriel, Farcon & Associates for private respondent.
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.1 The contract contained, among others:
1) a stipulation reading: "** All suits arising out of this Agreement shall be filed with/in
the proper Courts of Quezon City,” and
________________
1 The facts set out in this and succeeding paragraphs are taken mainly from the
challenged Decision of the Court of Appeals of January 6, 1995: SEE Rollo, pp. 13,
14.
763

763
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
764
764
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 P2,000,000.00.3 And on
February 3, 1994, the same Court promulgated 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."4
________________
2 Rollo, pp. 14, 15, 65,111–114.

3 Id., pp. 111–114.
4 Id., p. 32.
765

765
The Appellate Court agreed with KUBOTA that—in line with the Rules of Court5 and
this Court’s relevant rulings6—the stipulation respecting venue in its 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."7 The 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
Appeals several errors which it believes warrant reversal of the verdict, namely:8
_______________
5 Sec. 3, Rule 4.
6 Gesmundo, et al. v. JRB Realty Corporation, et al., 234 SCRA 153 (1994) (citing
Hoechst Philippines, Inc. v. Torres, 83 SCRA 297 and Villanueva v. Mosqueda, 115
SCRA 904, and distinguishing the same from Polytrade Corporation v. Blanco, 30
SCRA 18, Western Minolco Corp. v. Court of Appeals, 167 SCRA 592 and Nasser v.
Court of Appeals, 191 SCRA 783); and Limjap v. Aninas, 134 SCRA 87.
7 DECISION promulgated on January 6, 1995; reconsideration denied by Resolution
of February 28, 1995.
8 Rollo, pp. 16–17.
766
766
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,9 that ‘in
the absence of 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 crossexamine 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
________________
9 230 SCRA 413, 420–421.

767

767
waiving our right to submit the Motion to Dismiss"10 It is plain that under these
circumstances, 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"11Parties may 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,13 it is easy to accept the
proposition that normally, venue stipulations should be deemed permissive merely,
and that
________________
10 Rollo, pp. 45–61.

11 Sec. 3, Rule 4, Rules of Court.
12 Bautista v. De Borja, 18 SCRA 474 [1966], citing Central Azucarera de Tarlac v.
De Leon, 56 Phil. 169 [1931].
13 Uy v. Contreras, 237 SCRA 167 [1994]; Sweet Lines, Inc. v. Teves, 83 SCRA 361
[1978); Nicolas v. Reparations Commission, et al., 64 SCRA 111 [1975].
768
768
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 1969.14 In this case, the venue
stipulation was as follows:
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 1975.15 In this case, the stipulation
on venue read:
_______________
14 30 SCRA 187.
15 64 SCRA 110, citing Polytrade v. Blanco, 30 SCRA 187 [1969].
769
769
"** (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 1981.16 Here, the stipulation in the proissory
note and the chattel mortgage specified 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 1982.17 In this case, the 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.”
________________
16 108 SCRA 740.

17 113 SCRA 794, citing Nicolas v. Reparations Commission, 64 SCRA 110 (fn. 14,
supra).
770
770
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 1988.18 Here, the provision
governing venue read:
“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 1989.19 In this proceeding, the
Sales Invoice of a 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
________________
18 167 SCRA 592, citing Polytrade Corp. v. Blanco, 30 SCRA 187; Lamis Ents. v.
Lagamon, 108 SCRA 740; Nicolas v. Reparations Commission, 64 SCRA 110,
Tantoco v. C.A., et al., 77 SCRA 225.
19 169 SCRA 777, citing Polytrade Corp. v. Blanco, 30 SCRA 187, and Sweet Lines,
Inc. v. Teves, et al., 83 SCRA 361 supra.
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771
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 1989.20 Here the
stipulation on venue read:
"** (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 1990,21 in 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 1993:22 In this
case, the provision concerning venue was contained in a contract of lease of a barge,
and read as follows:
________________
20 176 SCRA 331, citing Polytrade v. Blanco, supra, and Lamis Ents. v. Lagamon,
supra.
21 191 SCRA 783, citing Western Minolco Corp. v. Court of Appeals, supra.
22 218 SCRA 619, citing Polytrade Corp. v. Blanco, supra.
772
772
Unimasters Conglomeration, Inc, vs. Court of Appeals
"** (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 1993.23 Here, the stipulation on venue was 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
________________
23 228 SCRA 387.

773

773
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 1994:24 In this case the subject promissory notes
commonly contained a stipulation reading:
“l/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 740, 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
________________
24 230 SCRA 413, citing inter alia Tantoco v. Court of Appeals, 77 SCRA 225 (1977),
etc.
774
774
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 1977.25 Here, the parties agreed in their
sales contracts that 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 1987.26 In 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
_______________
25 77 SCRA 225. N.B. No reference was made to the Polytrade doctrine.

26 83 SCRA 361. The decision was handed down on May 19, 1987, the day following
the promulgation on May 18, 1987 of the judgment in Hoechst Philippines, Inc. v.
Torres.
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775
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 1966.27 In this case, 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 1994.28 Here the lease contract
declared that
"** (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,29 decided much earlier, in 1978, involved a
strikingly similar stipulation, which read:
_______________
27 18 SCRA 474.
28 234 SCRA 153.
29 83 SCRA 297.
776
776
"** (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 1982.30 In this 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 1988.31 The condition 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
________________
30 115 SCRA 904.

31 168 SCRA 540, citing Bautista v. De Borja, 18 SCRA 474 [1966] and Central
Azucarera de Tarlac v. De Leon, 56 Phil. 169 [1931]).
777

777
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,32 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.
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."33 In 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.
________________
32 E.g.—"only,” “solely,” “exclusively in this court,” “in no other court save—,"
“particularly,” “nowhere else but/except—," etc.
33 Sec. 2 (b).
778
778
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.34 The action at bar, for the recovery of damages
________________
34 Venue is a procedural, not a jurisdictional matter. SEE Moran, Comments on the

Rules, Vol. 1, 1979 ed., pp. 235–236, citing Luna v. Carandang, 26 SCRA 306 (1968)
and Caltex (Phil.), Inc. v. Go, 24 SCRA 1013 (1968); Regalado, Remedial Law
Compendium, Vol. 1, 5th Revised Ed., p. 77, citing Vda. de Suan, et al. v. Cui, et al.,
L-35336, Oct. 27, 1983. In criminal cases, venue is jurisdictional. Peo. v. Mercado, 65
Phil. 665 (1938); Peo. v. Intia, et al., 70 SCRA 460 (1976), citing Lopez v. City Judge,
18 SCRA 616 (1966), in turn citing U.S. v. Pagdayuman, 5 Phil. 265 (1905), Beltran v.
Ramos, 96 Phil. 149 (1954), Ragpala v. Justice of the Peace of Tubod, 109 Phil. 373
(1960), Peo. v. Yumang, 11 SCRA 297 (1964), and Peo. v. San Antonio, 14 SCRA 63
(1965).
779

779
in an amount considerably in excess of P20,000.00, is assuredly within the jurisdiction
of a Regional Trial Court.35 Assuming that venue were 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,36
the RTC would proceed in perfectly regular fashion if it then tried and decided the
action.
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"37 were commenced in a province or city other than that “where the property
or any part thereof lies,"38 if no objection is seasonably made in a 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
________________
35 Sec. 19(8), B.P. 129, The Judiciary Reorganization Act of 1980.

36 Sec. 4, Rule 4.
37 Sec. 19(2) provides that cases of this nature are within the Regional Trial Courts’
“exclusive original jurisdiction ** except actions for forcible entry into and unlawful
detainer of lands or buildings, original jurisdiction over which is conferred upon
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts **."
38 Sec. 2(a), Rule 4.
39 Sec. 19(2), B.P. 129, pertinently provides that “Regional Trial Courts shall exercise
exclusive original jurisdiction ** ** In all civil actions which involve title to, or possession
of, real property, or any interest therein, except actions for forcible entry into and
unlawful detainer of lands and buildings **." SEE Eusebio v. Eusebio, 70 SCRA 268
(1978); Luna v. Carandang, supra, and Caltex (Phil.), Inc. v. Go, supra; Claridades v.
Mercader, 17 SCRA 1 (1966); Ocampo v. Domingo, 38 SCRA (1971).
780
780
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., Please see concurring opinion.
CONCURRING OPINION
REGALADO, J.:
I find no plausible reason to withhold concurrence from the opinion meticulously

crafted by the Chief Justice which provides a taxonomy of cases for future decisions.
It has figuratively parted the jurisprudential waves, laying on one side a catalogue of
holdings on the strict binding effect of a venue stipulation and, on the other, those
rulings on when it may be disregarded. This concurring opinion merely suggests,
therefore, some parametric qualifications on the applicability of the first type, that is,
the agreement which demands literal compliance by the parties.
Summarized, the rule is that if the parties to a contract merely agree on the venue of
any case arising therefrom, in addition to or aside from the legal venue provided
therefor by the Rules of Court or the law, that stipulation is merely permissive and the
parties may choose to observe the same or insist on the alternative venues in the
Rules or the law.
If, on the other hand, such venue stipulation contains qualifying, restrictive, mandatory
or exclusionary terms indicating that the additional forum shall be the unalterable
venue of prospective suits ex contractu between them, then such agreement shall
necessarily be observed to the exclusion
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781
of and shall bar resort to another forum which would otherwise have been the
reglementary prescription of venue for the case.
Of the latter genre are the use of such qualifying words like exclusively, only, solely,
limited to, in no other place, to the exclusion of, or other terms indicative of a clear and
categorical intent to lay the venue at a specific place and thereby waiving the general
provisions of the Rules or the law on venue or proscribing the filing of suit in any other
competent court.
These guidelines should accordingly be drawn from the decision in this case, viz.: (1)
the agreement on venue shall, in the first instance, be normally considered as merely
permissive; (2) to be restrictive, the language or terminology employed in the
stipulation must be unequivocal and admit of no contrary or doubtful interpretation; (3)
in case of irreconcilable doubt, the venue provision shall be deemed to be permissive;
and (4) in ascertaining the intent in that provision which reasonably admits of more
than one meaning, the construc-tion should be adopted which most conduces to the
convenience of the parties.
In addition to the foregoing, the writer suggests, by way of caveat, the matter of
adhesion contracts and restrictions of public policy as qualifying or delimiting the
application of the mandatory effect of restrictive venue stipulations.
Implicit in an agreement on venue, as in any contract or its terms, is the legal
imperative that the consent of the parties thereto were voluntarily, freely and
intelligently given. Now, as explained by a commentator, a contract of adhesion is one
in which a party imposes a ready-made form of contract which the other party may
accept or reject, but which the latter cannot modify. These are the contracts where all
the terms are fixed by one party and the other has merely “to take it or leave it.”
It is there admitted that these contracts usually contain a series of stipulations which
tend to increase the obligations of the adherent, and to reduce the responsibilities of
the offeror. There is such economic inequality between the parties to
782
782
these contracts that the independence of one of them is entirely paralyzed. Yet,
although other writers believe that there is no true contract in such cases because the
will of one of the parties is suppressed, our commentator says that this is not juridically
true. His view is that the one who adheres to the contract is in reality free to reject it
entirely; if he adheres, he gives his consent.1
This conclusion would not seem to square with what this Court stated in Qua Chee
Gan vs. Law Union and Rock Insurance Co., Ltd.2 It was there pointed out that by
reason of the exclusive control by one party in a contract of adhesion over the terms
and phraseology of the contract, any ambiguity must be held strictly against the one
who caused it to be prepared and liberally in favor of the other party. In fact, this rule
has since become a statutory provision.3 By analogy, these pronouncements in the
aforestated case would inveigh against a rigid application of an exclusive venue
stipulation where what is involved is a contract of adhesion, to wit:
“x x x The courts cannot ignore that nowadays monopolies, cartels and concentrations
of capital, endowed with overwhelming economic power, manage to impose upon
parties dealing with them cunningly prepared ‘agreements’ that the weaker party may
not change one whit, his participation in the ‘agreement’ being reduced to the
alternative to take it or leave it, labelled x x x ‘contracts by adherence’ (contracts
d’adhesion), in contrast to those entered into by parties bargaining on an equal footing,
such contracts x x x obviously call for greater strictness and vigilance on the part of
courts of justice with a view to protecting the weaker party from abuses and imposition,
and prevent their becoming traps for the unwa(r)y” (authorities omitted).
I respectfully submit, therefore, that while the enunciated rule on restrictive venue
stipulations should ordinarily be
________________
1 Tolentino, A., Civil Code of the Philippines, Vol. IV, 1987 ed., 503–504.
2 98 Phil. 85 (1955).
3 Art. 1377, Civil Code.
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783
respected, a greater caution on a case-to-case basis must be adopted by the courts
where such stipulation is contained in a contract of adhesion. Not only should they
consider the disadvantaged position of the adherent but, more importantly, the fact
that the raison d’etre for rules of venue is to afford due process, greater convenience
and more ready access to the court in favor of the adhering contracting party.
I also submit that the rule on restrictive venue stipulations should not apply where it
would be violative of a settled and important policy of the State. Thus, for instance, in
the cited case of Hongkong and Shanghai Banking Corporation vs. Sherman,4 aside
from the agreement that the contract should be determined in accordance with the
laws of Singapore, that contract also contained this provision: “We hereby agree that
the Courts in Singapore shall have jurisdiction over all disputes arising under this
guarantee x x x.”
While it is true that in civil cases venue is a procedural, and not a jurisdictional, matter
and the former may be the subject of stipulation, the quoted portion of the contract not
only refers to the venue of prospective suits but actually trenches on the jurisdiction of
our courts. Of course, in that case this Court did not enforce the quoted portion of the
agreement but on the theory that a literal interpretation shows that the parties did not
thereby stipulate that only the courts of Singapore, to the exclusion of all others, had
jurisdiction. In other words, that agreement was not enforced because it was not a
restrictive or mandatory provision.
Suppose, however, that stipulation had been couched in an exclusive and mandatory
form? Since the ostensible venue aspect was interlinked with the jurisdiction of the
foreign court, it would oust Philippine courts of jurisdiction and violate a fundamental
national policy. Although in a different setting and on laws then obtaining but
nonetheless upon a rationale applicable hereto, this Court has long declared as null
and void any agreement which would deprive a court of
________________
4 176 SCRA 331 (1989).

784
784
its jurisdiction.5 In fact, the matter of the jurisdiction of courts cannot be the subject of
a compromise.6 For that matter, the agreement in question, even on the issue of venue
alone, would also greatly inconvenience the Philippine litigant or even altogether deny
him access to the foreign court, for financial or other valid reasons, as to amount to
denial of due process.
Exclusive jurisdiction of foreign courts over causes of action arising in the Philippines
may be the subject of a treaty, international convention, or a statute permitting and
implementing the same. Definitely, however, such jurisdiction and venue designation
cannot and should not be conferred on a foreign court through a contractual stipulation
even if restrictive in nature.
Judgment reversed, order of court a quo reinstated and affirmed.
Note.—Venue or jurisdiction is determined by the allegations in the Information. (Lim
vs. Court of Appeals, 251 SCRA 408 [1996]) Unimasters Conglomeration, Inc. vs.
Court of Appeals, 267 SCRA 759, G.R. No. 119657 February 7, 1997
YOUNG AUTO SUPPLY CO. VS CA, 223 SCRA 670
G.R. No. 104175. June 25, 1993.*

YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners, vs. THE
HONORABLE COURT OF APPEALS (THIRTEENTH DIVISION) AND GEORGE
CHIONG ROXAS, respondents.
Remedial Law; Actions; Venue; A corporation is in a metaphysical sense a resident of

the place where its principal office is located as stated in the articles of incorporation.—
A corporation has no residence in the same sense in which this term is applied to a
natural person. But for practical purposes, a corporation is in a metaphysical sense a
resident of the place where its principal office is located as stated in the articles of
incorporation (Cohen v. Benguet Commercial Co., Ltd., 34 Phil. 526 [1916] Clavecilla
Radio System v. Antillon, 19 SCRA 379 [1967]). The Corporation Code precisely
requires each corporation to specify in its articles of incorporation the “place where the
principal office of the corporation is to be located which must be within the Philippines”
(Sec. 14 [3]). The purpose of this requirement is to fix the residence of a corporation
in a definite place, instead of allowing it to be ambulatory.
Same; Same; Same; 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 a defendant.—In Clavecilla Radio System v. Antillon, 19
SCRA 379 ([1967]), this Court explained why actions cannot be filed against a
corporation in any place where the corporation maintains its branch offices. The Court
ruled that to allow an action to be instituted in any place where the corporation has
branch offices, would create confusion and work untold inconvenience to said entity.
By the same token, 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 a defendant.
PETITION for review of the decision of the Court of Appeals.

Angara, Abello, Concepcion, Regala & Cruz for petitioners.
Antonio Nuyles for private respondent.
________________
* FIRST DIVISION.
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VOL. 223, JUNE 25, 1993

671
Young Auto Supply Co. vs. Court of Appeals
QUIASON, J.:
Petitioners seek to set aside the decision of respondent Court of Appeals in CA-G.R.
SP No. 25237, which reversed the Order dated February 8, 1991 issued by the
Regional Trial Court, Branch 11, Cebu City in Civil Case No. CEB 6967. The order of
the trial court denied the motion to dismiss filed by respondent George C. Roxas of
the complaint for collection filed by petitioners.
It appears that sometime on October 28, 1987, Young Auto Supply Co. Inc. (YASCO)
represented by Nemesio Garcia, its president, Nelson Garcia and Vicente Sy, sold all
of their shares of stock in Consolidated Marketing & Development Corporation
(CMDC) to Roxas. The purchase price was P8,000,000.00 payable as follows: a
downpayment of P4,000,000.00 and the balance of P4,000,000.00 in four postdated
checks of P1,000,000.00 each.
Immediately after the execution of the agreement, Roxas took full control of the four
markets of CMDC. However, the vendors held on to the stock certificates of CMDC as
security pending full payment of the balance of the purchase price.
The first check of P4,000,000.00, representing the down-payment, was honored by
the drawee bank but the four other checks representing the balance of P4,000,000.00
were dishonored. In the meantime, Roxas sold one of the markets to a third party. Out
of the proceeds of the sale, YASCO received P600,000.00, leaving a balance of
P3,400,000.00 (Rollo, p. 176).
Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to the
proceeds of the sale of the CMDC shares to Nemesio Garcia.
On June 10, 1988, petitioners filed a complaint against Roxas in the Regional Trial
Court, Branch 11, Cebu City, praying that Roxas be ordered to pay petitioners the sum
of P3,400,000.00 or that full control of the three markets be turned over to YASCO
and Garcia. The complaint also prayed for the forfeiture of the partial payment of
P4,600,000.00 and the payment of attorney’s fees and costs (Rollo, p. 290).
Roxas filed two motions for extension of time to submit his answer. But despite said
motion, he failed to do so causing petitioners to file a motion to have him declared in
default. Roxas then filed, through a new counsel, a third motion for extension of
672
672
time to submit a responsive pleading.
On August 19, 1988, the trial court declared Roxas in default. The order of default was,
however, lifted upon motion of Roxas.
On August 22, 1988, Roxas filed a motion to dismiss on the grounds that:
“1. The complaint did not state a cause of action due to non-joinder of indispensable
parties;
2. The claim or demand set forth in the complaint had been waived, abandoned or
otherwise extinguished; and
3. The venue was improperly laid” (Rollo, p. 299).
After a hearing, wherein testimonial and documentary evidence were presented by
both parties, the trial court in an Order dated February 8, 1991 denied Roxas’ motion
to dismiss. After receiving said order, Roxas filed another motion for extension of time
to submit his answer. He also filed a motion for reconsideration, which the trial court
denied in its Order dated April 10, 1991 for being pro-forma (Rollo, p. 17). Roxas was
again declared in default, on the ground that his motion for reconsideration did not toll
the running of the period to file his answer.
On May 3, 1991, Roxas filed an unverified Motion to Lift the Order of Default which
was not accompanied with the required affidavit of merit. But without waiting for the
resolution of the motion, he filed a petition for certiorari with the Court of Appeals.
The Court of Appeals sustained the findings of the trial court with regard to the first
two grounds raised in the motion to dismiss but ordered the dismissal of the complaint
on the ground of improper venue (Rollo, p. 49).
A subsequent motion for reconsideration by petitioner was to no avail.
Petitioners now come before us, alleging that the Court of Appeals erred in:
“1. holding that venue should be in Pasay City, and not in Cebu City (where both
petitioners/plaintiffs are residents;
2. not finding that Roxas is estopped from questioning the choice of venue” (Rollo, p.
19).
673
VOL. 223, JUNE 25, 1993

673
The petition is meritorious.
In holding that the venue was improperly laid in Cebu City, the Court of Appeals relied
on the address of YASCO, as appearing in the Deed of Sale dated October 28, 1987,
which is “No. 1708 Dominga Street, Pasay City.” This was the same address written
on YASCO’s letters and several commercial documents in the possession of Roxas
(Decision, p. 12; Rollo, p. 48).
In the case of Garcia, the Court of Appeals said that he gave Pasay City as his address
in three letters which he sent to Roxas’ brothers and sisters (Decision, p. 12; Rollo, p.
47). The appellate court held that Roxas was led by petitioners to believe that their
residence is in Pasay City and that he had relied upon those representations
(Decision, p. 12, Rollo, p. 47).
The Court of Appeals erred in holding that the venue was improperly laid in Cebu City.
In the Regional Trial Courts, all personal actions are commenced and tried in the
province or city 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 [Sec.
2(b) Rule 4, Revised Rules of Court].
There are two plaintiffs in the case at bench: a natural person and a domestic
corporation. Both plaintiffs aver in their complaint that they are residents of Cebu City,
thus:
“1.1 Plaintiff Young Auto Supply Co., Inc. (“YASCO”) is a domestic corporation duly
organized and existing under Philippine laws with principal place of business at M.J.
Cuenco Avenue, Cebu City. It also has a branch office at 1708 Dominga Street, Pasay
City, Metro Manila.
“Plaintiff Nemesio Garcia is of legal age, married, Filipino citizen and with business
address at Young Auto Supply Co., Inc., M.J. Cuenco Avenue, Cebu City. xxx”
(Complaint, p. 1; Rollo, p. 81).
The Article of Incorporation of YASCO (SEC Reg. No. 22083) states:
“THIRD. That the place where the principal office of the corporation is to be established
or located is at Cebu City, Philippines (as amended on December 20, 1980 and further
amended on December 20, 1984)” (Rollo, p. 273).
674
674
A corporation has no residence in the same sense in which this term is applied to a
natural person. But for practical purposes, a corporation is in a metaphysical sense a
resident of the place where its principal office is located as stated in the articles of
incorporation (Cohen v. Benguet Commercial Co., Ltd., 34 Phil. 526 [1916] Clavecilla
Radio System v. Antillo, 19 SCRA 379 [1967]). The Corporation Code precisely
requires each corporation to specify in its articles of incorporation the “place where the
principal office of the corporation is to be located which must be within the Philippines”
(Sec. 14 [3]). The purpose of this requirement is to fix the residence of a corporation
in a definite place, instead of allowing it to be ambulatory.
In Clavecilla Radio System v. Antillon, 19 SCRA 379 ([1967]), this Court explained
why actions cannot be filed against a corporation in any place where the corporation
maintains its branch offices. The Court ruled that to allow an action to be instituted in
any place where the corporation has branch offices, would create confusion and work
untold inconvenience to said entity. By the same token, 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 a defendant.
If it was Roxas who sued YASCO in Pasay City and the latter questioned the venue
on the ground that its principal place of business was in Cebu City Roxas could argue
that YASCO was in estoppel because it misled Roxas to believe that Pasay City was
its principal place of business. But this is not the case before us.
With the finding that the residence of YASCO for purposes of venue is in Cebu City,
where its principal place of business is located, it becomes unnecessary to decide
whether Garcia is also a resident of Cebu City and whether Roxas was in estoppel
from questioning the choice of Cebu City as the venue.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals
appealed from is SET ASIDE and the Order dated February 8, 1991 of the Regional
Trial Court is REINSTATED.
SO ORDERED.
Cruz (Chairman), Griño-Aquino and Bellosillo, JJ., concur.
Petition granted. Appealed decision set aside.
675
VOL. 223, JUNE 25, 1993

675
People vs. Enciso
Note.—Venue stipulations in a contract do not as a rule supersede the general rule
set out in Rule 4 of the Rules of Court, they should be construed merely as agreement
on an additional forum, not as limiting venue to the specified place (Nasser vs. Court
of Appeals, 191 SCRA 783). Young Auto Supply Co. vs. Court of Appeals, 223 SCRA
670, G.R. No. 104175 June 25, 1993

Capati Vs Ocampo, 113 Scra 794 No. L-28742. April 30, 1982. VIRGILIO CAPATI, Plaintiff-Appellant, vs. DR. JESUS P. OCAMPO, Defendant-Appellee

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Capati Vs Ocampo, 113 Scra 794 No. L-28742. April 30, 1982. VIRGILIO CAPATI, Plaintiff-Appellant, vs. DR. JESUS P. OCAMPO, Defendant-Appellee

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CAPATI VS OCAMPO, 113 SCRA 794

No. L-28742. April 30, 1982.*

The facts are stated in the opinion of the Court.

VOL. 113, APRIL 30, 1982

VOL. 113, APRIL 30, 1982

No. L-22238. February 18, 1967.

Corporation Law; Domicile of a corporation.—The residence of a corporation is the

The facts are stated in the opinion of the Court.

REURTEL WASHED NOT AVAILABLE REFINED TWENTY FIFTY IF AGREEABLE

VOL. 19, FEBRUARY 18, 1967

VOL. 19, FEBRUARY 18, 1967

G.R. No. 74854. April 2, 1991.*

The facts are stated in the opinion of the Court.

VOL. 195, APRIL 2, 1991

1 Penned by Presiding Justice Ramon G. Gaviola, Jr. and concurred in by Associate

4 Manila Railroad Co. vs. Attorney General, 20 Phil. 523.

7 Banco Espanol-Filipino vs. Palanca, 37 Phil. 921.

G.R. No. 106847. March 5, 1993.*

VOL. 219, MARCH 5, 1993

1 Petition, Annex "G".

6 Petition, Annex "C".

VOL. 219, MARCH 5, 1993

7 See Note 3, p. 11.

8 See Note 3, p. 20.

VOL. 219, MARCH 5, 1993

11 Uriarte v. CFI of Negros Occidental, Nos. L-21938-39, 29 October 1970, 33 SCRA

G.R. No. 53485. February 6, 1991.*

The facts are stated in the opinion of the Court.

VOL. 193, FEBRUARY 6, 1991

VOL. 193, FEBRUARY 6, 1991

G.R. No. 76431. October 16, 1989.*

VOL. 178, OCTOBER 16, 1989

The facts are stated in the opinion of the Court.

VOL. 178, OCTOBER 16, 1989

VOL. 178, OCTOBER 16, 1989

No. L-31095. June 18, 1976.*

VOL. 71, JUNE 18, 1976

VOL. 71, JUNE 18, 1976

No. L-17699. March 30, 1962.

VOL. 4, MARCH 30, 1962

G.R. No. L-37750 May 19, 1978

G.R. No. 119657. February 7, 1997.*

VOL. 267, FEBRUARY 7, 1997

The facts are stated in the opinion of the Court.

The appellate proceeding at bar turns upon the interpretation of a stipulation in a

VOL. 267, FEBRUARY 7, 1997

2 Rollo, pp. 14, 15, 65,111–114.

VOL. 267, FEBRUARY 7, 1997

9 230 SCRA 413, 420–421.

VOL. 267, FEBRUARY 7, 1997

10 Rollo, pp. 45–61.

16 108 SCRA 740.

VOL. 267, FEBRUARY 7, 1997

23 228 SCRA 387.

VOL. 267, FEBRUARY 7, 1997

25 77 SCRA 225. N.B. No reference was made to the Polytrade doctrine.

VOL. 267, FEBRUARY 7, 1997

30 115 SCRA 904.

VOL. 267, FEBRUARY 7, 1997

34 Venue is a procedural, not a jurisdictional matter. SEE Moran, Comments on the

VOL. 267, FEBRUARY 7, 1997

35 Sec. 19(8), B.P. 129, The Judiciary Reorganization Act of 1980.

I find no plausible reason to withhold concurrence from the opinion meticulously