AUCTION IN MALINTA, INC., G.R. No. 173979
Petitioner,
Present:
- versus - Ynares-Santiago, J. (Chairperson),
Austria-Martinez,
Callejo,
Sr.,
Chico-Nazario, and
Nachura, JJ.
WARREN EMBES
LUYABEN,
Respondent. Promulgated:
x
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x
YNARES-SANTIAGO, J.:
Assailed in this petition for review under Rule 45 of the Rules of Court
is the May 31, 2005 Decision[1] of
the Court of Appeals in CA-G.R. CV No. 78456, which held that venue was
properly laid before the Regional Trial Court of Bulanao, Tabuk, Kalinga
(Kalinga RTC), and reversed the trial court’s September 3, 2002 Resolution[2] dismissing
the complaint of respondent Warren Embes Lubayen in Civil Case No. 511, on the
ground of improper venue.
The facts show that on October 24,
2001, respondent, a resident of Magsaysay, Tabuk, Kalinga, filed with the
Kalinga RTC a complaint[3]
for damages against petitioner Auction in Malinta, Inc., a corporation with
business address at Malinta, Valenzuela City, and engaged in public auction of
heavy equipments, trucks, and assorted machineries. Respondent alleged that in an auction conducted
by petitioner on
Petitioner filed a motion to dismiss
on the ground of improper venue. It
argued that the correct venue is the RTC of Valenzuela City pursuant to the
stipulation in the Bidders Application and Registration Bidding Agreement which
states that:
All
Court litigation procedures shall be conducted in the appropriate Courts of
In a Resolution dated
Aggrieved, respondent appealed to the Court of Appeals which reversed the
Resolution of the Kalinga RTC and reinstated the complaint. The dispositive portion thereof, reads:
WHEREFORE, the Resolution appealed from is hereby REVERSED
and SET ASIDE. The case is remanded to
the RTC which is ordered to reinstate plaintiff’s complaint for damages.
SO ORDERED.[6]
Petitioner’s motion for reconsideration was denied; hence, the instant
petition.
The sole issue is whether the stipulation in the parties’ Bidders
Application and Registration Bidding Agreement effectively limited the venue of
the instant case exclusively to the proper court of Valenzuela City.
The Court rules in the negative.
The general rule on the venue of personal actions, as in the instant case
for damages[7] filed by
respondent, is embodied in Section
2, Rule 4 of the Rules of Court. It
provides:
Sec. 2. Venue of
personal actions. – All other actions may be commenced and tried where the plaintiff
or any of the principal plaintiffs resides, or where the defendant or any of
the principal defendants resides, or in the case of a nonresident defendant,
where he may be found, at the election of the plaintiff.
The aforequoted rule, however, finds no application where the parties,
before the filing of the action, have validly agreed in writing on an exclusive
venue.[8] But the mere
stipulation on the venue of an action is not enough to preclude parties from
bringing a case in other venues. It must
be shown that such stipulation is exclusive. In
the absence of qualifying or restrictive words, such as “exclusively” and
“waiving for this purpose any other venue,”[9] “shall
only” preceding the designation of venue,[10] “to the exclusion of the other courts,”[11]
or words of similar import, the stipulation
should be deemed as merely an agreement on an additional forum, not as limiting
venue to the specified place.[12]
This has been the rule since the 1969 case
of Polytrade Corporation v. Blanco.[13] It was held therein that the clause – “[t]he
parties agree to sue and be sued in the Courts of Manila,” does not preclude
the filing of suits in the court which has jurisdiction over the place of residence
of the plaintiff or the defendant. The
plain meaning of the said provision is that the parties merely consented to be
sued in
The Polytrade doctrine was further applied in the
case of Unimasters Conglomeration, Inc.
v. Court of Appeals,[15] which analyzed the various jurisprudence rendered after the
Polytrade case. In Unimasters, we
held that a stipulation stating that “[a]ll suits arising out of this
Agreement shall be filed with/in the proper Courts of Quezon City,”[16] is only permissive and does not limit the venue to the
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.[17]
The rule enunciated in Unimasters
and Polytrade was reiterated in subsequent
cases where the following agreements on venue were likewise declared to be
merely permissive and do not limit the venue to the place specified therein, to
wit:
1. “If court litigation becomes necessary
to enforce collection, an additional equivalent (sic) to 25% of the principal
amount will be charged. The agreed venue for such action is
2. “In case of
litigation hereunder, venue shall be in the City Court or Court of First
Instance of Manila as the case may be for determination of any and all
questions arising thereunder.”[19]
Then too, the doctrine that absent qualifying or restrictive words, the
venue shall either be that stated in the law or rule governing the action or
the one agreed in the contract, was applied to an extra-judicial foreclosure
sale under Act No. 3135.[20] In Langkaan Realty Development, Inc. v.
United Coconut Planters Bank,[21]
where the provision on the venue employed the word “shall” to refer to the
place where the foreclosure will be held, the Court ruled that said provision “lack(s)
qualifying or restrictive words to indicate the exclusivity of the agreed
forum,” and therefore “the stipulated place is considered only as an
additional, not a limiting venue.”[22] The said stipulation reads:
It is hereby agreed that in case of foreclosure of this
mortgage under Act 3135, as amended, and Presidential Decree No. 385, the
auction sale shall be held at the capital of the province, if the property is
within the territorial jurisdiction of the province concerned, or shall be held
in the city, if the property is within the territorial jurisdiction of the city
concerned.[23]
In the instant case, the stipulation in the parties’
agreement, i.e., “all Court litigation procedures
shall be conducted in the appropriate Courts of Valenzuela City, Metro Manila,”
evidently lacks the restrictive and qualifying words that will limit venue exclusively
to the RTC of Valenzuela City. Hence, the
Valenzuela courts should only be considered as an additional choice of venue to
those mentioned under Section
2, Rule 4 of the Rules of Court.
Accordingly, the present case for damages may be filed with the (a) RTC
of Valenzuela City as stipulated in the bidding agreement; (b) RTC of
Bulanao, Tabuk, Kalinga which has jurisdiction over the residence of respondent
(plaintiff); or with the (c) RTC of Valenzuela City which has jurisdiction over
the business address of petitioner (defendant). The filing of the complaint in the RTC of Bulanao,
Tabuk, Kalinga, is therefore proper, respondent being a resident of Tabuk,
Kalinga.
The case of Hoechst Philippines,
Inc. v. Torres,[24] promulgated
in 1978, and invoked by petitioner in its motion to dismiss, had already been
superseded by current decisions on venue.
In the said case, the Court construed the proviso: “[i]n case of any
litigation arising out of this agreement, the venue of action shall be in the
competent courts of the
In sum, we find that the Court of Appeals correctly declared that venue
in the instant case was properly laid with the RTC of Bulanao, Tabuk, Kalinga.
WHEREFORE, the petition is DENIED.
The May 31, 2005 Decision of the Court of Appeals in CA-G.R. CV No.
78456 which reversed the September 3, 2002 Resolution of the Regional Trial
Court of Bulanao, Tabuk, Kalinga; reinstated the complaint in Civil Case No.
511; and remanded the case to the said court, is AFFIRMED.
Costs against petitioner.
SO ORDERED.
CONSUELO
YNARES-SANTIAGO
Associate Justice
WE CONCUR:
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
ROMEO J. CALLEJO, SR. MINITA V.
CHICO-NAZARIO
Associate Justice Associate Justice
ANTONIO
EDUARDO B. NACHURA
Associate Justice
ATTESTATION
I attest that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson’s Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Rollo, pp. 22-33. Penned by Associate Justice Ruben T. Reyes
and concurred in by Associate Justices Josefina Guevara-Salonga and Fernanda
Lampas Peralta.
[2]
[3]
[4]
[5]
[6]
[7] Asset
Privatization Trust v. Court of Appeals, 381 Phil. 530, 550 (2000).
[8]
SEC. 4. When Rule not applicable. – This Rule shall not apply –
(a) In
those cases where a specific rule or law provides otherwise; or
(b) Where
the parties have validly agreed in writing before the filing of the action on
the exclusive venue thereof.
[9] Spouses
Lantin v. Lantion, G.R. No. 160053,
[10] Spouses
Rigor v. Consolidated Orix Leasing and Finance Corporation, 436 Phil. 243, 251 (2002).
[11] San Miguel Corporation v. Monasterio,
G.R. No. 151037,
[12] Spouses Lantin v. Lantion, supra.
[13]
140 Phil. 604 (1969).
[14]
[15]
335 Phil. 415 (1997).
[16]
[17]
[18] Mangila v. Court of Appeals, 435 Phil. 870, 883-884 (2002).
[19] Philippine
Bank of Communications v. Trazo, G.R. No. 165500,
[20]
“An Act to Regulate the
[21]
400 Phil. 1349 (2000).
[22]
[23]
[24]
G.R. No. L-44351,
[25]
[26]
334 Phil. 671, 680-681 (1997). See also Philippine Banking Corporation v. Tensuan, G.R. No. 104649,