[ GR NO.
145022, Sep 23, 2005 ] "This caricature was printed and first published in the City
ARMAND NOCUM v. LUCIO TAN +
DECISION
507 Phil. 620
CHICO-NAZARIO, J.
Assailed in a Petition for Review on Certiorari under Rule
45 of the 1997 Rules of Civil Procedure are the decision[1]
of the Court of Appeals dated 19 April 2000 that affirmed
the order of the Regional Trial Court (RTC) of Makati City,
Branch 56, in Civil Case No. 98-2288, dated 19 April
1999, admitting respondent Lucio Tan's Amended
Complaint for Damages for the alleged malicious and
defamatory imputations against him in two (2) articles of
the Philippine Daily Inquirer, and its Resolution[2] dated
15 September 2000 denying petitioners Armand Nocum
and The Philippine Daily Inquirer, Inc.'s motion for
reconsideration.
The antecedents are summarized by the Court of
Appeals.
On September 27, 1998, Lucio Tan filed a complaint
against reporter Armand Nocum, Capt. Florendo Umali,
ALPAP and Inquirer with the Regional Trial Court of
Makati, docketed as Civil Case No. 98-2288, seeking
moral and exemplary damages for the alleged malicious
and defamatory imputations contained in a news article.
INQUIRER and NOCUM filed their joint answer, dated
October 27, 1998, wherein they alleged that: (1) the
complaint failed to state a cause of action; (2) the
defamatory statements alleged in the complaint were
general conclusions without factual premises; (3) the
questioned news report constituted fair and true report on
the matters of public interest concerning a public figure
and therefore, was privileged in nature; and (4) malice on
their part was negated by the publication in the same
article of plaintiff's or PAL's side of the dispute with the
pilot's union.
ALPAP and UMALI likewise filed their joint answer, dated
October 31, 1998, and alleged therein that: (1) the
complaint stated no cause of action; (2) venue was
improperly laid; and (3) plaintiff Lucio Tan was not a real
party in interest. It appeared that the complaint failed to
state the residence of the complainant at the time of the
alleged commission of the offense and the place where
the libelous article was printed and first published.
Thus, the Regional Trial Court of Makati issued an Order
dated February 10, 1999, dismissing the complaint
without prejudice on the ground of improper venue.
Aggrieved by the dismissal of the complaint, respondent
Lucio Tan filed an Omnibus Motion dated February 24,
1999, seeking reconsideration of the dismissal and
admission of the amended complaint. In par. 2.01.1 of the
amended complaint, it is alleged that "This article was
printed and first published in the City of Makati" (p. 53,
Rollo, CA-G.R. SP No. 55192), and in par. 2.04.1, that
of Makati" (p. 55, id.).
The lower court, after having the case dismissed for
improper venue, admitted the amended complaint and
deemed set aside the previous order of dismissal, supra,
stating, inter alia, that:
"The mistake or deficiency in the original complaint
appears now to have been cured in the Amended
Complaint which can still be properly admitted, pursuant
to Rule 10 of the 1997 Rules of Civil Procedure, inasmuch
as the Order of dismissal is not yet final. Besides, there
is no substantial amendment in the Amended Complaint
which would affect the defendants' defenses and their
Answers. The Amendment is merely formal, contrary to
the contention of the defendants that it is substantial."
Dissatisfied, petitioners, together with defendants Capt.
Florendo Umali and the Airline Pilots Association of the
Philippines, Inc. (ALPAP), appealed the RTC decision to
the Court of Appeals. Two petitions for certiorari were
filed, one filed by petitioners which was docketed as CA-
G.R. SP No. 55192, and the other by defendants Umali
and ALPAP which was docketed as CA-G.R. SP No.
54894. The two petitions were consolidated.
On 19 April 2000, the Court of Appeals rendered its
decision the dispositive portion of which reads:
WHEREFORE, premises considered, the petition is
hereby DENIED DUE COURSE and DISMISSED for lack
of merit. The Order of the court a quo is hereby
AFFIRMED.
The motions for reconsideration filed by petitioners and by
defendants Umali and ALPAP were likewise denied in a
resolution dated 15 September 2000.
Both petitioners and defendants Umali and ALPAP
appealed to this Court. Under consideration is the petition
for review filed by petitioners.
On 11 December 2000, the Court required respondent
Tan to comment on the petition filed by petitioners.[3]
Respondent filed his comment on 22 January 2001[4] to
which petitioners filed a reply on 26 April 2001.[5]
In a Manifestation filed on 19 February 2001, respondent
stated that the petition[6] filed by defendants Umali and
ALPAP has already been denied by the Court in a
resolution dated 17 January 2001.[7]
On 20 August 2003, the Court resolved to give due course
to the petition and required the parties to submit their
respective memoranda within thirty (30) days from
notice.[8] Both petitioners and respondent complied.[9]
Petitioners assigned the following as errors:
THE COURT OF APPEALS ERRED IN RULING (1)
THAT THE LOWER COURT HAD JURISDICTION OVER
THE CASE (ON THE BASIS OF THE ORIGINAL
COMPLAINT) NOTWITHSTANDING THE FACT THAT
THE LOWER COURT HAD EARLIER DISMISSED THE
ORIGINAL COMPLAINT FOR ITS FAILURE TO
CONFER JURISDICTION UPON THJE COURT; AND (2)
1
THAT THE AMENDED COMPLAINT WAS PROPERLY
ALLOWED OR ADMITTED BECAUSE THE LOWER
COURT WAS "NEVER DIVESTED" OF JURISDICTION
OVER THE CASE;
THE COURT OF APPEALS ERRED IN NOT RULING
THAT THE ORIGINAL COMPLAINT OF RESPONDENT
WAS AMENDED PURPOSELY TO CONFER UPON THE
LOWER COURT JURISDICTION OVER THE CASE.[10]
Petitioners state that Article 360 of the Revised Penal
Code vests jurisdiction over all civil and criminal
complaints for libel on the RTC of the place: (1) where the
libelous article was printed and first published; or (2)
where the complainant, if a private person, resides; or (3)
where the complainant, if a public official, holds office.
They argue that since the original complaint only
contained the office address of respondent and not the
latter's actual residence or the place where the allegedly
offending news reports were printed and first published,
the original complaint, by reason of the deficiencies in its
allegations, failed to confer jurisdiction on the lower court.
The question to be resolved is: Did the lower court
acquire jurisdiction over the civil case upon the filing of the
original complaint for damages?
We rule in the affirmative.
It is settled that jurisdiction is conferred by law based on
the facts alleged in the complaint since the latter
comprises a concise statement of the ultimate facts
constituting the plaintiff's causes of action.[11] In the case
at bar, after examining the original complaint, we find that
the RTC acquired jurisdiction over the case when the
case was filed before it. From the allegations thereof,
respondent's cause of action is for damages arising from
libel, the jurisdiction of which is vested with the RTC.
Article 360 of the Revised Penal Code provides that it is
a Court of First Instance[12] that is specifically designated
to try a libel case.[13]
Petitioners are confusing jurisdiction with venue. A former
colleague, the Hon. Florenz D. Regalado,[14]
differentiated jurisdiction and venue as follows: (a)
Jurisdiction is the authority to hear and determine a case;
venue is the place where the case is to be heard or tried;
(b) Jurisdiction is a matter of substantive law; venue, of
procedural law; (c) Jurisdiction establishes a relation
between the court and the subject matter; venue, a
relation between plaintiff and defendant, or petitioner and
respondent; and, (d) Jurisdiction is fixed by law and
cannot be conferred by the parties; venue may be
conferred by the act or agreement of the parties.
In the case at bar, the additional allegations in the
Amended Complaint that the article and the caricature
were printed and first published in the City of Makati
referred only to the question of venue and not jurisdiction.
These additional allegations would neither confer
jurisdiction on the RTC nor would respondent's failure to
include the same in the original complaint divest the lower
court of its jurisdiction over the case. Respondent's failure
to allege these allegations gave the lower court the power,
upon motion by a party, to dismiss the complaint on the
ground that venue was not properly laid.
In Laquian v. Baltazar,[15] this Court construed the term
"jurisdiction" in Article 360 of the Revised Penal Code as
referring to the place where actions for libel shall be filed
or "venue."
In Escribano v. Avila,[16] pursuant to Republic Act No.
4363,[17] we laid down the following rules on the venue
of the criminal and civil actions in written defamations.
General rule: The action may be filed in the Court of First
Instance of the province or city where the libelous article
is printed and first published or where any of the offended
parties actually resides at the time of the commission of
the offense.
If the offended party is a public officer with office in Manila
at the time the offense was committed, the venue is
Manila or the city or province where the libelous article is
printed and first published.
Where an offended party is a public official with office
outside of Manila, the venue is the province or the city
where he held office at the time of the commission of the
offense or where the libelous article is printed and first
published.
If an offended party is a private person, the venue is his
place of residence at the time of the commission of the
offense or where the libelous article is printed and first
published.
The common feature of the foregoing rules is that whether
the offended party is a public officer or a private person,
he has always the option to file the action in the Court of
First Instance of the province or city where the libelous
article is printed or first published.
We further restated[18] the rules on venue in Article 360
as follows:
Whether the offended party is a public official or a private
person, the criminal action may be filed in the Court of
First Instance of the province or city where the libelous
article is printed and first published.
If the offended party is a private individual, the criminal
action may also be filed in the Court of First Instance of
the province where he actually resided at the time of the
commission of the offense.
If the offended party is a public officer whose office is in
Manila at the time of the commission of the offense, the
action may be filed in the Court of First Instance of Manila.
If the offended party is a public officer holding office
outside of Manila, the action may be filed in the Court of
First Instance of the province or city where he held office
at the time of the commission of the offense.
We fully agree with the Court of Appeals when it ruled:
We note that the amended complaint or amendment to
the complaint was not intended to vest jurisdiction to the
2
lower court, where originally it had none. The amendment
was merely to establish the proper venue for the action. WHEREFORE, the foregoing considered, the decision of
It is a well-established rule that venue has nothing to do the Court of Appeals dated 19 April 2000 is AFFIRMED in
with jurisdiction, except in criminal actions. Assuming that toto. No costs.
venue were properly laid in the court where the action was
instituted, that would be procedural, not a jurisdictional SO ORDERED.
impediment. In fact, in civil cases, venue may be waived.

Consequently, by dismissing the case on the ground of

improper venue, the lower court had jurisdiction over the
case. Apparently, the herein petitioners recognized this
jurisdiction by filing their answers to the complaint, albeit,
questioning the propriety of venue, instead of a motion to
dismiss.
...

We so hold that dismissal of the complaint by the lower

court was proper considering that the complaint, indeed,
on its face, failed to allege neither the residence of the
complainant nor the place where the libelous article was
printed and first published. Nevertheless, before the
finality of the dismissal, the same may still be amended
as in fact the amended complaint was admitted, in view of
the court a quo's jurisdiction, of which it was never
divested. In so doing, the court acted properly and
without any grave abuse of discretion.[19]
It is elementary that objections to venue in CIVIL
ACTIONS arising from libel may be waived since they do
not involve a question of jurisdiction. The laying of venue
is procedural rather than substantive, relating as it does
to jurisdiction of the court over the person rather than the
subject matter. Venue relates to trial and not to
jurisdiction.[20] It is a procedural, not a jurisdictional,
matter. It relates to the place of trial or geographical
location in which an action or proceeding should be
brought and not to the jurisdiction of the court.[21] It is
meant to provide convenience to the parties, rather than
restrict their access to the courts as it relates to the place
of trial.[22] In contrast, in criminal actions, it is
fundamental that venue is jurisdictional it being an
essential element of jurisdiction.[23]

Petitioners' argument that the lower court has no

jurisdiction over the case because respondent failed to
allege the place where the libelous articles were printed
and first published would have been tenable if the case
filed were a criminal case. The failure of the original
complaint to contain such information would be fatal
because this fact involves the issue of venue which goes
into the territorial jurisdiction of the court. This is not to be
because the case before us is a civil action where venue
is not jurisdictional.

The cases[24] cited by petitioners are not applicable here.

These cases involve amendments on complaints that
confer jurisdiction on courts over which they originally had
none. This is not true in the case at bar. As discussed
above, the RTC acquired jurisdiction over the subject
matter upon the filing of the original complaint. It did not
lose jurisdiction over the same when it dismissed it on the
ground of improper venue. The amendment merely laid
down the proper venue of the case.

3
G.R. No. L-40428 December 17, 1975
FRANCISCO T. KOH, petitioner,
vs.
COURT OF APPEALS, HON. MANUEL V. ROMILLO,
JR., District Judge, Court of First Instance of Ilocos
Norte, Branch I, and JOSE P. COLOMA, respondents.
Koh Law Offices for petitioner.
Ferdinand A. Valentin for respondents.
ESGUERRA, J.:
Petition for certiorari with writ of preliminary injunction to
review and reverse the decision of the Court of Appeals
(Eighth Division) in CA-G.R. No. SP-03322, entitled
"Francisco T. Koh, petitioner vs. Jose P. Coloma and Hon.
Manuel V. Romillo, Jr., Judge of First Instance of Ilocos
Norte, Branch I, respondents". The appellate Court found
"no grave abuse of discretion on the part of the
respondent judge in not dismissing the complaint on the
ground of improper venue"; dismissed the petition for
injunction and lifted the writ of preliminary injunction it
previously issued against the respondents.
The undisputed facts contained in petitioner's brief as
adopted in respondents' brief are:
On February 21, 1974, private respondent (Jose Coloma)
filed a Complaint for damages against the herein
petitioner in the Court of First Instance of Ilocos Norte,
Branch I, the same being docketed as Civil Case No.
5011-1 (Annex A of Amended Petition). On April 8, 1974,
petitioner filed a Motion to Dismiss the said Complaint on
the grounds that the same fails to state a sufficient cause
of action and that venue has been improperly laid. (Annex
B of Amended Petition) On May 8, 1974, petitioner filed a
Manifestation before the lower court apprising it that the
copy of the Motion To Dismiss sent to private respondent
(counsel for private respondent did not specify any
address in the Complaint other than his alleged address
in San Nicolas, Ilocos Norte) was returned unserved by
the Bureau of Post for the reason that he was unknown in
the said address. (San Nicolas, Ilocos Norte) Annexes "C"
and "D" of Amended Petition.
On May 28, 1974, petitioner's counsel received a Notice
from the lower court setting the hearing of the Motion To
Dismiss for June 4, 1974. In response to this notice,
petitioner on May 31, 1974 filed a Manifestation informing
the lower court that he, was submitting the motion without
further arguments. Three (3) days before the scheduled
hearing of the Motion to Dismiss, specifically on June 11,
1974, counsel for petitioner received a copy of private
respondents' opposition to his Motion To Dismiss. Finding
that the private respondents pleading required comment,
on June 18, 1974, petitioner herein filed a Reply thereto
(Annex G of Amended Petition).
On July 9, 1974, petitioner, thru counsel, received a copy
of the Order of the lower court denying the Motion To
Dismiss (Annex A of Amended Petition. However from the
registry return card of the corresponding pleadings, it was
apparent that the Order denying our Motion To Dismiss
dated June 25, 1974 of the lower court aforementioned
did not consider the facts and exhibits reflected in
petitioner's Reply To Opposition To Motion To Dismiss
inasmuch as the same was received by the lower court on
June 27, 1974 (2 days later) after the Order had been
issued (the petitionees pleadings in the said case were all
filed with the court thru registered mail special delivery
due to the distance involved). For this reason, and within
the period authorized by law, on July 11, 1974 petitioner
filed a Motion For Reconsideration of the said Order
reiterating therein the matter stated in his Reply to
Opposition which was not considered by the lower court
(Annex I of Amended Petition). This Motion for
Reconsideration was opposed by private respondent.
In an Order dated July 19, 1974, the lower court issued
an Order denying the Motion for Reconsideration filed by
the petitioner.
From the Orders of the lower court dated June 25, 1974
and July 19, 1974, the petitioner herein instituted certiorari
proceedings with preliminary injunction before the Court
of Appeal the same being docketed as CA-G.R. No. L-
03322. For failure of the petitioner to attach thereto
certified true copies of the Orders appealed from by
reason of their unavailability, the Court of Appeals
dismissed the said petition. However, on September 5,
1974, petitioner herein filed a Motion for Reconsideration
of the resolution of the Court of Appeals and on
September 24, 1974, the said Motion was favorably acted
upon and the petition was given due course. On October
9, 1974, the Court of Appeals issued a writ of preliminary
injunction in the said case enjoining the Court of First
Instance of Ilocos Norte from further proceeding thereon.
After the issues on the peticion were joined by the filing of
the ANSWER for the respondents dated October 15,
1974, the case was set for oral arguments after which the
parties were required to submit, simultaneously, their
respective memoranda. Only petitioner herein filed his
Memorandum in support of his petition. Private
respondents did not submit their memorandum.
In a resolution dated March 19, 1975, the Court of
Appeals dismiss the petition for certiorari and dissolved
the writ of preliminary injunction.
Hence this petition for review and reversal of said
resolution of March 19, 1975.
The only issue raised before Us is whether or not
respondent Appellate Court erred and thus committed
grave abuse of discretion in dismissing the petition for
certiorari filed by petitioner before it; in holding that private
respondent Jose P. Coloma is a resident of San Nicolas,
Ilocos Norte, and thereby holding that venue of the action
before the Court of First Instance of Ilocos Norte was
4
proper, and in finding that the complaint of private
respondent Coloma in the trial court recites a sufficient
cause of action.
Respondent Appellate Court predicted its decision on the
finding that despite the petitioner's receipt of a copy of the
opposition to the petitioner's motion to dismiss filed by
private respondent Coloma in the trial court, petitioner
failed to appear during the healing of his notion to dismiss
the complaint on June 14, 1974; that "the parties were
given the opportunity to adduce proofs and advance
arguments to support their respective sides and on the
basis of whatever were adduced during the hearing, it
rendered a ruling in the exercise of its jurisdiction; "that"
the lower court in its ruling cited the evidence it relied upon
and doctrines which supported and justified its findings
and conclusions;" that "considering that there is no
showing of whimsical and capricious exercise of
discretion, it could be said that if ever there was an error
committed by the respondent judge, it was an error of
judgment in the exercise of his discretion which is
correctable by appeal;" and that it concurred with the
lower court's order denying the motion to dismiss which is
anchored on the argument that the question of residence
of a person is one of intent. In the instant case, the trial
Court concluded that San Nicolas, Ilocos Norte, is the
residencia of plaintiff as contemplated in paragraph (b)
Section 2 of Rule 4.
Under ordinary circumstances the foregoing reasoning
and findings of the trial court and the respondent
Appellate Court could be considered highly tenable and
justifiably defensible, but We simply cannot ignore
petitioner's allegation in his motion to dismiss filed in the
trial court that "this clearly is a nuisance action brought
before the Honorable Court to require the defendant
(petitioner) to travel and appear in Laoag, Ilocos Norte" as
well as the background of the present case and compels
Us to delve deeper into the possible motives of private
respondent in choosing as situs for his claim for damages
against petitioner the rather relatively far Court of First
Instance of Ilocos Norte.
It is clear that Civil Case No. 5011 (for Damages) (Annex
"A" to this Petition) filed by private respondent Coloma in
the Court of First Instance of Ilocos Norte, wherein
Coloma is asking for damages to the tune of P173,000.00
from petitioner for alleged "malicious, baseless, and
unfounded criminal complaint" filed by petitioner against
Coloma, arose from the following alleged incidents, to wit:
That sometime on May 21, 1970, the defendant
(petitioner) Francisco T. Koh filed before the Municipal
Court of Mandaluyong, Rizal, a complaint of Forcible
Entry and Detainer against the plaintiff (private
respondent Coloma) for the possession of a house and
lot located at 480, Barangka Drive, Mandaluyong, Rizal,
on which plaintiff (Coloma) and his family were all
residing,
That to avert the ejectment of plaintiff (Coloma) and his
family from the aforecited house, plaintiff (Coloma) and
defendant (petitioner) entered into a compromise
settlement in court whereby plaintiff (Coloma) will pay to
defendant (petitioner) the total amount of P3,125.00,
That to insure the payment of the aforecited obligation
plaintiff (Coloma) issued to defendant (petitioner) a Manila
Banking Corporation check No. 17010812 post-dated
February 27, 1971;
That in post-dating the aforecited check, plaintiff (Coloma)
explicitly explained to defendant (petitioner) that there is
not sufficient funds at the time in the Bank to cover the
amount the necessity to post- date it with the expectation
that Plaintiff (Coloma) will deposit the necessary amount
on or before the due date;
That for certain beyond the control of plaintiff (Coloma),
he failed to deposit the required amount on the date due,
so that defendant (petitioner) Francisco T. Koh forcibly the
plaintiff and his family from their aforecited residence the
following day, February 28, 1971;
That defendant (petitioner), still not contented in having
successfully evicted plaintiff (Coloma) mo his family from
their residence, defendant (petitioner) filed a criminal
complaint against the plaintiff (Coloma) before the Fiscal's
Office at Pasig, Rizal, over the Manila Banking
Corporation check in question, which complaint was later
filed before the Court of First Instance of Rizal;
That defendant personally applied and actively
participated in the criminal case as a private prosecutor in
collaboration with the prosecuting fiscal;
That the Court of First Instance of Rizal, upon motion of
plaintiff (Coloma) dismissed said criminal complaint in its
order dated Sept. 26, 1972.
Private respondent Coloma convinced the trial court,
although he admitted that he is presently residing at No.
57 K-6th Street, Kamias, Quezon City, that he could be
considered a legal resident domiciled at San Nicolas,
Ilocos Norte, because he was born and he grew up there;
that his parents and his brothers and sisters still live there;
that their ancestral home and lands are situated there;
that he studied in Ilocos Norte up to his graduation in the
Ilocos Norte High School; that if ever he came to Manila,
it was for the purpose of pursuing a college carrer; that he
goes home time and again to oversee their properties'
harvests as he is the oldest; that if he is staying in Quezon
City now, it is because his wife is a government employee
as staff nurse in the Philippine General Hospital; and after
her retirement, he and his family intends to return to his
hometown of San Nicolas, Ilocos Norte, and establish his
permanent home there.
On the other hand, petitioner contends that on May 8,
1974, he filed a Manifestation before the lower court
apprising it that the copy of the motion to dismiss was sent
to private respondent Coloma (counsel for Coloma did not
specify any address in the complaint) in his alleged
address of San Nicolas, Ilocos Norte, but the same was
5
returned unserved by the Bureau of Posts for the reason
that he (Coloma) was unknown in the said address of San
Nicolas, Ilocos Norte (Annex "C" and "D" of Amended
Petition); that in pleadings under oath filed in several
judicial proceedings involving petitioner and private
respondent, the latter asserted his actual and present
residence as either 486 Barangka Drive, Mandaluyong,
Rizal or No. 57, K-6th Kamias, Quezon City, Rizal, to wit:
1. Jose P. Coloma vs. Francisco T. Koh,
Administrative Case No. 1060, Supreme Court;
2. Jose P. Coloma vs. Francisco T. Koh, Civil Case
No. 14067, C.F.I. Rizal, Branch XI;
3. Jose P. Coloma, et al. vs. Francisco T. Koh, Civil
Case No. 15450, C.F.I. Rizal, Branch VI;
4. Jose P. Coloma, et al. vs. Hon. Cesar C. Cruz, et
al., C.F.I. Rizal, Civil Case No. 14687;
5. Jose P. Coloma, et al., vs. Hon. Presiding Justice
Salvador V. Esguerra, et al., Supreme Court, G.R. No. L-
35945;
6. Jose P. Coloma vs. Hon. Cesar C. Cruz, et al.,
C.F.I. Rizal, Civil Case No. 14140;
7. Jose P. Coloma, et al. vs Hon. V.M. Ruiz, et al.,
C.A.-G.R. No. SP-00329;
8. Francisco T. Koh vs. Hon. Guardson Lood, et al., C.A.-
G.R. No.
00785-R;
9. Jose P. Coloma vs. Hon. Juan Enriquez, et al., G.R.
No. L-36425;
that both private respondent Coloma and his wife Crisanta
A. Coloma are registered voters in the Greater Manila
Area, it appearing in Jose P. Coloma's Voter's I.D. No. A-
4941010 and Mrs. Coloma's Voter's I.D. No. A-4941009
that they are residents of No. 486 Barangka Drive,
Mandaluyong, Rizal; that the complaint filed against
petitioner for damages in the C. F. 1. of Ilocos Norte, was
prepared in Manila, signed by a Manila lawyer, verified in
Manila by private respondent who showed his Residence
Certificate issued in Manila (R.C.A-324643, issued on
March 8, 1973, in Manila); that the filing of the complaint
for damages before the C.F.I. of Ilocos Norte was "purely
for the purpose of harrassment and that venue of the
action was improperly laid".
It is fundamental in the law governing venue of actions
(Rule 4 of the Rules of Court) that the situs for bringing
real and personal civil actions are fixed by the rules to
attain the greatest convenience possible to the parties
litigants by taking into consideration the maximum
accessibility to them of the courts of justice. It is likewise
undeniable that the term domicile is not exactly
synonymous in legal contemplation with the term
residence, for it is a established principle in Conflict of
Laws that domicile refers to the relatively more permanent
abode of a person while residence applies to a temporary
stay of a person in a given place. In fact this distinction is
very well emphasized in those cases where the
Domiciliary Theory must necessarily supplant the
Nationality Theory in cases involving stateless persons.
This Court held in the case of Uytengsu vs. Republic, 50
O.G. 4781, October, 1954, reversing its previous stand in
Larena v. Ferrer, 61 Phil. 36 and Nuval v. Guray 52 Phil.
645, that —
There is a difference between domicile and residence.
Residence is used to indicate a place of abode, whether
permanent or temporary; domicile, denotes a fixed
permanent residence to which when absent, one has the
in ten petition of returning. A man may have a residence
in one place and a domicile in another. Residence is not
domicile, but domicile is residence coupled with the
intention to remain for an unlimited time. A man can have
but one domicile for one and the same purpose at any
time, but he may have numerous places of residence. His
place of residence generally is his place of domicile, but
is not by any means, necessarily so since no length of
residence without intention of remaining will constitute
domicile. (Emphasis supplied)
We note that the law on venue in Courts of First Instance
(Section 2, of Rule 4, Rules of Court) in referring to the
parties utilizes the words "resides or may be found," and
not "is domiciled," thus:
Sec. 2(b) Personal actions — All other 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. (Emphasis supplied)
Applying the foregoing observation to the present case,
We are fully convinced that private respondent Coloma's
protestations of domicile in San Nicolas, Ilocos, Norte,
based on his manifested intention to return there after the
retirement of his wife from government service to justify
his bringing of an action for damages against petitioner in
the C.F.I. of Ilocos Norte, is entirely of no moment since
what is of paramount importance is where he actually
resided or where he may be found at the time he brought
the action, to comply substantially with the requirements
of Sec. 2 (b) of Rule 4, Rules of Court, on venue of
personal actions. The admission of private respondent
Coloma that when he brought the action for damages
against petitioner in the C.F.I. of Ilocos Norte, he was
"residing at No. 57 K-6th Street, Kamias, Quezon City" is
to Our mind absolutely fatal to all his contentions of good
faith in bringing that action in a distant place and at the
same time quite revealing of his motive for doing so, when
We take into consideration the basis of the action for
damages against petitioner which is the criminal
prosecution for estafa against private respondent Coloma
arising from a bank check he used to pay petitioner and
was dishonored for lack of funds; respondent Coloma's
proven acts in having the civil complaint for damages
6
prepared in Manila by a Manila lawyer, verified in Manila
and filed in Ilocos Norte C.F.I. and the numerous cases
between petitioner and respondent Coloma in this Court,
the Court of Appeals and the Rizal Courts of First Instance
wherein respondent Coloma swore under oath that he is
a resident of 486 Barangka Drive, Mandaluyong, Rizal
and No. 57, K-6th Kamuning, Quezon City.
An examination of the cause of action contained in the
civil complaint for damages filed by respondent Coloma
against petitioner in Civil Case No. 5011 of the Court of
First Instance of Ilocos Norte raises lingering doubts in
Our mind as to the existence of a valid and justified cause
of action, for it prays for P173,000.00 worth of alleged
damages (actual, moral exemplary and attorney's fees)
based on an alleged "malicious, baseless, and unfounded
complaint" filed by petitioner against respondent Coloma,
when it could be seen from the civil complaint itself that
the basis of the action for damages is the criminal
prosecution of respondent Coloma for the crime of estafa
in the C.F.I. of Rizal because of the complaint of petitioner
arising from the post-dated check admittedly issued by
respondent Coloma which was dishonored for lack of
funds. It can readily be seen from the record that it was
the Fiscal of Rizal who filed the criminal complaint for
estafa against respondent Coloma after preliminary
investigation when the fiscal was convinced of the
existence of a prima facie case against Coloma. While it
is true that petitioner was the offended party because the
dishonored check was issued in his favor and that he
acted as private prosecutor when the case was filed in the
C.F.I. of Rizal because there was no separate civil action
filed against Coloma arising from the same cause of
alleged estafa, it certainly cannot be said that as offended
party in the criminal case and by initiating the same
criminal case against respondent Coloma he (petitioner)
was the one who filed the "malicious, baseless and
unfounded complaint" against private respondent
Coloma. To establish the filing of the criminal case against
Coloma by the Fiscal of Rizal as "malicious" is highly
problematical because the Fiscal of Rizal conducted a
preliminary investigation on the same and if he in the
exercise of his quasi-judicial duty believed there was a
prima facie case against respondent Coloma that made
him file the case, his act cannot be called "malicious". We
note here that the petitioner was not the one who filed the
criminal case against the respondent Coloma, the former
being merely the offended party. The criminal complaint
against respondent Coloma could hardly be termed
"baseless and unfounded" because he himself admitted
that he issued a post-dated check that was dishonored. If
the criminal complaint against him was dismiss by the
C.F.I. of Rizal upon his own motion and perchance by
some reason of technicality or by reason of reasonable
doubt, respondent Coloma is by no means absolved from
the civil liability of refunding the amount written in the
dishonored check to the petitioner. The logical conclusion
that could be derived from all the foregoing is that the
criminal complaint filed against respondent Coloma for
Estafa by the Fiscal of Rizal is by no means "malicious",
"baseless", and "unfounded" and, therefore, the action for
damages is without any basis and that respondent
Coloma's civil complaint for damages filed in the C.F.I. of
Ilocos Norte was without sufficient cause of action.
We observe in the examination of the record of this case,
that private respondent Coloma can go to the extent of
resorting to other means while this case pending in the
respondent Court of Appeals to find a solution to another
aspect of the raging controversy between petitioner and
private respondent. As a result of respondent Coloma's
filing of a complaint for damages (Civil Case No. 5011)
against petitioner in the C.F.I. of Ilocos Norte, wherein
respondent Coloma alleged that "he is a resident of the
Municipality of San Nicolas, Province of Ilocos Norte,"
Petitioner filed in the Fiscal's Office of Manila a case of
perjury against respondent Coloma and the Investigating
Fiscal in his resolution believed in the existence of a prima
facie case against him. Respondent Coloma was able to
get a directive from the Secretary of Justice, dated Sept.
3, 1974, reversing the findings of the Investigating Fiscal
and instructing the City Fiscal of Manila to have the case
"dismissed, immediately upon receipt hereof". At any rate,
We are convinced that the misunderstanding between
petitioner and private respondent Coloma has gone to
such an extent that it would not be surprising for
respondent Coloma to be motivated by vengeance when
he filed his action for damages against the petitioner in
the C.F.I. of Ilocos Norte in order to get even with and
impose all kinds of inconveniences on the petitioner.
Otherwise,' it would have been easier and very much
more convenient for both parties if the civil action for
damages against petitioner had been filed either in the
C.F.I. of Quezon City or Pasig, Rizal, because both
petitioner and private respondent are admittedly residing
within the greater Manila area.
WHEREFORE, the decision of the respondent Appellate
Court is hereby reversed; the Orders dated June 25,
1974, and July 19, 1974, in Civil Case No. 5011-1 of the
Court of the First Instance of Ilocos Norte are set aside;
the complaint in the aforementioned case is hereby
dismissed for improper venue and lack of sufficient cause
of action, and the respondent judge of the Court of First
Instance of Ilocos Norte or his successor in office is
restrained from further proceeding with the hearing of said
case.
With costs against private respondent Coloma.
SO ORDERED.
7
G.R. No. L-40502 November 29, 1976
VIRGINIA GARCIA FULE, and HONORABLE SEVERO
A. MALVAR, Presiding Judge, Court of First Instance
of Laguna, Branch Vl, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, *
PRECIOSA B. GARCIA and AGUSTINA B. GARCIA,
respondents.
G.R. No. L-42670 November 29, 1976
VIRGINIA GARCIA FULE, petitioner,
vs.
HONORABLE ERNANI C. PAÑO, Presiding Judge of
Court of First Instance of Rizal, Quezon City, Branch
XVIII, and PRECIOSA B. GARCIA, respondents.
Francisco Carreon for petitioners.
Augusto G. Gatmaytan for private respondents.
MARTIN, J.:
These two interrelated cases bring to Us the question of
what the word "resides" in Section 1, Rule 73 of the
Revised Rules Of Court, referring to the situs of the
settlement of the estate of deceased persons, means.
Additionally, the rule in the appointment of a special
administrator is sought to be reviewed.
On May 2, 1973, Virginia G. Fule filed with the Court of
First Instance of Laguna, at Calamba, presided over by
Judge Severo A. Malvar, a petition for letters of
administration, docketed as Sp. Proc. No. 27-C, alleging,
inter alia, "that on April 26, 1973, Amado G. Garcia, a
property owner of Calamba, Laguna, died intestate in the
City of Manila, leaving real estate and personal properties
in Calamba, Laguna, and in other places, within the
jurisdiction of the Honorable Court." At the same time, she
moved
ex parte for her appointment as special administratrix over
the estate. On even date, May 2, 1973, Judge Malvar
granted the motion.
A motion for reconsideration was filed by Preciosa B.
Garcia on May 8, 1973, contending that the order
appointing Virginia G. Fule as special administratrix was
issued without jurisdiction, since no notice of the petition
for letters of administration has been served upon all
persons interested in the estate; there has been no delay
or cause for delay in the proceedings for the appointment
of a regular administrator as the surviving spouse of
Amado G. Garcia, she should be preferred in the
appointment of a special administratrix; and, Virginia G.
Fule is a debtor of the estate of Amado G. Garcia.
Preciosa B. Garcia, therefore, prayed that she be
appointed special administratrix of the estate, in lieu of
Virginia G. Fule, and as regular administratrix after due
hearing.
While this reconsideration motion was pending resolution
before the Court, Preciosa B. Garcia filed on May 29,
1973 a motion to remove Virginia G. Fule as special
administratrix alleging, besides the jurisdictional ground
raised in the motion for reconsideration of May 8, 1973
that her appointment was obtained through erroneous,
misleading and/or incomplete misrepresentations; that
Virginia G. Fule has adverse interest against the estate;
and that she has shown herself unsuitable as
administratrix and as officer of the court.
In the meantime, the notice of hearing of the petition for
letters of administration filed by Virginia G. Fule with the
Court of First Instance of Calamba, Laguna, was
published on May 17, 24, and 31, 1973, in the Bayanihan,
a weekly publication of general circulation in Southern
Luzon.
On June 6, 1973, Preciosa B. Garcia received a
"Supplemental Petition for the Appointment of Regular
Administrator ' filed by Virginia G. Fule. This supplemental
petition modified the original petition in four aspects: (1)
the allegation that during the lifetime of the deceased
Amado G. Garcia, he was elected as Constitutional
Delegate for the First District of Laguna and his last place
of residence was at Calamba, Laguna; (2) the deletion of
the names of Preciosa B. Garcia and Agustina Garcia as
legal heirs of Amado G. Garcia; (3) the allegation that
Carolina Carpio, who was simply listed as heir in the
original petition, is the surviving spouse of Amado G.
Garcia and that she has expressly renounced her
preferential right to the administration of the estate in
favor of Virginia G. Fule; and (4) that Virginia G. Fule be
appointed as the regular administratrix. The admission of
this supplemental petition was opposed by Preciosa B.
Garcia for the reason, among others, that it attempts to
confer jurisdiction on the Court of First Instance of
Laguna, of which the court was not possessed at the
beginning because the original petition was deficient.
On July 19, 1973, Preciosa B. Garcia filed an opposition
to the original and supplemental petitions for letters of
administration, raising the issues of jurisdiction, venue,
lack of interest of Virginia G. Fule in the estate of Amado
G. Garcia, and disqualification of Virginia G Fule as
special administratrix.
An omnibus motion was filed by Virginia G. Fule on
August 20, 1973, praying for authority to take possession
of properties of the decedent allegedly in the hands of
third persons as well as to secure cash advances from the
Calamba Sugar Planters Cooperative Marketing
Association, Inc. Preciosa B. Garcia opposed the motion,
calling attention to the limitation made by Judge Malvar
on the power of the special administratrix, viz., "to making
an inventory of the personal and real properties making
up the state of the deceased."
However, by July 2, 1973, Judge Malvar and already
issued an order, received by Preciosa B. Garcia only on
July 31, 1973, denying the motion of Preciosa B. Garcia
to reconsider the order of May 2, 1973, appointing Virginia
8
G. Fule as special administratrix, and admitting the
supplementation petition of May 18,1973.
On August 31, 1973, Preciosa B. Garcia moved to dismiss
the petition, because (1) jurisdiction over the petition or
over the parties in interest has not been acquired by the
court; (2) venue was improperly laid; and (3) Virginia G.
Fule is not a party in interest as she is not entitled to inherit
from the deceased Amado G. Garcia.
On September 28, 1973, Preciosa B. Garcia filed a
supplemental motion to substitute Virginia G. Fule as
special administratrix, reasoning that the said Virginia G.
Fule admitted before before the court that she is a full-
blooded sister of Pablo G. Alcalde, an illegitimate son of
Andrea Alcalde, with whom the deceased Amado G.
Garcia has no relation.
Three motions were filed by Preciosa B. Garcia on
November 14, 1973, one, to enjoin the special
administratrix from taking possession of properties in the
hands of third persons which have not been determined
as belonging to Amado G. Garcia; another, to remove the
special administratrix for acting outside her authority and
against the interest of the estate; and still another, filed in
behalf of the minor Agustina B. Garcia, to dismiss the
petition for want of cause of action, jurisdiction, and
improper venue.
On November 28, 1973, Judge Malvar resolved the
pending omnibus motion of Virgina G. Fule and the
motion to dismiss filed by Preciosa B. Garcia. Resolving
the motion to dismiss, Judge Malvar ruled that the powers
of the special administratrix are those provided for in
Section 2, Rule 80 of the Rules of Court, 1 subject only to
the previous qualification made by the court that the
administration of the properties subject of the marketing
agreement with the Canlubang Sugar Planters
Cooperative Marketing Association should remain with
the latter; and that the special administratrix had already
been authorized in a previous order of August 20, 1973 to
take custody and possession of all papers and certificates
of title and personal effects of the decedent with the
Canlubang Sugar Planters Cooperative Marketing
Association, Inc. Ramon Mercado, of the Canlubang
Sugar Planters Cooperative Marketing Association, Inc.,
was ordered to deliver to Preciosa B. Garcia all
certificates of title in her name without any qualifying
words like "married to Amado Garcia" does not appear.
Regarding the motion to dismiss, Judge Malvar ruled that
the issue of jurisdiction had already been resolved in the
order of July 2, 1973, denying Preciosa B. Garcia's motion
to reconsider the appointment of Virginia G. Fule and
admitting the supplemental petition, the failure of Virginia
G. Fule to allege in her original petition for letters of
administration in the place of residence of the decedent
at the time of his death was cured. Judge Malvar further
held that Preciosa B. Garcia had submitted to the
jurisdiction of the court and had waived her objections
thereto by praying to be appointed as special and regular
administratrix of the estate.
An omnibus motion was filed by Preciosa B. Garcia on
December 27, 1973 to clarify or reconsider the foregoing
order of Judge Malvar, in view of previous court order
limiting the authority of the special administratrix to the
making of an inventory. Preciosa B. Garcia also asked for
the resolution of her motion to dismiss the petitions for
lack of cause of action, and also that filed in behalf of
Agustina B. Garcia. Resolution of her motions to
substitute and remove the special administratrix was
likewise prayed for.
On December 19, 1973, Judge Malvar issued two
separate orders, the first, denying Preciosa B. Garcia's
motions to substitute and remove the special
administratrix, and the second, holding that the power
allowed the special administratrix enables her to conduct
and submit an inventory of the assets of the estate.
On January 7, 1974, Preciosa B. Garcia moved for
reconsideration of the foregoing orders of November 28,
1973 and December 19, 1973, insofar as they sustained
or failed to rule on the issues raised by her: (a) legal
standing (cause of action) of Virginia G. Fule; (b) venue;
(c) jurisdiction; (d) appointment, qualification and removal
of special administratrix; and (e) delivery to the special
administratrix of checks and papers and effects in the
office of the Calamba Sugar Planters Cooperative
Marketing Association, Inc.
On March 27, 1973, Judge Malvar issued the first
questioned order denying Preciosa B. Garcia's motion for
reconsideration of January 7, 1974. On July 19, 1974,
Judge Malvar issued the other three questioned orders:
one, directing Ramon Mercado, of the Calamba Sugar
Planters Cooperative Marketing Association, Inc., to
furnish Virginia G. Fule, as special administratrix, copy of
the statement of accounts and final liquidation of sugar
pool, as well as to deliver to her the corresponding
amount due the estate; another, directing Preciosa B.
Garcia to deliver to Virginia G. Fule two motor vehicles
presumably belonging to the estate; and another,
directing Ramon Mercado to deliver to the court all
certificates of title in his possession in the name of
Preciosa B. Garcia, whether qualified with the word
"single" or "married to Amado Garcia."
During the hearing of the various incidents of this case
(Sp. Proc. 27-C) before Judge Malvar, 2 Virginia G. Fule
presented the death certificate of Amado G. Garcia
showing that his residence at the time of his death was
Quezon City. On her part, Preciosa B. Garcia presented
the residence certificate of the decedent for 1973 showing
that three months before his death his residence was in
Quezon City. Virginia G. Fule also testified that Amado G.
Garcia was residing in Calamba, Laguna at the time of his
death, and that he was a delegate to the 1971
Constitutional Convention for the first district of Laguna.
On July 26, 1974, Preciosa B. Garcia and Agustina B.
Garcia commenced a special action for certiorari and/or
prohibition and preliminary injunction before the Court of
Appeals, docketed as CA-G.R. No. 03221-SP. primarily
9
to annul the proceedings before Judge Malvar in Sp. Proc.
No. 27-C of the Court of First Instance of Laguna, or, in
the alternative, to vacate the questioned four orders of
that court, viz., one dated March 27, 1974, denying their
motion for reconsideration of the order denying their
motion to dismiss the criminal and supplemental petitions
on the issue, among others, of jurisdiction, and the three
others, all dated July 19, 1974, directing the delivery of
certain properties to the special administratrix, Virginia G.
Fule, and to the court.
On January 30, 1975, the Court of Appeals rendered
judgment annulling the proceedings before Judge Severo
A. Malvar in Sp. Proc. 27-C of the Court of First Instance
of Calamba, Laguna, for lack of jurisdiction.
Denied of their motion for reconsideration on March 31,
1975, Virginia G. Fule forthwith elevated the matter to Us
on appeal by certiorari. The case was docketed as G.R.
No. L-40502.
However, even before Virginia G. Fule could receive the
decision of the Court of Appeals, Preciosa B. Garcia had
already filed on February 1, 1975 a petition for letters of
administration before the Court of First Instance of Rizal,
Quezon City Branch, docketed as Sp. Proc. No. Q-19738,
over the same intestate estate of Amado G. Garcia. On
February 10, 1975, Preciosa B. Garcia urgently moved for
her appointment as special administratrix of the estate.
Judge Vicente G. Ericta granted the motion and appointed
Preciosa B. Garcia as special administratrix upon a bond
of P30,000.00. Preciosa B. Garcia qualified and assumed
the office.
For the first time, on February 14, 1975, Preciosa B.
Garcia informed Judge Ericta of the pendency of Sp.
Proc. No. 27-C before Judge Malvar of the Court of First
Instance of Laguna, and the annulment of the
proceedings therein by the Court of Appeals on January
30, 1975. She manifested, however, her willingness to
withdraw Sp. Proc. Q-19738 should the decision of the
Court of Appeals annulling the proceedings before the
Court of First Instance of Laguna in Sp. Proc. No. 27-C
have not yet become final, it being the subject of a motion
for reconsideration.
On March 10, 1973, Judge Ericta ordered the suspension
of the proceedings before his court until Preciosa B.
Garcia inform the court of the final outcome of the case
pending before the Court of Appeals. This
notwithstanding, Preciosa B. Garcia filed on December
11, 1975, an "Urgent Petition for Authority to Pay Estate
Obligations."
On December 13, 1975, Virginia G. Fule filed a "Special
Appearance to Question Venue and Jurisdiction"
reiterating the grounds stated in the previous special
appearance of March 3, 1975, and calling attention that
the decision of the Court of Appeals and its resolution
denying the motion for reconsideration had been
appealed to this Court; that the parties had already filed
their respective briefs; and that the case is still pending
before the Court.
On December 17, 1975, Judge Ernani Cruz Pano, who
succeeded Judge Ericta, issued an order granting
Preciosa B. Garcia's "Urgent Petition for Authority to Pay
Estate Obligations" in that the payments were for the
benefit of the estate and that there hangs a cloud of doubt
on the validity of the proceedings in Sp. Proc. No. 27-C of
the Court of First Instance of Laguna.
A compliance of this Order was filed by Preciosa B.
Garcia on January 12,1976.
On February 4,1974, VIRGINIA G. FULE instituted G.R.
No. L-42670, a petition for certiorari with temporary
restraining order, to annul the proceedings in Sp. Proc.
No. Q-19738 and to restrain Judge Ernani Cruz Paño
from further acting in the case. A restraining order was
issued on February 9, 1976.
We dismiss the appeal in G.R. No. L-40502 and the
petition for certiorari in G.R. No. L-42670 for the reasons
and considerations hereinafter stated.
1. Section 1, Rule 73 of the Revised Rules of Court
provides: "If the decedent is an inhabitant of the
Philippines at the time of his death, whether a citizen or
an alien, his will shall be proved, or letters of
administration granted, and his estate settled, in the Court
of First Instance in the province in which he resides at the
time of his death, and if he is an inhabitant of a foreign
country, the Court of First Instance of any province in
which he had estate. The court first taking cognizance of
the settlement of the estate of a decedent, shall exercise
jurisdiction to the exclusion of all other courts. The
jurisdiction assumed by a court, so far as it depends on
the place of residence of the decedent, or of the location
of his estate, shall not be contested in a suit or
proceeding, except in an appeal from that court, in the
original case, or when the want of jurisdiction appears on
the record." With particular regard to letters of
administration, Section 2, Rule 79 of the Revised Rules of
Court demands that the petition therefor should
affirmatively show the existence of jurisdiction to make the
appointment sought, and should allege all the necessary
facts, such as death, the name and last residence of the
decedent, the existence, and situs if need be, of assets,
intestacy, where this is relied upon, and the right of the
person who seeks administration, as next of kin, creditor,
or otherwise, to be appointed. The fact of death of the
intestate and his last residence within the country are
foundation facts upon which all subsequent proceedings
in the administration of the estate rest, and that if the
intestate was not an inhabitant of the state at the time of
his death, and left no assets in the state, no jurisdiction is
conferred on the court to grant letters of administration. 3
The aforequoted Section 1, Rule 73 (formerly Rule 75,
Section 1), specifically the clause "so far as it depends on
the place of residence of the decedent, or of the location
of the estate," is in reality a matter of venue, as the caption
10
of the Rule indicates: "Settlement of Estate of Deceased
Persons. Venue and Processes. 4 It could not have been
intended to define the jurisdiction over the subject matter,
because such legal provision is contained in a law of
procedure dealing merely with procedural matters.
Procedure is one thing; jurisdiction over the subject matter
is another. The power or authority of the court over the
subject matter "existed and was fixed before procedure in
a given cause began." That power or authority is not
altered or changed by procedure, which simply directs the
manner in which the power or authority shall be fully and
justly exercised. There are cases though that if the power
is not exercised conformably with the provisions of the
procedural law, purely, the court attempting to exercise it
loses the power to exercise it legally. However, this does
not amount to a loss of jurisdiction over the subject matter.
Rather, it means that the court may thereby lose
jurisdiction over the person or that the judgment may
thereby be rendered defective for lack of something
essential to sustain it. The appearance of this provision in
the procedural law at once raises a strong presumption
that it has nothing to do with the jurisdiction of the court
over the subject matter. In plain words, it is just a matter
of method, of convenience to the parties. 5
The Judiciary Act of 1948, as amended, confers upon
Courts of First Instance jurisdiction over all probate cases
independently of the place of residence of the deceased.
Because of the existence of numerous Courts of First
Instance in the country, the Rules of Court, however,
purposedly fixes the venue or the place where each case
shall be brought. A fortiori, the place of residence of the
deceased in settlement of estates, probate of will, and
issuance of letters of administration does not constitute
an element of jurisdiction over the subject matter. It is
merely constitutive of venue. And it is upon this reason
that the Revised Rules of Court properly considers the
province where the estate of a deceased person shall be
settled as "venue." 6
2. But, the far-ranging question is this: What does
the term "resides" mean? Does it refer to the actual
residence or domicile of the decedent at the time of his
death? We lay down the doctrinal rule that the term
"resides" connotes ex vi termini "actual residence" as
distinguished from "legal residence or domicile." This term
"resides," like, the terms "residing" and "residence," is
elastic and should be interpreted in the light of the object
or purpose of the statute or rule in which it is employed. 7
In the application of venue statutes and rules — Section
1, Rule 73 of the Revised Rules of Court is of such nature
— residence rather than domicile is the significant factor.
Even where the statute uses the word "domicile" still it is
construed as meaning residence and not domicile in the
technical sense. Some cases make a distinction between
the terms "residence" and "domicile" but as generally
used in statutes fixing venue, the terms are synonymous,
and convey the same meaning as the term "inhabitant." 8
In other words, "resides" should be viewed or understood
in its popular sense, meaning, the personal, actual or
physical habitation of a person, actual residence or place
of abode. It signifies physical presence in a place and
actual stay thereat. In this popular sense, the term means
merely residence, that is, personal residence, not legal
residence or domicile. 9 Residence simply requires bodily
presence as an inhabitant in a given place, while domicile
requires bodily presence in that place and also an
intention to make it one's domicile. 10 No particular length
of time of residence is required though; however, the
residence must be more than temporary. 11
3. Divergent claims are maintained by Virginia G.
Fule and Preciosa B. Garcia on the residence of the
deceased Amado G. Garcia at the time of his death. In
her original petition for letters of administration before the
Court of First Instance of Calamba, Laguna, Virginia G.
Fule measely stated "(t)hat on April 26,1973, Amado G.
Garcia, a property owner of Calamba, Laguna, died
intestate in the City of Manila, leaving real estate and
personal properties in Calamba, Laguna, and in other
places within the jurisdiction of this Honorable Court."
Preciosa B. Garcia assailed the petition for failure to
satisfy the jurisdictional requirement and improper laying
of venue. For her, the quoted statement avers no domicile
or residence of the deceased Amado G. Garcia. To say
that as "property owner of Calamba, Laguna," he also
resides in Calamba, Laguna, is, according to her, non
sequitur. On the contrary, Preciosa B. Garcia claims that,
as appearing in his death certificate presented by Virginia
G. Fule herself before the Calamba court and in other
papers, the last residence of Amado G. Garcia was at 11
Carmel Avenue, Carmel Subdivision, Quezon City.
Parenthetically, in her amended petition, Virginia G. Fule
categorically alleged that Amado G. Garcia's "last place
of residence was at Calamba, Laguna."
On this issue, We rule that the last place of residence of
the deceased Amado G. Garcia was at 11 Carmel
Avenue, Carmel Subdivision, Quezon City, and not at
Calamba, Laguna. A death certificate is admissible to
prove the residence of the decedent at the time of his
death. 12 As it is, the death certificate of Amado G.
Garcia, which was presented in evidence by Virginia G.
Fule herself and also by Preciosa B. Garcia, shows that
his last place of residence was at 11 Carmel Avenue,
Carmel Subdivision, Quezon City. Aside from this, the
deceased's residence certificate for 1973 obtained three
months before his death; the Marketing Agreement and
Power of Attorney dated November 12, 1971 turning over
the administration of his two parcels of sugar land to the
Calamba Sugar Planters Cooperative Marketing
Association, Inc.; the Deed of Donation dated January 8,
1973, transferring part of his interest in certain parcels of
land in Calamba, Laguna to Agustina B. Garcia; and
certificates of titles covering parcels of land in Calamba,
Laguna, show in bold documents that Amado G. Garcia's
last place of residence was at Quezon City. Withal, the
conclusion becomes imperative that the venue for Virginia
C. Fule's petition for letters of administration was
improperly laid in the Court of First Instance of Calamba,
Laguna. Nevertheless, the long-settled rule is that
objection to improper venue is subject to waiver. Section
4, Rule 4 of the Revised Rules of Court states: "When
improper venue is not objected to in a motion to dismiss,
11
it is deemed waived." In the case before Us the Court of
Appeals had reason to hold that in asking to substitute
Virginia G. Fule as special administratrix, Preciosa B.
Garcia did not necessarily waive her objection to the
jurisdiction or venue assumed by the Court of First
Instance of Calamba, Laguna, but availed of a mere
practical resort to alternative remedy to assert her rights
as surviving spouse, while insisting on the enforcement of
the Rule fixing the proper venue of the proceedings at the
last residence of the decedent.
4. Preciosa B. Garcia's challenge to Virginia G. Fule's
appointment as special administratrix is another issue of
perplexity. Preciosa B. Garcia claims preference to the
appointment as surviving spouse. Section 1 of Rule 80
provides that "(w)hen there is delay in granting letters
testamentary or of administration by any cause including
an appeal from the allowance or disallowance of a will, the
court may appoint a special administrator to take
possession and charge of the estate of the deceased until
the questions causing the delay are decided and
executors or administrators appointed. 13 Formerly, the
appointment of a special administrator was only proper
when the allowance or disallowance of a will is under
appeal. The new Rules, however, broadened the basis for
appointment and such appointment is now allowed when
there is delay in granting letters testamentary or
administration by any cause e.g., parties cannot agree
among themselves. 14 Nevertheless, the discretion to
appoint a special administrator or not lies in the probate
court. 15 That, however, is no authority for the judge to
become partial, or to make his personal likes and dislikes
prevail over, or his passions to rule, his judgment.
Exercise of that discretion must be based on reason,
equity, justice and legal principle. There is no reason why
the same fundamental and legal principles governing the
choice of a regular administrator should not be taken into
account in the appointment of a special administrator. 16
Nothing is wrong for the judge to consider the order of
preference in the appointment of a regular administrator
in appointing a special administrator. After all, the
consideration that overrides all others in this respect is the
beneficial interest of the appointee in the estate of the
decedent. 17 Under the law, the widow would have the
right of succession over a portion of the exclusive property
of the decedent, besides her share in the conjugal
partnership. For such reason, she would have as such, if
not more, interest in administering the entire estate
correctly than any other next of kin. The good or bad
administration of a property may affect rather the fruits
than the naked ownership of a property. 18
Virginia G. Fule, however, disputes the status of Preciosa
B. Garcia as the widow of the late Amado G. Garcia. With
equal force, Preciosa B. Garcia maintains that Virginia G.
Fule has no relation whatsoever with Amado G. Garcia,
or that, she is a mere illegitimate sister of the latter,
incapable of any successional rights. 19 On this point, We
rule that Preciosa B. Garcia is prima facie entitled to the
appointment of special administratrix. It needs be
emphasized that in the issuance of such appointment,
which is but temporary and subsists only until a regular
administrator is appointed, 20 the appointing court does
not determine who are entitled to share in the estate of
the decedent but who is entitled to the administration. The
issue of heirship is one to be determined in the decree of
distribution, and the findings of the court on the
relationship of the parties in the administration as to be
the basis of distribution. 21 The preference of Preciosa B.
Garcia is with sufficient reason. In a Donation Inter Vivos
executed by the deceased Amado G. Garcia on January
8, 1973 in favor of Agustina B. Garcia, he indicated
therein that he is married to Preciosa B. Garcia. 22 In his
certificate of candidacy for the office of Delegate to the
Constitutional Convention for the First District of Laguna
filed on September 1, 1970, he wrote therein the name of
Preciosa B. Banaticla as his spouse. 23 Faced with these
documents and the presumption that a man and a woman
deporting themselves as husband and wife have entered
into a lawful contract of marriage, Preciosa B. Garcia can
be reasonably believed to be the surviving spouse of the
late Amado G. Garcia. Semper praesumitur pro
matrimonio. 24
5. Under these circumstances and the doctrine laid down
in Cuenco vs. Court of Appeals, 25 this Court under its
supervisory authority over all inferior courts may properly
decree that venue in the instant case was properly
assumed by and transferred to Quezon City and that it is
in the interest of justice and avoidance of needless delay
that the Quezon City court's exercise of jurisdiction over
the settlement of the estate of the deceased Amado G.
Garcia and the appointment of special administratrix over
the latter's estate be approved and authorized and the
Court of First Instance of Laguna be disauthorized from
continuing with the case and instead be required to
transfer all the records thereof to the Court of First
Instance of Quezon City for the continuation of the
proceedings.
6. Accordingly, the Order of Judge Ernani Cruz
Pano of December 17, 1975, granting the "Urgent Petition
for Authority to Pay Estate Obligations" filed by Preciosa
B. Garcia in Sp. Proc. No. Q-19738, subject matter of
G.R. No. L-42670, and ordering the Canlubang Sugar
Estate to deliver to her as special administratrix the sum
of P48,874.70 for payment of the sum of estate
obligations is hereby upheld.
IN VIEW OF THE FOREGOING, the petitions of petitioner
Virginia Garcia Fule in G.R. No. L-40502 and in G.R. No.
L42670 are hereby denied, with costs against petitioner.
SO ORDERED.
12
G.R. No. L-29791 January 10, 1978
FRANCISCO S. HERNANDEZ and JOSEFA U.
ATIENZA, plaintiffs-appellees,
vs.
RURAL BANK OF LUCENA, INC., CENTRAL BANK OF
THE PHILIPPINES, in its capacity as Liquidator of
Rural Bank of Lucena, and JOSE S. MARTINEZ in his
capacity as Receiver of Rural Bank of Lucena,
defendants-appellants.
Ciceron B. Angeles & Fabian S. Lombos for appellants.
Tomas Yumol and Felipe Dimaculangan for appellees.
AQUINO, J.:
This case is about the propriety of a separate action to
compel a distress rural bank. which is under Judicial
liquidation, to accept a check in payment of a mortgage
debt. The fact are as follows:
On March 21, 1961 the spouses Francisco S. Hernandez
and Josefa U. Atienza obtained from the Rural Bank of
Lucena, Inc. a loan of P6,000 which was payable on
March 21, 1962. The loan was cured by a mortgage on
their two lots situated in Cubao, Quezon City with a total
area of 600 square meters. The interest for one year was
paid in advance.
About three months after that loan was obtained, the
Lucena Bank became a distress bank. In a letter dated
June 6, 1961 the Acting Governor of the Central Bank
apprised the stockholders of the Lucena bank that the
Monetary Board in its Resolution No. 928, which was
approved on June 13, 1961 allegedly after hearing the
Lucena bank. found that its officers, directors and
employees had committed certain anomalies or had
resorted to unsound and unsafe banking practices which
were prejudicial to the government, its depositors and
creditors.
The Monetary Board advised the stockholders to
reorganize the Lucena bank by electing a new board of
directors and directed that bank (a) not to grant new loans
or renewals; (b) not to accept deposits from new
depositors; (c) to service only the existing deposit
accounts and (d) not to issue drafts or make any
disbursements without the prior approval of Central Bank
examiners.
The Monetary Board gave the warning that, if its directives
were not obeyed, the Central Bank. would take over the
management of the Lucena bank.
The Central Bank Governor informed the Lucena bank
that the chief examiner of the department of rural banks
would oversee the operations of the Lucena bank.
That letter of the Central Bank Governor was construed
as a directive to the Lucena bank to suspend operations.
The Manila times in its issue of June 21, 1961 carried a
news story with the heading "Bank told to suspend
operations". The story was accompanied by a picture of
depositors who jammed the lobby of the bank trying to
withdraw their money.
Instead of bowing to the will of the Monetary Board, the
Lucena bank and its board of directors filed with the Court
of First Instance of Manila a complaint dated June 21,
1961 seeking to restrain the implementation of Resolution
No. 928 (Civil Case No. 47345).
Before the expiration of the one-year term of the loan, or
on August 22, 1961, Hernandez went to the Lucena bank
and offered to pay the loan by means of a check for
P6,000 dated August 8, 1961 which was drawn against
the bank by a depositor, the San Pablo Colleges, and
which was payable to Fernandez As the bank's executive
vice president was not available, the payment was not
consummated.
At the time that the check was issued, the San Pablo
Colleges, had a deposit in the Lucena bank amounting to
P11,890.16 (27 tsn April 25, 1966). Instead of withdrawing
P6,000 from that deposit, the San Pablo Colleges chose
to issue a check for that amount w Hernandez. It is not
clear whether in August, 1961 the San Pablo Colleges
could make a withdrawal from its deposit in the Lucena
bank.
On the following day, August 23, Hernandez sent to the
bank by registered mail a photostat of the check and a
letter inquiring whether the bank would honor the check
and when he should go personally to the bank for that
purpose. That letter was received by the bank on August
29.
On August 30, the executive vice-president wrote to
Hernandez and informed him that the check could not be
honored for the time being because of adverse events
that had disrupted the bank's operations. What the vice-
president meant was that by reason of the letter of the
Central Bank Governor dated June 16. 1961 the
operations of the Lucena bank were suspended (6 tsn
August 15, 1966).
The vice-president explained that because there was a
run the bank its assets were exhausted, and so the check
sent by Hernandez, which check was drawn against the
Lucena bank, could not be accepted (16, 21-24 tsn
August 15, 1966).
The vice-president said that when Hernandez presented
the check, the Lucena bank was no longer in a position to
honor withdrawals and that had Hernandez paid cash, his
payment would have been accepted. To honor the check
would have been tantamount to allowing a depositor (San
Pablo Colleges) to make a withdrawal but the Lucena
bank could not entertain withdrawals without the consent
of the Central Bank examiners (26-28 tsn). Payment by
check was a disbursement (31 tsn).
13
Apparently, the vice-president did not take the trouble of
asking the Central Bank examiners whether the payment
by check made by Hernandez could be accepted.
Hernandez himself who should have known that the bank
was a distressed bank which had suspended operations
and which was under the supervision of Central Bank
examiners, did not bother to take up his problem with the
said examiners.
Hernandez, in his letter of October 18, 1961, again asked
the bank when he could deliver the check. The executive
vice-president, in his reply of October 24, told Hernandez
that the bank could not yet honor the check because it
had not resumed its banking operations; that it was
awaiting the outcome of a case filed by the bank against
the Central Bank; that it might reopen in January, 1962,
and that, anyway, the loan would not be due until March
21, 1962.
Hernandez sent another letter dated February 1, 1962.
Finally, he enclosed the original check (duly endorsed)
with his letter to the bank dated March 7, 1962, which was
sent by registered mail and special delivery. That letter of
March 7, together with the check, was returned to
Hernandez because the bank's manager was allegedly in
Manila. Undeterred, Hernandez again mailed the check to
the bank on April 25, with the request that his mortgage
be cancelled.
In the meantime, the Monetary Board had decided to
liquidate the Lucena Bank. The Governor of the Central
Bank in a letter dated February 8, 1962 enjoined the
Lucena bank from transacting business and advised it to
turn over its assets, documents and records to the chief
bank examiner. The bank building was sealed.
The following notice was posted at the entrance of the
building:
This bank is temporarily closed pending final decision of
the courts as to its status. Payments of loans would be
accepted; meanwhile, no payments of withdrawals
against deposits can be made. Please transact business
with the Central Bank's representatives only.
To head off the liquidation, the Lucena Bank filed with the
Court of First Instance of Lucena City a complaint dated
February 12, 1962, praying that the Central Bank be
enjoined from liquidating the said bank. On February 14,
the court issued an ex parte preliminary injunction which
it dissolved ten days later (civil Case No. 6471; Rural
Bank of Lucena, Inc. vs. Arca, L-21146, September 20,
1965, 15 SCRA 66).
On February 14, 1962, the Manila court rendered a
decision in Civil Case No. 47345, restraining the
enforcement of the Monetary Board resolution, which
required the Lucena bank to undertake a reorganization
and to curtail its operations. The Central Bank appealed.
(This Court reversed that decision and dismissed the
complaint for injunction. Rural Bank of Lucena, Inc. vs.
Central Bank, L-19621, November 29, 1969, 30 SCRA
628).
To implement the resolution of the Monetary Board for the
Liquidation of the Lucena bank, the Central Bank,
pursuant to section 29 of its charter and on the
assumption that the Lucena bank was insolvent, filed with
the Court of first Instance of Manila a petition dated March
27, 1962 for assistance and supervision in the liquidation
of the Lucena bank (Civil Case No. 50019).
Acting on that petition, the Court of First Instance of
Manila issued an order dated march 28, 1963, directing
the Lucena bank to turn over its assets to the Central
Bank's authorized representative.
The Monetary Board in its Resolution No. 426 dated April
2, 1963 designated the Superintendent of Banks or his
duly authorized representative to take charge of the
assets of the Lucena bank.
The Board in its resolution of November 27, 1963 ordered
the Superintendent of Banks to convert the assets of the
Lucena bank to money. The Lucena bank, by means of
certiorari sought to annul the liquidation proceeding . This
Court denied its petition (Rural Bank of Lucena, Inc. vs.
Arca, L-21146, September 20, 1965, 15 SCRA 66).
Among the accounts receivable of the Lucena bank
inventoried by the Central Bank's representative was the
account of Hernandez- In a letter dated October 29, 1963
Hernandez informed the Central Bank that he had sent to
the Lucena bank on April 25, 1962 the chock for P6,000.
He again requested that his mortgage be cancelled.
The Associate Superintendent of Banks in his answer
dated December 9, 1963 returned the chock to
Hernandez and informed him that, according to the
Lucena bank's executive vice-president, the check could
not be applied to the payment of Hernandez' loan
because the bank was already closed when he received
the check. Moreover, the chock was drawn against the
current deposits of the San Pablo Colleges in the Lucena
bank which was in the process of liquidation. Hernandez
was advised to settle his account by paying cash or by
means of a chock drawn against a bank other than the
Lucena bank.
Disregarding that suggestion, Hernandez announced to
the Associate Superintendent of Banks in his letter of
December 16, 1963 that he was going to deposit the said
check in the court of First Instance of Lipa City on or
before December 26, 1963.
Instead of filing a consignation complaint, Hernandez
enclosed the check with his letter dated January 2, 1964
to the clerk of court of the Court of First Instance at Lipa
City. That letter was received in court on January 6, 1964.
Hernandez wrote a letter dated January 11, 1964
informing the Associate Superintendent of Banks of the
judicial deposit of the check. Copies of that letter were
furnished the Lucena bank and the San Pablo Colleges.
14

It was only on October 12, 1964 when Hernandez and his
wife filed an action in the Court of First Instance at Lipa
City to compel the Rural Bank of Lucena, Inc., the Central
Bank as liquidator, and Jose S. Martinez as receiver, to
accept the check and to execute the cancellation of the
real estate mortgage. The Hernandez spouses also asked
for moral damages in the amount of P10.000 and
attorney's fees of P3,000 (Civil Case No. 1615).
On October 20, 1964 the Central Bank filed a motion to
dismiss. It contended that there was improper venue
because, as the action allegedly involved title to real
property, it should have been instituted in Quezon City
where the encumbered lots are situated. It Mother
contended that since the Lucena bank is under liquidation
and is in the hands of a receiver, its properties and assets
are in custodia legis and may, therefore, be reached only
by motion or petition in Civil Case No. 50019 of the Court
of First Instance of Manila. The motion was denied.
To complete the facts, it should be stated that the counsel
for the Lucena bank on January 30, 1967 offered to
compromise the case by stipulating that the Central Bank
would apply the check in question to the mortgage debt of
Hernandez if the balance of the deposit of the San Pablo
Colleges would be enough to cover the amount of the
check of P6,000 and that, by virtue of that compromise,
the complaint and counterclaim would be dismissed.
That conditional and equivocal compromise offer fizzled
out, because the lawyers of Hernandez and the Central
Bank did not assent to it.
After trial, the lower court rendered an amended decision
dated October 31, 1967, ordering the Lucena Bank or the
Central Bank, as liquidator, to accept the honor the check,
to cancel the mortage, and to pay Hernandez spouses
(P25,000 as moral damages (not P10,000 as prayed for
the complaint) plus P1,000 as attorney's fees.
The Lucena bank, the Central Bank and its employee, the
receiver, appealed to this Court.
The Central Bank contends that the trial court erred (1) in
not holding that the venue was improperly laid; (2) in not
holding that it had no jurisdiction because the Hernandez
spouses should have ventilated their claim in the
liquidation proceeding pending in the Court of First
Instance of Manila. instead of filing a separate action in
the Court of First Instance at Lipa City; (3) in not holding
that there was no valid consignation, (4) in awarding
moral damages and attorney's fees, and (5) in ordering
execution pending appeal in spite of the tact that the
assets of the Lucena bank are in custodia legis or in the
custody of the liquidation court and the receiver appointed
by it.
On the issue of venue, defendants-appellants contend
that the action of the Hernandez spouses to compel them
to honor the check in question and to cancel the mortgage
on their two lots is a real action affecting title to real
property which should have been filed in the Court of First
Instance of Rizal at Quezon City where the mortgaged
lots are situated.
Section 2(a), Rule 4 of the Rules of Court provides that
"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".
Note that the rule mentions an action for foreclosure of a
real estate mortgage but does not mention an action for
the cancellation of a real mortgage. In the instant case,
the action is primarily to compel the mortgagee to accept
payment of the mortgage debt and to release the
mortgage.
That action, which is not expressive included in the
enumeration found in section 2(a) of Rule 4, does not
involve the title to the mortgage lots. It is a personal action
and not a real action. The mortgagee has, not foreclosure
the mortgage, Plaintiffs' title is not in question. They are
in possession of the mortgaged lots.
Hence, the venue of plaintiffs' personal action is the place
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 (Sec. 2[b], Rule 4).
The plaintiffs in their brief confound a real action with an
action in rem and a personal action with an action in
personam. They argue that their action is not an action in
rem and, therefore, it could be brought in a place other
than the place where the mortgaged lots are located.
A real action is not the same as an action in rem and a
personal action is not the same as an action in personam.
In a personal action, the plaintiff seeks the recovery of
personal property, the enforcement of a contract or the
recovery of damages. In a real action, the plaintiff seeks
the recovery of real property. or, as indicated in section
2(a) of Rule 4, a real action Is an action affecting tithe to
real property or for the recovery of possession. or for
partition or condemnation of, or foreclosure of a mortage
on, real property.
An action in personam is an action against a person on
the basis of his personal liability, while an action in rem is
an action against the thing itself, instead of against the
person (1 C. J. S. 943-4), Hence, a real action may at the
same time be an action in personam and not necessary
an action in rem.
In this case, the plaintiffs alleged in their complaint that
they were residents of San Juan, Batangas, which in their
brief (They characterize as their legal residence and
which appears to be their domicile of origin. On the other
hand, it is indicated in the promissory note and mortgage
signed by them and in the Torrens title covering the
mortgaged lots that their residence is at 11 Chicago
15
Street, Cubao, Quezon City, which apparently is the place
where the said lots are located, The plaintiffs did not
testify during the trial. So, they have no testimony in the
records as to their actual residence.
We hold that the trial court should have dismissed the
action because the venue thereof was improperly laid in
Batangas. The term "resides" in section 2[b] of Rule 4
refers to the place of actual residence or domicile.)
San Juan, Batangas might be the place where the
plaintiffs have their domicile or legal residence but there
is no question that 11 Chicago Street, Cubao, Quezon
City is their place of abode or the place where they
actually reside. So, the action in this case, which is a
personal action to compel the defendants to honor the
check in question and to Cancel the mortgage, should
have been filed in Quezon City if the plaintiffs intended to
use their residence as the basis for their choice of venue.
Thus, it was held that venue was improperly laid in a case
where plaintiff Jose Coloma filed a complaint in the Court
of First Instance of Ilocos Norte, because he was
allegedly a resident of San Nicolas, Ilocos Norte, where
he was born and reared, but his actual residence was at
57 K-6th Kamias, 486 Barangka Drive, Mandaluyong,
Rizal (Koh vs. Court of Appeals, L-40428, December 17,
1975; 70 SCRA 298).
In Gracia Fule vs. Court of Appeals, L-404502, November
29, 1976, 74 SCRA 189, it was held that an intestate
proceedings 9 for the settlement of the estate of the
deceased Amado G. Garcia was improperly filed in the
Court of First Instance of Laguna. The deceased was
allegedly domiciled in Calamba, Laguna. He was a
delegate of the first district of Laguna to the constitutional
convention. However, at the time of his death he was
actually a resident of Quezon City. Hence. the proper
venue of the intestate proceeding was Quezon City.
In the foregoing discussion. it is assumed that the plaintiff
could bring a separate action to compel the defendants
honor the check in question in spite of the fact that the
Lucena bank is under liquidation in Civil Case No. 50019
of the Court of First Instance of Manila.
The Central Bank contends that such a separate action
was not maintainable and that the Hernandez spouse
should have ventilated in the liquidation proceeding their
claim that they had already paid their mortgage debt by
means of the check issued by the San Pablo Colleges and
that their mortgage should be cancelled.
The Central Bank points out that the redemption action
the Hernandez spouses would ultimately affect the funds
and property of the Lucena Bank. Hence, the liquidation
court is the competent tribunal to pass upon the issue as
to whether the Hernandez spouses could validly pay their
mortage debt by means of the check of the San Pablo
Colleges.
On the other hand, the Hernandez spouses argue that
their action in the Court of First Instance at Lipa City
"deals with a sum of money which is still not in the
possession, custody, and administration" of the Central
Bank and the receiver; that their action had "nothing to do
with the funds and property" held by the receiver; that the
Lucena bank had not lost its juridical personality after it
was placed under liquidation, and that the issue as to
whether the Lucena bank should have accepted the
chock in question was "not in anyway connected with the
causes and grounds under which the liquidation
proceedings were instituted nor with the administration of
the property and funds under liquidation"
Those contentions of the Hernandez spouse are
untenable. The trial court did not rule squarely on the
Jurisdictional issue raised by the Central Bank and the
receiver
We hold that the liquidation court or the Manila court has
exclusive jurisdiction to entertain the claim of the
Hernandez spouses that their mortgage obligation had
already been extinguished by means of their tender of the
check issued by the San Pablo Colleges.
At the time the Hernandez spouses filed in 1964 their
consignation complaint the Lucena bank was already
under liquidation. The Manila court in its order of March
28,1963 had ordered the officers of the Lucena bank to
turn over to the Central Bank or to the receiver, the
Superintendent of Banks, all of its assets, properties and
papers. Among the assets turned over to the receiver was
the outstanding or unpaid account of the Hernandez
spouses which appears in the inventory as: "393.
Hernandez, Francisco St., 11 Chicago St., Cubao, Q.C.
TCT-34262 — 3/21/61, P6,000.00" (Exh. 4-CB).
And among the papers or obligations turned over to the
receiver was Ledger No. 056 evidencing the deposit of the
San Pablo Colleges in the Lucena bank in the sum of
P11,890.16. against which the check for P6,000 was
drawn. It was that check which the Hernandez spouses
had issued to pay the mortgage debt to the Lucena bank.
Under the section 29 of the Central Bank Act, republic Act
No. 265, when the Monetary Board, upon information
submitted by the Superintendent of the Bank, finds a bank
to be insolvent, it shall be forbid the bank to do the
business and it shall take care of its assets according to
law.
In that case, if the Monetary Board finds out that the
insolvent bank cannot resume business with safety to its
creditors, it shall through the Solicitor General, file a
petition in the Court of First Instance, praying for the
assistance and supervision of the court in the liquidation
of the bank's affairs. Thereafter, the Superintendent of
Banks, upon order of the Monetary Board and under the
supervision of the court, shall convert to money the bank's
assets. "Subido es que uno de los deberes primordiales
de un depositario es hacerse cargo immediatemente de
16
todol el activo y pasivo de un banco" (Luy Lam & Co. vs.
Mercantile Bank of China, 71 Phil. 573, 576).
The fact the insolvent bank is forbidden to do business,
that its assets are turn over to the Superintendent of
Banks, as a receiver, for conversation into cash, and that
its liquidation is undertaken with judicial intervention
means that, as far as lawful and practicable, all claims
against the insolvent bank and that the liquidation court
should be filed in the liquidation proceeding.
The judicial liquidation is intended to prevent multiplicity
of actions against the insolvent bank. The lawmaking
body contemplated that for convenience only one court, if
possible, should pass upon the claims against the
insolvent bank and that the liquidation court should assist
the Superintended of Banks and control his operations.
In the course of the liquidation, contentious cases might
arise wherein a full-dress hearing would be required and
legal issues would have to be resolved. Hence, it would
be necessary in justice to all concerned that a Court of
First Instance should assist and supervise the liquidation
and should act umpire and arbitrator in the allowance and
disallowance of claims.
The judicial liquidation is a pragmatic arrangement
designed to establish due process and orderliness in the
liquidation of the bank, to obviate the proliferation of
litigations and to avoid injustice and arbitrariness.
Thus, in the liquidation before the war of the insolvement
Mercantile Bank of china, various claims were adjudicated
by the liquidation Court, which was the court of First
Instance of Manila, pursuant to section 1639 of the
Revised Administrative Code, from which section 29 pf
the Central Bank Law was taken. (See In re Liquidation of
Mercantile Bank of China: Tan Tiong Tick vs. American
Apothecaries Co., 65 Phil. 414; Pacific Coast Biscuit Co.
vs Chinese Grocers Association, 65 Phil. 375; Fletcher
American National Bank vs. Ang cheng Lian, 65 Phil. 385;
Pacific Commercial Co. vs. American Apothecaries Co.,
65 Phil. 429; Gopoco Grocery vs. Pacific Coast Biscuit
co., 65 Phil. 443; Chinese Grocers' Association vs.
American Apothecaries Co., 65 Phil. 395; and Yu Ping
Kun, 65 Phil. 410).
There is a ruling that, although the taking over of a bank
by state officials for liquidation does not dissolve the bank,
a court has no jurisdiction (after such takeover) to
entertain an action or to render a judgment against the
bank (9 C.J.S. 852, note 38 citing Bushnell vs. F.W.
Woolworth co., 241 Pac. 738. 112 Okl. 297; State vs.
Quigley, 220 Pac. 918, 93 Okl. 296).
It has been held that an insolvent bank, which was under
the control of the finance commissioner for liquidation,
was without power or capacity to sue or be sued,
prosecute or defend or otherwise function except through
the finance commissioner or liquidator (Wauer vs. Bank
of Pendleton, 65 S.W. 2nd 167 228 Mo. App. 1150).
Suits brought against a bank after the issuance of a notice
that the finance commissioner has taken possession of
the bank should be dismissed or are barred for want of
jurisdiction (Rouse vs. Bank of Darlington, 41 S.W. 2nd
159; Bartlett vs. Mc Callister, 289 S.W. 814, 316 Mo. 129).
This Court has already held that after a savings bank was
declared insolvent by the Monetary Board, a depositor
could not bring a separate action against it for the
recovery of his time deposit. His remedy is to intervene in
the liquidation proceeding (Central Bank of the Philippines
vs. Morfe, L-38427, March 12, 1975, 63 SCRA 144). *
In the instant case, the Hernandez spouses, after having
become cognizant of the fact that the Lucena bank was
under liquidation, chose to file a separate action against
that bank for redemption and damages. Although
residents of Cubao, Quezon City, where the mortgage lots
are located and which was the address used by them in
dealing with the Lucena bank, they chose Lipa City as the
venue of their action.
They ignored the liquidation court. Evidently, one of their
objectives was to obtain against the Lucena bank a
judgment for moral damages which they surmised would
not be granted by the Manila liquidation court. They
attained more than what they had originally desired
because, instead of the moral damages of P10,00
indicated in their complaint, the trial court generously
awarded them P25,000.
Not only that. The trial court granted execution pending
appeal although it was aware that eventually the claim of
the Hernandez spouses would have to be submitted to the
liquidation court for allowance. The sheriff could not
enforce the writ of execution because the Lucena bank
was under liquidation (p. 92, Rollo). Hence, the
Hernandez spouses had to file a claim with the liquidation
court. That court has been pending since September,
1968.
Thus, much time, money and effort would have been
saved if at the outset the Hernandez spouse filed their
claim in the liquidation court.
WHEREFORE, the trial court judgment is reversed and
set aside. The case is dismissed without prejudice to the
right of the Hernandez spouses to take up with the
liquidation court the settlement of their mortgage
obligation. Costs against the plaintiffs-appellees.
SO ORDERED.
17
G.R. No. 80380 September 28, 1988
CARLOS BELL RAYMOND and AGUSTIN ALBA,
petitioners,
vs.
HON. COURT OF APPEALS, HON. RICARDO M.
ILARDE, etc., and SANTIAGO BITERA, respondents.
Lenin R. Victoriano for petitioners.
Cirilo T. Ganzon for respondents.
NARVASA, J.:
The petition for review on certiorari filed with this Court by
the petitioners Raymond and Alba seeks reversal of the
decision of the Court of Appeals which dismissed for lack
of merit their petition for certiorari and prohibition; that
petition, in turn, had assailed the refusal of the respondent
Judge to dismiss the action filed against petitioners by
private respondent Santiago Bitera on the ground of
improper venue. By Resolution dated February 1, 1988,
this Court required the respondents to comment on the
petition within a ten-day period which expired on February
29,1988. Upon motions timely filed by private respondent,
said period was extended by a total of thirty (30) days.
This notwithstanding, no word has been received from
private respondent on whom is reposed, by established
rule, the function of sustaining the challenged action of the
respondent Courts. Be this as it may, since the relevant
facts are not and cannot be disputed, and only one legal
issue is raised, the Court has resolved to give due course
to the petition and decide that issue on the merits.
A complaint for damages was filed with the Regional Trial
Court of Iloilo by Santiago Bitera against Carlos Bell
Raymond and Agustin Alba. The latter moved to dismiss
the action on the ground of improper venue. They argued
that although Bitera's complaint gives his address as 240-
C Jalandoni Street, Iloilo City, he is, and for many years
has been actually residing at the so-called UPSUMCO
Compound, Bais City, he being the officer-in-charge of the
business firm known as UPSUMCO, which has offices at
Bais and Manjuyod Negros Oriental, and that, indeed, his
affidavit, appended to his complaint, contains his
affirmation that lie is "a resident of the UPSUMCO
Compound, City of Bais and shows (in the jurat) that his
residence certificate had been issued at Manjuyod
Negros Oriental. The Trial Court however denied their
motion to dismiss. They then filed a special civil action of
certiorari and prohibition with the Court of Appeals. But,
as above stated, they fared no better in that court. It
dismissed their petition, saying:
Why Bitera chose to file this action for damages in Iloilo
City instead of in Dumaguete City is beyond this Court,
even as the pleadings show that plaintiff is actually
residing at UPSUMCO, the defendants are both residents
of UPSUMCO, the cause of damages arose out of a
controversy in the UPSUMCO and because of plaintiffs
and defendant's positions as officer and board members
of Upsumco.
While it would seem the height of inequity were We to
allow plaintiff to bring suit in Iloilo City instead of in
Dumaguete City on the basis of his allegation that his
permanent place of abode is in Iloilo City and he only
temporarily resides in Bais City, Dumaguete City, it is,
however, the plaintiff who is given the right to elect where
to bring his action. As plaintiff chose his legal domicile or
residence, We cannot compel him to bring suit in the
place where he has his temporary residence. 1
According to Section 2, Rule 4 of the Rules of Court,
personal actions, such as Bitera's, "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
term, where a person "resides," or "residence," may be
understood as synonymous with domicile: as referring to
a person's "permanent home, the place to which,
whenever absent for business or pleasure, one intends to
return," and it has been held that "a man can have but one
domicile at a time." 2 The term may also be taken in
another sense, and it is this which is germane to the
determination of venue, as meaning a person's actual
residence, different and distinct from his permanent one,
or domicile, where he was born and reared, and e.g.,
where he usually casts his vote during elections. Thus this
Court has held that venue was improperly laid in a case
where the complaint was filed in the Court of First
Instance of Ilocos Norte by the plaintiff who was born and
reared in that province, but whose actual residence at
time of suit was admittedly at Quezon
City. 3 In another case, where the plaintiffs instituted a
personal action4 in the Court of First Instance at Lipa City,
claiming that their domicile was San Juan, Batangas, the
Court declared the venue to be erroneously selected in
view of the fact that the plaintiffs' place of abode, where
they actually reside, was at Quezon City. 5
Garcia Fule v. Court of Appeals 6 definitively explained
and settled the meaning to be put to the words "reside" or
"residence" as used in the venue provisions:
2. But, the far-ranging question is this: What does
the term 'resides' mean? Does it refer to the actual
residence or domicile of the decedent at the time of his
death? We lay down the doctrinal rule that the term
"resides" connotes ex vi termini "actual residence" as
distinguished from legal residence or domicile this term
"resides," like the terms "residing" and "residence," is
elastic and should be interpreted in the light of the object
or purpose of the statute or rule in which it is employed.
In the application of venue statutes and rules-Section 1,
Rule 73 of the Revised Rules of Court is of such nature-
residence rather than domicile is the significant factor.
Even where the statute uses the word domicile still it is
construed as meaning residence and not "domicile" in the
technical sense. Some cases make a distinction between
the terms "residence" and "domicile" but as generally
used in statutes fixing venue, the terms are synonymous,
18
and convey the same meaning as the term "inhabitant."
In other words, "resides" should be viewed or understood
in its popular sense, meaning the personal, actual or
physical habitation of a person, actual residence or place
of abode. It signifies physical presence in a place and
actual stay thereat. In this popular sense, the term means
merely residence, that is, personal residence, not legal
residence or domicile. Residence simply requires bodily
presence as an inhabitant in a given place, while domicile
requires bodily presence in that place and also an
intention to make it one's domicile ... 7

It therefore clearly appears that both the respondent

Judge and the Court of Appeals, the former in the first
instance and the latter on review, committed reversible
legal error, if not grave abuse of discretion, in not
dismissing Bitera's action despite the fact that its venue
had clearly been improperly laid, and had been
seasonably objected to on that ground by petitioners in a
motion to dismisses.8

WHEREFORE, the questioned Order of the respondent

Judge denying petitioner's motion to dismiss and the
Decision of the Court of Appeals affirming said order are
REVERSED AND SET ASIDE. Civil Case No. 17354 of
the Regional Trial Court of Iloilo City, Branch XXVI, is
hereby DISMISSED on the ground that venue has been
improperly laid. No pronouncement as to costs.

SO ORDERED.

19
G.R. No. L-53485 February 6, 1991
PATRIA ESUERTE and HERMINIA JAYME,
petitioners,
vs.
HON. COURT OF APPEALS (Eleventh Division), HON.
RAFAEL T. MENDOZA, Judge, Branch VI, Court of
First Instance of Cebu and MA. BEVERLY TAN,
respondents.
Romeo B. Esuerte for petitioners.
Eleno V. Andales & Sisinio M. Andales for private
respondent.
MEDIALDEA, J.:
This petition for certiorari with a prayer for preliminary
injunction seeks to set aside the decision of the Court of
Appeals in CA G.R. No. SP-08999-R, involving the same
parties.
An action for damages was filed by private respondent
Beverly Tan against herein petitioners Patria Esuerte and
Herminia Jayme with the Court of First Instance (now
Regional Trial Court) of Cebu and docketed as Civil Case
No. R-17584. The claim for damages arose from an
incident involving the parties and summarized by the
Court of Appeals, as follows:
. . . that 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. The other petitioner, Herminia Jayme,
who was one of those who were present at the time of the
incident also sent a letter to the Chief of the Hospital, Dr.
Teodoro Motus, informing the latter of what she had
witnessed. 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; . . . . (pp. 91-92, Rollo)
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.
On January 2, 1979, the trial court denied the motion to
dismiss. The motion for reconsideration of the denial was
likewise denied by the court on February 16, 1979.
Esuerte and Jayme filed a petition for certiorari and
prohibition with a prayer for preliminary injunction with the
Court of Appeals. On September 18, 1979, the petition
was dismissed without pronouncement as to costs. The
motion for reconsideration of the decision was likewise
denied for lack of merit on February 18, 1980.
The following reasons were advanced by petitioners for
the allowance of this petition:
1) The Court of Appeals committed gross error and
grave abuse of discretion when it dismissed the petition
despite petitioners' overwhelming evidence showing that
the venue of private respondent's action (Civil Case No.
R-17584) was improperly laid.
2) The Court of Appeals committed gross error and
grave abuse of discretion when it dismissed the petition
despite petitioners' overwhelming evidence showing that
the filing of Civil Case No. R-17584 is premature due to
non-exhaustion of administrative remedies.
It is the contention of petitioners that the proper venue of
the action filed by Tan should be Bacolod City and not
Cebu City. At the time of the filing of her action in court,
Tan was actually residing and may be found in Bacolod
City. In fact, in her "Statement of Assets and Liabilities,"
submitted by Tan to her employer, the Corazon Locsin
Montelibano Memorial Hospital, she declared that she is
a resident of FRAYU INTERIOR, 6th Street, Bacolod City.
Section 2(b), Rule 4 of the Rules of Court provides:
Sec. 2. Venue in Courts of First Instance. —
xxx xxx xxx
(b) Personal Actions. — All other actions may be
commenced and tried where the defendants 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 choice of venue for personal actions cognizable by
the Regional Trial Court is given to the plaintiff but not to
the plaintiff's caprice because the matter is regulated by
the Rules of Court (see Clavecilla Radio System v.
Antillon, 19 SCRA 379). The rule on venue, like other
procedural rules, are designed to insure a just and orderly
administration of justice or the impartial and evenhanded
determination of every action and proceeding (Sy v.
Tyson Enterprises Inc., 19 SCRA 367). The option of the
plaintiff in personal actions cognizable by the Regional
Trial Court is either the place where the defendant resides
or may be found or the place where the plaintiff resides. If
plaintiff opts for the latter, he is limited to that place.
"Resides" in the rules on venue on personal actions
means the place of abode, whether permanent or
temporary, of the plaintiff or defendants as distinguished
from "domicile" which denotes a fixed permanent
residence (Dangwa Transportation Co., Inc. v. Sarmiento,
20
G.R. No. L-22795, January 31, 1977, 75 SCRA 124). And, government who is the aggrieved party and no award for
in Hernandez v. Rural Bank of Lucena, Inc., G.R. No. L- damages may be granted in favor of private persons. In
29791, January 10, 1978, 81 SCRA 75), venue of the civil action for damages, the trial court's concern is
personal actions should be at the place of abode or place whether or not damages, personal to the plaintiff, were
where plaintiffs actually reside, not in domicile or legal caused by the acts of the defendants. The civil action for
residence. damages can proceed notwithstanding the pendency of
the administrative action.
In Koh v. CA, L-40428, December 17, 1975, 70 SCRA
298; 305, We ruled: WHEREFORE, the position is GRANTED. The
questioned decision of the Court of Appeals is SET
Applying the foregoing observation to the present case, ASIDE. Civil Case No. R-17584 is DISMISSED for
We are fully convinced that private respondent Coloma's improper venue.
protestations of domicile in San Nicolas, Ilocos Norte,
based on his manifested intention to return there after the SO ORDERED.
retirement of his wife from government service to justify
his bringing of an action for damages against petitioner in
the C.F.I. of Ilocos Norte, is entirely of no moment since
what is of paramount importance is where he actually
resided or where he may be found at the time he brought
the action, to comply substantially with the requirements
of Sec. 2(b) of Rule 4, Rules of Court, on venue of
personal actions. . ..

As perspicaciously observed by Justice Moreland, the

purpose of procedure is not to restrict the court's
jurisdiction over the subject matter but to give it effective
facility "in righteous action," "to facilitate and promote the
administration of justice" or to insure "just judgments" by
means of a fair hearing. If the objective is not achieved,
then "the administration of justice becomes incomplete
and unsatisfactory and lays itself open to criticism."
(Manila Railroad Co. v. Attorney General, 20 Phil. 523,
530).

There is no question that private respondent as plaintiff in

the Civil Case is a legal resident of Cebu City.1âwphi1
Her parents live there. However, it cannot also be denied
that 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.

The second ground raised by petitioners is devoid of

merit. The alleged need by private respondent Tan to
exhaust administrative remedies before filing the
complaint for damages does not apply to the instant case.
Private respondent as plaintiff in the civil Case for
damages has no administrative remedy available to her.
It is true that the same incident complained of in the
administrative case filed by petitioners against Tan is the
subject of the action for damages filed by Tan against the
petitioners in the trial court. However, the cause of action
in the administrative case is different from that of the civil
case for damages. While the complainant in the
administrative case may be a private person, it is the

21
[G.R. No. L-10128. November 13, 1956.]
MAMERTO C. CORRE, Plaintiff-Appellant,
GUADALUPE TAN CORRE, Defendant-Appellee.
DECISION
BAUTISTA ANGELO, J.:
Plaintiff brought this action in the Court of First Instance
of Manila seeking his legal separation from Defendant, his
wife, and the placing of their minor children under the care
and custody of a reputable women’s dormitory or
institution as the court may recommend.
Defendant moved to dismiss the complaint on the ground
that the venue is improperly laid. She claims that since it
appears in the complaint that neither the Plaintiff nor the
Defendant is a resident of the City of Manila the court
where the action was filed is not the proper court to take
cognizance of the case. The court upheld the contention
of Defendant and, accordingly, dismissed the case
without pronouncement as to costs. This is an appeal
from this decision.
The pertinent portion of the complaint which refers to the
residence of both Plaintiff and Defendant is as
follows:chanroblesvirtuallawlibrary
“1. That Plaintiff is an American citizen, 44 years of age,
resident of 114 North Ist Street, Las Vegas, Nevada,
United States of America, master sergeant in the U. S.
Army with military service address of Ro-6739431, Army
Section, Military Assistance Advisory Group (MAAG)
Formosa, APO 63, San Francisco, California, and for the
purpose of filing and maintaining this suit, temporarily
resides at 576 Paltoc, Santa Mesa, Manila;
“2. That Defendant is a Filipino, 40 years of age and
resident of the municipality of Catbalogan, province of
Samar, Philippines, where summons may be served;”
Section 1, Rule 5, of the Rules of Court provides that Civil
actions in Courts of First Instance 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.” From
this rule it may be inferred that Plaintiff can elect to file the
action in the court he may choose if both the Plaintiff and
the Defendant have their residence in the Philippines.
Otherwise, the action can only be brought in the place
where either one resides.
It the present case, it clearly appears in the complaint that
the Plaintiff is a resident of Las Vegas, Nevada, U. S. A.
while the Defendant is a resident of the municipality of
Catbalogan, province of Samar. Such being the case,
Plaintiff has no choice other than to file the action in the
court of first instance of the latter province. The allegation
that the Plaintiff “for the purpose of filing and maintaining
this suit, temporarily resides at 576 Paltoc, Santa Mesa,
Manila” cannot serve as basis for the purpose of
vs. determining the venue for that is not the residence
contemplated by the rule. If that were allowed, we would
create a situation where a person may have his residence
in one province and, to suit his convenience, or to harass
the Defendant, may bring the action in the court of any
other province. That cannot be the intendment of the rule.
Indeed, residence as used in said rule is synonymous with
domicile. This is define as “the permanent home, the
place to which, whenever absent for business or pleasure,
one intends to return, and depends on facts and
circumstances, in the sense that they disclose intent” (67
C.J., 123-124). This is what we said in the recent case of
Evangelista vs. Santos, 86 Phil.,
387:chanroblesvirtuallawlibrary
“The fact that Defendant was sojourning in Pasay at the
time he was served with summons does not make him a
resident of that place for purposes of venue. Residence is
‘the permanent home, the place to which, whenever
absent for business or pleasure, one intends to return
cralaw.’ (67 C.J. pp. 123-124.) A man can have but one
domicile at a time (Alcantara vs. Secretary of Interior, 61
Phil. 459), and residence is synonymous with domicile
under section 1 of Rule 5 (Moran’s Comments, supra, p.
104).”
The case of Dela Rosa and Go Kee vs. De Borja, 53 Phil.,
990, cited by Appellant to support his contention, is not
controlling. In that case, the Defendant submitted to the
jurisdiction of the court and did not raise the point of venue
until after judgment had been rendered. And so it was
held that Defendant was estopped to raise this point on
appeal, although in passing the court insinuated that
residence for purposes of venue need not be permanent.
At any rate, this matter should now be regarded as
modified by our decision in the aforesaid case of
Evangelista.
Wherefore, the decision appealed from is affirmed, with
costs against Appellant.
22
G.R. No. 159507 April 19, 2006
ANICETO G. SALUDO, JR., Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL, INC., and/or
IAN T. FISH and DOMINIC MASCRINAS, Respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is the Petition for Review on Certiorari
filed by Aniceto G. Saludo, Jr. seeking to reverse and set
aside the Decision1 dated May 22, 2003 of the Court of
Appeals in CA-G.R. SP No. 69553. The assailed decision
directed the Regional Trial Court (RTC) of Maasin City,
Southern Leyte, Branch 25 thereof, to vacate and set
aside its Orders dated September 10, 2001 and January
2, 2002 in Civil Case No. R-3172, and enjoined the
presiding judge2 thereof from conducting further
proceedings in said case, except to dismiss the complaint
filed therewith on ground of improper venue. The petition
also seeks to reverse and set aside the appellate court's
Resolution dated August 14, 2003 denying the motion for
reconsideration of the assailed decision.
The factual and procedural antecedents are as follows:
Aniceto G. Saludo, Jr. filed a complaint for damages
against the American Express International, Inc. (AMEX)
and/or its officers Ian T. Fish, Vice-President and Country
Manager, and Dominic Mascrinas, Head of Operations,
with the RTC of Maasin City, Southern Leyte. The case
was raffled to Branch 25 of the said court.
The complaint alleged, inter alia, that plaintiff (herein
petitioner Saludo) "is a Filipino citizen, of legal age, and a
member of the House of Representatives and a resident
of Ichon, Macrohon, Southern Leyte, Philippines." On the
other hand, defendant (herein respondent AMEX, Inc.) "is
a corporation doing business in the Philippines and
engaged in providing credit and other credit facilities and
allied services with office address at 4th floor, ACE
Building, Rada Street, Legaspi Village, Makati City." The
other defendants (herein respondents Fish and
Mascrinas) are officers of respondent AMEX, and may be
served with summons and other court processes at their
office address.
The complaint's cause of action stemmed from the
alleged wrongful dishonor of petitioner Saludo's AMEX
credit card and the supplementary card issued to his
daughter. The first dishonor happened when petitioner
Saludo's daughter used her supplementary credit card to
pay her purchases in the United States some time in April
2000. The second dishonor occurred when petitioner
Saludo used his principal credit card to pay his account at
the Hotel Okawa in Tokyo, Japan while he was there with
other delegates from the Philippines to attend the
Congressional Recognition in honor of Mr. Hiroshi
Tanaka.
The dishonor of these AMEX credit cards were allegedly
unjustified as they resulted from respondents' unilateral
act of suspending petitioner Saludo's account for his
failure to pay its balance covering the period of March
2000. Petitioner Saludo denied having received the
corresponding statement of account. Further, he was
allegedly wrongfully charged for late payment in June
2000. Subsequently, his credit card and its supplementary
cards were canceled by respondents on July 20, 2000.
Petitioner Saludo claimed that he suffered great
inconvenience, wounded feelings, mental anguish,
embarrassment, humiliation and besmirched political and
professional standing as a result of respondents' acts
which were committed in gross and evident bad faith, and
in wanton, reckless and oppressive manner. He thus
prayed that respondents be adjudged to pay him, jointly
and severally, actual, moral and exemplary damages, and
attorney's fees.
In their answer, respondents specifically denied the
allegations in the complaint. Further, they raised the
affirmative defenses of lack of cause of action and
improper venue. On the latter, respondents averred that
the complaint should be dismissed on the ground that
venue was improperly laid because none of the parties
was a resident of Leyte. They alleged that respondents
were not residents of Southern Leyte. Moreover,
notwithstanding the claim in his complaint, petitioner
Saludo was not allegedly a resident thereof as evidenced
by the fact that his community tax certificate, which was
presented when he executed the complaint's verification
and certification of non-forum shopping, was issued at
Pasay City. To buttress their contention, respondents
pointed out that petitioner Saludo's complaint was
prepared in Pasay City and signed by a lawyer of the said
city. Respondents prayed for the dismissal of the
complaint a quo.
Thereafter, respondents filed an Opposition to Ex-Parte
Motion (to Set Case for Pre-Trial) and Motion for
Preliminary Hearing (on Affirmative Defense of Improper
Venue) to which petitioner Saludo filed his Comments
and/or Objections to the Affirmative Defense of Improper
Venue. He asserted that any allegation refuting his
residency in Southern Leyte was baseless and unfounded
considering that he was the congressman of the lone
district thereof at the time of the filing of his complaint. He
urged the court a quo to take judicial notice of this
particular fact. As a member of Congress, he possessed
all the qualifications prescribed by the Constitution
including that of being a resident of his district. He was
also a member of the Integrated Bar of the Philippines-
Southern Leyte Chapter, and has been such ever since
his admission to the Bar. His community tax certificate
was issued at Pasay City only because he has an office
thereat and the office messenger obtained the same in
the said city. In any event, the community tax certificate is
not determinative of one's residence.
In the Order dated September 10, 2001, the court a quo
denied the affirmative defenses interposed by
23
respondents. It found the allegations of the complaint
sufficient to constitute a cause of action against
respondents. The court a quo likewise denied
respondents' affirmative defense that venue was
improperly laid. It reasoned, thus:
x x x [T]he fact alone that the plaintiff at the time he filed
the complaint was and still is, the incumbent
Congressman of the Lone District of Southern Leyte with
residence at Ichon, Macrohon, Southern Leyte, is enough
to dispell any and all doubts about his actual residence.
As a high-ranking government official of the province, his
residence there can be taken judicial notice of. As such
his personal, actual and physical habitation or his actual
residence or place of abode can never be in some other
place but in Ichon, Macrohon, Southern Leyte. It is
correctly stated by the plaintiff, citing the case of Core v.
Core, 100 Phil. 321 that, "residence, for purposes of fixing
venue of an action, is synonymous with domicile. This is
defined as the permanent home, the place to which,
whenever absent for business or pleasure, one intends to
return, and depends on the facts and circumstances, in
the sense that they disclose intent. A person can have but
one domicile at a time. A man can have but one domicile
for one and the same purpose at any time, but he may
have numerous places of residence. Venue could be at
place of his residence. (Masa v. Mison, 200 SCRA 715
[1991])3
Respondents sought the reconsideration thereof but the
court a quo denied the same in the Order dated January
2, 2002. They then filed with the appellate court a petition
for certiorari and prohibition alleging grave abuse of
discretion on the part of the presiding judge of the court a
quo in issuing the September 10, 2001 and January 2,
2002 Orders. Upon respondents' posting of a bond, the
appellate court issued on March 14, 2002 a temporary
restraining order which enjoined the presiding judge of the
court a quo from conducting further proceedings in Civil
Case No. R-3172.
On May 22, 2003, the appellate court rendered the
assailed decision granting respondents' petition for
certiorari as it found that venue was improperly laid. It
directed the court a quo to vacate and set aside its Orders
dated September 10, 2001 and January 2, 2002, and
enjoined the presiding judge thereof from further
proceeding in the case, except to dismiss the complaint.
The appellate court explained that the action filed by
petitioner Saludo against respondents is governed by
Section 2, Rule 4 of the Rules of Court. The said rule on
venue of personal actions basically provides that personal
actions may be commenced and tried where plaintiff or
any of the principal plaintiffs resides, or where defendant
or any of the principal defendants resides, at the election
of plaintiff.
Venue was improperly laid in the court a quo, according
to the appellate court, because not one of the parties was
a resident of Southern Leyte. Specifically, it declared that
petitioner Saludo was not a resident thereof. The
appellate court pronounced that, for purposes of venue,
the residence of a person is his personal, actual or
physical habitation, or his actual residence or place of
abode, which may not necessarily be his legal residence
or domicile provided he resides therein with continuity and
consistency.4
The appellate court quoted the following discussion in
Koh v. Court of Appeals5 where the Court distinguished
the terms "residence" and "domicile" in this wise:
x x x [T]he term domicile is not exactly synonymous in
legal contemplation with the term residence, for it is [an]
established principle in Conflict of Laws that domicile
refers to the relatively more permanent abode of a person
while residence applies to a temporary stay of a person in
a given place. In fact, this distinction is very well
emphasized in those cases where the Domiciliary Theory
must necessarily supplant the Nationality Theory in cases
involving stateless persons.
xxxx
"There is a difference between domicile and residence.
Residence is used to indicate a place of abode, whether
permanent or temporary; domicile denotes a fixed
permanent residence to which when absent, one has the
intention of returning. A man may have a residence in one
place and a domicile in another. Residence is not
domicile, but domicile is residence coupled with intention
to remain for an unlimited time. A man can have but one
domicile for one and the same purpose at any time, but
he may have numerous places of residence. His place of
residence generally is his place of domicile, but is not by
any means, necessarily so since no length of residence
without intention of remaining will constitute domicile."6
(Italicized for emphasis)
In holding that petitioner Saludo is not a resident of
Maasin City, Southern Leyte, the appellate court referred
to his community tax certificate, as indicated in his
complaint's verification and certification of non-forum
shopping, which was issued at Pasay City. Similarly, it
referred to the same community tax certificate, as
indicated in his complaint for deportation filed against
respondents Fish and Mascrinas. Under Republic Act No.
7160,7 the community tax certificate shall be paid in the
place of residence of the individual, or in the place where
the principal office of the juridical entity is located.8 It also
pointed out that petitioner Saludo's law office, which was
also representing him in the present case, is in Pasay
City. The foregoing circumstances were considered by
the appellate court as judicial admissions of petitioner
Saludo which are conclusive upon him and no longer
required proof.
The appellate court chided the court a quo for stating that
as incumbent congressman of the lone district of
Southern Leyte, judicial notice could be taken of the fact
of petitioner Saludo's residence thereat. No evidence had
yet been adduced that petitioner Saludo was then the
24
congressman of Southern Leyte and actual resident of
Ichon, Macrohon of the said province.
The appellate court held that, based on his complaint,
petitioner Saludo was actually residing in Pasay City. It
faulted him for filing his complaint with the court a quo
when the said venue is inconvenient to the parties to the
case. It opined that under the rules, the possible choices
of venue are Pasay City or Makati City, or any place in the
National Capital Judicial Region, at the option of petitioner
Saludo.
It stressed that while the choice of venue is given to
plaintiff, said choice is not left to his caprice and cannot
deprive a defendant of the rights conferred upon him by
the Rules of Court.9 Further, fundamental in the law
governing venue of actions that the situs for bringing real
and personal civil actions is fixed by the rules to attain the
greatest possible convenience to the party litigants by
taking into consideration the maximum accessibility to
them - i.e., to both plaintiff and defendant, not only to one
or the other - of the courts of justice.10
The appellate court concluded that the court a quo should
have given due course to respondents' affirmative
defense of improper venue in order to avoid any suspicion
that petitioner Saludo's motive in filing his complaint with
the court a quo was only to vex and unduly inconvenience
respondents or even to wield influence in the outcome of
the case, petitioner Saludo being a powerful and
influential figure in the said province. The latter
circumstance could be regarded as a "specie of forum
shopping" akin to that in Investors Finance Corp. v.
Ebarle11 where the Court mentioned that the filing of the
civil action before the court in Pagadian City "was a specie
of forum shopping" considering that plaintiff therein was
an influential person in the locality.
The decretal portion of the assailed Decision dated May
22, 2003 of the appellate court reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the
challenged orders must be, as they hereby are,
VACATED and SET ASIDE and the respondent judge, or
any one acting in his place or stead, is instructed and
enjoined to desist from further proceeding in the case,
except to dismiss it. The temporary restraining order
earlier issued is hereby converted into a writ of preliminary
injunction, upon the posting this time by petitioners [herein
respondents], within five (5) days from receipt of this
decision, of a bond in the amount of Five Million Pesos
(P5,000,000.00), to answer for all damages that private
respondent [herein petitioner] may sustain by reason of
the issuance of such injunction should the Court finally
decide that petitioners are not entitled thereto. Private
respondent, if he so minded, may refile his case for
damages before the Regional Trial Court of Makati City or
Pasay City, or any of the Regional Trial Courts of the
National Capital Judicial Region. Without costs.
SO ORDERED.12
Petitioner Saludo sought the reconsideration of the said
decision but the appellate court, in the Resolution dated
August 14, 2003, denied his motion for reconsideration.
Hence, he filed the instant petition for review with the
Court alleging that:
The Court of Appeals, (Special Fourth Division), in
promulgating the afore-mentioned Decision and
Resolution, has decided a question of substance in a way
probably not in accord with law or with applicable
decisions of this Honorable Court.
(a) the Court of Appeals erred in not taking judicial notice
of the undisputed fact that herein petitioner is the
incumbent congressman of the lone district of Southern
Leyte and as such, he is a residence (sic) of said district;
(b) the Court of Appeals erred in dismissing the complaint
on the basis of improper venue due to the alleged judicial
admission of herein petitioner;
(c) the Court of Appeals in dismissing the complaint
ignored applicable decisions of this Honorable Court;
and1avvphil.net
(d) the Court of Appeals erred in deciding that herein
petitioner violated the rules on venue, and even
speculated that herein petitioner's motive in filing the
complaint in Maasin City was only to vex the
respondents.13
In gist, the sole substantive issue for the Court's resolution
is whether the appellate court committed reversible error
in holding that venue was improperly laid in the court a
quo in Civil Case No. R-3172 because not one of the
parties, including petitioner Saludo, as plaintiff therein,
was a resident of Southern Leyte at the time of filing of
the complaint.
The petition is meritorious.
Petitioner Saludo's complaint for damages against
respondents before the court a quo is a personal action.
As such, it is governed by Section 2, Rule 4 of the Rules
of Courts which reads:
SEC. 2. Venue of personal actions. - All other actions may
be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any
of the principal defendants resides, or in the case of a
non-resident defendant where he may be found, at the
election of the plaintiff.
The choice of venue for personal actions cognizable by
the RTC is given to plaintiff but not to plaintiff's caprice
because the matter is regulated by the Rules of Court.14
The rule on venue, like other procedural rules, is designed
to insure a just and orderly administration of justice, or the
impartial and evenhanded determination of every action
and proceeding.15 The option of plaintiff in personal
actions cognizable by the RTC is either the place where
defendant resides or may be found, or the place where
25
plaintiff resides. If plaintiff opts for the latter, he is limited
to that place.16
Following this rule, petitioner Saludo, as plaintiff, had
opted to file his complaint with the court a quo which is in
Maasin City, Southern Leyte. He alleged in his complaint
that he was a member of the House of Representatives
and a resident of Ichon, Macrohon, Southern Leyte to
comply with the residency requirement of the rule.
However, the appellate court, adopting respondents'
theory, made the finding that petitioner Saludo was not a
resident of Southern Leyte at the time of the filing of his
complaint. It hinged the said finding mainly on the fact that
petitioner Saludo's community tax certificate, indicated in
his complaint's verification and certification of non-forum
shopping, was issued at Pasay City. That his law office is
in Pasay City was also taken by the appellate court as
negating petitioner Saludo's claim of residence in
Southern Leyte.
The appellate court committed reversible error in finding
that petitioner Saludo was not a resident of Southern
Leyte at the time of the filing of his complaint, and
consequently holding that venue was improperly laid in
the court a quo. In Dangwa Transportation Co., Inc. v.
Sarmiento,17 the Court had the occasion to explain at
length the meaning of the term "resides" for purposes of
venue, thus:
In Koh v. Court of Appeals, we explained that the term
"resides" as employed in the rule on venue on personal
actions filed with the courts of first instance means the
place of abode, whether permanent or temporary, of the
plaintiff or the defendant, as distinguished from "domicile"
which denotes a fixed permanent residence to which,
when absent, one has the intention of returning.
"It is fundamental in the law governing venue of actions
(Rule 4 of the Rules of Court) that the situs for bringing
real and personal civil actions are fixed by the rules to
attain the greatest convenience possible to the parties-
litigants by taking into consideration the maximum
accessibility to them of the courts of justice. It is, likewise,
undeniable that the term domicile is not exactly
synonymous in legal contemplation with the term
residence, for it is an established principle in Conflict of
Laws that domicile refers to the relatively more permanent
abode of a person while residence applies to a temporary
stay of a person in a given place. In fact, this distinction is
very well emphasized in those cases where the
Domiciliary Theory must necessarily supplant the
Nationality Theory in cases involving stateless persons.
"This Court held in the case of Uytengsu v. Republic, 50
O.G. 4781, October, 1954, reversing its previous stand in
Larena v. Ferrer, 61 Phil. 36, and Nuval v. Guray, 52 Phil.
645, that -
'There is a difference between domicile and residence.
Residence is used to indicate a place of abode, whether
permanent or temporary; domicile denotes a fixed
permanent residence to which when absent, one has the
intention of returning. A man may have a residence in one
place and a domicile in another. Residence is not
domicile, but domicile is residence coupled with the
intention to remain for an unlimited time. A man can have
but one domicile for one and the same purpose at any
time, but he may have numerous places of residence. His
place of residence generally is his place of domicile, but
is not by any means, necessarily so since no length of
residence without intention of remaining will constitute
domicile.' (Italicized for emphasis)
"We note that the law on venue in Courts of First Instance
(Section 2, of Rule 4, Rules of Court) in referring to the
parties utilizes the words 'resides or may be found,' and
not 'is domiciled,' thus:
'Sec. 2(b) Personal actions - All other 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.' (Italicized for emphasis)
"Applying the foregoing observation to the present case,
We are fully convinced that private respondent Coloma's
protestations of domicile in San Nicolas, Ilocos Norte,
based on his manifested intention to return there after the
retirement of his wife from government service to justify
his bringing of an action for damages against petitioner in
the C.F.I. of Ilocos Norte, is entirely of no moment since
what is of paramount importance is where he actually
resided or where he may be found at the time he brought
the action, to comply substantially with the requirements
of Sec. 2(b) of Rule 4, Rules of Court, on venue of
personal actions." (Koh v. Court of Appeals, supra, pp.
304-305.)
The same construction of the word "resides" as used in
Section 1, Rule 73, of the Revised Rules of Court, was
enunciated in Fule v. Court of Appeals, et al. (G.R. No. L-
40502) and Fule v. Hon. Ernani C. Paño, et al. (G.R. No.
L-42670), decided on November 29, 1976. Thus, this
Court, in the aforecited cases, stated:
"2. But, the far-ranging question is this: What does the
term 'resides' mean? Does it refer to the actual residence
or domicile of the decedent at the time of his death? We
lay down the doctrinal rule that the term 'resides' connotes
ex vi termini 'actual residence' as distinguished from 'legal
residence or domicile.' This term 'resides,' like the terms
'residing' and 'residence' is elastic and should be
interpreted in the light of the object or purposes of the
statute or rule in which it is employed. In the application
of venue statutes and rules - Section 1, Rule 73 of the
Revised Rules of Court is of such nature - residence
rather than domicile is the significant factor. Even where
the statute uses the word 'domicile' still it is construed as
meaning residence and not domicile in the technical
sense. Some cases make a distinction between the terms
'residence' and 'domicile' but as generally used in statutes
fixing venue, the terms are synonymous, and convey the
same meaning as the term 'inhabitant.' In other words,
26
'resides' should be viewed or understood in its popular
sense, meaning, the personal, actual or physical
habitation of a person, actual residence or place of abode.
It signifies physical presence in a place and actual stay
thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence
or domicile. Residence simply requires bodily presence
as an inhabitant in a given place, while domicile requires
bodily presence in that place and also an intention to
make it one's domicile. No particular length of time of
residence is required though; however, the residence
must be more than temporary."18
There is no dispute that petitioner Saludo was the
congressman or the representative of the lone district of
Southern Leyte at the time of filing of his complaint with
the court a quo. Even the appellate court admits this fact
as it states that "it may be conceded that private
respondent ever so often travels to Maasin City, Southern
Leyte, because he is its representative in the lower
house."19
As a member of the House of Representatives, petitioner
Saludo was correctly deemed by the court a quo as
possessing the requirements for the said position,20
including that he was then a resident of the district which
he was representing, i.e., Southern Leyte. Significantly,
for purposes of election law, the term "residence" is
synonymous with "domicile," thus:
x x x [T]he Court held that "domicile" and "residence" are
synonymous. The term "residence," as used in the
election law, imports not only an intention to reside in a
fixed place but also personal presence in that place,
coupled with conduct indicative of such intention.
"Domicile" denotes a fixed permanent residence to which
when absent for business or pleasure, or for like reasons,
one intends to return. x x x21
It can be readily gleaned that the definition of "residence"
for purposes of election law is more stringent in that it is
equated with the term "domicile." Hence, for the said
purpose, the term "residence" imports "not only an
intention to reside in a fixed place but also personal
presence in that place, coupled with conduct indicative of
such intention."22 When parsed, therefore, the term
"residence" requires two elements: (1) intention to reside
in the particular place; and (2) personal or physical
presence in that place, coupled with conduct indicative of
such intention. As the Court elucidated, "the place where
a party actually or constructively has a permanent home,
where he, no matter where he may be found at any given
time, eventually intends to return and remain, i.e., his
domicile, is that to which the Constitution refers when it
speaks of residence for the purposes of election law."23
On the other hand, for purposes of venue, the less
technical definition of "residence" is adopted. Thus, it is
understood to mean as "the personal, actual or physical
habitation of a person, actual residence or place of abode.
It signifies physical presence in a place and actual stay
thereat. In this popular sense, the term means merely
residence, that is, personal residence, not legal residence
or domicile. Residence simply requires bodily presence
as an inhabitant in a given place, while domicile requires
bodily presence in that place and also an intention to
make it one's domicile."24
Since petitioner Saludo, as congressman or the lone
representative of the district of Southern Leyte, had his
residence (or domicile) therein as the term is construed in
relation to election laws, necessarily, he is also deemed
to have had his residence therein for purposes of venue
for filing personal actions. Put in another manner,
Southern Leyte, as the domicile of petitioner Saludo, was
also his residence, as the term is understood in its popular
sense. This is because "residence is not domicile, but
domicile is residence coupled with the intention to remain
for an unlimited time."
Reliance by the appellate court on Koh v. Court of
Appeals25 is misplaced. Contrary to its holding,26 the
facts of the present case are not similar to the facts
therein. In Koh, the complaint was filed with the Court of
First Instance in San Nicolas, Ilocos Norte by plaintiff who
admitted that he was a resident of Kamias, Quezon City.
Save for the fact that he grew up in San Nicolas, Ilocos
Norte and that he manifested the intent to return there
after retirement, plaintiff therein had not established that
he was actually a resident therein at the time of the filing
of his complaint. Neither did he establish that he had his
domicile therein because although he manifested the
intent to go back there after retirement, the element of
personal presence in that place was lacking. To reiterate,
domicile or residence, as the terms are taken as
synonyms, imports "not only an intention to reside in a
fixed place but also personal presence in that place,
coupled with conduct indicative of such intention."27
In contrast, petitioner Saludo was the congressman or
representative of Southern Leyte at the time of filing of his
complaint with the court a quo. Absent any evidence to
the contrary, he is deemed to possess the qualifications
for the said position, including that he was a resident
therein. And following the definition of the term
"residence" for purposes of election law, petitioner Saludo
not only had the intention to reside in Southern Leyte, but
he also had personal presence therein, coupled with
conduct indicative of such intention. The latter element, or
his bodily presence as an inhabitant in Southern Leyte,
was sufficient for petitioner Saludo to be considered a
resident therein for purposes of venue.
The following ratiocination of the court a quo is apt:
Residence in civil law is a material fact, referring to the
physical presence of a person in a place. A person can
have two or more residences, such as a country
residence and a city residence. (Quetulio v. Ruiz, S.C.
Off. Gaz. 156, Commentaries and Jurisprudence in Civil
Law, Vol. 1, page 211, Tolentino). Residence is acquired
by living in a place; on the other hand, domicile can exist
without actually living in the place. The important thing for
domicile is that, once residence has been established in
27
one place, there be an intention to stay there
permanently, even if residence is also established in
some other place.
Thus, if a person lives with his family habitually in Quezon
City, he would have his domicile in Quezon City. If he also
has a house for vacation purposes in the City of Baguio,
and another house in connection with his business in the
City of Manila, he would have residence in all three places
(Tolentino, Commentaries and Jurisprudence on Civil
Law, Vol. 1, Page 212, 1990 Edition) so that one[']s legal
residence or domicile can also be his actual, personal or
physical residence or habitation or place of abode if he
stays there with intention to stay there permanently.
In the instant case, since plaintiff has a house in Makati
City for the purpose of exercising his profession or doing
business and also a house in Ichon, Macrohon, Southern
Leyte, for doing business and/or for election or political
purposes where he also lives or stays physically,
personally and actually then he can have residences in
these two places. Because it would then be preposterous
to acknowledge and recognize plaintiff Aniceto G. Saludo,
Jr. as congressman of Southern Leyte without also
recognizing him as actually, personally and physically
residing thereat, when such residence is required by
law.28
The fact then that petitioner Saludo's community tax
certificate was issued at Pasay City is of no moment
because granting arguendo that he could be considered
a resident therein, the same does not preclude his having
a residence in Southern Leyte for purposes of venue. A
man can have but one domicile for one and the same
purpose at any time, but he may have numerous places
of residence.29
That petitioner Saludo was the congressman or
representative of the lone district of Southern Leyte at the
time of the filing of his complaint was admitted as a fact
by the court a quo. In this connection, it consequently held
that, as such, petitioner Saludo's residence in Southern
Leyte, the district he was the representing, could be taken
judicial notice of. The court a quo cannot be faulted for
doing so because courts are allowed "to take judicial
notice of matters which are of public knowledge, or are
capable of unquestionable demonstration, or ought to be
known to judges because of their judicial functions." 30
Courts are likewise bound to take judicial notice, without
the introduction of evidence, of the law in force in the
Philippines, 31 including its Constitution.
The concept of "facts of common knowledge" in the
context of judicial notice has been explained as those
facts that are "so commonly known in the community as
to make it unprofitable to require proof, and so certainly
known to as to make it indisputable among reasonable
men." 32 Moreover, "though usually facts of 'common
knowledge' will be generally known throughout the
country, it is sufficient as a basis for judicial notice that
they be known in the local community where the trial court
sits." 33 Certainly, the fact of petitioner Saludo being the
duly elected representative of Southern Leyte at the time
could be properly taken judicial notice of by the court a
quo, the same being a matter of common knowledge in
the community where it sits.
Further, petitioner Saludo's residence in Southern Leyte
could likewise be properly taken judicial notice of by the
court a quo. It is bound to know that, under the
Constitution, one of the qualifications of a congressman
or representative to the House of Representatives is
having a residence in the district in which he shall be
elected.
In fine, petitioner Saludo's act of filing his complaint with
the court a quo cannot be characterized as a "specie of
forum-shopping" or capricious on his part because, under
the rules, as plaintiff, he is precisely given this option.
Finally, respondents' claim that the instant petition for
review was not properly verified by petitioner Saludo
deserves scant consideration.
Section 4, Rule 7 of the Rules of Court reads:
Sec. 4. Verification. - Except when otherwise specifically
required by law or rule, pleadings need not be under oath,
verified or accompanied by affidavit.
A pleading is verified by an affidavit that the affiant has
read the pleading and that the allegations therein are true
and correct of his personal knowledge or based on
authentic records.
A pleading required to be verified which contains a
verification based on "information and belief," or upon
"knowledge, information and belief," or lacks proper
verification, shall be treated as an unsigned pleading.
Petitioner Saludo's verification and certification of non-
forum shopping states that he has "read the contents
thereof [referring to the petition] and the same are true
and correct of my own personal knowledge and belief and
on the basis of the records at hand." The same clearly
constitutes substantial compliance with the above
requirements of the Rules of Court.
WHEREFORE, premises considered, the petition is
GRANTED. The Decision dated May 22, 2003 and
Resolution dated August 14, 2003 of the Court of Appeals
in CA-G.R. SP No. 69553 are REVERSED and SET
ASIDE. The Orders dated September 10, 2001 and
January 2, 2002 of the Regional Trial Court of Maasin
City, Southern Leyte, Branch 25 thereof, in Civil Case No.
R-3172 are REINSTATED.
SO ORDERED.
28
G.R. No. L-22238 February 18, 1967
CLAVECILLIA RADIO SYSTEM, petitioner-appellant,
vs.
HON. AGUSTIN ANTILLON, as City Judge of the
Municipal Court of Cagayan de Oro City
and NEW CAGAYAN GROCERY, respondents-
appellees.
B. C. Padua for petitioner and appellant.
Pablo S. Reyes for respondents and appellees.
REGALA, J.:
This is an appeal from an order of the Court of First
Instance of Misamis Oriental dismissing the petition of the
Clavecilla Radio System to prohibit the City Judge of
Cagayan de Oro from taking cognizance of Civil Case No.
1048 for damages.
It appears that on June 22, 1963, the New Cagayan
Grocery filed a complaint against the Clavecilla Radio
System alleging, in effect, that on March 12, 1963, the
following message, addressed to the former, was filed at
the latter's Bacolod Branch Office for transmittal thru its
branch office at Cagayan de Oro:
NECAGRO CAGAYAN DE ORO (CLAVECILLA)
REURTEL WASHED NOT AVAILABLE REFINED
TWENTY FIFTY IF AGREEABLE SHALL SHIP LATER
REPLY POHANG
The Cagayan de Oro branch office having received the
said message omitted, in delivering the same to the New
Cagayan Grocery, the word "NOT" between the words
"WASHED" and "AVAILABLE," thus changing entirely the
contents and purport of the same and causing the said
addressee to suffer damages. After service of summons,
the Clavecilla Radio System filed a motion to dismiss the
complaint on the grounds that it states no cause of action
and that the venue is improperly laid. The New Cagayan
Grocery interposed an opposition to which the Clavecilla
Radio System filed its rejoinder. Thereafter, the City
Judge, on September 18, 1963, denied the motion to
dismiss for lack of merit and set the case for
hearing.1äwphï1.ñët
Hence, the Clavecilla Radio System filed a petition for
prohibition with preliminary injunction with the Court of
First Instance praying that the City Judge, Honorable
Agustin Antillon, be enjoined from further proceeding with
the case on the ground of improper venue. The
respondents filed a motion to dismiss the petition but this
was opposed by the petitioner. Later, the motion was
submitted for resolution on the pleadings.
In dismissing the case, the lower court held that the
Clavecilla Radio System may be sued either in Manila
where it has its principal office or in Cagayan de Oro City
where it may be served, as in fact it was served, with
summons through the Manager of its branch office in said
city. In other words, the court upheld the authority of the
city court to take cognizance of the case.1äwphï1.ñët
In appealing, the Clavecilla Radio System contends that
the suit against it should be filed in Manila where it holds
its principal office.
It is clear that the case for damages filed with the city court
is based upon tort and not upon a written contract. Section
1 of Rule 4 of the New Rules of Court, governing venue
of actions in inferior courts, provides in its paragraph (b)
(3) that when "the action is not upon a written contract,
then in the municipality where the defendant or any of the
defendants resides or may be served with summons."
(Emphasis supplied)
Settled is the principle in corporation law that the
residence of a corporation is the place where its principal
office is established. Since it is not disputed that the
Clavecilla Radio System has its principal office in Manila,
it follows that the suit against it may properly be filed in
the City of Manila.
The appellee maintain, however, that with the filing of the
action in Cagayan de Oro City, venue was properly laid
on the principle that the appellant may also be served with
summons in that city where it maintains a branch office.
This Court has already held in the case of Cohen vs.
Benguet Commercial Co., Ltd., 34 Phil. 526; that the term
"may be served with summons" does not apply when the
defendant resides in the Philippines for, in such case, he
may be sued only in the municipality of his residence,
regardless of the place where he may be found and
served with summons. As any other corporation, the
Clavecilla Radio System maintains a residence which is
Manila in this case, and a person can have only one
residence at a time (See Alcantara vs. Secretary of the
Interior, 61 Phil. 459; Evangelists vs. Santos, 86 Phil.
387). The fact that it maintains branch offices in some
parts of the country does not mean that it can be sued in
any of these places. To allow an action to be instituted in
any place where a corporate entity has its branch offices
would create confusion and work untold inconvenience to
the corporation.
It is important to remember, as was stated by this Court in
Evangelista vs. Santos, et al., supra, that 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. Applying the
provision of the Rules of Court, the venue in this case was
improperly laid.
The order appealed from is therefore reversed, but
without prejudice to the filing of the action in Which the
venue shall be laid properly. With costs against the
respondents-appellees.
29
G.R. No. 104175 June 25, 1993
YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA,
petitioners,
vs.
THE HONORABLE COURT OF APPEALS
(THIRTEENTH DIVISION) AND GEORGE CHIONG
ROXAS, respondents.
Angara, Abello, Concepcion, Regala & Cruz for
petitioners.
Antonio Nuyles for private respondent.
QUIASON, J.:
Petitioners seek to set aside the decision of respondent
Court of Appeals in CA-G.R. SP No. 25237, which
reversed the Order dated February 8, 1991 issued by the
Regional Trial Court, Branch 11, Cebu City in Civil Case
No. CEB 6967. The order of the trial court denied the
motion to dismiss filed by respondent George C. Roxas of
the complaint for collection filed by petitioners.
It appears that sometime on October 28, 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 Roxas. The
purchase price was P8,000,000.00 payable as follows: a
downpayment of P4,000,000.00 and the balance of
P4,000,000.00 in four post dated 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 (Rollo, p. 176).
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 June 10, 1988, petitioners filed a complaint against
Roxas in the Regional Trial Court, Branch 11, Cebu City,
praying that Roxas be ordered to pay petitioners the sum
of P3,400,00.00 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 (Rollo, p. 290).
Roxas filed two motions for extension of time to submit his
answer. But despite said motion, he failed to do so
causing petitioners to file a motion to have him declared
in default. Roxas then filed, through a new counsel, a third
motion for extension of time to submit a responsive
pleading.
On August 19, 1988, the trial court declared Roxas in
default. The order of default was, however, lifted upon
motion of Roxas.
On August 22, 1988, Roxas filed a motion to dismiss on
the grounds that:
1. The complaint did not state a cause of action due
to non-joinder of indispensable parties;
2. The claim or demand set forth in the complaint
had been waived, abandoned or otherwise extinguished;
and
3. The venue was improperly laid (Rollo, p. 299).
After a hearing, wherein testimonial and documentary
evidence were presented by both parties, the trial court in
an Order dated February 8, 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 April 10, 1991 for being pro-
forma (Rollo, p. 17). 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 May 3, 1991, Roxas filed an unverified Motion to Lift
the Order of Default which was not accompanied with the
required affidavit or 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 sustained the findings of the trial
court with regard to the first two grounds raised in the
motion to dismiss but ordered the dismissal of the
complaint on the ground of improper venue (Rollo, p. 49).
A subsequent motion for reconsideration by petitioner
was to no avail.
Petitioners now come before us, alleging that the Court of
Appeals
erred in:
1. holding the venue should be in Pasay City, and
not in Cebu City (where both petitioners/plaintiffs are
residents;
2. not finding that Roxas is estopped from
questioning the choice of venue (Rollo, p. 19).
The petition is meritorious.
30
In holding that the venue was improperly laid in Cebu City,
the Court of Appeals relied on the address of YASCO, as
appearing in the Deed of Sale dated October 28, 1987,
which is "No. 1708 Dominga Street, Pasay City." This was
the same address written in YASCO's letters and several
commercial documents in the possession of Roxas
(Decision, p. 12; Rollo, p. 48).
In the case of Garcia, the Court of Appeals said that he
gave Pasay City as his address in three letters which he
sent to Roxas' brothers and sisters (Decision, p. 12; Rollo,
p. 47). The appellate court held that Roxas was led by
petitioners to believe that their residence is in Pasay City
and that he had relied upon those representations
(Decision, p. 12, Rollo, p. 47).
The Court of Appeals erred in holding that the venue was
improperly laid in Cebu City.
In the Regional Trial Courts, all personal actions are
commenced and tried in the province or city 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 [Sec. 2(b) Rule 4, Revised
Rules of Court].
There are two plaintiffs in the case at bench: a natural
person and a domestic corporation. Both plaintiffs aver in
their complaint that they are residents of Cebu City, thus:
1.1. Plaintiff Young Auto Supply Co., Inc., ("YASCO")
is a domestic corporation duly organized and existing
under Philippine laws with principal place of business at
M. J. Cuenco Avenue, Cebu City. It also has a branch
office at 1708 Dominga Street, Pasay City, Metro Manila.
of a corporation in a definite place, instead of allowing it
to be ambulatory.
In Clavencilla Radio System v. Antillon, 19 SCRA 379
([1967]), this Court explained why 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.
If it was Roxas who sued YASCO in Pasay City and the
latter questioned the venue on the ground that its principal
place of business was in Cebu City, Roxas could argue
that YASCO was in estoppel because it misled Roxas to
believe that Pasay City was its principal place of business.
But this is not the case before us.
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.
WHEREFORE, the petition is GRANTED. The decision of
the Court of Appeals appealed from is SET ASIDE and
the Order dated February 8, 1991 of the Regional Trial
Court is REINSTATED.
SO ORDERED.

Plaintiff Nemesio Garcia is of legal age, married, Filipino

citizen and with business address at Young Auto Supply
Co., Inc., M. J. Cuenco Avenue, Cebu City. . . .
(Complaint, p. 1; Rollo, p. 81).

The Article of Incorporation of YASCO (SEC Reg. No.

22083) states:

THIRD That the place where the principal office of the

corporation is to be established or located is at Cebu City,
Philippines (as amended on December 20, 1980 and
further amended on December 20, 1984) (Rollo, p. 273).

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 (Cohen v.
Benguet Commercial Co., Ltd., 34 Phil. 256 [1916]
Clavecilla Radio System v. Antillon, 19 SCRA 379 [1967]).
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" (Sec. 14
[3]). The purpose of this requirement is to fix the residence

31
GOLDEN ARCHES DEVELOPMENT CORPORATION,
Petitioner,
G.R. No. 183843
versus -
Present:
CARPIO MORALES, Chairperson, J.,
BRION,
ST. FRANCIS SQUARE HOLDINGS, INC.,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.
Respondent.
Promulgated:
January 19, 2011
x--------------------------------------------------------------------------
---------------x
DECISION
CARPIO MORALES, J.,
In June 1991, Golden Arches Development Corporation
(petitioner) entered into a lease contract over a property
owned by Prince City Realty, Inc. located at the corner of
Julia Vargas Avenue and Bank Drive, Ortigas Center,
Mandaluyong City.
The lease contract commenced on June 27, 1991 and
was to terminate on February 27, 2008. On November 2,
2006, however, petitioner informed St. Francis Square
Holdings, Inc. (respondent), successor-in-interest of ASB
Holdings, Inc. by which Prince Realty, Inc. eventually
became known, of its intention to discontinue the lease.
Amicable negotiations between the parties having failed,
respondent filed on May 4, 2007 an action for breach of
contract and damages against petitioner before the
Regional Trial Court (RTC) of Mandaluyong.
Petitioner filed a Motion to Dismiss for lack of cause of
action and improper venue. It claimed that respondent
maintained its principal address in Makati as records of
the Securities and Exchange Commission (SEC) in 2007
show, viz: Cover Sheet of Amended Articles of
Incorporation[1] (wherein it is stated that the business
address of ASB Holdings Inc. is at Makati), Company
Relationship Information Sheet, and Directors Certificate
dated February 3, 2007 stating that ASB Holdings, Inc.,
with principal address at Makati, had amended its Articles
of Incorporation by renaming it (ASB Holdings, Inc.) to St.
Francis Square Holdings, Inc., respondent herein, hence,
the complaint should have been filed in Makati. By filing
the complaint in Mandaluyong, petitioner concluded that
respondent violated Section 2, Rule 4 of the Rules of
Court which provides:
Sec. 2. Venue of personal actions. All other actions may
be commenced and tried where the plaintiff or any of the
principal plaintiff resides, or where the defendant or any
of the principal defendant resides, or in the case of a non-
resident defendant where he may be found, at the election
of the plaintiff. (underscoring supplied)
Opposing the Motion to Dismiss, respondent claimed that
it had closed down its office in Makati effective December
31, 2005 as it now holds office in Mandaluyong City of
which petitioner is aware.
By Order of August 21, 2007,[2] Branch 212 of the
Mandaluyong RTC denied the motion to dismiss in this
wise:
. . . [P]laintiffs[-herein respondents] Articles of
Incorporation having stated [that] its principal office is
located in Metro Manila, this Court is of the opinion that
venue was properly laid considering that the instant case
was filed in Mandaluyong Cty which is part or a place
within Metro Manila.
Basic is the rule regarding propriety of venue in actions
involving private juridical entities that the principal place
of business of a corporation determines its residence or
domicile such that the place indicated in petitioners
Articles of Incorporation becomes controlling in
determining the venue.[3]
Petitioner moved to reconsider the denial of the motion,
pointing out that respondent violated SEC Memorandum
Circular No. 03 dated February 16, 2006, the relevant
portion of which reads:
In line with the full disclosure requirement of existing laws,
all corporations and partnerships applying for registration
with the Securities and Exchange Commission should
state in their Articles of Incorporation or Articles of
Partnership the (i) specific address of their principal office,
which shall include, if feasible, the street name, barangay,
city or municipality; and (ii) specific residence address of
each incorporator, stockholder, director, trustee, or
partner.
Metro Manila shall no longer be allowed as address of the
principal office. (emphasis and underscoring supplied)
32

Albeit in respondents Amended Articles of Incorporation
which was filed in 2007, after the above-stated SEC
circular had been issued, it still indicated its principal
office address to be Metro Manila, the trial court just the
same denied petitioners motion for reconsideration by
Order of November 12, 2007.[4]
be respected as [t]he controlling factor in determining
venue for cases is the primary objective for which said
cases are filed.[10] Respondents purpose in filing the
complaint in Mandaluyong where it holds its principal
office is obviously for its convenience and for orderly
administration of justice.

On petition for certiorari and prohibition, the Court of WHEREFORE, the petition is DENIED.
Appeals, by Decision of July 22, 2008,[5] affirmed the trial
courts order, hence, the present petition for review on SO ORDERED.
certiorari.

The petition fails.

Venue, in essence, concerns a rule of procedure. In

personal actions, it is fixed for the greatest possible
convenience of the plaintiff and his witnesses,[6] and to
promote the ends of justice.

Respondents complaint, being one for enforcement of

contractual provisions and recovery of damages, is in the
nature of a personal action which, under Section 2, Rule
4 of the Rules of Court,[7] shall be filed at the plaintiffs
residence. Specifically with respect to a domestic
corporation, it is in a metaphysical sense a resident of the
place where its principal office is located as stated in the
articles of incorporation.[8]

The letters of petitioner itself to respondent dated

November 2, 2006, December 18, 2006 and January 2,
2007 indicate the address of respondent to be at St.
Francis Square Mall, Julia Vargas, Ortigas Center, just as
the letters of respondent to petitioner before the filing of
the complaint on May 4, 2007 indicate its (respondents)
address to be at St. Francis Square Mall, Julia Vargas,
Ortigas Center. Petitioner was thus put on notice that at
the respondents filing of the complaint, the latters
business address has been at Mandaluyong.

IN FINE, although respondents Amended Articles of

Incorporation of 2007 indicates that its principal business
address is at Metro Manila, venue was properly laid in
Mandaluyong since that is where it had actually been
residing (or holding its principal office) at the time it filed
its complaint. Section 2, Rule 4 of the Rules of Court,
quoted earlier, authorizes the plaintiff (respondent in this
case) to make a choice of venue for personal actions
whether to file the complaint in the place where he resides
or where defendant resides.[9] Respondents choice must

33
G.R. No. L-27033 October 31, 1969
POLYTRADE CORPORATION, plaintiff-appellee,
vs.
VICTORIANO BLANCO, defendant-appellant.
Paredes, Poblador, Cruz and Nazareno for plaintiff-
appellee.
Isidro T. Almeda and Mario T. Banzuela for defendant-
appellant.
SANCHEZ, J.:
Suit before the Court of First Instance of Bulacan on four
causes of action to recover the purchase price of rawhide
delivered by plaintiff to defendant.1 Plaintiff corporation
has its principal office and place of business in Makati,
Rizal. Defendant is a resident of Meycauayan, Bulacan.
Defendant moved to dismiss upon the ground of improper
venue. He claims that by contract suit may only be lodged
in the courts of Manila. The Bulacan court overruled him.
He did not answer the complaint. In consequence, a
default judgment was rendered against him on September
21, 1966, thus:
WHEREFORE, judgment is hereby rendered in favor of
plaintiff and against defendant ordering defendant to pay
plaintiff the following amounts:
First Cause of Action
— general rule set forth in Section 2 (b), Rule 4, governs,
P60,845.67, with interest thereon at 1% a month from
May 9, 1965 until the full amount is paid.
Second Cause of Action
— "The parties agree to sue and be sued in the Courts of
P51,952.55, with interest thereon at 1% a month from
March 30, 1965 until the full amount is paid.
Third Cause of Action
— and defendant bound themselves to file suits with respect
P53,973.07, with interest thereon at 1% a month from July
3, 1965 until the full amount is paid.
Fourth Cause of Action
— 4. Renuntiatio non praesumitur.
P41,075.22, with interest thereon at 1% a month2 until the
full amount is paid.
In addition, defendant shall pay plaintiff attorney's fees
amounting to 25% of the principal amount due in each
cause of action, and the costs of the suit. The amount of
P400.00 shall be deducted from the total amount due
plaintiff in accordance with this judgment.
Defendant appealed.
1. The forefront question is whether or not venue
was properly laid in the province of Bulacan where
defendant is a resident.
Section 2 (b), Rule 4 of the Rules of Court on venue of
personal actions triable by courts of first instance — and
this is one — 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." Qualifying this provision in Section 3 of the same
Rule which states that venue may be stipulated by written
agreement — "By written agreement of the parties the
venue of an action may be changed or transferred from
one province to another."
Defendant places his case upon Section 3 of Rule 4 just
quoted. According to defendant, plaintiff and defendant,
by written contracts covering the four causes of action,
stipulated that: "The parties agree to sue and be sued in
the Courts of Manila." This agreement is valid.3
Defendant says that because of such covenant he can
only be sued in the courts of Manila. We are thus called
upon to shake meaning from the terms of the agreement
just quoted.
But first to the facts. No such stipulation appears in the
contracts covering the first two causes of action. The
and as to said two causes of action, venue was properly
laid in Bulacan, the province of defendant's residence.
The stipulation adverted to is only found in the
agreements covering the third and fourth causes of
action. An accurate reading, however, of the stipulation,
Manila," does not preclude the filing of suits in the
residence of plaintiff or defendant. The plain meaning is
that the parties merely consented to be sued in Manila.
Qualifying or restrictive words which would indicate that
Manila and Manila alone is the venue are totally absent
therefrom. We cannot read into that clause that plaintiff
to the last two transactions in question only or exclusively
in Manila. For, that agreement did not change or transfer
venue. It simply is permissive. The parties solely agreed
to add the courts of Manila as tribunals to which they may
resort. They did not waive their right to pursue remedy in
the courts specifically mentioned in Section 2(b) of Rule
Illuminating on this point is Engel vs. Shubert Theatrical
Co., 151 N.Y.S. 593, 594. And this, became there the
stipulation as to venue is along lines similar to the present.
Said stipulation reads: "In case of dispute, both
contracting parties agree to submit to the jurisdiction of
the Vienna courts." And the ruling is: "By the clause in
question the parties do not agree to submit their disputes
to the jurisdiction of the Viennese court, and to those
34
courts only. There is nothing exclusive in the language
used. They do agree to submit to the Viennese
jurisdiction, but they say not a word in restriction of the
jurisdiction of courts elsewhere; and whatever may be
said on the subject of the legality of contracts to submit
controversies to courts of certain jurisdictions exclusively,
it is entirely plain that such agreements should be strictly
construed, and should not be extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant
to plaintiff of interest at the rate of one per centum per
month. Defendant says that no such stipulation as to right
of interest appears in the sales confirmation orders which
provided: "TERMS — 60 days after delivery with interest
accruing on postdated cheques beyond 30 days." The
flaw in this argument lies in that the interest and the rate
thereof are expressly covenanted in the covering trust
receipts executed by defendant in favor of plaintiff, as
follows: "All obligations of the undersigned under this
agreement of trust shall bear interest at the rate of one
per centum (1%) per month from the date due until paid."
is that this case should not have gone to court. It could
have been easily avoided had defendant been faithful in
complying with his obligations. It is not denied that the
rawhide was converted into leather and sold by
defendant. He raises no defense. In fact, he did not even
answer the complaint in the lower court, and was thus
declared in default. Nor does he deny the principal
liability. Add to all these the fact that the writ of attachment
issued below upon defendant's properties yielded no
more than P400 and the picture is complete. The
continued maintenance by defendant of the suit is plainly
intended for delay. The attorneys' fees awarded cannot
be called iniquitous or unconscionable.
In the very recent case of Universal Motors Corporation
vs. Dy Hian Tat (1969), 28 SCRA 161, 170, we allowed
attorneys' fees in the form of liquidated damages at the
rate of 25% of the total amount of the indebtedness. Here,
the trial court has already reduced the attorneys' fees from
the stipulated 25% "of the total amount involved, principal
and interest, then unpaid" to only 25% of the principal
amount due. There is no reason why such judgment
should be disturbed.

On this score, we find no error.
3. Defendant protests the award of attorneys' fees
which totals P51,961.63, i.e., 25% of the total principal
indebtedness of P207,846.51 (exclusive of interest).
Defendant's thesis is that the foregoing sum is "exorbitant
and unconscionable."
FOR THE REASON GIVEN, the appealed judgment is
hereby affirmed, except that interest granted, in reference
to the fourth cause of action, should start from March 24,
1965.
Costs against defendant-appellant. So ordered.

To be borne in mind is that the attorneys' fees here

provided is not, strictly speaking, the attorneys' fees
recoverable as between attorney and client spoken of and
regulated by the Rules of Court. Rather, the attorneys'
fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause.4 It has
been said that so long as such stipulation does not
contravene law, morals, or public order, it is strictly
binding upon defendant.5 The attorneys' fees so provided
are awarded in favor of the litigant, not his counsel. It is
the litigant, not counsel, who is the judgment creditor
entitled to enforce the judgment by execution.6

The governing law then is Article 2227 of the Civil Code,

viz.: "Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they
are iniquitous or unconscionable." For this reason, we do
not really have to strictly view the reasonableness of the
attorneys' fees in the light of such factors as the amount
and character of the services rendered, the nature and
importance of the litigation, and the professional character
and the social standing of the attorney. We do concede,
however, that these factors may be an aid in the
determination of the iniquity or unconscionableness of
attorneys' fees as liquidated damages.

May the attorneys' fees (P51,961.63) here granted be

tagged as iniquitous or unconscionable? Upon the
circumstances, our answer is in the negative. Plaintiff's
lawyers concededly are of high standing. More important

35
G.R. No. L-27033 October 31, 1969
POLYTRADE CORPORATION, plaintiff-appellee,
vs.
VICTORIANO BLANCO, defendant-appellant.
Paredes, Poblador, Cruz and Nazareno for plaintiff-
appellee.
Isidro T. Almeda and Mario T. Banzuela for defendant-
appellant.
SANCHEZ, J.:
Suit before the Court of First Instance of Bulacan on four
causes of action to recover the purchase price of rawhide
delivered by plaintiff to defendant.1 Plaintiff corporation
has its principal office and place of business in Makati,
Rizal. Defendant is a resident of Meycauayan, Bulacan.
Defendant moved to dismiss upon the ground of improper
venue. He claims that by contract suit may only be lodged
in the courts of Manila. The Bulacan court overruled him.
He did not answer the complaint. In consequence, a
default judgment was rendered against him on September
21, 1966, thus:
WHEREFORE, judgment is hereby rendered in favor of
plaintiff and against defendant ordering defendant to pay
plaintiff the following amounts:
First Cause of Action
— general rule set forth in Section 2 (b), Rule 4, governs,
P60,845.67, with interest thereon at 1% a month from
May 9, 1965 until the full amount is paid.
Second Cause of Action
— "The parties agree to sue and be sued in the Courts of
P51,952.55, with interest thereon at 1% a month from
March 30, 1965 until the full amount is paid.
Third Cause of Action
— and defendant bound themselves to file suits with respect
P53,973.07, with interest thereon at 1% a month from July
3, 1965 until the full amount is paid.
Fourth Cause of Action
— 4. Renuntiatio non praesumitur.
P41,075.22, with interest thereon at 1% a month2 until the
full amount is paid.
In addition, defendant shall pay plaintiff attorney's fees
amounting to 25% of the principal amount due in each
cause of action, and the costs of the suit. The amount of
P400.00 shall be deducted from the total amount due
plaintiff in accordance with this judgment.
Defendant appealed.
1. The forefront question is whether or not venue
was properly laid in the province of Bulacan where
defendant is a resident.
Section 2 (b), Rule 4 of the Rules of Court on venue of
personal actions triable by courts of first instance — and
this is one — 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." Qualifying this provision in Section 3 of the same
Rule which states that venue may be stipulated by written
agreement — "By written agreement of the parties the
venue of an action may be changed or transferred from
one province to another."
Defendant places his case upon Section 3 of Rule 4 just
quoted. According to defendant, plaintiff and defendant,
by written contracts covering the four causes of action,
stipulated that: "The parties agree to sue and be sued in
the Courts of Manila." This agreement is valid.3
Defendant says that because of such covenant he can
only be sued in the courts of Manila. We are thus called
upon to shake meaning from the terms of the agreement
just quoted.
But first to the facts. No such stipulation appears in the
contracts covering the first two causes of action. The
and as to said two causes of action, venue was properly
laid in Bulacan, the province of defendant's residence.
The stipulation adverted to is only found in the
agreements covering the third and fourth causes of
action. An accurate reading, however, of the stipulation,
Manila," does not preclude the filing of suits in the
residence of plaintiff or defendant. The plain meaning is
that the parties merely consented to be sued in Manila.
Qualifying or restrictive words which would indicate that
Manila and Manila alone is the venue are totally absent
therefrom. We cannot read into that clause that plaintiff
to the last two transactions in question only or exclusively
in Manila. For, that agreement did not change or transfer
venue. It simply is permissive. The parties solely agreed
to add the courts of Manila as tribunals to which they may
resort. They did not waive their right to pursue remedy in
the courts specifically mentioned in Section 2(b) of Rule
Illuminating on this point is Engel vs. Shubert Theatrical
Co., 151 N.Y.S. 593, 594. And this, became there the
stipulation as to venue is along lines similar to the present.
Said stipulation reads: "In case of dispute, both
contracting parties agree to submit to the jurisdiction of
the Vienna courts." And the ruling is: "By the clause in
question the parties do not agree to submit their disputes
to the jurisdiction of the Viennese court, and to those
36
courts only. There is nothing exclusive in the language
used. They do agree to submit to the Viennese
jurisdiction, but they say not a word in restriction of the
jurisdiction of courts elsewhere; and whatever may be
said on the subject of the legality of contracts to submit
controversies to courts of certain jurisdictions exclusively,
it is entirely plain that such agreements should be strictly
construed, and should not be extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant
to plaintiff of interest at the rate of one per centum per
month. Defendant says that no such stipulation as to right
of interest appears in the sales confirmation orders which
provided: "TERMS — 60 days after delivery with interest
accruing on postdated cheques beyond 30 days." The
flaw in this argument lies in that the interest and the rate
thereof are expressly covenanted in the covering trust
receipts executed by defendant in favor of plaintiff, as
follows: "All obligations of the undersigned under this
agreement of trust shall bear interest at the rate of one
per centum (1%) per month from the date due until paid."
is that this case should not have gone to court. It could
have been easily avoided had defendant been faithful in
complying with his obligations. It is not denied that the
rawhide was converted into leather and sold by
defendant. He raises no defense. In fact, he did not even
answer the complaint in the lower court, and was thus
declared in default. Nor does he deny the principal
liability. Add to all these the fact that the writ of attachment
issued below upon defendant's properties yielded no
more than P400 and the picture is complete. The
continued maintenance by defendant of the suit is plainly
intended for delay. The attorneys' fees awarded cannot
be called iniquitous or unconscionable.
In the very recent case of Universal Motors Corporation
vs. Dy Hian Tat (1969), 28 SCRA 161, 170, we allowed
attorneys' fees in the form of liquidated damages at the
rate of 25% of the total amount of the indebtedness. Here,
the trial court has already reduced the attorneys' fees from
the stipulated 25% "of the total amount involved, principal
and interest, then unpaid" to only 25% of the principal
amount due. There is no reason why such judgment
should be disturbed.

On this score, we find no error.
3. Defendant protests the award of attorneys' fees
which totals P51,961.63, i.e., 25% of the total principal
indebtedness of P207,846.51 (exclusive of interest).
Defendant's thesis is that the foregoing sum is "exorbitant
and unconscionable."
FOR THE REASON GIVEN, the appealed judgment is
hereby affirmed, except that interest granted, in reference
to the fourth cause of action, should start from March 24,
1965.
Costs against defendant-appellant. So ordered.

To be borne in mind is that the attorneys' fees here

provided is not, strictly speaking, the attorneys' fees
recoverable as between attorney and client spoken of and
regulated by the Rules of Court. Rather, the attorneys'
fees here are in the nature of liquidated damages and the
stipulation therefor is aptly called a penal clause.4 It has
been said that so long as such stipulation does not
contravene law, morals, or public order, it is strictly
binding upon defendant.5 The attorneys' fees so provided
are awarded in favor of the litigant, not his counsel. It is
the litigant, not counsel, who is the judgment creditor
entitled to enforce the judgment by execution.6

The governing law then is Article 2227 of the Civil Code,

viz.: "Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they
are iniquitous or unconscionable." For this reason, we do
not really have to strictly view the reasonableness of the
attorneys' fees in the light of such factors as the amount
and character of the services rendered, the nature and
importance of the litigation, and the professional character
and the social standing of the attorney. We do concede,
however, that these factors may be an aid in the
determination of the iniquity or unconscionableness of
attorneys' fees as liquidated damages.

May the attorneys' fees (P51,961.63) here granted be

tagged as iniquitous or unconscionable? Upon the
circumstances, our answer is in the negative. Plaintiff's
lawyers concededly are of high standing. More important

37
G.R. No. L-37750 May 19, 1978
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. 4 Petitioner
moved to reconnsider the order of denial, but no avail. 5
Hence, this instant petition 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. 7 On January 18,
1974, We gave due course to the petition and required
respondent to answer. 8 Thereafter, the parties submitted
their 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; 10 that is an effective
waiver of venue, valid and binding as 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; 11 and that
condition No. 14 is unequivocal 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; 13 that while venue 6f
38
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., 17
and later through Justice Fernando in Fieldman Insurance
v. Vargas, 18 held —
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
39
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.
tendency to be injurious to the public or against the public
good ... 22 Under this principle" ... freedom of contract or
private dealing is restricted by law for the good of the
public. 23 Clearly, Condition No. 14, if enforced, will be
subversive of the 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.

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 21 the ends of justice.
Considering the 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

40
G.R. No. L-68111 December 20, 1988
BERNOLI P. ARQUERO, petitioner,
vs.
HONORABLE NAPOLEON J. FLOJO, Presiding
Judge, Branch VI, Regional Trial Court, Second
Judicial Region, Aparri, Cagayan and RADIO
COMMUNICATION OF THE PHILIPPINES (RCPI),
respondents.
Hermenegildo G. Rapanan for petitioner.
Treñas, Pagada & Associates for respondents.
PARAS, J.:
On November 27, 1983, the petitioner and private
respondent Radio Communications of the Philippines,
Inc. (RCPI), entered into a contract for services for the
transmission of a telegraphic message thru RCPI's
branch office in Aparri, Cagayan to Atty. Eleazar S.
Calasan at his office address in Quiapo, Manila. The text
of the telegram contract form for transmission (as well as
the telegram itself) reads:
Send the following message subject to the condition that
the RCPI shall not be liable for any damage howsoever
same may arise except for the refund of telegraphic tolls.
The sender agrees that as a condition precedent for a
cause of action against the RCPI any complaint relative
to the transmittal of this telegram must be brought to the
attention of the company within three months from date,
and that venue thereof shall be in the courts of Quezon
City alone and in no other courts.
ATTY. CALASAN
ROOM 401 PAYAWAL BLDG.
709 PATERNO, QUIAPO, MANILA
CONGRATULATIONS PREPARE ONE XEROX COPY
DECISION SEE YOU BONI'S BIRTHDAY.
BERNOLI
(Annex "D", P. 16, Rollo)
Atty. Eleazar S. Calasan received a copy of the telegram
the next day but he was made to pay the sum of P 7.30
for delivery charges. Thereafter, on November 30, 1983,
at the birthday party of Asst. Fiscal Bonifacio Sison in
Quezon City, Atty. Calasan confronted and censured the
petitioner anent the said telegram. Despite the petitioner's
explanation that the telegram had been duly paid for he
was branded as a "stingy mayor who cannot even afford
to pay the measely sum of P 7.30 for the telegram," (p. 2
Memorandum; p. 55, Rollo) in the presence of many
persons.
Thus, the petitioner filed an action for damages against
RCPI before the Regional Trial Court of Aparri, Cagayan.
RCPI filed a motion to dismiss on the ground of improper
venue, contending that pursuant to the service contract,
the parties had agreed that the venue of any action which
may arise out of the transmittal of the telegram shall be in
the courts of Quezon City alone.
On February 13, 1984, the trial court dismissed the case
and denied the motion for reconsideration re said
dismissal.
Hence, the instant petition. Citing the case of Sweet
Lines, Inc. v. Bernardo Teves, et al., 83 SCRA 361, the
petitioner claims that the condition with respect to venue
appearing on the ready printed form of RCPI's telegram
for transmission is void and unenforceable because the
petitioner had no hand in its preparation. The Court there
held that contracts of adhesion, where the provisions
have been drafted only by one party and the only
participation of the other party is the signing of his
signature or his adhesion thereto, are contrary to public
policy as they are injurious to the public or public good.
WE DISAGREE.
The agreement of the parties in the case at bar as to
venue is not contrary to law, public order, public policy,
morals or good customs.
The parties do not dispute that in the written contract sued
upon, it was expressly stipulated that any action relative
to the transmittal of the telegram against the RCPI must
be brought in the Courts of Quezon City alone. We note
that neither party to the contract reserved the right to
choose the venue of action as fixed by law (i.e., where the
plaintiff or defendant resides, at the election of the plaintiff
[par. 'b'], Section 2, Rule 4, Revised Rules of Court), as is
usually done if the parties purported to retain that right of
election granted by the Rules. Such being the case, it can
reasonably be inferred that the parties intended to
definitely fix the venue of action, in connection with the
written contract sued upon, in the courts of Quezon City
only. Section 3, Rule 4, Revised Rules of Court sanctions
such stipulation by providing that "by written agreement of
the parties the venue of action may be changed or
transferred from one province to another." (Bautista vs. de
Borja, 18 SCRA 474). As aptly held in the case of Central
Azucarera de Tarlac vs. De Leon, 56 Phil. 169,—
By said agreement the parties waived the legal venue,
and such waiver is valid and legally effective, because it
was merely a personal privilege they waived, which is not
contrary to public policy or to the prejudice of third
persons. It is a general principle that a person may
renounce any right which the law give unless such
renunciation is expressly prohibited or the right conferred
is of such nature that its renunciation would be against
public policy.
In Sweet Lines, Inc. vs. Teves, et al. supra, the Supreme
Court, in declaring the stipulation which limited the venue
of actions as void and unenforceable held:
41
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 hereto 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 insure that justice and fair play
characterize the relationship of the contracting parties.

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 secure whatever accommodations
may be availed of, even through circuitous routes, and/or
at the risk of their safety. ... 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 thereon, much less charge
them with having consented to the conditions, so printed,
especially if there are a number. of such conditions in fine
print, as in this case.

It should also be stressed that shipping companies are

franchise holders of certificates of public convenience
and, therefore, possess 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 vessels come from the
low-income groups and are less literate, and who have
little or no choice but to avail of petitioner's vessels.

In the instant case, the condition with respect to venue in

the telegram form for transmission was printed clearly in
the upper front portion of the form. Considering the
petitioner's educational attainment (being a lawyer by
profession and the Municipal Mayor of Sta. Teresita,
Cagayan), he must be charged with notice of the condition
limiting the venue to Quezon City, and by affixing his
signature thereon, he signified his assent thereto. Thus,
the ruling in Sweet Lines, Inc. vs. Teves, et al., is not
applicable in this case.

WHEREFORE, the petition is hereby DISMISSED for lack

of merit.

SO ORDERED.

42
G.R. No. 190071 August 15, 2012
UNION BANK OF THE PHILIPPINES, Petitioner,
vs.
MAUNLAD HOMES, INC. and all other persons or
entities claiming rights under it, Respondents.
VILLARAMA, JR.,*
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1
under Rule 45 of the Rules of Court filed by petitioner
Union Bank of the Philippines (Union Bank), assailing the
decision dated October 28, 20092 of the Court of Appeals
(CA) in CA-G.R. SP No. 107772.
THE FACTS
Union Bank is the owner of a commercial complex located
in Malolos, Bulacan, known as the Maunlad Shopping
Mall.
Sometime in August 2002, Union Bank, as seller, and
respondent Maunlad Homes, Inc. (Maunlad Homes), as
buyer, entered into a contract to sell3 involving the
Maunlad Shopping Mall. The contract set the purchase
price at ₱ 151 million, ₱ 2.4 million of which was to be paid
by Maunlad Homes as down payment payable on or
before July 5, 2002, with the balance to be amortized over
the succeeding 180-month period.4 Under the contract,
Union Bank authorized Maunlad Homes to take
possession of the property and to build or introduce
improvements thereon. The parties also agreed that if
Maunlad Homes violates any of the provisions of the
contract, all payments made will be applied as rentals for
the use and possession of the property, and all
improvements introduced on the land will accrue in favor
of Union Bank.5 In the event of rescission due to failure
to pay or to comply with the terms of the contract, Maunlad
Homes will be required to immediately vacate the property
and must voluntarily turn possession over to Union
Bank.6
When Maunlad Homes failed to pay the monthly
amortization, Union Bank sent the former a Notice of
Rescission of Contract7 dated February 5, 2003,
demanding payment of the installments due within 30
days from receipt; otherwise, it shall consider the contract
automatically rescinded. Maunlad Homes failed to
comply. Hence, on November 19, 2003, Union Bank sent
Maunlad Homes a letter demanding payment of the
rentals due and requiring that the subject property be
vacated and its possession turned over to the bank. When
Maunlad Homes continued to refuse, Union Bank
instituted an ejectment suit before the Metropolitan Trial
Court (MeTC) of Makati City, Branch 64, on February 19,
2004. Maunlad Homes resisted the suit by claiming,
among others, that it is the owner of the property as Union
Bank did not reserve ownership of the property under the
terms of the contract.8 By virtue of its ownership, Maunlad
Homes claimed that it has the right to possess the
property.
On May 18, 2005, the MeTC dismissed Union Bank’s
ejectment complaint.9 It found that Union Bank’s cause of
action was based on a breach of contract and that both
parties are claiming a better right to possess the property
based on their respective claims of ownership of the
property.
The MeTC ruled that the appropriate action to resolve
these conflicting claims was an accion reivindicatoria,
over which it had no jurisdiction.
On appeal, the Regional Trial Court (RTC) of Makati City,
Branch 139, affirmed the MeTC in its decision dated July
17, 2008;10 it agreed with the MeTC that the issues
raised in the complaint extend beyond those commonly
involved in an unlawful detainer suit. The RTC declared
that the case involved a determination of the rights of the
parties under the contract. Additionally, the RTC noted
that the property is located in Malolos, Bulacan, but the
ejectment suit was filed by Union Bank in Makati City,
based on the contract stipulation that "the venue of all
suits and actions arising out or in connection with the
Contract to Sell shall be in Makati City."11 The RTC ruled
that the proper venue for the ejectment action is in
Malolos, Bulacan, pursuant to the second paragraph of
Section 1, Rule 4 of the Rules of Court, which states:
Section 1. Venue of real actions. - Actions affecting title to
or possession of real property, or interest therein, shall be
commenced and tried in the proper court which has
jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced
and tried in the municipal trial court of the municipality or
city wherein the real property involved, or a portion
thereof, is situated. [emphasis ours]
The RTC declared that Union Bank cannot rely on the
waiver of venue provision in the contract because
ejectment is not an action arising out of or connected with
the contract.
Union Bank appealed the RTC decision to the CA through
a petition for review under Rule 42 of the Rules of Court.
The CA affirmed the RTC decision in its October 28, 2009
decision,12 ruling that Union Bank’s claim of possession
is based on its claim of ownership which in turn is based
on its interpretation of the terms and conditions of the
contract, particularly, the provision on the consequences
of Maunlad Homes’ breach of contract. The CA
determined that Union Bank’s cause of action is premised
on the interpretation and enforcement of the contract and
the determination of the validity of the rescission, both of
which are matters beyond the jurisdiction of the MeTC.
Therefore, it ruled that the dismissal of the ejectment suit
was proper. The CA, however, made no further ruling on
the issue of venue of the action.
43

From the CA’s judgment, Union Bank appealed to the
Court by filing the present petition for review on certiorari
under Rule 45 of the Rules of Court.
THE PARTIES’ ARGUMENTS
Union Bank disagreed with the CA’s finding that it is
claiming ownership over the property through the
ejectment action. It claimed that it never lost ownership
over the property despite the execution of the contract,
since only the right to possess was conceded to Maunlad
Homes under the contract; Union Bank never transferred
ownership of the property to Maunlad Homes. Because of
Maunlad Homes’ failure to comply with the terms of the
contract, Union Bank believes that it rightfully rescinded
the sale, which rescission terminated Maunlad Homes’
right to possess the subject property. Since Maunlad
Homes failed to turn over the possession of the subject
property, Union Bank believes that it correctly instituted
the ejectment suit.
The Court initially denied Union Bank’s petition in its
Resolution dated March 17, 2010.13 Upon motion for
reconsideration filed by Union Bank, the Court set aside
its Resolution of March 17, 2010 (in a Resolution dated
May 30, 201114 ) and required Maunlad Homes to
comment on the petition.
Maunlad Homes contested Union Bank’s arguments,
invoking the rulings of the lower courts. It considered
Union Bank’s action as based on the propriety of the
rescission of the contract, which, in turn, is based on a
determination of whether Maunlad Homes indeed failed
to comply with the terms of the contract; the propriety of
the rescission, however, is a question that is within the
RTC’s jurisdiction. Hence, Maunlad Homes contended
that the dismissal of the ejectment action was proper.
THE COURT’S RULING
We find the petition meritorious.
The authority of the MeTC to
interpret contracts in an unlawful
detainer action
In any case involving the question of jurisdiction, the Court
is guided by the settled doctrine that the jurisdiction of a
court is determined by the nature of the action pleaded by
the litigant through the allegations in his complaint.15
Unlawful detainer is an action to recover possession of
real property from one who unlawfully withholds
possession after the expiration or termination of his right
to hold possession under any contract, express or
implied. The possession of the defendant in unlawful
detainer is originally legal but became illegal due to
expiration or termination of the right to possess.16 Under
Section 1, Rule 70 of the Rules of Court, the action must
be filed "within one (1) year after the unlawful deprivation
or withholding of possession." Thus, to fall within the
jurisdiction of the MeTC, the complaint must allege that –
1. the defendant originally had lawful possession of the
property, either by virtue of a contract or by tolerance of
the plaintiff; 2. eventually, the defendant’s possession of
the property becameillegal or unlawful upon notice by the
plaintiff to defendant of the expiration or the termination of
the defendant’s right of possession;
3. thereafter, the defendant remained in possession of the
property and deprived the plaintiff the enjoyment thereof;
and
4. within one year from the unlawful deprivation or
withholding of possession, the plaintiff instituted the
complaint for ejectment.17
Contrary to the findings of the lower courts, all four
requirements were alleged in Union Bank’s Complaint.
Union Bank alleged that Maunlad Homes "maintained
possession of the subject properties" pursuant to the
Contract to Sell.18 Maunlad Homes, however, "failed to
faithfully comply with the terms of payment," prompting
Union Bank to "rescind the Contract to Sell in a Notice of
Rescission dated February 5, 2003."19 When Maunlad
Homes "refused to turn over and vacate the subject
premises,"20 Union Bank sent another Demand Letter on
November 19, 2003 to Maunlad Homes requiring it (1)
"[t]o pay the equivalent rentals-in-arrears as of October
2003 in the amount of ₱ 15,554,777.01 and monthly
thereafter until the premises are fully vacated and turned
over" to Union Bank, and (2) to vacate the property
peacefully and turn over possession to Union Bank.21 As
the demand went unheeded, Union Bank instituted an
action for unlawful detainer before the MeTC on February
19, 2004, within one year from the date of the last
demand. These allegations clearly demonstrate a cause
of action for unlawful detainer and vested the MeTC
jurisdiction over Union Bank’s action.
Maunlad Homes denied Union Bank’s claim that its
possession of the property had become unlawful. It
argued that its failure to make payments did not terminate
its right to possess the property because it already
acquired ownership when Union Bank failed to reserve
ownership of the property under the contract. Despite
Maunlad Homes’ claim of ownership of the property, the
Court rules that the MeTC retained its jurisdiction over the
action; a defendant may not divest the MeTC of its
jurisdiction by merely claiming ownership of the
property.22 Under Section 16, Rule 70 of the Rules of
Court, "when the defendant raises the defense of
ownership in his pleadings and the question of
possession cannot be resolved without deciding the issue
of ownership, the issue of ownership shall be resolved
only to determine the issue of possession." Section 18,
Rule 70 of the Rules of Court, however, states that "the
judgment x x x shall be conclusive with respect to the
possession only and shall in no wise bind the title or affect
the ownership of the land or building."
44
The authority granted to the MeTC to preliminarily resolve
the issue of ownership to determine the issue of
possession ultimately allows it to interpret and enforce the
contract or agreement between the plaintiff and the
defendant. To deny the MeTC jurisdiction over a
complaint merely because the issue of possession
requires the interpretation of a contract will effectively rule
out unlawful detainer as a remedy. As stated, in an action
for unlawful detainer, the defendant’s right to possess the
property may be by virtue of a contract, express or
implied; corollarily, the termination of the defendant’s right
to possess would be governed by the terms of the same
contract. Interpretation of the contract between the
plaintiff and the defendant is inevitable because it is the
contract that initially granted the defendant the right to
possess the property; it is this same contract that the
plaintiff subsequently claims was violated or extinguished,
terminating the defendant’s right to possess. We ruled in
Sps. Refugia v. CA23 that –
where the resolution of the issue of possession hinges on
a determination of the validity and interpretation of the
document of title or any other contract on which the claim
of possession is premised, the inferior court may likewise
pass upon these issues.
The MeTC’s ruling on the rights of the parties based on
its interpretation of their contract is, of course, not
conclusive, but is merely provisional and is binding only
with respect to the issue of possession.
Thus, despite the CA’s opinion that Union Bank’s "case
involves a determination of the rights of the parties under
the Contract to Sell,"24 it is not precluded from resolving
this issue. Having acquired jurisdiction over Union Bank’s
action, the MeTC can resolve the conflicting claims of the
parties based on the facts presented and proved.
The right to possess the property was
extinguished when the contract to
sell failed to materialize
Maunlad Homes acquired possession of the property
based on its contract with Union Bank. While admitting
that it suspended payment of the installments,25 Maunlad
Homes contended that the suspension of payment did not
affect its right to possess the property because its contract
with Union Bank was one of sale and not to sell; hence,
ownership of the
property has been transferred to it, allowing it to retain
possession notwithstanding nonpayment of installments.
The terms of the contract, however, do not support this
conclusion.
Section 11 of the contract between Union Bank and
Maunlad Homes provides that "upon payment in full of the
Purchase Price of the Property x x x, the SELLER shall
execute and deliver a Deed of Absolute Sale conveying
the Property to the BUYER."26 "Jurisprudence has
established that where the seller promises to execute a
deed of absolute sale upon the completion by the buyer
of the payment of the price, the contract is only a contract
to sell."27 The presence of this provision generally
identifies the contract as being a mere contract to sell.28
After reviewing the terms of the contract between Union
Bank and Maunlad Homes, we find no reasonable ground
to exempt the present case from the general rule; the
contract between Union Bank and Maunlad Homes is a
contract to sell.
In a contract to sell, the full payment of the purchase price
is a positive suspensive condition whose non-fulfillment is
not a breach of contract, but merely an event that
prevents the seller from conveying title to the purchaser.
"The non-payment of the purchase price renders the
contract to sell ineffective and without force and effect."29
Maunlad Homes’ act of withholding the installment
payments rendered the contract ineffective and without
force and effect, and ultimately deprived itself of the right
to continue possessing Maunlad Shopping Mall.
The propriety of filing the unlawful
detainer action in Makati City
pursuant to the venue stipulation in
the contract
Maunlad Homes questioned the venue of Union Bank’s
unlawful detainer action which was filed in Makati City
while the contested property is located in Malolos,
Bulacan. Citing Section 1, Rule 4 of the Rules of Court,
Maunlad Homes claimed that the unlawful detainer action
should have been filed with the municipal trial court of the
municipality or city where the real property involved is
situated. Union Bank, on the other hand, justified the filing
of the complaint with the MeTC of Makati City on the
venue stipulation in the contract which states that "the
venue of all suits and actions arising out of or in
connection with this Contract to Sell shall be at Makati
City."30
While Section 1, Rule 4 of the Rules of Court states that
ejectment actions shall be filed in "the municipal trial court
of the municipality or city wherein the real property
involved x x x is situated," Section 4 of the same Rule
provides that the rule shall not apply "where the parties
have validly agreed in writing before the filing of the action
on the exclusive venue thereof." Precisely, in this case,
the parties provided for a different venue. In Villanueva v.
Judge Mosqueda, etc., et al.,31 the Court upheld the
validity of a stipulation in a contract providing for a venue
for ejectment actions other than that stated in the Rules
of Court. Since the unlawful detainer action is connected
with the contract, Union Bank rightfully filed the complaint
with the MeTC of Makati City.
WHEREFORE, we hereby GRANT the petition and SET
ASIDE the decision dated October 28, 2009 of the Court
of Appeals in CA-G.R. SP No. 107772. Respondent
Maunlad Homes, Inc. is ORDERED TO VACATE the
Maunlad Shopping Mall, the property subject of the case,
immediately upon the finality of this Decision. Respondent
Maunlad Homes, Inc. is further ORDERED TO PAY the
45
rentals-in-arrears, as well as rentals accruing in the
interim until it vacates the property.

The case is REMANDED to the Metropolitan Trial Court

of Makati City, Branch 64, to determine the amount of
rentals due. In addition to the amount determined as
unpaid rent, respondent Maunlad Homes, Inc. is
ORDERED TO PAY legal interest of six percent (6o/o) per
annum, from November 19, 2003, when the demand to
pay and to vacate was made, up to the finality of this
Decision. Thereafter, an interest of twelve percent ( 12%)
per annum shall be imposed on the total amount due until
full payment is made.

SO ORDERED.

46
[G.R. No. 156966. May 7, 2004]
PILIPINO TELEPHONE CORPORATION, petitioner,
vs. DELFINO TECSON, respondent.
DECISION
VITUG, J.:
The facts, by and large, are undisputed.
On various dates in 1996, Delfino C. Tecson applied for
six (6) cellular phone subscriptions with petitioner Pilipino
Telephone Corporation (PILTEL), a company engaged in
the telecommunications business, which applications
were each approved and covered, respectively, by six
mobiline service agreements.
On 05 April 2001, respondent filed with the Regional Trial
Court of Iligan City, Lanao Del Norte, a complaint against
petitioner for a Sum of Money and Damages. Petitioner
moved for the dismissal of the complaint on the ground of
improper venue, citing a common provision in the
mobiline service agreements to the effect that -
Venue of all suits arising from this Agreement or any other
suit directly or indirectly arising from the relationship
between PILTEL and subscriber shall be in the proper
courts of Makati, Metro Manila. Subscriber hereby
expressly waives any other venues.[1]
In an order, dated 15 August 2001, the Regional Trial
Court of Iligan City, Lanao del Norte, denied petitioners
motion to dismiss and required it to file an answer within
15 days from receipt thereof.
Petitioner PILTEL filed a motion for the reconsideration,
through registered mail, of the order of the trial court. In
its subsequent order, dated 08 October 2001, the trial
court denied the motion for reconsideration.
Petitioner filed a petition for certiorari under Rule 65 of the
Revised Rules of Civil Procedure before the Court of
Appeals.
The Court of Appeals, in its decision of 30 April 2002, saw
no merit in the petition and affirmed the assailed orders of
the trial court. Petitioner moved for a reconsideration, but
the appellate court, in its order of 21 January 2003, denied
the motion.
There is merit in the instant petition.
Section 4, Rule 4, of the Revised Rules of Civil
Procedure[2] allows the parties to agree and stipulate in
writing, before the filing of an action, on the exclusive
venue of any litigation between them. Such an agreement
would be valid and binding provided that the stipulation on
the chosen venue is exclusive in nature or in intent, that it
is expressed in writing by the parties thereto, and that it is
entered into before the filing of the suit. The provision
contained in paragraph 22 of the Mobile Service
Agreement, a standard contract made out by petitioner
PILTEL to its subscribers, apparently accepted and
signed by respondent, states that the venue of all suits
arising from the agreement, or any other suit directly or
indirectly arising from the relationship between PILTEL
and subscriber, shall be in the proper courts of Makati,
Metro Manila. The added stipulation that the subscriber
expressly waives any other venue[3] should indicate,
clearly enough, the intent of the parties to consider the
venue stipulation as being preclusive in character.
The appellate court, however, would appear to anchor its
decision on the thesis that the subscription agreement,
being a mere contract of adhesion, does not bind
respondent on the venue stipulation.
Indeed, the contract herein involved is a contract of
adhesion. But such an agreement is not per se
inefficacious. The rule instead is that, should there be
ambiguities in a contract of adhesion, such ambiguities
are to be construed against the party that prepared it. If,
however, the stipulations are not obscure, but are clear
and leave no doubt on the intention of the parties, the
literal meaning of its stipulations must be held
controlling.[4]
A contract of adhesion is just as binding as ordinary
contracts. It is true that this Court has, on occasion, struck
down such contracts as being assailable when the weaker
party is left with no choice by the dominant bargaining
party and is thus completely deprived of an opportunity to
bargain effectively. Nevertheless, contracts of adhesion
are not prohibited even as the courts remain careful in
scrutinizing the factual circumstances underlying each
case to determine the respective claims of contending
parties on their efficacy.
In the case at bar, respondent secured six (6) subscription
contracts for cellular phones on various dates. It would be
difficult to assume that, during each of those times,
respondent had no sufficient opportunity to read and go
over the terms and conditions embodied in the
agreements. Respondent continued, in fact, to acquire in
the pursuit of his business subsequent subscriptions and
remained a subscriber of petitioner for quite sometime.
In Development Bank of the Philippines vs. National
Merchandising Corporation,[5] the contracting parties,
being of age and businessmen of experience, were
presumed to have acted with due care and to have signed
the assailed documents with full knowledge of their
import. The situation would be no less true than that which
obtains in the instant suit. The circumstances in Sweet
Lines, Inc. vs. Teves,[6] wherein this Court invalidated the
venue stipulation contained in the passage ticket, would
appear to be rather peculiar to that case. There, the Court
took note of an acute shortage in inter-island vessels that
left passengers literally scrambling to secure
accommodations and tickets from crowded and
congested counters. Hardly, therefore, were the
passengers accorded a real opportunity to examine the
fine prints contained in the tickets, let alone reject them.
47
A contract duly executed is the law between the parties,
and they are obliged to comply fully and not selectively
with its terms. A contract of adhesion is no exception.[7]

WHEREFORE, the instant petition is GRANTED, and the

questioned decision and resolution of the Court of
Appeals in CA-G.R. SP No. 68104 are REVERSED and
SET ASIDE. Civil Case No. 5572 pending before the
Regional Trial Court of Iligan City, Branch 4, is
DISMISSED without prejudice to the filing of an
appropriate complaint by respondent against petitioner
with the court of proper venue. No costs.

SO ORDERED.

48
[G.R. No. 142523. November 27, 2001]
MARIANO L. GUMABON, JOSEFA GUMABON
TOLENTINO, TERESA GUMABON EUGENIO, MARIO
GUEVARRA, FAUSTINO GUMABON ONDEVILLA,
WILFREDO GUMABON, GUILLERMO GUMABON,
BRAULIO GUMABON and NOEL DOLOJAN,
petitioners, vs. AQUILINO T. LARIN, respondent.
DECISION
VITUG, J.:
The Petition for Review on Certiorari raises before the
Court one simple query Whether or not a trial court judge
can motu proprio dismiss an action for its improper venue.
The Court here rules in the negative.
Petitioners executed, on 29 April 1958, in favor of
respondent Aquilino Larin a Deed of Sale With Right of
Repurchase over a parcel of land covered by Transfer
Certificate of Title ("TCT") No. 6643, located in Pangdara,
Candaba, Pampanga. The terms of repurchase, spelled
out in the deed, were that the vendors, or any one of them,
could repurchase the property, or their respective
undivided shares, "at any time, from the date of the
contract, after each harvest of each crop year," by
repaying Larin the purchase price and such other sums of
money as might have been or be advanced to them.
Thirty-nine years later, petitioners filed a complaint
against respondent before the Regional Trial Court
("RTC") of Quezon City, seeking the return of the
certificate of title from Larin who, it was alleged, refused
to hand over the certificate despite the full payment,
nearly seven times the original amount, of their loan. In
his answer with counterclaim, respondent averred that the
transaction was not, as petitioners so asserted, an
equitable mortgage but a true sale with a right to
repurchase; that no repurchase amount was paid to him;
and that the period for the right of repurchase had already
prescribed. Petitioners filed a reply together with a motion
to dismiss the counterclaim which asseverated that the
counterclaim contained no certification of non-forum
shopping prescribed by Section 5, Rule 7, of the 1997
Rules of Civil Procedure. On 07 November 1997, the RTC
dismissed the counterclaim on the basis of that
technicality. The failure of respondent and his counsel to
submit a pre-trial brief, as well as to attend the pre-trial
scheduled on 16 September 1997, enabled petitioners,
upon motion, to present their evidence ex-parte.
Demurring to the evidence and contending that petitioners
had no right to the relief sought, respondent moved for the
dismissal of the case. The RTC, in its order of 06 May
1999, after noting the exceptions taken by respondent,
admitted the offered exhibits of petitioners, denied due
course to the demurrer of respondent to the evidence, and
gave petitioners thirty days within which to submit their
memorandum. On 18 May 1999, respondent moved for
the reconsideration of the order asking, at the same time,
for the inhibition of Judge Thelma A. Ponferrada from
further hearing the case. The motion was objected to by
petitioners. Meanwhile, on 14 June 1999, petitioners filed
their memorandum. On 24 July 1999, Judge Thelma A.
Ponferrada voluntarily inhibited herself.
The case was raffled to Branch 82 of RTC Quezon City,
presided over by Judge Salvador C. Ceguera, which
forthwith set the motion for reconsideration of respondent
for hearing. In due time, Judge Ceguera issued the
assailed order, dismissing the complaint on the ground
that, being a real action, the case should have been filed
before the RTC of Pampanga, not the RTC of Quezon
City, which could validly take cognizance of the
controversy. The order came unexpectedly, according to
petitioners, for not only was it issued motu proprio; it was
also made at the homestretch stage of the proceedings.
In questioning the ruling of the trial court in the instant
recourse, petitioners would emphasize that respondent
Larin never assailed, at any stage theretofore, the venue
of the case nor raised in issue the competence of the RTC
of Quezon City to try the case. Instead, petitioners pointed
out that Larin had impliedly affirmed his assent to venue
by persistently seeking affirmative reliefs from the court
and a favorable judgment on his demurrer to evidence.
The Court will limit itself to the parameters of the legal
inquiry posed, i.e., whether or not the trial court, given the
circumstances, has acted correctly in dismissing the case
on the ground of improper venue.
Petitioners assert that the relief they seek is not to be
declared the owners of the land, as TCT No. 6643 is
already in their name, nor to regain possession thereof,
as they have been the continuous occupants of the
property up until now, but merely to compel respondent to
return the certificate of title back to them.
Sections 1 and 2, Rule 4, of the 1997 Rules of Civil
Procedure, under the title Venue of Actions, provide:
"Section 1. Venue of Real Actions. Actions affecting title
to or possession of real property, or interest therein, shall
be commenced and tried in the proper court which has
jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.
"Sec. 2. Venue of personal actions. All other actions may
be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any
of the principal defendants resides, or in the case of a
non-resident defendant where he may be found, at the
election of the plaintiff."
Real actions, as so opposed to personal actions, are
those which affect the title to or possession of real
property. Where a contrary claim to ownership is made by
an adverse party, and where the relief prayed for cannot
be granted without the court deciding on the merits the
issue of ownership and title, more specifically so as to
who, between the contending parties, would have a better
right to the property, the case can only be but a real
action.
49
 be pleaded as an affirmative defense in the answer, and
In Espineli, et al. vs. Santiago,[1] cited by Judge Ceguera upon the discretion of the court, a preliminary hearing may
in dismissing the case, the Court there ruled: be made thereon as if a motion to dismiss has been filed.
But, as it is, improper venue not having been so raised by
"Under the facts set forth in the complaint and in the respondent as a ground to dismiss, he must be deemed
motion to intervene filed in said Civil Case No. U-152, the to have waived the same.[11]
issue therein is, who, as between Mrs. Ramirez, on the
one hand, and the Espinelis on the other, has a better Jurisdiction, on the other hand, is more substantive than
right to the aforementioned Lot No. 34, which is situated procedural. It refers to the authority of the court to hear
in Quezon City. The main relief sought therein by Mrs. and decide a case, and, it is one that is dictated by
Ramirez - the delivery of the certificate of title covering law,[12] and the matter ordinarily can be raised at any
said Lot is entirely dependent upon the aforesaid issue. stage of the trial, even upon appeal. The rule, of course,
Thus, it is not possible for the Court of First Instance of deviates from this general rule in criminal cases where
Pangasinan to decide the case, without passing upon the locus criminis itself defines the jurisdiction of the trial
claim of the parties with respect to the title and possession court.[13]
of said Lot No. 34, which claim shall be determined
pursuant to the above-quoted provision in the province The wrong venue in Civil Case No. 97-31709, being
where' said 'property or any part thereof lies.'" merely a procedural infirmity, not a jurisdictional
impediment, does not, without timely exception, disallow
Referring to the place where a civil action must be tried, the RTC of Quezon City to take cognizance of, and to
venue, unlike jurisdiction which is conferred by law, proceed with, the case.[14] In failing to raise his objection
essentially concerns a rule of procedure which looks to it either in a motion to dismiss or in his answer, coupled
primarily at the convenience of the litigants. A plaintiff by his having sought relief from the court and favorable
impliedly elects venue by choosing the court where he judgment on his demurrer to evidence, respondent has
files his complaint. Venue can even be the subject of himself evinced an acceptance on the venue of the action.
agreement by the parties.[2] Under Section 4, Rule 4, of The court a quo has thus erred in dismissing motu proprio
the old rules,[3] such an agreement to venue may be the complaint on the ground of improper venue.[15]
impliedly made by the defendant when he fails to
seasonably object to it. While the present 1997 Rules of WHEREFORE, the Petition for Review on Certiorari is
Civil Procedure, particularly Section 1, Rule 9,[4] thereof, GRANTED. The orders of the Regional Trial Court of
does not contain provisions similar to Sections 3 and 4 of Quezon City, Branch 82, dated 25 October 1999 and 15
the old rules, the deletion, however, cannot be taken to March 1999, are SET ASIDE. Civil Case No. Q-97-31709
mean that objection to venue may now be raised at any is ordered REINSTATED, and the case is remanded to
time but that, rather, an objection to venue may still be the court a quo for further proceedings. No costs.
made in an answer if no motion to dismiss is filed.[5]
SO ORDERED.
As so aptly observed by Mr. Justice Jose A.R. Melo during
the deliberations, the motu proprio dismissal of a case
was traditionally limited to instances when the court
clearly had no jurisdiction over the subject matter and
when the plaintiff did not appear during trial, failed to
prosecute his action for an unreasonable length of time or
neglected to comply with the rules or with any order of the
court.[6] Outside of these instances, any motu proprio
dismissal would amount to a violation of the right of the
plaintiff to be heard. Except for qualifying and expanding
Section 2,[7] Rule 9, and Section 3,[8] Rule 17, of the
Revised Rules of Court, the amendatory 1997 Rules of
Civil Procedure[9] brought about no radical change.
Under the new rules, a court may motu proprio dismiss a
claim when it appears from the pleadings or evidence on
record that it has no jurisdiction over the subject matter;
when there is another cause of action pending between
the same parties for the same cause, or where the action
is barred by a prior judgment or by statute of limitations.
Improper venue not being included in the enumeration, it
should follow that motu proprio dismissal on said ground
would still not be allowed under the 1997 Rules of Civil
Procedure. Sections 6,[10] Rule 16, of the 1997 Rules of
Civil Procedure further provides that if no motion to
dismiss has been filed, any of the grounds for dismissal
provided under the rules, including improper venue, may

50
G.R. No. 222711, August 23, 2017
LEY CONSTRUCTION AND DEVELOPMENT
CORPORATION, REPRESENTED BY ITS PRESIDENT,
JANET C. LEY, Petitioner, v. MARVIN MEDEL
SEDANO, DOING BUSINESS UNDER THE NAME AND
STYLE "LOLA TABA LOLO PATO PALENGKE AT
PALUTO SA SEASIDE," Respondent.
MARVIN MEDEL SEDANO, DOING BUSINESS UNDER
THE NAME AND STYLE "LOLA TABA LOLO PATO
PALENGKE AT PALUTO SA SEASIDE," Respondent
(THIRD-PARTY PLAINTIFF), VS. PHILIPPINE
NATIONAL CONSTRUCTION CORPORATION,
Respondent (THIRD-PARTY DEFENDANT).
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the
Orders dated June 15, 20152 and January 27, 20163 of
the Regional Trial Court (RTC) of Valenzuela City, Branch
75 (Valenzuela-RTC) in Civil Case No. 40-V-12, which
dismissed petitioner Ley Construction and Development
Corporation's (as represented by its President, Janet C.
Ley; petitioner) complaint for collection of sum of money
and damages, without prejudice, on the ground of
improper venue.
The Facts
On March 13, 2012, petitioner filed a Complaint for
Collection of Sum of Money and Damages4 against
respondent Marvin Medel Sedano (respondent), doing
business under the name and style "Lola Taba Lolo Pato
Palengke at Paluto sa Seaside," before the Valenzuela-
RTC, docketed as Civil Case No. 40-V-12. In its
complaint, petitioner alleged that on January 14, 2005, it
leased5 a 50,000-square meter (sq.m.) parcel of land
located at Financial Center Area, Pasay City (now, Lot 5-
A Diosdado Macapagal Boulevard, Pasay City) from
respondent third-party defendant, the Philippine National
Construction Corporation (PNCC).6 On September 11,
2006, petitioner subleased7 the 14,659.80-sq.m. portion
thereof to respondent for a term often (10) years
beginning November 15, 2005, for a monthly rent of
P1,174,780.00, subject to a ten percent (10%) increase
beginning on the third year and every year thereafter
(lease contract).8 Respondent allegedly failed to pay the
rent due for the period August 2011 to December 2011,
amounting to a total of P8,828,025.46, and despite
demands,9 refused to settle his obligations;10 hence, the
complaint.
In his Answer with Third-Party Complaint,11 respondent
countered that he religiously paid rent to petitioner until
PNCC demanded12 that the rent be paid directly to it, in
view of the petitioner's eviction from the subject property
by virtue of a court order.13 Thus, during the period from
August 2011 until December 2011, he remitted the rentals
to PNCC.14 Should he be found liable to petitioner,
respondent maintained that the RTC should hold PNCC
liable to reimburse to him the amounts he paid as rentals;
hence, the third-party complaint.15
Respondent likewise pointed out that the venue was
improperly laid since Section 2116 of the lease contract
provides that "[a]ll actions or case[s] filed in connection
with this case shall be filed with the Regional Trial Court
of Pasay City, exclusive of all others."17 Hence, the
complaint should be dismissed on the ground of improper
venue.
Finally, respondent argued that he paid petitioner the
amounts of P3,518,352.00 as deposit and advance
rentals under the lease contract, and that he made a
P400,000.00 overpayment, all of which amounts were not
liquidated or credited to respondent during the
subsistence of the lease contract. Thus, respondent
interposed a counterclaim, seeking petitioner to
reimburse the said amounts to him, and to pay him moral
and exemplary damages, including litigation expenses, in
view of petitioner's filing of such baseless suit.18
In its Comment/Opposition19 to respondent's affirmative
defense of improper venue, petitioner argued that Section
21 of the lease contract is not a stipulation as to venue,
but a stipulation on jurisdiction which is void.20 This is
because such stipulation deprives other courts, i.e., the
Municipal Trial Courts, of jurisdiction over cases which,
under the law, are within its exclusive original jurisdiction,
such as an action for unlawful detainer.21 Petitioner
further posited that respondent had already submitted
himself to the jurisdiction of the Valenzuela-RTC and had
waived any objections on venue, since he sought
affirmative reliefs from the said court when he asked
several times for additional time to file his responsive
pleading, set-up counterclaims against petitioner, and
impleaded PNCC as a third-party defendant.22
Meanwhile, in its Answer to Third Party Complaint with
Counterclaim,23 PNCC contended that respondent has
no cause of action against it, since he acknowledged
PNCC's right to receive rent, as evidenced by his direqt
payment thereof to PNCC.24 Respondent also entered
into a contract of lease with PNCC after learning that
petitioner had been evicted from the premises by virtue of
a court ruling.25
The Valenzuela-RTC Ruling
In an Order26 dated June 15, 2015, the Valenzuela-RTC
granted respondent's motion and dismissed the complaint
on the ground of improper venue. It held that Section 21
of the lease contract between petitioner and respondent
is void insofar as it limits the filing of cases with the RTC
of Pasay City, even when the subject matter jurisdiction
over the case is with the Metropolitan Trial Courts.27
However, with respect to the filing of cases cognizable by
the RTCs, the stipulation validly limits the venue to the
RTC of Pasay City.28 Since petitioner's complaint is one
for collection of sum of money in an amount that is within
51
the jurisdiction of the RTC, petitioner should have filed the
case with the RTC of Pasay City.29
The Valenzuela-RTC also found no merit in petitioner's
claim that respondent waived his right to question the
venue when he filed several motions for extension of time
to file his answer. It pointed out that improper venue was
among the defenses raised in respondent's Answer. As
such, it was timely raised and, therefore, not waived.30
Aggrieved, petitioner moved for reconsideration31 which
was, however, denied by the Valenzuela-RTC in its
Order32 dated January 27, 2016; hence, the present
petition.
The Issue Before the Court
The sole issue for the Court's resolution is whether or not
the
Valenzuela-RTC erred in ruling that venue was improperly
laid.
The Court's Ruling
The petition has no merit.
Rule 4 of the Rules of Court governs the rules on venue
of civil actions, to wit:chanRoblesvirtualLawlibrary
Rule 4
VENUE OF ACTIONS
Section 1. Venue of real actions. - Actions affecting title to
or possession of real property, or interest therein, shall be
commenced and tried in the proper court which has
jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced
and tried in the municipal trial court of the municipality or
city wherein the real property involved, or a portion
thereof, is situated.
Section 2. Venue of personal actions. - All other actions
may be commenced and tried where the plaintiff or any of
the principal plaintiffs resides, or where the defendant or
any of the principal defendants resides, or in the case of
a non-resident defendant where he may be found, at the
election of the plaintiff.
Section 3. Venue of actions against nonresidents. - If any
of the defendants does not reside and is not found in the
Philippines, and the action affects the personal status of
the plaintiff, or any property of said defendant located in
the Philippines, the action may be commenced and tried
in the court of the place where the plaintiff resides, or
where the property or any portion thereof is situated or
found.
Section 4. When Rule not applicable. - This Rule shall not
apply
(a) In those cases where a specific rule or law provides
otherwise; or
(b) Where the parties have validly agreed in writing before
the filing of the action on the exclusive venue thereof.
(Emphases supplied)
Based on these provisions, the venue for personal actions
shall - as a general rule - lie with the court which has
jurisdiction where the plaintiff or the defendant resides, at
the election of the plaintiff.33 As an exception, parties
may, through a written instrument, restrict the filing of said
actions in a certain exclusive venue.34 In Briones v. Court
of Appeals,35 the Court
explained:chanRoblesvirtualLawlibrary
Written stipulations as to venue may be restrictive in the
sense that the suit may be filed only in the place agreed
upon, or merely permissive in that the parties may file
their suit not only in the place agreed upon but also in the
places fixed by law. As in any other agreement, what is
essential is the ascertainment of the intention of the
parties respecting the matter.
As regards restrictive stipulations on venue,
jurisprudence instructs that it must be shown that such
stipulation is exclusive. In the absence of qualifying or
restrictive words, such as "exclusively," "waiving for this
purpose any other venue," "shall only" preceding the
designation of venue, "to the exclusion of the other
courts," or words of similar import, the stipulation should
be deemed as merely an agreement on an additional
forum, not as limiting venue to the specified place.36
In Pilipino Telephone Corporation v. Tecson,37 the Court
held that an exclusive venue stipulation is valid and
binding, provided that: (a) the stipulation on the chosen
venue is exclusive in nature or in intent; (b) it is expressed
in writing by the parties thereto; and (c) it is entered into
before the filing of the suit.38
After a thorough study of the case, the Court is convinced
that all these elements are present and that the
questioned stipulation in the lease contract, i.e., Section
21 thereof, is a valid venue stipulation that limits the
venue of the cases to the courts of Pasay City. It
states:chanRoblesvirtualLawlibrary
Should any of the party (sic) renege or violate any terms
and conditions of this lease contract, it shall be liable for
damages. All actions or case[s] filed in connection with
this lease shall be filed with the Regional Trial Court of
Pasay City, exclusive of all others.39 (Emphases and
underscoring supplied)
The above provision clearly shows the parties' intention to
limit the place where actions or cases arising from a
violation of the terms and conditions of the contract of
lease may be instituted. This is evident from the use of the
phrase "exclusive of all others" and the specification of the
locality of Pasay City as the place where such cases may
be filed.
Notably, the fact that this stipulation generalizes that all
actions or cases of the aforementioned kind shall be filed
with the RTC of Pasay City, to the exclusion of all other
courts, does not mean that the same is a stipulation which
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attempts to curtail the jurisdiction of all other courts. It is
fundamental that jurisdiction is conferred by law and not
subject to stipulation of the parties.40 Hence, following
the rule that the law is deemed written into every
contract,41 the said stipulation should not be construed
as a stipulation on jurisdiction but rather, one which
merely limits venue. Moreover, "[t]he parties are charged
with knowledge of the existing law at the time they enter
into the contract and at the time it is to become
operative."42 Thus, without any clear showing in the
contract that the parties intended otherwise, the
questioned stipulation should be considered as a
stipulation on venue (and not on jurisdiction), consistent
with the basic principles of procedural law.
In this case, it is undisputed that petitioner's action was
one for collection of sum of money in an amount43 that
falls within the exclusive jurisdiction of the RTC.44 Since
the lease contract already provided that all actions or
cases involving the breach thereof should be filed with the
RTC of Pasay City, and that petitioner's complaint
purporting the said breach fell within the RTC's exclusive
original jurisdiction, the latter should have then followed
the contractual stipulation and filed its complaint before
the RTC of Pasay City. However, it is undeniable that
petitioner filed its complaint with the Valenzuela-RTC;
hence, the same is clearly dismissible on the ground of
improper venue, without prejudice, however, to its refiling
in the proper court.
That respondent had filed several motions for extension
of time to file a responsive pleading, or that he interposed
a counterclaim or third-party complaint in his answer does
not necessarily mean that he waived the affirmative
defense of improper venue. The prevailing rule on
objections to improper venue is that the same must be
raised at the earliest opportunity, as in an answer or a
motion to dismiss; otherwise, it is deemed waived.45
Here, respondent timely raised the ground of improper
venue since it was one of the affirmative defenses raised
in his Answer with Third-Party Complaint.46 As such, it
cannot be said that he had waived the same.
rationale for the Pantranco ruling is that a party cannot
invoke a violation of a rule on venue against his counter-
party, when he himself is bound by the same rule, but
nonetheless, seeks his own relief and in so doing, violates
it.
In contrast, the counterclaim of respondent was alleged
to be a compulsory counterclaim,50 which he was
prompted to file only because of petitioner's complaint for
collection of sum of money, else the same would be
barred.51 In fact, his counterclaim only sought
reimbursement of his overpayment to petitioner in the
amount of P400,000.00, as well as damages for the filing
of a purported baseless suit. Thus, his counterclaim is not
covered by the venue stipulation, since he is not asserting
a violation of the terms and conditions of the lease
contract, but rather an independent right which arose only
because of the complaint. The same goes for his third-
party complaint, whereby he only pleaded that the rental
payments remitted to PNCC for the period August 2011
to December 2011 be reimbursed to him in the event that
petitioner's complaint is found to be meritorious. Since his
counterclaim and third-party complaint are not covered by
the venue stipulation, respondent had, therefore, every
right to invoke the same whilst raising the ground of
improper venue against petitioner's complaint, which
action was, on the contrary, covered by the stipulation.
Thus, there is no inconsistency in respondent's posturing,
which perforce precludes the application of the Pantranco
ruling, as well as negates the supposition that he had
waived the defense of improper venue.
WHEREFORE, the petition is DENIED. Accordingly, the
Orders dated June 15, 2015 and January 27, 2016 of the
Regional Trial Court of Valenzuela City, Branch 75 in Civil
Case No. 40-V-12 are hereby AFFIRMED.
SO ORDERED.

Further, it should be pointed out that the case of

Pangasinan Transportation Co., Inc. v. Yatco
(Pantranco)47 cited in the instant petition48 should not
apply to this case, considering that the invocation of the
ground of improper venue therein was not based on a
contractual stipulation, but rather on respondent Elpidio
O. Dizon's alleged violation of the Rules of Court, as he
filed his case for damages before the Court of First
Instance of Rizal, Branch IV (Quezon City), despite
testifying that he was actually a resident of Dagupan City.
In that case, the Court ruled that the filing of a
counterclaim and third party-complaint, and additionally,
the introduction of evidence of petitioner Pantranco
(respondent in the case for damages) after the denial of
its motion to dismiss on the ground of improper venue,
"necessarily implied a submission to the jurisdiction of
[the trial court therein], and, accordingly, a waiver of such
right as Pantranco may have had to object to the venue,
upon the ground that it had been improperly laid."49 The

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