31.
SPOUSES TEODORO and ROSARIO SARAZA and FERNANDO Upon inquiry from PNB, the respondent found out that the
SARAZA, Petitioners, vs. WILLIAM FRANCISCO, Respondent.
G.R. No. 198718 November 27, 2013
[Venue of Actions for Specific Performance]
Facts:
The case stems from an amended complaint filed by William (Francisco)
(respondent) against Fernando Saraza (Fernando) and Spouses Teodoro and
Rosario (Rosario) Saraza (Spouses Saraza) (petitioners).
Francisco alleged in his complaint that on September 1, 1999, he and
Fernando executed an Agreement that provided for the Fernando’s sale of his
100-square meter share in a lot situated in Bangkal, Makati City, which at that
time was still registered in the name of one Emilia Serafico for a total
consideration of ₱3,200,000.00. The amount of ₱1,200,000.00 was paid
upon the Agreement’s execution, while the balance of ₱2,000,000.00 was to
be paid on installments to the Philippine National Bank (PNB), to cover a loan
of Spouses Saraza, Fernando’s parents, with the bank. A final deed of sale
conveying the property was to be executed by Fernando upon full payment of
the PNB loan.
It was also agreed upon that should the parties fail for any reason to transfer
the subject property to the respondent’s name, Rosario and Fernando’s 136-
sq m property covered by TCT No. 156126 and encumbered to PNB to secure
the loan that was to be paid by the respondent shall be considered a collateral
in favor of the respondent. Spouses Saraza signified their conformity to the
Agreement. Francisco was also allowed to take immediate possession of said
property through a contract of lease.
The Sarazas also furnished PNB with an Authority, allowing Francisco to pay
their obligations to the PNB, to negotiate for a loan restructuring, to receive
the owner’s duplicate copy of TCT No. 156126 upon full payment of the loan
secured by its mortgage, and to perform such other acts as may be necessary
in connection with the settlement of the loan.
When the remaining balance of the PNB loan reached ₱226,582.13, the
respondent asked for the petitioners’ issuance of an SPA that would authorize
him to receive from PNB the owner’s duplicate copy of TCT No. 156126 upon
full payment of the loan. The petitioners denied the request.
petitioners had instead executed an Amended Authority, which
provided that the owner’s copy of TCT No. 156126 should be
returned to the mortgagors upon full payment of the loan. Spouses
Saraza also caused the eviction of the respondent from the
property. These prompted the respondent to institute the civil case
for specific performance, sum of money and damages with the RTC
of Imus, Cavite on December 7, 2004.
Petitioners admitted the existence of the Agreement and the Authority which
was addressed to PNB; opposed the respondent’s complaint on the ground
that the amount of ₱1,200,000.00 which was supposed to be paid by the
respondent upon the Agreement’s execution remained unpaid. The
respondent allegedly took advantage of the trust that was reposed upon him
by the petitioners, who nonetheless did not formally demand payment from
him but merely waited for him to pay the amount.
The RTC ruled in favor of the respondent and considered the contents of the
Agreement executed by the parties. The RTC, however, declared that only
Fernando should be held liable for the respondent’s claims, since the main
action was for specific performance, specifically to compel him to execute a
Deed of Absolute Sale over the subject property already covered by TCT No.
220530 under Fernando’s name.
Fernando questioned the RTC Decision before the CA. He argued that the RTC
of Imus lacked jurisdiction over the case as it involved an adjudication of
ownership of a property situated in Makati City.
The CA affirmed the RTC Decision. On the issue of jurisdiction, the CA cited
Fernando’s failure to seasonably file before the lower court a motion to dismiss
stating that the action should have been filed in Makati City. More
importantly, the Court explained that the case was a personal
action since it did not involve a claim of ownership of the subject
property, but only sought Fernando’s execution of a deed of sale in
the respondent’s favor. Thus, the venue for the action was the
residence of the plaintiff or the defendant, at the plaintiff’s option
Issue:
Whether or not the action is one of specific performance which is subjected to
the rules of venue in personal actions?
Held:
The petitioners’ argument that the action should have been instituted with the
RTC of Makati City, and not the RTC of Imus, Cavite, is misplaced. Although
the end result of the respondent’s claim was the transfer of the subject
property to his name, the suit was still essentially for specific performance, a
personal action, because it sought Fernando’s execution of a deed of absolute
sale based on a contract which he had previously made.
Citing Cabutihan v. Landcenter Construction & Development Corporation,
In the said case, a complaint for specific performance that involved property
situated in Parañaque City was instituted before the RTC of Pasig City. When
the case’s venue was raised as an issue, the Court sided with therein petitioner
who argued that "the fact that ‘she ultimately sought the conveyance of real
property’ not located in the territorial jurisdiction of the RTC of Pasig is x x x
an anticipated consequence and beyond the cause for which the action [for
specific performance with damages] was instituted.
Elucidated further in [i]n La Tondeña Distillers, Inc. v. Ponferrada,
respondents filed an action for specific performance with damages before the
RTC of Bacolod City. The defendants allegedly reneged on their contract to sell
to them a parcel of land located in Bago City – a piece of property which the
latter sold to petitioner while the case was pending before the said RTC.
Private respondent did not claim ownership but, by annotating a notice of lis
pendens on the title, recognized defendants’ ownership thereof. This Court
ruled that the venue had properly been laid in the RTC of Bacolod, even if the
property was situated in Bago.
In Siasoco v. Court of Appeals, private respondent filed a case for specific
performance with damages before the RTC of Quezon City. It alleged that after
it accepted the offer of petitioners, they sold to a third person several parcels
of land located in Montalban, Rizal. The Supreme Court sustained the trial
court’s order allowing an amendment of the original Complaint for specific
performance with damages. Contrary to petitioners’ position that the RTC of
Quezon City had no jurisdiction over the case, as the subject lots were located
in Montalban, Rizal, the said RTC had jurisdiction over the original
Complaint. The Court reiterated the rule that a case for specific performance
with damages is a personal action which may be filed in a court where any of
the parties reside.
The Court compared these two cases with the case of National Steel
Corporation v. Court of Appeals34 where the Court held that an action that
seeks the execution of a deed of sale over a parcel of land is for recovery of real
property, and not for specific performance, because the primary objective is
to regain ownership and possession of the property.35 It was explained that
the prayer in National Steel was not in any way connected to a contract that
was previously executed by the party against whom the complaint was filed,
unlike in Cabutihan where the parties had earlier executed an Undertaking for
the property’s transfer, correctly giving rise to a cause of action either for
specific performance or for rescission, as in this case.
Section 2, Rule 4 of the Rules of Court then governs the venue for the
respondent’s action. It provides that personal actions "may be commenced
and tried where the plaintiff or any of the principal plaintiffs resides, or where
the defendant or any of the principal defendants resides, or in the case of a
non-resident defendant where he may be found, at the election of the
plaintiff." Considering the respondent’s statement in his complaint that he
resides in Imus, Cavite,36 the filing of his case with the RTC of Imus was
proper
32. GOCHAN VS COCHAN
G.R. No. 146089. December 13, 2001
[Venue of Actions for Specific Performance]
Facts:
Respondents were stockholders of the Felix Gochan and Sons Realty
Corporation and the Mactan Realty Development Corporation.
Sometime in 1996, respondents offered to sell their shares in the two
corporations to the individual petitioners, the heirs of the late Ambassador
Esteban Gochan, for and in consideration of the sum of P200,000,000.00.
Petitioners accepted and paid the said amount to respondents. Accordingly,
respondents issued to petitioners the necessary receipts. In addition,
respondents executed their respective Release, Waiver and Quitclaim,
wherein they undertook that they would not initiate any suit, action or
complaint against petitioners for whatever reason or purpose.
In turn, respondents, through Crispo Gochan, Jr., required individual
petitioners to execute a promissory note, undertaking not to divulge the actual
consideration they paid for the shares of stock. For this purpose, Crispo
Gochan, Jr. drafted a document entitled promissory note in his own
handwriting and had the same signed by Felix Gochan, III, Louise Gochan and
Esteban Gochan, Jr.
Unbeknown to petitioners, Crispo Gochan, Jr. inserted in the promissory note
a phrase that says, said amount is in partial consideration of the sale. Mactan
Realty Development Corporation; and that they executed a Provisional
Memorandum of Agreement, wherein they enumerated the following as
consideration for the sale:
1. Pesos: Two Hundred Million Pesos (P200M)
2. Two (2) hectares more or less of the fishpond in Gochan compound,
Mabolo, Lot 4F-2-B
3. Lot 2, Block 9 with an area of 999 square meters in Gochan Compound,
Mabolo, Cebu
4. Three Thousand (3,000) square meters of Villas Magallanes in Mactan,
Cebu
5. Lot 423 New Gem Building with an area of 605 square meters.
Respondents claimed that they are entitled to the conveyance of the
aforementioned properties, in addition to the amount of
P200,000,000.00, which they acknowledge to have received from
petitioners. Further, respondents prayed for moral damages of
P15,000,000.00, exemplary damages of P2,000,000.00, attorneys
fees of P14,000,000.00, and litigation expenses of P2,000,000.00.
Petitioners filed their answer, raising the following affirmative defenses: (a)
lack of jurisdiction by the trial court for non-payment of the correct
docket fees; (b) unenforceability of the obligation to convey real properties
due to lack of a written memorandum thereof, pursuant to the Statute of
Frauds; (c) extinguishment of the obligation by payment; (d) waiver,
abandonment and renunciation by respondent of all their claims against
petitioners; and (e) non-joinder of indispensable parties.
Petitioners filed with the trial court a motion for a preliminary hearing on the
affirmative defenses which the trial court denied.
The RTC held that the matter of payment of docketing and filing fees is not a
fatal issue in this case because the record shows that the plaintiffs had paid at
least P165,000.00 plus in the form of filing and docketing fees.
Petitioners filed an MR which was denied by the RTC. The CA, rendered an
appealed decision dismissing the petition on the ground that respondent court
did not commit grave abuse of discretion, tantamount to lack or in excess of
jurisdiction in denying the motion to hear the affirmative defenses. Another
MR was filed with the CA which was likewise denied.
Respondents maintain that they paid the correct docket fees in the amount of
P165,000.00 when they filed the complaint with the trial court. Petitioners,
on the other hand, contend that the complaint is in the nature of a
real action which affects title to real properties; hence,
respondents should have alleged therein the value of the real
properties which shall be the basis for the assessment of the
correct docket fees.
The Court of Appeals found that the complaint was one for specific
performance and incapable of pecuniary estimation.
Issue:
Whether or not the action is a real action or one for specific performance?
Held:
The Supreme Court ruled that the complaint was a real action and not one
for specific performance.
The rule is well-settled that the court acquires jurisdiction over any case only
upon the payment of the prescribed docket fees. In the case of Sun Insurance
Office, Ltd. (SIOL) v. Asuncion, this Court held that it is not simply the filing
of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee that vests a trial court with jurisdiction over the subject
matter or nature of the action.
It is necessary to determine the true nature of the complaint in order to resolve
the issue of whether or not respondents paid the correct amount of docket fees
therefor. In this jurisdiction, the dictum adhered to is that the nature of an
action is determined by the allegations in the body of the pleading or
complaint itself, rather than by its title or heading. The caption of the
complaint was denominated as one for specific performance and damages.
The relief sought, however, is the conveyance or transfer of real
property, or ultimately, the execution of deeds of conveyance in
their favor of the real properties enumerated in the provisional
memorandum of agreement. Under these circumstances, the case
below was actually a real action, affecting as it does title to or
possession of real property.
In the case of Hernandez v. Rural Bank of Lucena, the Court held that a real
action is one where the plaintiff seeks the recovery of real property or, as
indicated in section 2(a) of Rule 4 (now Section 1, Rule 4 of the 1997 Rules of
Civil Procedure), a real action is an action affecting title to or recovery of
possession of real property.
It has also been held that where a complaint is entitled as one for specific
performance but nonetheless prays for the issuance of a deed of sale for a
parcel of land, its primary objective and nature is one to recover the parcel of
land itself and, thus, is deemed a real action. In such a case, the action must
be filed in the proper court where the property is located:
In this Court, the appellant insists that her action is one for specific
performance, and, therefore, personal and transitory in nature. This very issue
was considered and decided by this Court in the case of Manuel B. Ruiz vs.
J.M. Tuason & Co., Inc. et al.,:
This contention has no merit. Although appellants complaint is entitled to be
one for specific performance, yet the fact that he asked that a deed of sale of a
parcel of land situated in Quezon City be issued in his favor and that a transfer
certificate of title covering said parcel of land be issued to him shows that the
primary objective and nature of the action is to recover the parcel of land itself
because to execute in favor of appellant the conveyance requested there is
need to make a finding that he is the owner of the land which in the last
analysis resolves itself into an issue of ownership. Hence, the action must be
commenced in the province where the property is situated pursuant to Section
3, Rule 5, of the Rules of Court, which provides that actions affecting title to
or recovery of possession of real property shall be commenced and tried in the
province where the property or any part thereof lies.
In the case at bar, therefore, the complaint filed with the trial court was in the
nature of a real action, although ostensibly denominated as one for specific
performance. Consequently, the basis for determining the correct docket fees
shall be the assessed value of the property, or the estimated value thereof as
alleged by the claimant. We are not unmindful of our pronouncement in the
case of Sun Insurance, to the effect that in case the filing of the initiatory
pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive period.
However, the liberal interpretation of the rules relating to the payment of
docket fees as applied in the case of Sun Insurance cannot apply to the instant
case as respondents have never demonstrated any willingness to abide by the
rules and to pay the correct docket fees. Instead, respondents have stubbornly
insisted that the case they filed was one for specific performance and damages
and that they actually paid the correct docket fees therefor at the time of the
filing of the complaint. Thus, it was stated in the case of Sun Insurance:
The principle in Manchester could very well be applied in the present case.
The pattern and the intent to defraud the government of the docket fee due it
is obvious not only in the filing of the original complaint but also in the filing
of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until
the case was decided by this Court on May 7, 1987. Thus, in Manchester, due
to the fraud committed on the government, this Court held that the court a
quo did not acquire jurisdiction over the case and that the amended complaint
could not have been admitted inasmuch as the original complaint was null and
void.
In the present case, a more liberal interpretation of the rules is called for
considering that, unlike Manchester, private respondent demonstrated his
willingness to abide by the rules by paying the additional docket fees as
required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket
fee as ordered by the respondent court. It triggered his change of stance by
manifesting his willingness to pay such additional docket fee as may be
ordered.
True, the trial court has the discretion to conduct a preliminary hearing on
affirmative defenses. In the case at bar, however, the trial court committed a
grave abuse of its discretion when it denied the motion for preliminary
hearing. As we have discussed above, some of these defenses, which
petitioners invoked as grounds for the dismissal of the action, appeared to be
indubitable, contrary to the pronouncement of the trial court. Indeed, the
abuse of discretion it committed amounted to an evasion of positive duty or
virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, which would have warranted the extraordinary writ of
certiorari. Hence, the Court of Appeals erred when it dismissed the petition
for certiorari filed by petitioners.
33. BPI FAMILY SAVINGS BANK INC., Petitioner, vs. SPOUSES
BENEDICTO & TERESITA YUJUICO, Respondents,
G.R. No. 175796 July 22, 2015
[Recovery of Deficiency after Extrajudicial Forclosure - An action
to recover the deficiency after extrajudicial foreclosure of a real
property mortgage is a personal action because it does not affect
title to or possession of real property, or any interest therein.]
Facts:
On August 22, 1996, the City of Manila filed a complaint against the
respondents for the expropriation of five parcels of land located in Tondo,
Manila and registered in the name of respondent Teresita Yujuico. Two of the
parcels of land, covered by Transfer Certificate of Title (TCT) No. 261331 and
TCT No. 261332, were previously mortgaged to Citytrust Banking
Corporation, the petitioner's predecessor-in-interest, under a First Real
Estate Mortgage Contract.
On June 30, 2000, the Manila RTC rendered its judgment declaring the five
parcels of land expropriated for public use. The judgment became final and
executory on January 28, 2001 and was entered in the book of entries of
judgment on March 23, 2001. The petitioner subsequently filed a Motion to
Intervene in Execution with Partial Opposition to Defendant's Request to
Release, but the RTC denied the motion for having been "filed out of time."
Hence, the petitioner decided to extrajudicially foreclose the mortgage
constituted on the two parcels of land subject of the respondents' loan. After
holding the public auction, the sheriff awarded the two lots to the petitioner
as the highest bidder at ₱10, 000, 000.00.
Claiming a deficiency amounting to Pl8, 522, 155.42, the petitioner sued the
respondents to recover such deficiency in the Makati RTC (Civil Case No. 03-
450). The respondents moved to dismiss the complaint on several grounds,
namely: that the suit was barred by res judicata; that the complaint stated no
cause of action; and that the plaintiffs claim had been waived, abandoned, or
extinguished.
In its order issued on October 17, 2003, the Makati RTC denied the
respondents' motion to dismiss, ruling that there was no res judicata; that the
complaint stated a sufficient cause of action to recover the deficiency; and that
there was nothing to support the claim that the obligation had been
abandoned or extinguished apart from the respondents' contention that the
properties had been subjected to expropriation by the City of Manila.
The respondents moved for reconsideration, reiterating their grounds earlier
made in their motion to dismiss.
In turn, the petitioner adopted its comment/opposition to the motion to
dismiss.
The respondents then filed their reply, in which they raised for the
first time their objection on the ground of improper venue. They
contended that the action for the recovery of the deficiency, being
a supplementary action of the extrajudicial foreclosure
proceedings, was a real action that should have been brought in the
Manila RTC because Manila was the place where the properties
were located.
The Makati RTC denied the respondents' motion for reconsideration for its
lack of merit; and held on the issue of improper venue that it would be
improper for this Court to dismiss the plaintiffs complaint on the ground of
improper venue, assuming that the venue is indeed improperly laid, since the
said ground was not raised in the defendant's Motion to Dismiss.
Respondents appealed to the CA. The CA ruled that a suit for recovery of the
deficiency after the foreclosure of a mortgage is in the nature of a mortgage
action because its purpose is precisely to enforce the mortgage contract; it is
upon a written contract and upon an obligation of the mortgage-debtor to pay
the deficiency which is created by law. As such, the venue of an action for
recovery of deficiency must necessarily be the same venue as that of the
extrajudicial foreclosure of mortgage.
The CA denied the respondents' Motion for Partial Reconsideration and the
petitioner's Partial Motion for Reconsideration. The respondents assail the
CA's dismissal of Civil Case No. 03-450 on the ground of improper venue.
Issue:
Whether or not an action to recover the deficiency after extrajudicial
foreclosure of a real property mortgage is a personal action or a real action?
Held:
The Supreme Court granted the petition for review on certiorari.
It is basic that the venue of an action depends on whether it is a real or a
personal action. The determinants of whether an action is of a real or a
personal nature have been fixed by the Rules of Court and relevant
jurisprudence. According to Section 1, Rule 4 of the Rules of Court, a real
action is one that affects title to or possession of real property, or an interest
therein. Thus, an action for partition or condemnation of, or foreclosure of
mortgage on, real property is a real action. The real action is to be commenced
and tried in the proper court having jurisdiction over the area wherein the real
property involved, or a portion thereof, is situated, which explains
why the action is also referred to as a local action.
In contrast, the Rules of Court declares all other actions as
personal actions. such actions may include those brought for the
recovery of personal property, or for the enforcement of some
contract or recovery of damages for its breach, or for the recovery
of damages for the commission of an injury to the person or
property. The venue of a personal action is the place where the
plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case
of a non-resident defendant where he may be found, at the election
of the plaintiff, for which reason the action is considered a
transitory one.
Based on the distinctions between real and personal actions, an
action to recover the deficiency after the extrajudicial foreclosure
of the real property mortgage is a personal action, for it does not
affect title to or possession of real property, or any interest therein.
It is true that the Court has said in Caltex Philippines, Inc. v. Intermediate
Appellate Court 24 that "a suit for the recovery of the deficiency after the
foreclosure of a mortgage is in the nature of a mortgage action because its
purpose is precisely to enforce the mortgage contract." However, the CA erred
in holding, upon the authority of Caltex Philippines, Inc., that the venue of
Civil Case No. 03 450 must necessarily be Manila, the same venue as that of
the extrajudicial foreclosure of mortgage. An examination of Caltex
Philippines, Inc. reveals that the Court was thereby only interpreting the
prescriptive period within which to bring the suit for the recovery of the
deficiency after the foreclosure of the mortgage, and was not at all ruling
therein on the venue of such suit or on the nature of such suit being either a
real or a personal action.
Given the foregoing, the petitioner correctly brought Civil Case No.03-450 in
the Makati RTC because Makati was the place where the main office of the
petitioner was located.1avvphi1
Moreover, the Makati RTC observed, and the observation is correct in our
view, that it would be improper to dismiss Civil Case No. 03-450 on the ground
of improper venue, assuming that the venue had been improperly laid,
considering that the respondents had not raised such ground in their Motion
to Dismiss. As earlier indicated, they came to raise the objection of improper
venue for the first time only in their reply to the petitioner's comment on their
Motion for Reconsideration. They did so belatedly.
We underscore that in civil proceedings, venue is procedural, not
jurisdictional, and may be waived by the defendant if not seasonably raised
either in a motion to dismiss or in the answer.25 Section 1, Rule 9 of the Rules
of Court thus expressly stipulates that defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived. As it relates
to the place of trial, indeed, venue is meant to provide convenience to the
parties, rather than to restrict their access to the courts.26 In other words,
unless the defendant seasonably objects, any action may be tried by a court
despite its being the improper venue.
34. BRIONES, Petitioner, v. COURT OF APPEALS
G.R. No. 204444, January 14, 2015
[Exclusive Venue]
Facts:
Briones alleged that he is the owner of a property covered by TCT No. 160689
(subject property),and that, on July 15, 2010, his sister informed him that his
property had been foreclosed and a writ of possession had already been issued
in favor of Cash Asia. Upon investigation, Briones discovered that: (a) on
December 6, 2007, he purportedly executed a promissory note, loan
agreement, and deed of real estate mortgage11covering the subject property
(subject contracts) in favor of Cash Asia in order to obtain a loan in the amount
of P3,500,000.00 from the latter; and (b) since the said loan was left unpaid,
Cash Asia proceeded to foreclose his property.
In this relation, Briones claimed that he never contracted any loans from Cash
Asia as he has been living and working in Vietnam since October 31, 2007. He
further claimed that he only went back to the Philippines on December 28,
2007 until January 3, 2008 to spend the holidays with his family, and that
during his brief stay in the Philippines, nobody informed him of any loan
agreement entered into with Cash Asia. Essentially, Briones assailed the
validity of the foregoing contracts claiming his signature to be forged.
For its part, Cash Asia filed a Motion to Dismiss, praying for the
outright dismissal of Briones’s complaint on the ground of
improper venue. In this regard, Cash Asia pointed out the venue
stipulation in the subject contracts stating that “all legal actions
arising out of this notice in connection with the Real Estate
Mortgage subject hereof shall only be brought in or submitted to
the jurisdiction of the proper court of Makati City.” In view thereof,
it contended that all actions arising out of the subject contracts may
only be exclusively brought in the courts of Makati City, and as
such, Briones’s complaint should be dismissed for having been
filed in the City of Manila.
In response, Briones filed an opposition, asserting, inter alia, that he should
not be covered by the venue stipulation in the subject contracts as he was
never a party therein. He also reiterated that his signatures on the said
contracts were forgeries.
The RTC denied Cash Asia’s MTD for lack of merit opining that the parties
must be afforded the right to be heard in view of the substance of Briones’s
cause of action against Cash Asia as stated in the complaint. Cash Asia moved
for reconsideration which was, however, denied.
The CA annulled the RTC orders, and dismissed Briones’s complaint without
prejudice to the filing of the same before the proper court in Makati City. The
CA concluded that Briones’s complaint should have been dismissed outright
on the ground of improper venue, this, notwithstanding Briones’s claim of
forgery.
Dissatisfied, Briones moved for reconsideration, which was, however, denied.
A petition for certiorari under Rule 65 was filed with the Supreme Court.
Issue:
Whether or not the ruling of the Briones’s complaint should have been
dismissed outright on the ground of improper venue notwithstanding
Briones’s claim of forgery?
Held:
The petition is meritorious.
The Court finds that the CA gravely abused its discretion in ordering the
outright dismissal of Briones’s complaint against Cash Asia, without prejudice
to its re-filing before the proper court in Makati City.
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit:
Rule 4
VENUE OF ACTIONS
SECTION 1. Venue of real actions. — Actions affecting title to or possession of
real property, or interest therein, shall be commenced and tried in the proper
court which has jurisdiction over the area wherein the real property involved,
or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the
municipal trial court of the municipality or city wherein the real property
involved, or a portion thereof, is situated.
SEC. 2. Venue of personal actions. — All other actions may be commenced and
tried where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a non-
resident defendant where he may be found, at the election of the plaintiff.
SEC. 3. Venue of actions against nonresidents. — If any of the defendants does
not reside and is not found in the Philippines, and the action affects the
personal status of the plaintiff, or any property of said defendant located in
the Philippines, the action may be commenced and tried in the court of the
place where the plaintiff resides, or where the property or any portion thereof
is situated or found.
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.
Based therefrom, the general rule is that the venue of real actions is the court
which has jurisdiction over the area wherein the real property involved, or a
portion thereof, is situated; while the venue of personal actions is the court
which has jurisdiction where the plaintiff or the defendant resides, at the
election of the plaintiff. As an exception, jurisprudence in Legaspi v. Rep. of
the Phils. instructs that the parties, thru a written instrument, may either
introduce another venue where actions arising from such instrument may be
filed, or restrict the filing of said actions in a certain exclusive venue,
The parties, however, are not precluded from agreeing in writing on an
exclusive venue, as qualified by Section 4 of the same rule. 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. As in any other agreement, what is essential is the ascertainment of
the intention of the parties respecting the matter.
As regards restrictive stipulations on venue, jurisprudence instructs that it
must be shown that such stipulation is exclusive. In the absence of qualifying
or restrictive words, such as “exclusively,” “waiving for this purpose any other
venue,” “shall only” preceding the designation of venue, “to the exclusion of
the other courts,” 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. (Emphases and underscoring supplied)
In this relation, case law likewise provides that in cases where the complaint
assails only the terms, conditions, and/or coverage of a written instrument
and not its validity, the exclusive venue stipulation contained therein shall still
be binding on the parties, and thus, the complaint may be properly dismissed
on the ground of improper venue.
Conversely, therefore, a complaint directly assailing the validity of
the written instrument itself should not be bound by the exclusive
venue stipulation contained therein and should be filed in
accordance with the general rules on venue. To be sure, it would be
inherently consistent for a complaint of this nature to recognize
the exclusive venue stipulation when it, in fact, precisely assails the
validity of the instrument in which such stipulation is contained.
In this case, the venue stipulation found in the subject contracts is indeed
restrictive in nature, considering that it effectively limits the venue of the
actions arising therefrom to the courts of Makati City. However, it must be
emphasized that Briones’s complaint directly assails the validity of the subject
contracts, claiming forgery in their execution. Given this circumstance,
Briones cannot be expected to comply with the aforesaid venue stipulation, as
his compliance therewith would mean an implicit recognition of their validity.
Hence, pursuant to the general rules on venue, Briones properly filed his
complaint before a court in the City of Manila where the subject property is
located.
In conclusion, the CA patently erred and hence committed grave abuse of
discretion in dismissing Briones’s complaint on the ground of improper
venue.
35. SAN MIGUEL CORPORATION, petitioner, vs. TROY FRANCIS
L. MONASTERIO, respondent
[Limitation on Exclusivity of Venue]
Facts:
On August 1, 1993, petitioner SMC entered into an Exclusive Warehouse
Agreement (EWA) with SMB Warehousing Services (SMB), represented by its
manager, respondent Troy Francis L. Monasterio. SMB undertook to provide
land, physical structures, equipment and personnel for storage, warehousing
and related services such as, but not limited to, segregation of empty bottles,
stock handling, and receiving SMC products for its route operations at
Sorsogon, Sorsogon and Daet, Camarines Norte.
The agreement likewise contained a stipulation on venue of actions, to wit:
26. GENERAL PROVISIONS. . .
b. Should it be necessary that an action be brought in court to
enforce the terms of this Agreement or the duties or rights of the
parties herein, it is agreed that the proper court should be in the
courts of Makati or Pasig, Metro Manila, to the exclusion of the
other courts at the option of the COMPANY. [Underscoring
supplied.]
In his Complaint, Monasterio claimed ₱900,600 for unpaid cashiering fees.
He alleged that from September 1993 to September 1997 and May 1995 to
November 1997, aside from rendering service as warehouseman, he was given
the additional task of cashiering in SMC’s Sorsogon and Camarines Norte
sales offices for which he was promised a separate fee.
Monasterio demanded ₱82,959.32 for warehousing fees, ₱11,400 for
cashiering fees for the month of September, 1998, as well as exemplary
damages, and attorney’s fees in the amount of ₱500,000 and ₱300,000,
respectively.
SMC filed a Motion to Dismiss on the ground of improper venue. SMC
contended that respondent’s money claim for alleged unpaid cashiering
services arose from respondent’s function as warehouse contractor thus the
EWA should be followed and thus, the exclusive venue of courts of Makati or
Pasig, Metro Manila is the proper venue as provided under paragraph 26(b)
of the EWA.
Respondent filed an Opposition contending that the cashiering service he
rendered for the petitioner was separate and distinct from the services under
the EWA. Hence, the provision on venue in the EWA was not applicable to
said services. Hence, respondent insists that in accordance with Section 2 of
Rule 4 of the Rules of Court the venue should be in Naga City, his place of
residence.
The Regional Trial Court, of Naga City, Branch 20 issued an Order12 denying
petitioner’s motion to dismiss. The court held that the services agreed upon in
said contract is limited to warehousing services and the claim of plaintiff in
his suit pertains to the cashiering services rendered to the defendant, a
relationship which was not documented, and is certainly a contract separate
and independent from the exclusive warehousing agreements. SMC filed an
MR which was likewise denied.
Petitioner elevated the controversy to the Court of Appeals by way of a special
civil action for certiorari with a prayer for the issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction, imputing grave
abuse of discretion on the RTC Naga City for denying its motion to dismiss
and subsequent motion for reconsideration.
During the pendency of the certiorari petition SMC filed before the trial court
an answer ex abundanti cautela with a compulsory counterclaim for moral and
exemplary damages and attorney’s fees. SMC averred lack of cause of action,
payment, waiver, abandonment and extinguishment.
The CA found respondent’s claim for cashiering services inseparable from his
claim for warehousing services, thus, the venue stipulated in the EWA is the
proper venue. SMC filed an MR which was denied.
Issue:
Whether or not the RTC of Naga City err in denying the motion to dismiss filed
by SMC alleging improper venue?
Held:
On disputes relating to the enforcement of the rights and duties of the
contracting parties, the venue stipulation in the EWA should be construed as
mandatory. Nothing therein being contrary to law, morals, good custom or
public policy, this provision is binding upon the parties.
The EWA stipulation on venue is clear and unequivocal, thus it ought to be
respected.
However, we note that the cause of action in the complaint filed by
the respondent before the RTC of Naga was not based on the EWA,
but concern services not enumerated in the EWA.
Records show also that previously, respondent received a separate
consideration of ₱11,400 for the cashiering service he rendered to SMC.
Moreover, in the amended complaint, the respondent’s cause of action was
specifically limited to the collection of the sum owing to him for his cashiering
service in favor of SMC. He already omitted petitioner’s non-payment of
warehousing fees.
As previously ruled, allegations in the complaint determines the cause of
action or the nature of the case.21
Thus, given the circumstances of this case now before us, we are constrained
to hold that it would be erroneous to rule, as the CA did, that the collection
suit of the respondent did not pertain solely to the unpaid cashiering services
but pertain likewise to the warehousing services.22
Exclusive venue stipulation embodied in a contract restricts or confines
parties thereto when the suit relates to breach of the said contract. But where
the exclusivity clause does not make it necessarily all encompassing, such that
even those not related to the enforcement of the contract should be subject to
the exclusive venue, the stipulation designating exclusive venues should be
strictly confined to the specific undertaking or agreement. Otherwise, the
basic principles of freedom to contract might work to the great disadvantage
of a weak party-suitor who ought to be allowed free access to courts of justice.
Restrictive stipulations are in derogation of the general policy of making it
more convenient for the parties to institute actions arising from or in relation
to their agreements. Thus, the restriction should be strictly construed as
relating solely to the agreement for which the exclusive venue stipulation is
embodied. Expanding the scope of such limitation on a contracting party will
create unwarranted restrictions which the parties might find unintended or
worse, arbitrary and oppressive.
Moreover, since convenience is the raison d’etre of the rules on venue,24
venue stipulation should be deemed merely permissive, and that
interpretation should be adopted which most serves the parties’ convenience.
Contrawise, the rules mandated by the Rules of Court should govern.26
Accordingly, since the present case for the collection of sum of money filed by
herein respondent is a personal action,27 we find no compelling reason why it
could not be instituted in the RTC of Naga City, the place where plaintiff
resides.
A.M. No. 99-10-05-0 December 14, 1999
(Amended by A.M. 99-10-05-0, August 7, 2001)
PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF
MORTGAGE
In line with the responsibility of an Executive Judge under Administrative
Order No. 6, dated June 30, 1975, for the management of courts within his
administrative area, included in which is the task of supervising directly the
work of the Clerk of Court, who is also the Ex Officio Sheriff, and his staff, and
the issuance of commissions to notaries public and enforcement of their duties
under the law, the following procedures are hereby prescribed in extrajudicial
foreclosure of mortgages:
1. All applications for extra-judicial foreclosure of mortgage whether under the
direction of the sheriff or a notary public, pursuant to Act 3135, as amended
by Act 4118, and Act 1508, as amended, shall be filed with the Executive Judge,
through the Clerk of Court who is also the Ex-Officio Sheriff.
2. Upon receipt of an application for extra-judicial foreclosure of mortgage, it
shall be the duty of the Clerk of Court to:
a) receive and docket said application and to stamp thereon the
corresponding file number, date and time of filing;
b) collect the filing fees therefor and issue the corresponding official
receipt;
c) examine, in case of real estate mortgage foreclosure, whether the
applicant has complied with all the requirements before the public auction is
conducted under the direction of the sheriff or a notary public, pursuant to
Sec. 4 of Act 3135, as amended;
d) sign and issue the certificate of sale, subject to the approval of the
Executive Judge, or in his absence, the Vice-Executive Judge; and
e) after the certificate of sale has been issued to the highest bidder, keep
the complete records, while awaiting any redemption within a period of one
(1) year from date of registration of the certificate of sale with the Register of
Deeds concerned, after which the records shall be archived.
Where the application concerns the extrajudicial foreclosure of mortgages of
real estates and/or chattels in different locations covering one indebtedness,
only one filing fee corresponding to such indebtedness shall be collected. The
collecting Clerk of Court shall, apart from the official receipt of the fees, issue
a certificate of payment indicating the amount of indebtedness, the filing fees
collected, the mortgages sought to be foreclosed, the real estates and/or
chattels mortgaged and their respective locations, which certificate shall serve
the purpose of having the application docketed with the Clerks of Court of the
places where other properties are located and of allowing the extrajudicial
foreclosures to proceed thereat.
3. The notices of auction sale in extrajudicial foreclosure for publication by the
sheriff or by a notary public shall be published in a newspaper of general
circulation pursuant to Section 1, Presidential Decree No. 1709, dated January
26, 1977, and non-compliance therewith shall constitute a violation of Section
6 thereof.
4. The Executive Judge shall, with the assistance of the Clerk of Court, raffle
application for extrajudicial foreclosure of mortgage under the direction of the
sheriff among all sheriffs, including those assigned to the Office of the Clerk
of Court and Sheriffs IV assigned in the branches.
5. No auction sale shall be held unless there are at least two (2) participating
bidders, otherwise the sale shall be postponed to another date. If on the new
date set for the sale there shall not be at least two bidders, the sale shall then
proceed. The names of the bidders shall be reported by the sheriff or the notary
public who conducted the sale to the Clerk of Court before the issuance of the
certificate of sale.
This Resolution amends or modifies accordingly Administrative Order No. 3
issued by then Chief Justice Enrique M. Fernando on 19 October 1984 and
Administrative Circular No. 3-98 issued by the Chief Justice Andres R.
Narvasa on 5 February 1998.
The Court Administrator may issue the necessary guidelines for the effective
enforcement of this Resolution.
The Clerk of Court shall cause the publication of this Resolution in a
newspaper of general circulation not later than 27 December 1999 and furnish
copies thereof to the Integrated Bar of the Philippines.
This Resolution shall take effect on the fifteenth day of January year 2000.
Enacted this 14th day of December 1999 in the City of Manila.
36. SPOUSES OCHOA VS CHINA BANKING CORP
GR NO. 192877 MARCH 23, 2011
[NB: COURT RESOLUTION ONLY; COPY PASTED THE ENTIRE
TEXT HERE]
RESOLUTION
NACHURA, J.:
For resolution is petitioners' motion for reconsideration[1] of our January 17,
2011 Resolution[2] denying their petition for review on certiorari[3] for failing
to sufficiently show any reversible error in the assailed judgment[4] of the
Court of Appeals (CA).
Petitioners insist that it was error for the CA to rule that the stipulated
exclusive venue of Makati City is binding only on petitioners' complaint for
Annulment of Foreclosure, Sale, and Damages filed before the Regional Trial
Court of Parañaque City, but not on respondent bank's Petition for
Extrajudicial Foreclosure of Mortgage, which was filed with the same court.
We disagree.
The extrajudicial foreclosure sale of a real estate mortgage is governed by Act
No. 3135, as amended by Act No. 4118, otherwise known as "An Act to
Regulate the Sale of Property Under Special Powers Inserted In or Annexed to
Real-Estate Mortgages." Sections 1 and 2 thereof clearly state:
Section 1. When a sale is made under a special power inserted in or attached
to any real-estate mortgage hereafter made as security for the payment of
money or the fulfillment of any other obligation, the provisions of the
following sections shall govern as to the manner in which the sale and
redemption shall be effected, whether or not provision for the same is made
in the power.
Sec. 2. Said sale cannot be made legally outside of the province in which the
property sold is situated; and in case the place 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.[5]
The case at bar involves petitioners' mortgaged real property located in
Parañaque City over which respondent bank was granted a special power to
foreclose extra-judicially. Thus, by express provision of Section 2, the sale can
only be made in Parañaque City.
The exclusive venue of Makati City, as stipulated by the parties[6] and
sanctioned by Section 4, Rule 4 of the Rules of Court,[7] cannot be made to
apply to the Petition for Extrajudicial Foreclosure filed by respondent bank
because the provisions of Rule 4 pertain to venue of actions, which an
extrajudicial foreclosure is not.
Pertinent are the following disquisitions in Supena v. De la Rosa:[8]
Section 1, Rule 2 [of the Rules of Court] defines an action in this wise:
"Action means an ordinary suit in a court of justice, by which one party
prosecutes another for the enforcement or protection of a right, or the
prevention or redress of a wrong."
Hagans v. Wislizenus does not depart from this definition when it states that
"[A]n action is a formal demand of one's legal rights in a court of justice in the
manner prescribed by the court or by the law. x x x." It is clear that the
determinative or operative fact which converts a claim into an "action or suit"
is the filing of the same with a "court of justice." Filed elsewhere, as with some
other body or office not a court of justice, the claim may not be categorized
under either term. Unlike an action, an extrajudicial foreclosure of real estate
mortgage is initiated by filing a petition not with any court of justice but with
the office of the sheriff of the province where the sale is to be made. By no
stretch of the imagination can the office of the sheriff come under the category
of a court of justice. And as aptly observed by the complainant, if ever the
executive judge comes into the picture, it is only because he exercises
administrative supervision over the sheriff. But this administrative
supervision, however, does not change the fact that extrajudicial foreclosures
are not judicial proceedings, actions or suits.[9]
These pronouncements were confirmed on August 7, 2001 through A.M. No.
99-10-05-0, entitled "Procedure in Extra-Judicial Foreclosure of Mortgage,"
the significant portions of which provide:
In line with the responsibility of an Executive Judge under Administrative
Order No. 6, date[d] June 30, 1975, for the management of courts within his
administrative area, included in which is the task of supervising directly the
work of the Clerk of Court, who is also the Ex-Office Sheriff, and his staff, and
the issuance of commissions to notaries public and enforcement of their duties
under the law, the following procedures are hereby prescribed in extra-judicial
foreclosure of mortgages:
1. All applications for extrajudicial foreclosure of mortgage whether under the
direction of the sheriff or a notary public, pursuant to Act 3135, as amended
by Act 4118, and Act 1508, as amended, shall be filed with the Executive Judge,
through the Clerk of Court who is also the Ex-Officio Sheriff.
Verily then, with respect to the venue of extrajudicial foreclosure sales, Act No.
3135, as amended, applies, it being a special law dealing particularly with
extrajudicial foreclosure sales of real estate mortgages, and not the general
provisions of the Rules of Court on Venue of Actions.
Consequently, the stipulated exclusive venue of Makati City is relevant only to
actions arising from or related to the mortgage, such as petitioners' complaint
for Annulment of Foreclosure, Sale, and Damages.
The other arguments raised in the motion are a mere reiteration of those
already raised in the petition for review. As declared in this Court's Resolution
on January 17, 2011, the same failed to show any sufficient ground to warrant
the exercise of our appellate jurisdiction.

WHEREFORE, premises considered, the motion for reconsideration is hereby

DENIED.

SO ORDERED.

Carpio, (Chairperson), Brion,* Peralta, and Abad, JJ., concur.