DACOYCOY V. IAC G.R. # 74854
Carandang, we emphasized:
FACTS
 On March 22, 1983, Dacoycoy, a resident of Balanti, Cainta, Rizal, filed before the
Rizal RTC, a complaint against private respondent de Guzman praying for the
annulment of 2 deeds of sale involving a parcel of riceland 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 de Guzman, 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 RTC
dismissed the complaint on the ground of improper venue.
o 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 Pangasinan, outside its’ territorial jurisdiction.
 Petitioner appealed to the IAC, which affirmed the order of dismissal of his
complaint.
ISSUE
 W/N the trial court may motu proprio dismiss a complaint on the ground of
improper venue?? NO
HELD
 The motu proprio dismissal of petitioner's complaint by the RTC on the ground of
improper venue is plain error, 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 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.
 In Luna vs.
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;
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 . . ." in accordance with Section 19 (2) of Batas Pambansa Blg.
129. With respect to the parties, there is no dispute that it acquired jurisdiction
over the plaintiff Dacoycoy, the moment he filed his complaint for annulment and
damages. Respondent trial court could have acquired jurisdiction over the
defendant 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.
o Although petitioner contends that, he requested the City Sheriff of Olongapo
City or his deputy to serve the summons on de Guzman at his residence, it
does not appear that said service had been properly effected or that private
respondent had appeared voluntarily in court or filed his answer to the
complaint. 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.
o 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 CFI (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.
 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 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.
IAC decision is reversed and set aside. The complaint before the RTC is revived and
reinstated.
 Issue: WON petitioner’s action for annulment of the real estate mortgage
extrajudicial foreclosure sale of Fortune Building is personal action or a real action
for venue purposes

Ruling: Yes, the action is a real action which should have been filed before the RTC
of Makati.

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 CFI of the province where the property or any part thereof lies.

Fortune Motors, Inc. v CA (Civil procedure) Personal actions upon the other hand, may be instituted in the CFI where the
defendant resides or may be found, or where the plaintiff or any of the plaintiffs
Fortune Motors, Inc. v. CA, Metropolitan Bank and Trust Company resides, at the election of the plaintiff.

Facts: An action for the annulment or rescission of contract does not operate to efface the
·       Private respondent extended various loans to petitioner for a total sum of true objectives and nature of action which is to recover real property.
P32,500,000.00;
An action for annulment or rescission of sale of real property is a real action; its
·       Due to financial difficulties, and economic recession, the petitioner was not able to
prime objective is to recover said real property.
pay the loan which became due;
·       The respondent bank initiated extrajudicial foreclosure proceedings, the mortgaged
An action to annul a real estate mortgage foreclosure is no different from an action to
property was sold at public auction where respondent was the highest bidder;
annul a private sale of real property.
·       3 days before the expiration of the redemption period, petitioner filed a complaint for
the annulment of the extrajudicial foreclosure sale at the RTC of Manila, alleging
that:
(a)   the foreclosure was premature because its obligation to the Bank was not yet due, Hence, the petition is denied for lack of merit. The decision of CA is affirmed
(b)   the publication of the notice of sale was incomplete, there was no public auction,
(c)   thhe price for which was “shockingly low”;
·       Respondent 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 CLAVECILLA Radio System v. Hon. Agustin Antillon
mortgages is situated in Makati, therefore the action to annul the foreclosure sale
should be filed in the RTC of Makati; Facts:
·       Petitioner argued 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 1. New Cagayan Grocery (NECAGRO) filed a complaint for damages
period to redeem the same. against Clavecilla Radio system. They alleged that Clavecilla
Lower court rulings: omitted the word “NOT” in the letter addressed to NECAGRO for
RTC: reserved the resolution of the Bank’s motion to dismiss until after the trial on transmittal at Clavecilla Cagayan de Oro Branch.
the merits 2. NECAGRO alleged that the omission of the word “not” between the
word WASHED and AVAILABLE altered the contents of the same
CA: on petition for certiorari and prohibition, granted the petitions and dismissed the causing them to suffer from damages.
case without prejudice to the filing of the case before the proper courts 3. Clavecilla filed a motion to dismiss on the ground of failure to state
a cause of action and improper venue.
*Reconsideration was denied, hence the petition before the SC
4. City Judge of CDO denied the MTD. Clavecilla filed a petition for
prohibition with preliminary Injunction with the CFI praying that the
 City Judge be enjoined from further proceeding with the case
because of improper venue.
5. CFI – dismissed the case and held that Clavecilla may be sued
either in Manila (principal office) or in CDO (branch office).
6. Clavecilla appealed to the SC contending that the suit against it
should be filed in Manila where it holds its principal office.
Issue:
WON the present case against Clavecilla should be filed in Manila
where it holds its principal office.
Held:
YES
It is clear that the case from damages is based upon a written contract.
Under par. (b)(3) Sec. 1 Rule 4 of the New Rules of Court, when an action is
not upon a written contract then the case should be filed in the
municipality where the defendant or any of the defendant resides or
maybe served upon with summons.
In corpo. Law, the residence of the corporation is the place where the
principal office is established. Since Clavecilla’s principal office is in Manila,
then the suit against it may properly be file in the City of Manila.
As stated in Evangelista v. Santos, 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.
Young Auto Supply vs. Court of Appeals
[GR 104175, 25 June 1993]
Facts: On 28 October 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 George C. Roxas. The purchase price was
P8,000,000.00 payable as follows: a down payment 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. 
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
10 June 1988, YASCO and Garcia filed a complaint against Roxas in the
Regional Trial Court, Branch 11, Cebu City, praying that Roxas be ordered to
pay them 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. Failing to submit his answer, and on 19 August
1988, the trial court declared Roxas in default. The order of default was,
however, lifted upon motion of Roxas. On 22 August 1988, Roxas filed a
motion to dismiss. After a hearing, wherein testimonial and documentary
evidence were presented by both parties, the trial court in an Order dated 8
February 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 10 April 1991 for being pro-forma. 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 3 May 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 dismissal of the complaint on the ground of improper venue. A
subsequent motion for reconsideration by YASCO was to no avail. YASCO
and Garcia filed the petition. 
Issue: Whether the venue for the case against YASCO and Garcia in Cebu
City was improperly laid. 
Held: 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. 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." The purpose of this requirement is to fix the
residence of a corporation in a definite place, instead of allowing it to be
ambulatory. 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. 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. The
decision of the Court of Appeals was set aside.
Jose M. Hernandez v. DBP and CFI of Batangas
Facts:
·       Petitioner was an employee of defendant in its Legal Department for 21 years until
his retirement due to illness;
·       Petitioner was awarded a lot (810 sq-m, type E) in respondent’s Housing Project in
Quezon City;
·       However, more than a week thereafter, the Chief Accountant and Comptroller of the
private respondent returned to the petitioner the checks he has paid pursuant to such
award and informed him that the private respondent, through its Committee on
Organization, Personnel and Facilities, had cancelled the award of the lot and hour
previously awarded on the ground that:
(a)   He has already retired;
(b)   He has only an option to purchase said house and lot;
(c)   There are a big number of employees who have no houses or lots;
(d)   He has been given his retirement gratuity; that the awarding of the aforementioned
house and lot in his favor would subserve the purpose;
·       Petitioner protested the cancellation and so filed a complaint in the CFI of Batangas,
seeking 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 it is illegal and unwarranted because he has already a vested right
thereto because of the award;
·       Private respondent filed a motion to dismiss based on improper venue, contending
that since the petitioner’s action affects the title to a house and lot in Quezon city, the
same should have been commenced in the CFI of Quezon City where the real
property is located.
Lower court ruling:
CFI of Batangas: sustained the motion to dismiss based on improper venue.
*Case immediately elevated to the SC
Issue: WON the action of petitioner was improperly laid in the CFI of Batangas
Ruling: No, the case was not improperly filed in the CFI of Batangas.
The venue of actions or, more appropriately,  the county where the action is triable
depends to a great extent on the nature of the action to be filed, whether it is real or
personal.
Real action is one brought for the specific recovery of land, tenements, or
hereditaments. A personal action is one brought for 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 injury to the person or property.
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 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.
The dismissal is overturned and the suit is remanded for further proceedings.
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.
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 costs 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 of the Sinkang
Subdivision in Bacolod City, making therefor a downpayment 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"
aforementioned; 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 enjoining 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 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.  1äwphï1.ñët
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.
Esuerte v. CA, 193 SCRA 541 (1991)
Facts: 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. 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
An action for damages was filed by private respondent Beverly Tan against
herein petitioners Patria Esuerte and Herminia Jayme with Regional Trial
Court of Cebu. 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. The RTC denied the MtD as well as the
MfR. And so with the CA.
Issue: WON the Cebu City is the proper venue of the action.
Held: No. For purposes of venue of personal actions, the venue is to be
determined where the plaintiff or the defendant is actually located. It is
actual residence, not legal domicile, which is relevant.
To file the case in the court of the place where the plaintiff temporarily
actually resides at the time he files a complaint. In the case at bar, 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.
de Leon: The meaning of “residence” in determining venue of personal
actions is the same as “residence” in determinng venue of estate
proceedings.
VIRGILIO CAPATI, plaintiff-appellant,
vs.
DR. JESUS P. OCAMPO, defendant-appellee.
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 ... "
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 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 aforequoted 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
auxillary verb indicating liberty, opportunity, permission or
possibility. 1
In Nicolas vs. Reparations Commission 2, 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 ... 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.
UNIMASTERS CONGLOMERATION, INC. vs. COURT OF
APPEALS
Kubota Agri-Machinery Philippines, Inc. and Unimasters
Conglomeration, Inc. entered into a Dealership Agreement for
Sales and Services of the former's products in Samar and Leyte
Provinces. The Agreement contained a stipulation that “All
suits arising out of this Agreement shall be filed with the proper
Courts of Quezon City.”
Five years later, Unimasters filed an action in the RTC of
Tacloban against Kubota, Reynaldo Go and Metrobank for
damages and breach of contracts, and injunction with prayer for
temporary restraining order.
Kubota filed two motions, one for the dismissal of the case on
the ground of improper venue, the other prayed for the transfer
of the injunction hearing because its counsel is unavailable on
the given date.
The court issued an order allowing the issuance of preliminary
injunction. Also, said court denied the motion to dismiss on the
reason that Unimasters’ place of business is in Tacloban City
while Kubota’s principal place of business is in Quezon City. In
accordance with the Rules of Court, the proper venue would
either be Quezon City or Tacloban City at the election of the
plaintiff. Hence, the filing in the RTC of Tacloban is proper.
Kubota appealed to both orders on the grounds they were
issued with grave abuse of discretion in a special action for
certiorari and prohibition filed with the CA. Kubota asserted
that RTC of Tacloban had no jurisdiction was improperly laid.
The Court of Appeals decided in favor of Kubota and it held
that: “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.” Subsequently, Unimasters filed a
motion for reconsideration, but was turned down by the
appellate court.
ISSUE: Whether the venue stipulated in the contract has the effect
of limiting the venue to a specified place.
HELD: NO.
The Polytrade doctrine was applied in the case at bar. This
doctrine enunciated that as long as the stipulation does not set
forth qualifying or restrictive words to indicate that the agreed
place alone and none other is the venue of the action, the parties
do not lose the option of choosing the venue.
According to the court, 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. Unless the parties make it clear, by
employing categorical and suitably limiting language, that they
wish the venue of actions between them 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.
In light of all the cases 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.
Kubota's theory that the RTC had no jurisdiction considering
that the venue was improperly laid 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 was
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.
Diaz v. Judge Adiong, 219 SCRA 631 (1993)
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 DENR. 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 in the RTC Marawi City. The City Prosecutor dismissed the
criminal case. The civil complaint for damages 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. Respondent judge
dismissed the MtD for lack of merit as well as the MfD.
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 RTC in Marawi City has no jurisdiction to entertain the civil
action for damages.
Issue: WON venue for the action for damages filed in Marawi is proper
notwithstanding the fact that none of the respondents held office in Marawi
nor were the alleged libelous news items published in that city.
Held: The petitioner is correct in saying that the 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.
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. Thus, filing of answer waives
MTD on ground of improper venue.
Escolin: the rules now allow raising the issue of improper venue as an
affirmative defense in the answer even if there was failure to raise it in a
motion to dismiss (Rule 16, Sec. 6).
ENUE OF LIBEL CASE WHERE OFFENDED PARTY IS AN PUBLIC OFFICIAL. —
From the provision of Article 360, third paragraph of the Revised Penal Code
as amended by R.A. 4363, 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.
IMPROPER VENUE; MUST BE RAISED IN A MOTION TO DISMISS PRIOR TO A
RESPONSIVE PLEADING. — 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.
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.   Petitioner moved to
4
reconnsider the order of denial, but no avail.   Hence, this instant petition
5
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.   On January 18, 1974, We gave due course to the petition and
7
required respondent to answer.   Thereafter, the parties submitted their
8
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;   that is an effective waiver of venue, valid and binding as
10
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;   and that condition No. 14 is unequivocal
11
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;   that while
13
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.,   and later through Justice
17
Fernando in Fieldman Insurance v. Vargas,   held —
18
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   the ends of justice. Considering the
21
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 ...   Under this principle" ... freedom of
22
contract or private dealing is restricted by law for the good of the
public.   Clearly, Condition No. 14, if enforced, will be subversive of the
23
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.
 
 
Separate Opinions
 
BARREDO, J., concurring:
I concur in the dismissal of the instant petition.
Only a few days ago, in Hoechst Philippines, Inc. vs. Francisco Torres, et
al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that
although generally, agreements regarding change of venue are
enforceable, there may be instances where for equitable considerations
and in the better interest of justice, a court may justify the laying of, the
venue in the place fixed by the rules instead of following written
stipulation of the parties.
In the particular case at bar, there is actually no written agreement as to
venue between the parties in the sense contemplated in Section 3 of
Rule 4, which governs the matter. I take it that the importance that a
stipulation regarding change of the venue fixed by law entails is such that
nothing less than mutually conscious agreement as to it must be what the
rule means. In the instant case, as well pointed out in the main opinion,
the ticket issued to private respondents by petitioner constitutes at best a
"contract of adhesion". In other words, it is not that kind of a contract
where the parties sit down to deliberate, discuss and agree specifically
on all its terms, but rather, one which respondents took no part at all in
preparing, since it was just imposed upon them when they paid for the
fare for the freight they wanted to ship. It is common knowledge that
individuals who avail of common carriers hardly read the fine prints on
such tickets to note anything more than the price thereof and the
destination designated therein.
Under these circumstances, it would seem that, since this case is already
in respondent court and there is no showing that, with its more or less
known resources as owner of several inter-island vessels plying between
the different ports of the Philippines for sometime already, petitioner
would be greatly inconvenienced by submitting to the jurisdiction of said
respondent court, it is best to allow the proceedings therein to continue. I
cannot conceive of any juridical injury such a step can cause to anyone
concerned. I vote to dismiss the petition.
 

Separate Opinions

BARREDO, J., concurring:

I concur in the dismissal of the instant petition.

Only a few days ago, in Hoechst Philippines, Inc. vs. Francisco Torres, et
al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that
although generally, agreements regarding change of venue are
enforceable, there may be instances where for equitable considerations
and in the better interest of justice, a court may justify the laying of, the
venue in the place fixed by the rules instead of following written
stipulation of the parties.

In the particular case at bar, there is actually no written agreement as to

venue between the parties in the sense contemplated in Section 3 of
Rule 4, which governs the matter. I take it that the importance that a
stipulation regarding change of the venue fixed by law entails is such that
nothing less than mutually conscious agreement as to it must be what the
rule means. In the instant case, as well pointed out in the main opinion,
the ticket issued to private respondents by petitioner constitutes at best a
"contract of adhesion". In other words, it is not that kind of a contract
where the parties sit down to deliberate, discuss and agree specifically
on all its terms, but rather, one which respondents took no part at all in
preparing, since it was just imposed upon them when they paid for the
fare for the freight they wanted to ship. It is common knowledge that
individuals who avail of common carriers hardly read the fine prints on
such tickets to note anything more than the price thereof and the
destination designated therein.

Under these circumstances, it would seem that, since this case is already
in respondent court and there is no showing that, with its more or less
known resources as owner of several inter-island vessels plying between
the different ports of the Philippines for sometime already, petitioner
would be greatly inconvenienced by submitting to the jurisdiction of said
respondent court, it is best to allow the proceedings therein to continue. I
cannot conceive of any juridical injury such a step can cause to anyone
concerned. I vote to dismiss the petition.