STIPULATION ON VENUE IN THE LOAN AGREEMENT

Main point: Written stipulations as to venue are either mandatory or permissive. In interpreting
stipulations as to venue, there is a need to inquire as to whether or not the agreement is restrictive i.e.
the suit may be filed only in the place agreed upon.

65. Rodrigo Supena v Judge Rosalio Dela Rosa

FACTS:

This case involves an extrajudicial foreclosure sale of a real estate mortgage executed by the
mortgagor PQL in favour of mortgagee BAID. One day before the auction sale. Judge Dela Rosa of
RTC Manila issued an order holding in the abeyance the scheduled public auction sale on the basis
PQL-mortgagor filed an ex-parte motion (it relied upon the stipulation on venue of action that
the parties have agreed to hold the foreclosure proceedings in Makati and not in Manila..) to hold
public auction in abeyance with the intention to attempt to short cut the entire process.
Mr. Supena, President of BPI Agricultural Development Bank (BAID) charges Judge Rosalio Dela
Rosa with gross ignorance of law for issuing an unlawful order, such order is issued without proper
case being filed and without the benefit of notice and hearing, or even an injunction bond from
which the BAID-mortgagee may seek compensation and restitution for the damages it may suffer
by reason of the cancellation of the auction sale.
Respondent Judge Dela Rosa argue that he issued the order to determine whether the venue in
Foreclosure Proceeding was properly laid in the light of the stipulation in the Loan Agreement
duly entered by both parties and acknowledge before a Notary Public.

ISSUE:

W/N venue of execution of sale was improperly laid.

HELD:

No. The case is extra-judicial sale. RA 3135, Sec 2 applies in the instant case which is a special law is dealing
with extra-judicial foreclosure sales of real estate mortgages:

Said sale cannot be made legally outside of the province in which the property sold is situated; and in case
the place is within said province in which the sale is to be made is the subject of stipulation, such sale shall
be made in said place or in the municipal building of the municipality in which the property or part thereof
is situated.- The subject property is in Manila, hence, it cannot be made outside of Manila.

The provisions on Rules of Court on venue of actions does not apply.

Section 5, Rule 4 states that When rule not applicable. This shall not apply in those cases where a specific
rule or law provides otherwise.

Section 3, Rule 4 By written agreement of the parties, the venue of an action may be changed or
transferred from one province to another.