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VENUE

Westmont vs Samaniego

G.R. Nos. 146653-54 February 20, 2006

WESTMONT PHARMACEUTICALS, INC., UNITEDLABORATORIES, INC., and/or JOSE YAO

CAMPOS, CARLOS EJERCITO, ERNESTOSALAZAR, ELIEZER SALAZAR, JOSE SOLIDUM,JR.,Petitioners,vs.RICARDO C. SAMANIEGO, Respondent.

x - - - - - - - - - - - - - - - x

G.R. Nos. 147407-08 February 20, 2006

RICARDO C. SAMANIEGO, Petitioner,vs.WESTMONT PHARMACEUTICALS, INC. andUNITED LABORATORIES, INC., Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

Before us are consolidated petitions for reviewon certiorari under Rule 45 of the 1997 Rules of CivilProcedure, as amended, filed by both contendingparties assailing the Decision1 dated January 8, 2001

and the Resolution2 dated March 9, 2001 rendered bythe Court of Appeals in CA-G.R. SP No. 60400.

The factual antecedents as borne by the records are:

On May 5, 1998, Ricardo C. Samaniego filed with theOffice of the Labor Arbiter, Regional ArbitrationBranch (RAB) No. II, Tuguegarao City, Cagayan, acomplaint for illegal dismissal and damages againstWestmont Pharmaceuticals, Inc. (Westmont) andUnited Laboratories, Inc. (Unilab), herein

Respondents. Also impleaded as respondents areUnilab’s officers, Jose Yao Campos, Carlos Ejercito,Ernesto Salazar, Eliezer Salazar, and Jose Solidum, Jr.

The complaint alleges that Unilab initially hiredSamaniego as Professional Service Representative of its marketing arm, Westmont. Later, Unilab promotedhim as Senior Business Development Associate andassigned him in Isabela as Acting District Manager of Westmont and Chairman of Unilab Special Projects. InAugust 1995, he was transferred to Metro Manilapending investigation of his subordinate and

physicians of Region II involved in a sales discoand Rx trade-off controversy. He was then plaunder "floating status" and assigned to perform dunot connected with his position, like fetching at airport physicians coming from the provinces; makdeposits in banks; fetching field men and domessengerial works. His transfer to Metro Maresulted in the diminution of his salary as his per dwas reduced from P13,194.00 to P2,299.00 only.

On June 26, 1998, Westmont and Unilab filedmotion to dismiss Samaniego’s complaint on ground of improper venue and lack of cause of actiThey argued that the complaint should have been fwith the National Labor Relations Commission (NLin Manila, not with the Office of the Labor ArbiteTuguegarao City, Cagayan; and that the action shoonly be against Westmont, Samaniego’s employer.

Samaniego filed an Opposition to the motion to whWestmont and Unilab filed a Reply.

On August 13, 1998, the Labor Arbiter denied motion to dismiss, citing Section 1, Rule IV of NLRC New Rules of Procedure. This provision allothe Labor Arbiter to order a change of venuemeritorious cases.

The Labor Arbiter then set the case for preliminconference during which Westmont and Unexpressly reserved their right to contest the ordenying their motion to dismiss.

On September 3, 1998, Westmont and Unilab fwith the NLRC an Urgent Petition to Change Transfer Venue. On the same date, they filed with Office of the Labor Arbiter in Cagayan a MotionSuspend Proceedings in view of the pendency of thpetition for change or transfer of venue in the NLRC

On September 8, 1998, the Labor Arbiter issued Order directing the parties to submit their respectposition papers and supporting documents wittwenty (20) days from notice, after which the cshall be deemed submitted for decision.

On September 22, 1998, the NLRC, acting on petition to change venue, directed the Labor Arbiteforward to the NLRC the records of the case. TLabor Arbiter retained the complete duplicate origcopies of the records and set the case for heariWestmont and Unilab repeatedly filed motions cancellation of the scheduled dates of hearing on ground that their petition for change of venue remained unresolved. They did not file their posit

papers nor did they attend the hearing. Thus,

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Labor Arbiter considered the case submitted forDecision based on the records and the evidencesubmitted by Samaniego.

On December 16, 1998, the Labor Arbiter rendered aDecision finding that Samaniego was "illegally andunjustly dismissed constructively" and ordering hisreinstatement to his former position without loss of seniority rights and privileges; and payment of his full

backwages from the date of his dismissal from theservice up to the date of his actual reinstatement, aswell as per diem differential, profit share, and actual,moral and exemplary damages, plus 10% attorney’sfees.

On January 21, 1999, Westmont and Unilabinterposed an appeal to the NLRC. In its Resolutiondated August 31, 1999, the NLRC dismissed thepetition for change of venue, holding that when thecause of action arose, Samaniego’s workplace was inIsabela over which the Labor Arbiter in Cagayan has

jurisdiction; and that the Labor Arbiter’s Decision isnot appealable.

In the same Resolution, the NLRC declared the LaborArbiter’s Decision null and void, finding that:

x x x the Executive Labor Arbiter below only allowedthe transmittal of the official records of the instantcase to the Commission. Throwing caution into thewind, he retained complete duplicate original copies of the same, conducted further proceedings and

rendered his now contested Decision despite thependency of the appeal-treated Urgent Petition forChange of Venue.

As a consequence, respondents-appellants weredeprived of their opportunity to be heard and defendthemselves on the issues raised in the instant case.They were therefore denied of their right to dueprocess of law in violation of Section 1, Article III of the Constitution which provides: "No person shall bedeprived of his....property without due process of law."

The dispositive portion of the NLRC Resolution reads:

WHEREFORE, premises considered, the main Appealand Motion to Quash are hereby PARTIALLY GRANTEDand the appeal-treated Petition for Change of VenueDISMISSED for lack of jurisdiction and/or merit.Accordingly, the Decision appealed from is declaredNULL and VOID and the Order appealed fromSUSTAINED insofar as the denial of the Motion toDismiss is concerned. The entire records of the instant

case are DIRECTED to be immediately remanded to

the Executive Labor Arbiter of origin for immediconduct of further proceeding. The respondenappellants are DIRECTED to pay complainant-appethe amount of Two Hundred Thirty Thousand SevHundred Twenty Pesos and Thirty Centa(P230,720.30) representing his salary from January1999 to August 31, 1999, the date of issuance of tResolution less any salary collected by him by wayexecution pending appeal.

SO ORDERED.

The parties separately filed their motions reconsideration but were both denied by the NLRCits Resolution dated June 27, 2000.

On January 8, 2001, the Court of Appeals, acting the parties’ petitions for certiorari , rendered Decision setting aside the NLRC Resolutions aaffirming with modification the Labor Arbiter’s Decisin the sense that the award of moral damages w

reduced from P5,000,000.00 to P500,000.00; and exemplary damages from P1,000,000to P300,000.00, thus:

x x x

While this Court concurs with the ruling of Executive Labor Arbiter that there was constructdismissal committed against Ricardo Samaniego, Court finds the award on moral and exempdamages unconscionable.

x x x

WHEREFORE, the NLRC’s resolutions dated August 1999 and June 27, 2000 are hereby SET ASIDE. Tdecision of the Executive Labor Arbiter daDecember 16, 1998 is REINSTATED and AFFIRMEDall respect except with the following modification: moral and exemplary damages are reduto P500,000.00 andP300,000.00, respectively.

SO ORDERED.

Hence, these consolidated petitions for revon certiorari filed by the opposing parties.

In their petition, Westmont and Unilab allege that Court of Appeals erred in denying their motiondismiss by reason of improper venue and in sustainthe Labor Arbiter’s Decision declaring that Samaniewas constructively dismissed; and that they wdenied due process.



For his part, Samaniego maintains that the Court of Appeals did not err in its ruling. However, he claimsthat the Appellate Court should not have reduced theLabor Arbiter’s award for moral and exemplarydamages.

The petition to change or transfer venue filed byWestmont and Unilab with the NLRC is not theproper remedy to assail the Labor Arbiter’s Order

denying their motion to dismiss. Such Order ismerely interlocutory, hence, not appealable.Section 3, Rule V of the Rules of Procedure of theNLRC, as amended, provides:

SECTION 3. Motion to Dismiss . On or before the dateset for the conference, the respondent may file amotion to dismiss. Any motion to dismiss on theground of lack of jurisdiction, improper venue, orthat the cause of action is barred by prior judgment,prescription or forum shopping, shall beimmediately resolved by the Labor Arbiter by a

written order. An order denying the motion todismiss or suspending its resolution until the finaldetermination of the case is not appealable.

In Indiana Aerospace University v. Commission on Higher Education ,3 we held:

An order denying a motion to dismiss is interlocutory,and so the proper remedy in such a case is toappeal after a decision has been rendered.

Assuming that the petition to change or transfervenue is the proper remedy, still we find that theCourt of Appeals did not err in sustaining the LaborArbiter’s Order denying the motion to dismiss.

Section 1(a), Rule IV of the NLRC Rules of Procedure,as amended, provides:1avvphil.net

SECTION 1. Venue. – (a) All cases which LaborArbiters have authority to hear and decide may befiled in the Regional Arbitration Branch havingjurisdiction over the workplace of thecomplainant/petitioner.

For purposes of venue, workplace shall be understoodas the place or locality where the employee isregularly assignedwhen the cause of action arose.It shall include the place where the employee issupposed to report back after a temporary detail,assignment or travel. In the case of field employees,as well as ambulant or itinerant workers, theirworkplace is where they are regularly assigned, orwhere they are supposed to regularly receive their

salaries/wages or work instructions from and repthe results of their assignment to, their employers.

In Sulpicio Lines, Inc. v. NLRC,4 we held:

The question of venue essentially relates to the tand touches more upon the convenience of parties, rather than upon the substance and meritsthe case. Our permissive rules underlying provisi

on venue are intended to assure convenience for plaintiff and his witnesses and to promote the ends

justice. This axiom all the more finds applicabilitycases involving labor and management because of principle, paramount in our jurisdiction, that the Stshall afford full protection to labor.

x x x

This provision is obviously permissive, for the ssection uses the word "may," allowing a differvenue when the interests of substantial jusdemand a different one. In any case, as stated earlthe Constitutional protection accorded to labor iparamount and compelling factor, provided the vechosen is not altogether oppressive to the employer

Here, it is undisputed that Samaniego’s regular plof assignment was in Isabela when he was transferto Metro Manila or when the cause of action aroClearly, the Appellate Court was correct in affirmthe Labor Arbiter’s finding that the proper venue isthe RAB No. II at Tuguegarao City, Cagayan.

On the contention of Westmont and Unilab that twere denied due process, well settled is the rule tthe essence of due process is simply opportunity to be heard or, as applied administrative proceedings, an opportunity to expone’s side or an opportunity to seek a reconsideratof the action or ruling complained of. The requiremof due process in labor cases before a Labor Arbitesatisfied when the parties are given the opportunto submit their position papers to which they supposed to attach all the supporting documentsdocumentary evidence that would prove threspective claims, in the event the Labor Arbdetermines that no formal hearing would conducted or that such hearing was not necessary.5

As shown by the records, the Labor Arbiter gWestmont and Unilab, not only once, but thrice, opportunity to submit their position papers asupporting affidavits and documents. But they wobstinate. Clearly, they were not denied their rightdue process.














The ultimate issue for our resolution is whether theCourt of Appeals erred in holding that Samaniego wasconstructively dismissed by Westmont and Unilab.

To recapitulate, Samaniego claims that upon hisreassignment and/or transfer to Metro Manila, he wasplaced on "floating status" and directed to performfunctions not related to his position. For their part,Westmont and Unilab explain that his transfer is based

on a sound business judgment, a managementprerogative.

In constructive dismissal, the employer has theburden of proving that the transfer of an employee isfor just and valid grounds, such as genuine businessnecessity. The employer must be able to show thatthe transfer is not unreasonable, inconvenient, orprejudicial to the employee. It must not involve ademotion in rank or a diminution of salary and otherbenefits. If the employer cannot overcome this burdenof proof, the employee’s transfer shall be tantamount

to unlawful constructive dismissal.6

Westmont and Unilab failed to discharge this burden.Samaniego was unceremoniously transferred fromIsabela to Metro Manila. We hold that such transfer iseconomically and emotionally burdensome on his part.He was constrained to maintain two residences – onefor himself in Metro Manila, and the other for hisfamily in Tuguegarao City, Cagayan. Worse,immediately after his transfer to Metro Manila, he wasplaced "on floating status" and was demoted in rank,

performing functions no longer supervisory in nature.

There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomesso unbearable on the part of the employee that itcould foreclose any choice by him except to forego hiscontinued employment.7 This was what happened toSamaniego. Thus, he is entitled to reinstatementwithout loss of seniority rights, full backwages,inclusive of allowances, and other benefits or theirmonetary equivalent, computed from the time hiscompensation was withheld from him up to thetime of his actual reinstatement.8

However, the circumstances obtaining in this case donot warrant the reinstatement of Samaniego.Antagonism caused a severe strain in the relationshipbetween him and his employer. A more equitabledisposition would be an award of separation payequivalent to at least one month pay, or one monthpay for every year of service, whichever is higher(with a fraction of at least six [6 months beingconsidered as one [1 whole year),9 in addition to his

full backwages, allowances and other benefits.10

Records show that Samaniego was employed frOctober 1982 to May 27, 1998,11 or for sixteen (years and seven (7) months, with a monthly salof P25,000.00. Hence, he is entitled to a separatpay of P425,000.00.

WHEREFORE, the assailed Decision and Resolutof the Court of Appeals in CA-G.R. SP No. 60400 aCA-G.R. SP No. 60478 are AFFIRMED, w

MODIFICATION in the sense that Westmont aUnilab are ordered to pay Samaniego his separatpay equivalent to P425,000.00, plus his backwages, and other privileges and benefits, or thmonetary equivalent, from the time of his dismissalto his supposed actual reinstatement. The award moral and exemplary damages is deleted.

Costs against Westmont and Unilab.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERR Associate J ustice

WE CONCUR:

UNIMASTERS CONGLOMERATION, INC

v. CA

[G.R. No. 119657. February 7, 1997]

UNIMASTERS CONGLOMERATIOINC., petitioner, vs . COURT OF APPEAand KUBOTA AGRI-MACHINEPHILIPPINES, INC., respondents .

D E C I S I O N

NARVASA, C.J .:

The appellate proceeding at bar turns upon interpretation of a stipulation in a contract governvenue of actions thereunder arising.

On October 28, 1988 Kubota Agri-MachinPhilippines, Inc. (hereafter, simply KUBOTA) aUnimasters Conglomeration, Inc. (hereafter, simUNIMASTERS) entered into a "Dealership Agreemfor Sales and Services" of the former's productsSamar and Leyte Provinces.[1]The contract contain

among others:



















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1) a stipulation reading: "** All suits arising out of this Agreement shall be filed with / in the proper Courts of Quezon City," and

2) a provision binding UNIMASTERS to obtain (as itdid in fact obtain) a credit line with Metropolitan Bank and Trust Co.-Tacloban Branch in the amountofP2,000,000.00 to answer for its obligations toKUBOTA.

Some five years later, or more precisely onDecember 24, 1993, UNIMASTERS filed an action inthe Regional Trial Court of Tacloban City againstKUBOTA, a certain Reynaldo Go, and MetropolitanBank and Trust Company-Tacloban Branch (hereafter,simply METROBANK) for damages for breach of contract, and injunction with prayer for temporaryrestraining order. The action was docketed as CivilCase No. 93-12-241 and assigned to Branch 6.

On the same day the Trial Court issued a

restraining order enjoining METROBANK from"authorizing or effecting payment of any allegedobligation of ** (UNIMASTERS) to defendant **KUBOTA arising out of or in connection with purchasesmade by defendant Go against the credit line causedto be established by ** (UNIMASTERS) for and in theamount of P2 million covered by defendantMETROBANK ** or by way of charging **(UNIMASTERS) for any amount paid and released todefendant ** (KUBOTA) by the Head Office of METROBANK in Makati, Metro-Manila **." The Courtalso set the application for preliminary injunction for

hearing on January 10, 1994 at 8:30 o'clock in themorning.

On January 4, 1994 KUBOTA filed twomotions. One prayed for dismissal of the case on theground of improper venue (said motion being set forhearing on January 11, 1994). The other prayed forthe transfer of the injunction hearing to January 11,1994 because its counsel was not available on January10 due to a prior commitment before another court.

KUBOTA claims that notwithstanding that its

motion to transfer hearing had been granted, the TrialCourt went ahead with the hearing on the injunctionincident on January 10, 1994 during which it receivedthe direct testimony of UNIMASTERS' generalmanager, Wilford Chan; that KUBOTA's counsel was"shocked" when he learned of this on the morning of the 11th, but was nonetheless instructed to proceedto cross-examine the witness; that when said counselremonstrated that this was unfair, the Court reset thehearing to the afternoon of that same day, at whichtime Wilford Chan was recalled to the stand to repeathis direct testimony. It appears that cross-

examination of Chan was then undertaken KUBOTA's lawyer with the "express reservation t** (KUBOTA was) not (thereby) waiving andabandoning its motion to dismiss;" and that in course of the cross-examination, exhibits (numbefrom 1 to 20) were presented by said attorney wafterwards submitted a memorandum in lieu testimonial evidence.[2]

On January 13, 1994, the Trial Court hand

down an Order authorizing the issuance of preliminary injunction prayed for, upon a boofP2,000,000.00.[3] And on February 3, 1994, same Court promulgated an Order denying KUBOTmotion to dismiss. Said the Court:

"The plaintiff UNIMASTERS Conglomeration isholding its principal place of business in theCity of Tacloban while the defendant **(KUBOTA) is holding its principal place of business in Quezon City. The proper venuetherefore pursuant to Rules of Court would

either be Quezon City or Tacloban City at theelection of the plaintiff. Quezon City andManila (sic ), as agreed upon by the parties inthe Dealership Agreement, are additionalplaces other than the place stated in theRules of Court. The filing, therefore, of thiscomplaint in the Regional Trial Court inTacloban City is proper."

Both orders were challenged as having bissued with grave abuse of discretion by KUBOTA ispecial civil action of certiorari and prohibition f

with the Court of Appeals, docketed as CA-G.R. SP 33234. It contended, more particularly, that (1) RTC had "no jurisdiction to take cognizance of (UNIMASTERS') action considering that venue wimproperly laid," (2) UNIMASTERS had in truth "fato prove that it is entitled to the ** writ of prelimininjunction;" and (3) the RTC gravely erred "in denythe motion to dismiss."[4]

The Appellate Court agreed with KUBOTA thain line with the Rules of Court[5] and this Courelevant rulings[6] -- the stipulation respecting venue

its Dealership Agreement with UNIMASTERS didtruth limit the venue of all suits arising thereunonly and exclusively to "the proper courts of QueCity."[7] The Court also held that the participationKUBOTA's counsel at the hearing on the injunctincident did not in the premises operate as a waiverabandonment of its objection to venue; that assumthat KUBOTA's standard printed invoices provided tthe venue of actions thereunder should be laid at Court of the City of Manila, this was inconsequensince such provision would govern "suits or le

actions between petitioner and its buyers" but



























actions under the Dealership Agreement betweenKUBOTA and UNIMASTERS, the venue of which wascontrolled by paragraph No. 7 thereof; and that noimpediment precludes issuance of a TRO or injunctivewrit by the Quezon City RTC against METROBANK-Tacloban since the same "may be served on theprincipal office of METROBANK in Makati and would bebinding on and enforceable against, METROBANK branch in Tacloban."

After its motion for reconsideration of thatdecision was turned down by the Court of Appeals,UNIMASTERS appealed to this Court. Here, it ascribesto the Court of Appeals several errors which it believeswarrant reversal of the verdict, namely:[8]

1) "in concluding, contrary to decisions of this **Court, that the agreement on venue betweenpetitioner (UNIMASTERS) and private respondent(KUBOTA) limited to the proper courts of Quezon Citythe venue of any complaint filed arising from the

dealership agreement between ** (them);"

2) "in ignoring the rule settled in Philippine Banking Corporation vs. Tensuan ,[9] that 'in theabsence of qualifying or restrictive words, venuestipulations in a contract should be considered merelyas agreement on additional forum, not as limitingvenue to the specified place;" and in concluding,contrariwise, that the agreement in the case at bar"was the same as the agreement on venue inthe Gesmundo case," and therefore,the Gesmundo case was controlling; and

3) "in concluding, based solely on the self-servingnarration of ** (KUBOTA that its) participation in thehearing for the issuance of a ** preliminary injunctiondid not constitute waiver of its objection to venue."

The issue last mentioned, of whether or not theparticipation by the lawyer of KUBOTA at theinjunction hearing operated as a waiver of itsobjection to venue, need not occupy the Court toolong. The record shows that when KUBOTA's counsel

appeared before the Trial Court in the morning of January 11, 1994 and was then informed that heshould cross-examine UNIMASTERS' witness, who hadtestified the day before, said counsel drew attention tothe motion to dismiss on the ground of impropervenue and insistently attempted to argue the matterand have it ruled upon at the time; and when theCourt made known its intention (a) "to (resolve firstthe) issue (of) the injunction then rule on the motionto dismiss," and (b) consequently its desire toforthwith conclude the examination of the witness onthe injunction incident, and for that purpose reset the

hearing in the afternoon of that day, the 11th, so tthe matter might be resolved before the lapse of temporary restraining order on the 13th, KUBOTlawyer told the Court: "Your Honor, we are waiving our right to submit the Motion Dismiss." [10] It is plain that under these circumstancno waiver or abandonment can be imputed KUBOTA.

The essential question really is that posed in

first and second assigned errors, i.e., wconstruction should be placed on the stipulation in Dealership Agreement that "(a)ll suits arising outthis Agreement shall be filed with/in the proper Coof Quezon City."

Rule 4 of the Rules of Court sets forth principles generally governing the venue of actiowhether real or personal, or involving persons wneither reside nor are found in the Philippinesotherwise. Agreements on venue are explicallowed. "By written agreement of the parties

venue of an action may be changed or transferfrom one province to another." [11] Parties may stipulation waive the legal venue and such waivevalid and effective being merely a personal privilewhich is not contrary to public policy or prejudiciathird persons. It is a general principle that a permay renounce any right which the law gives unsuch renunciation would be against public policy.[12]

Written stipulations as to venue may be restricin the sense that the suit may be filed only in place agreed upon, or merely permissive in that

parties may file their suit not only in the place agreupon but also in the places fixed by law (Rulespecifically). As in any other agreement, whatessential is the ascertainment of the intention of parties respecting the matter.

Since convenience is the raison d'etre of the ruof venue,[13] it is easy to accept the proposition tnormally, venue stipulations should be deempermissive merely, and that interpretation should adopted which most serves the partconvenience. In other words, stipulations designat

venues other than those assigned by Rule 4 shouldinterpreted as designed to make it more convenifor the parties to institute actions arising from orrelation to their agreements; that is to say, as simadding to or expanding the venues indicated in sRule 4.

On the other hand, because restricstipulations are in derogation of this general polthe language of the parties must be so clear acategorical as to leave no doubt of their intentionlimit the place or places, or to fix places other th


























those indicated in Rule 4, for their actions. This iseasier said than done, however, as an examination of precedents involving venue covenants will immediatelydisclose.

In at least thirteen (13) cases, this Courtconstrued the venue stipulations involved as merelypermissive. These are:

1. Polytrade Corporation v. Blanco , decided in

1969.[14] In this case, the venue stipulation was asfollows:

"The parties agree to sue and be sued in the Courts of Manila."

This Court ruled that such a provision "does notpreclude the filing of suits in the residence of theplaintiff or the defendant. The plain meaning is thatthe parties merely consented to be sued inManila. Qualifying or restrictive words which would

indicate that Manila and Manila alone is the venue aretotally absent therefrom. It simply is permissive. Theparties solely agreed to add the courts of Manila astribunals to which they may resort. They did not waivetheir right to pursue remedy in the courts specificallymentioned in Section 2(b) of Rule 4."

The Polytrade doctrine was reiterated expressly orimplicitly in subsequent cases, numbering at least ten(10).

2. Nicolas v. Reparations Commission , decided in1975.[15] In this case, the stipulation on venue read:

"** (A)ll legal actions arising out of this contract **may be brought in and submitted to the jurisdiction of the proper courts in the City of Manila."

This Court declared that the stipulation does notclearly show the intention of the parties to limit thevenue of the action to the City of Manila only. "Itmust be noted that the venue in personal actions isfixed for the convenience of the plaintiff and his

witnesses and to promote the ends of justice. Wecannot conceive how the interest of justice may beserved by confining the situs of the action to Manila,considering that the residences or offices of all theparties, including the situs of the acts sought to berestrained or required to be done, are all within theterritorial jurisdiction of Rizal. ** Such agreementsshould be construed reasonably and should not beapplied in such a manner that it would work more tothe inconvenience of the parties without promotingthe ends of justice."

3. Lamis Ents. v. Lagamon , decided 1981.[16] Here, the stipulation in the promissory nand the chattel mortgage specifed Davao City as venue.

The Court, again citing Polytrade , stated that provision "does not preclude the filing of suits in residence of plaintiff or defendant under Section 2Rule 4, Rules of Court, in the absence of qualifying

restrictive words in the agreement which woindicate that the place named is the only veagreed upon by the parties. The stipulation did deprive ** (the affected party) of his right to purremedy in the court specifically mentioned in Sect2(b) of Rule 4, Rules of Court. Renuntiato praesumitur ."

4. Capati v. Ocampo , decided in 1982.[17] In case, the provision of the contract relative to venwas as follows:

" ** (A)ll actions arising out, or relating to contract may be instituted in the Court of FInstance of the City of Naga."

The Court ruled that the parties "did not agree to their suits solely and exclusively with the Court of FInstance of Naga;" they "merely agreed to subtheir disputes to the said court without waiving thright to seek recourse in the court specificindicated in Section 2 (b), Rule 4 of the RulesCourt."

5. Western Minolco v. Court of Appeals , decided1988.[18] Here, the provision governing venue read:

"The parties stipulate that the venue of the actireferred to in Section 12.01 shall be in the CityManila."

The court restated the doctrine that a stipulation icontract fixing a definite place for the institution ofaction arising in connection therewith, does ordinarily supersede the general rules set out in R4, and should be construed merely as an agreemon an additional forum, not as limiting venue to specified place.

6. Moles v. Intermediate Appellate Court , deciin 1989.[19] In this proceeding, the Sales Invoice olinotype machine stated that the proper venue shobe Iloilo.

This Court held that such an invoice was not contract of sale of the linotype machine in questi



























consequently the printed provisions of the invoicecould not have been intended by the parties to governthe sale of the machine, especially since said invoicewas used for other types of transactions. This Courtsaid: "It is obvious that a venue stipulation, in orderto bind the parties, must have been intelligently anddeliberately intended by them to exclude their casefrom the reglementary rules on venue. Yet, even suchintended variance may not necessarily be given

judicial approval, as, for instance, where there are norestrictive or qualifying words in the agreementindicating that venue cannot be laid in any place otherthan that agreed upon by the parties, and in contractsof adhesion."

7. Hongkong and Shanghai Banking Corp. v.Sherman , decided in 1989.[20] Here the stipulation onvenue read:

" ** (T)his guarantee and all rights, obligations andliabilities arising hereunder shall be construed and

determined under and may be enforced in accordancewith the laws of the Republic of Singapore. Wehereby agree that the Courts in Singapore shall havejurisdiction over all disputes arising under thisguarantee **."

This Court held that due process dictates that thestipulation be liberally construed. The parties did notthereby stipulate that only the courts of Singapore, tothe exclusion of all the others, had jurisdiction. Theclause in question did not operate to divest Philippine

courts of jurisdiction.

8. Nasser v. Court of Appeals , decided in1990,[21] in which the venue stipulation in thepromissory notes in question read:

" ** (A)ny action involving the enforcement of thiscontract shall be brought within the City of Manila,Philippines."

The Court's verdict was that such a provision does notas a rule supersede the general rule set out in Rule 4of the Rules of Court, and should be construed merelyas an agreement on an additional forum, not aslimiting venue to the specified place.

9. Surigao Century Sawmill Co., Inc. v. Court of Appeals , decided in 1993:[22] In this case, theprovision concerning venue was contained in acontract of lease of a barge, and read as follows:

" ** (A)ny disagreement or dispute arising out of lease shall be settled by the parties in the proper coin the province of Surigao del Norte."

The venue provision was invoked in an action filedthe Regional Trial Court of Manila to recover damaarising out of marine subrogation based on a billading. This Court declared that since the action not refer to any disagreement or dispute arising ou

the contract of lease of the barge, the venstipulation in the latter did not apply; but that evassuming the contract of lease to be applicablestatement in a contract as to venue does not precluthe filing of suits at the election of the plaintiff whno qualifying or restrictive words indicate that agreed place alone was the chosen venue.

10. Philippine Banking Corporation v. Hon. SalvaTensuan, etc., Circle Financial Corporation, et decided in 1993.[23] Here, the stipulation on venue wcontained in promissory notes and read as follows:

"I/We hereby expressly submit to the jurisdictionthe courts of Valenzuela any legal action which marise out of this promissory note."

This Court held the stipulation to be merely permisssince it did not lay the venue in Valenzuela exclusivor mandatorily. The plain or ordinary import of stipulation is the grant of authority or permissionbring suit in Valenzuela; but there is not the slightindication of an intent to bar suit in other compet

courts. The Court stated that there is no necessarycustomary connection between the words "any leaction" and an intent strictly to limit permissible veto the Valenzuela courts. Moreover, since the vestipulations include no qualifying or exclusionterms, express reservation of the right to elect venunder the ordinary rules was unnecessary in the cat bar. The Court made clear that "to extent Bautista and Hoechst Philippines inconsistent with Polytrade (an en banc decision lain time than Bautista ) and subsequent careiterating Polytrade , Bautista and Hoechst Philippines have been rendered obsolete thePolytrade line of cases."

11. Philippine Banking Corporation v. Hon. SalvaTensuan, etc., Brinell Metal Works Corp., al., decided in 1994:[24] In this case the subjpromissory notes commonly contained a stipulatreading:

"I/we expressly submit to the jurisdiction of the couof Manila, any legal action which may arise out of t

promissory note."























the Court restated the rule in Polytrade that venuestipulations in a contract, absent any qualifying orrestrictive words, should be considered merely as anagreement on additional forum, not limiting venue tothe specified place. They are not exclusive, butrather, permissive. For to restrict venue only to thatplace stipulated in the agreement is a constructionpurely based on technicality; on the contrary, thestipulation should be liberally construed. The Court

stated: "The later cases of Lamis Ents v.Lagamon [108 SCRA 1981], Capati v. Ocampo [113SCRA 794 [1982], Western Minolco v. Court of Appeals [167 SCRA 592 [1988], Moles v. Intermediate Appellate Court [169 SCRA 777 [1989], Hongkong and Shanghai Banking Corporation v. Sherman [176 SCRA 331], Nasser v. Court of Appeals [191 SCRA 783[1990] and just recently, Surigao Century Sawmill Co.v. Court of Appeals [218 SCRA 619 [1993], all treadedthe path blazed byPolytrade . The conclusion to bedrawn from all these is that the more recentjurisprudence shall properly be deemed modificatory

of the old ones."

The lone dissent observed: "There is hardly anyquestion that a stipulation of contracts of adhesion,fixing venue to a specified place only, is void for, insuch cases, there would appear to be no valid andfree waiver of the venue fixed by the Rules of Courts. However, in cases where both parties freelyand voluntarily agree on a specified place to be thevenue of actions, if any, between them, then the onlyconsiderations should be whether the waiver (of the

venue fixed by the Rules of Court) is against publicpolicy and whether the parties would suffer, by reasonof such waiver, undue hardship and inconvenience;otherwise, such waiver of venue should be upheld asbinding on the parties. The waiver of venue in suchcases is sanctioned by the rules on jurisdiction."

Still other precedents adhered to the same principle.

12. Tantoco v. Court of Appeals , decided in1977.[25] Here, the parties agreed in their salescontracts that the courts of Manila shall have

jurisdiction over any legal action arising out of theirtransaction. This Court held that the parties agreedmerely to add the courts of Manila as tribunals towhich they may resort in the event of suit, to thoseindicated by the law: the courts either of Rizal, of which private respondent was a resident, or of Bulacan, where petitioner resided.

13. Sweet Lines, Inc. v. Teves , promulgated in1987.[26] In this case, a similar stipulation on venue,contained in the shipping ticket issued by Sweet Lines,

Inc. (as Condition 14) --

" ** that any and all actions arising out or condition and provisions of this ticket, irrespectivewhere it is issued, shall be filed in the competcourts in the City of Cebu"

-- was declared unenforceable, being subversivepublic policy. The Court explained that the philosoon transfer of venue of actions is the conveniencethe plaintiffs as well as his witnesses and to prom

the ends of justice; and considering the expense atrouble a passenger residing outside of Cebu Cwould incur to prosecute a claim in the City of Cehe would most probably decide not to file the actionall.

On the other hand, in the cases hereunmentioned, stipulations on venue were held to restrictive, or mandatory.

1. Bautista vs. De Borja , decided in 1966.[27

this case, the contract provided that in case of

litigation arising therefrom or in connection therewthe venue of the action shall be in the City Manila. This Court held that without either pareserving the right to choose the venue of actionfixed by law, it can reasonably be inferred that parties intended to definitely fix the venue of action, in connection with the contract sued uponthe proper courts of the City of Manila onotwithstanding that neither party is a residentManila.

2. Gesmundo v. JRB Realty Corporation , deciin 1994.[28] Here the lease contract declared that

" ** (V)enue for all suits, whether for breach hereodamages or any cause between the LESSOR LESSEE, and persons claiming under each, ** (sbe) the courts of appropriate jurisdiction in Pasay C. ."

This Court held that: "(t)he language used leaves room for interpretation. It clearly evinces the partintent to limit to the 'courts of appropriate jurisdictof Pasay City' the venue for all suits between lessor and the lessee and those between parclaiming under them. This means a waiver of thright to institute action in the courts provided foRule 4, sec. 2(b)."

3. Hoechst Philippines, Inc. v. Torres ,[29] decimuch earlier, in 1978, involved a strikingly simstipulation, which read:






















" ** (I)n case of any litigation arising out of thisagreement, the venue of any action shall be in thecompetent courts of the Province of Rizal."

This Court held: "No further stipulations are necessaryto elicit the thought that both parties agreed that anyaction by either of them would be filed only in thecompetent courts of Rizal province exclusively."

4. Villanueva v. Mosqueda , decided in 1982.[30]

Inthis case, it was stipulated that if the lessor violatedthe contract of lease he could be sued in Manila, whileif it was the lessee who violated the contract, thelessee could be sued in Masantol, Pampanga. ThisCourt held that there was an agreement concerningvenue of action and the parties were bound by theiragreement. "The agreement as to venue was notpermissive but mandatory."

5. Arquero v. Flojo , decided in 1988.[31] Thecondition respecting venue -- that any action against

RCPI relative to the transmittal of a telegram must bebrought in the courts of Quezon City alone -- wasprinted clearly in the upper front portion of the formto be filled in by the sender. This Court held thatsince neither party reserved the right to choose thevenue of action as fixed by Section 2 [b], Rule 4, as isusually done if the parties mean to retain the right of election so granted by Rule 4, it can reasonably beinferred that the parties intended to definitely fix thevenue of action, in connection with the writtencontract sued upon, in the courts of Quezon City only.

An analysis of these precedents reaffirms andemphasizes the soundness of the Polytrade principle. Of the essence is theascertainment of the parties' intention in theiragreement governing the venue of actions betweenthem. That ascertainment must be done keeping inmind that convenience is the foundation of venueregulations, and that that construction should beadopted which most conduces thereto. Hence, theinvariable construction placed on venue stipulations isthat they do not negate but merely complement oradd to the codal standards of Rule 4 of the Rules of Court. In other words, unless the parties make veryclear, by employing categorical and suitably limitinglanguage, that they wish the venue of actionsbetween them to be laid only and exclusively at adefinite place, and to disregard the prescriptions of Rule 4, agreements on venue are not to be regardedas mandatory or restrictive, but merely permissive, orcomplementary of said rule. The fact that in theiragreement the parties specify only one of the venuesmentioned in Rule 4, or fix a place for their actions

different from those specified by said rule, does not,

without more, suffice to characterize the agreemas a restrictive one. There must, to repeat, accompanying language clearly and categoricexpressing their purpose and design that actibetween them be litigated only at the place namedthem,[32] regardless of the general precepts of Ruleand any doubt or uncertainty as to the partintentions must be resolved against giving thagreement a restrictive or mandatory aspect. A

other rule would permit of individual, subject judicial interpretations without stable standards, whcould well result in precedents in hopeinconsistency.

The record of the case at bar discloses tUNIMASTERS has its principal place of businessTacloban City, and KUBOTA, in Quezon City. UnRule 4, the venue of any personal action betwthem is "where the defendant or any of defendants resides or may be found, or where plaintiff or any of the plaintiffs resides, at the elect

of the plaintiff."[33] In other words, Rule 4 giUNIMASTERS the option to sue KUBOTA for breachcontract in the Regional Trial Court of either TacloCity or Quezon City.

But the contract between them provides that " **suits arising out of this Agreement shall be fwith/in the proper Courts of Quezon City ," withmention of Tacloban City. The question is whetthis stipulation had the effect of effectively eliminatthe latter as an optional venue and limiting litigat

between UNIMASTERS and KUBOTA only aexclusively to Quezon City.

In light of all the cases above surveyed, and general postulates distilled therefrom, the questshould receive a negative answer. Absent additiowords and expressions definitely and unmistakadenoting the parties' desire and intention that actibetween them should be ventilated only at the plselected by them, Quezon City -- or other contractprovisions clearly evincing the same desire aintention -- the stipulation should be construed, not

confining suits between the parties only to that oplace, Quezon City, but as allowing suits eitherQuezon City or Tacloban City, at the option of plaintiff (UNIMASTERS in this case).

One last word, respecting KUBOTA's theory that Regional Trial Court had "no jurisdiction to tcognizance of ** (UNIMASTERS') action considerthat venue was improperly laid." This is not accurate statement of legal principle. It equavenue with jurisdiction; but venue has nothing to

with jurisdiction, except in criminal actions. This



















fundamental.[34] The action at bar, for the recovery of damages in an amount considerably in excessof P20,000.00, is assuredly within the jurisdiction of aRegional Trial Court.[35] Assuming that venue wereimproperly laid in the Court where the action wasinstituted, the Tacloban City RTC, that would be aprocedural, 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 tovenue is waived by the failure to set it up in a motionto dismiss,[36] the RTC would proceed in perfectlyregular fashion if it then tried and decided the action.

This is true also of real actions. Thus, even if a case"affecting title to, or for recovery of possession, or forpartition or condemnation of, or foreclosure of mortgage on, real property"[37] were commenced in aprovince or city other than that "where the property orany part thereof lies,"[38] if no objection is seasonablymade in a motion to dismiss, the objection is deemed

waived, and the Regional Trial Court would be actingentirely within its competence and authority inproceeding to try and decide the suit.[39]

WHEREFORE, the appealed judgment of theCourt of Appeals is REVERSED, the Order of theRegional Trial Court of Tacloban City, Branch 6, datedFebruary 3, 1994, is REINSTATED and AFFIRMED, andsaid Court is DIRECTED to forthwith proceed with CivilCase No. 93-12-241 in due course.

SO ORDERED.

Padilla, Davide, Jr., Romero, Bellosillo, Melo,Puno, Vitug, Kapunan, Mendoza, Francisco,Hermosisima, Jr. Panganiban, and Torres, Jr.,JJ., concur.

Regalado, J., See concurring opinion.

Lantin v. Lantion

G.R. No. 160053 August 28, 2006

SPS. RENATO & ANGELINA LANTIN, Petitioners,vs.HON. JANE AURORA C. LANTION, PresidingJudge of the Regional Trial Court of Lipa City,Fourth Judicial Region, Branch 13, PLANTERSDEVELOPMENT BANK, ELIZABETH C. UMALI,ALICE PERCE, JELEN MOSCA, REGISTER OFDEEDS FOR LIPA CITY, BATANGAS, THE CLERK OF COURT and EX-OFFICIO SHERIFF OF THEREGIONAL TRIAL COURT OF

BATANGAS, Respondents.

D E C I S I O N

QUISUMBING, J.:

This is a petition for certiorari assailing the orddated May 15, 20031 and September 15, 20032 in CCase No. 2002-0555 issued by public respondePresiding Judge Jane Aurora C. Lantion, of Regional Trial Court (RTC) of Lipa City, Batangas.

The facts of the case are as follows:

Petitioners Renato and Angelina Lantin took sevepeso and dollar loans from respondent PlantDevelopment Bank and executed several real estmortgages and promissory notes to cover the loaThey defaulted on the payments so respondent bforeclosed the mortgaged lots. The forecloproperties, in partial satisfaction of petitioners’ dewere sold at a public auction where the respondbank was the winning bidder. On November 8, 20petitioners filed against Planters Development Band its officers Elizabeth Umali, Alice Perce and JeMosca (private respondents), a Complaint Declaration of Nullity and/or Annulment of Sale andMortgage, Reconveyance, Discharge of Mortga

Accounting, Permanent Injunction, and Damages wthe RTC of Lipa City, Batangas. Petitioners allegthat only their peso loans were covered by mortgages and that these had already been fully phence, the mortgages should have been dischargThey challenged the validity of the foreclosure on

alleged non-payment of their dollar loans as mortgages did not cover those loans.

Private respondents moved to dismiss the complaon the ground of improper venue since the loagreements restricted the venue of any suit in MeManila.

On May 15, 2003, the respondent judge dismissed case for improper venue.

Petitioners sought reconsideration. They argued tthe trial court in effect prejudged the validity of loan documents because the trial court based dismissal on a venue stipulation provided in agreement. The motion for reconsideration wdenied and the lower court held that the previorder did not touch upon the validity of the lodocuments but merely ruled on the procedural isof venue.

Petitioners now come before us alleging that:



















http://www.lawphil.net/judjuris/juri2006/aug2006/gr_160053_2006.html#fnt1















I

THE HONORABLE JUDGE COMMITTED GRAVE ABUSEOF DISCRETION AMOUNTING TO LACK OR EXCESSOF JURISDICTION IN HOLDING THAT THE VENUESTIPULATIONS IN THE "REAL ESTATE MORTGAGE"AND "PROMISSORY NOTES" FALL WITHIN THEPURVIEW OF SECTION 4(B) OF RULE 4 OF THE 1997RULES OF CIVIL PROCEDURE IN THAT IT LIMITED

THE VENUE OF ACTIONS TO A DEFINITE PLACE.

II

THE HONORABLE JUDGE COMMITTED GRAVE ABUSEOF DISCRETION AMOUNTING TO LACK OR EXCESSOF JURISDICTION IN NOT FINDING THAT THE MEREUSE OF THE WORD "EXCLUSIVELY" DOES NOT, BY ITSELF, MEAN THAT SUCH STIPULATIONSAUTOMATICALLY PROVIDE FOR AN "EXCLUSIVEVENUE", AS CONTEMPLATED BY SECTION 4(B) OFRULE 4 OF THE 1997 RULES OF CIVIL PROCEDURE,

SPECIALLY WHEN THE TENOR OR LANGUAGE OFTHE ENTIRE VENUE STIPULATION CLEARLY PROVIDES OTHERWISE.

III

THE HONORABLE JUDGE COMMITTED GRAVE ABUSEOF DISCRETION AMOUNTING TO LACK OR EXCESSOF JURISDICTION IN DISREGARDING THE FACTTHAT HEREIN PETITIONERS’ COMPLAINT INVOLVESSEVERAL CAUSES OF ACTION WHICH

DO NOT ARISE SOLELY FROM THE "REAL ESTATEMORTGAGE" AND "PROMISSORY NOTES" AND WHICHOTHER CAUSES OF ACTION MAY BE FILED IN OTHER VENUES UNDER SECTIONS 1 AND 2 OF RULE 4 OFTHE 1997 RULES OF CIVIL PROCEDURE.

IV

THE HONORABLE JUDGE COMMITTED GRAVE ABUSEOF DISCRETION AMOUNTING TO LACK OR EXCESSOF JURISDICTION IN DISREGARDING THE PRINCIPLETHAT THE RULE ON VENUE OF ACTIONS ISESTABLISHED FOR THE CONVENIENCE OF THEPLAINTIFFS.3

The main issue in the present petition is whetherrespondent judge committed grave abuse of discretionwhen she dismissed the case for improper venue.

Petitioners contend that, since the validity of the loandocuments were squarely put in issue, necessarily thismeant also that the validity of the venue stipulationalso was at issue. Moreover, according to the

petitioners, the venue stipulation in the lodocuments is not an exclusive venue stipulation unSection 4(b) of Rule 4 of the 1997 Rules of CProcedure.4 The venue in the loan agreement was specified with particularity. Besides, petitioners pothe rule on venue of action was established for convenience of the plaintiff, herein petitioneFurther, petitioners also contend that since complaint involves several causes of action which

not arise solely from or connected with the lodocuments, the cited venue stipulation should notmade to apply.

Private respondents counter that, in their complapetitioners did not assail the loan documents, and issue of validity was merely petitioners’ afterthouto avoid being bound by the venue stipulation. Talso aver that the venue stipulation was not contrto the doctrine in Unimasters ,5 which requires thavenue stipulation employ categorical and suitalimiting language to the effect that the parties ag

that the venue of actions between them should be only and exclusively at a definite place. Accordingprivate respondents, the language of the stipulatioclearly exclusive.

At the outset, we must make clear that under Sect4 (b) of Rule 4 of the 1997 Rules of Civil Proceduthe general rules on venue of actions shall not apwhere the parties, before the filing of the action, hvalidly agreed in writing on an exclusive venue. Tmere stipulation on the venue of an action, howev

is not enough to preclude parties from bringing a cin other venues. The parties must be able to shthat such stipulation is exclusive .6 In the absencequalifying or restrictive words, the stipulation shobe deemed as merely an agreement on an additioforum, not as limiting venue to the specified place.7

The pertinent provisions of the several real estmortgages and promissory notes executed by petitioner respectively read as follows:

18. In the event of suit arising out of or in connectwith this mortgage and/or the promissory notsecured by this mortgage, the parties hereto agreebring their causes of auction (sic) exclusively in proper court of Makati, Metro Manila or at such otvenue chosen by the Mortgagee, the Mortgawaiving for this purpose any other venue.8(Emphasupplied.)

I/We further submit that the venue of any legal actarising out of this note shall exclusively be at proper court of Metropolitan Manila, Philippines or

other venue chosen by the BANK, waiving for


























purpose any other venue provided by the Rules of Court.9 (Emphasis supplied.)

Clearly, the words "exclusively " and "waiving for this purpose any other venue " are restrictive and usedadvisedly to meet the requirements.

Petitioners claim that effecting the exclusive venuestipulation would be tantamount to a prejudgment on

the validity of the loan documents. We note howeverthat in their complaint, petitioners never assailed thevalidity of the mortgage contracts securing their pesoloans. They only assailed the terms and coverage of the mortgage contracts. What petitioners claimed isthat their peso loans had already been paid thus themortgages should be discharged, and that themortgage contracts did not include their dollar loans.In our view, since the issues of whether themortgages should be properly discharged and whetherthese also cover the dollar loans, arose out of the saidloan documents, the stipulation on venue is also

applicable thereto.

Considering all the circumstances in this controversy,we find that the respondent judge did not commitgrave abuse of discretion, as the questioned orderswere evidently in accord with law and jurisprudence.

WHEREFORE, the petition is DISMISSED. Theassailed orders dated May 15, 2003 and September15, 2003 of the Regional Trial Court of Lipa City,Batangas, in Civil Case No. 2002-0555

are AFFIRMED.

Costs against petitioners.

SO ORDERED.

LEONARDO A. QUISUMBING Associate Justice

WE CONCUR





Documents

CIVPRO CASE 1 VENUE-judge wagan list.pdf