Rule 4 Venue

1. Auction in Malinta v. Luyaben

Warren Luyaben filed a complaint for damages with the Kalinga RTC against Auction in Malinta Inc.
He alleged that he was the highest bidder for a wheel loader, for which he tendered payment.
But AIM could not longer produce the unit.
AIM offered a replacement but failed to deliver the same.
Complaint for actual, moral and exemplary damages plus attorneys fees.
AIM filed an MTD on the ground of Improper Venue, arguing that the correct venue is the RTC of
Valenzuela, pursuant to the stipulation in the Bidders Application and Registration Bidding Agreement
(Bid Agreement).
All court litigation procedures shall be conducted in the appropriate courts of Valenzuela City, Metro
Manila.
Kalinga RTC dismissed complaint for improper venue.
Held that clear intention of the parties was to limit the venue to the proper court of Valenzuela.
CA reversed RTCs decision and reinstated the complaint.
AIMs MR denied.
Petition for review under Rule 45.
Issue: WON the stipulation in the Bid Agreement effectively limited the venue of the case exclusively to the
proper court in Valenzuela
Held: NO
General Rule on Venue of Personal Actions Sec. 2, Rule 4:
may be commenced and tried where
the plaintiff or any of the principal plaintiffs resides, OR
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.
However, GR does not apply where the parties, before the filing of the action, have validly agreed in
writing on an exclusive venue.
But mere stipulation on the venue of an action is not enough to preclude parties from bringing a case in
other venues.
It must be shown that such stipulation is exclusive.
In absence of qualifying or restrictive words, such as:
exclusively and 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 or an additional forum, not as limiting
venue to the specified place.
HERE: the stipulation evidently lacks the restrictive and qualifying words that will limit venue exclusively
to the RTC of Valenzuela.
Hence, the Valenzuela courts should only be considered as an additional choice of venue to those
mentioned under the RoC.
The case may be filed with:
RTC of Valenzuela,as stipulated in the bidding agreement
RTC of Kalinga, which has jurisdiction over the residence of plaintiff (Lubayen)
RTC of Valenzuela, which has jurisdiction over the business address of defendant (AIM)
Thus, filing of the complaint in RTC of Kalinga was proper.

2. Gumabon v. Larin
Petitioners Gumabons (9 people) executed a Deed of Sale with Right of Repurchase in favor of Larin
over a parcel of land in Pampanga.
The sale was on the condition that any one of the vendors could repurchase the property at any time
from the date of the contract by repaying Larin the purchase price.
39 years later, petitioners filed a complaint against Larin before the RTC-QC, seeking the return of the
TCT from Larin who allegedly refused to hand over the certificate despite full payment of the loan.
Larin filed a counterclaim and contended that the period for the right of repurchase had already
prescribed and that no repurchase amount was paid to him.
He claimed that it was not an equitable mortgage but a true sale.
Petitioners filed a reply with a Motion to Dismiss the counterclaim since it did not contain a certification of
non-forum shopping.
RTC dismissed the counterclaim due to lack of certification of non-forum shopping.
Larin and his counsel failed to submit a pre-trial brief and attend the pre-trial.
Hence, the petitioners, upon motion, presented their evidence ex-parte.
Demurring to the evidence, Larin moved for the dismissal of the case.
RTC admitted the offered exhibits of the petitioners and denied Larin's Demurrer to Evidence.
Larin moved for the reconsideration of the order denying his Demurrer to Evidence.
The case was reraffled after the judge voluntarily inhibited.
The new judge, Judge Ceguera, set the MR for the Demurrer for hearing.
Judge Ceguera issued an order motu proprio 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-QC.
Issue: WON the trial court judge can motu proprio dismiss an action for improper venue
Held: NO
Venue, unlike jurisdiction which is conferred by law, essentially concerns a rule of procedure.

A plaintiff impliedly elects venue by choosing the court where he files his complaint. Venue can even be
the subject of agreement by the parties.
Under the old rules, such an agreement to venue may be impliedly made by the defendant when he
fails to seasonably object to it.
The motu proprio dismissal of a case was traditionally limited to instances when:
the court clearly had no jurisdiction over the subject matter
plaintiff did not appear during trial
failed to prosecute his action for an unreasonable length of time
neglected to comply with the rules or with any order of the court.
Outside of these instances, any motu proprio dismissal would amount to a violation of the right of the
plaintiff to be heard.
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;
there is another cause of action pending between the same parties for the same cause
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.
Under Rule 16, Sec. 6: if no motion to dismiss has been filed, any of the grounds for dismissal provided
under the rules, including improper venue, may be pleaded as an affirmative defense in the answer, and
upon the discretion of the court, a preliminary hearing may be made thereon as if a motion to dismiss
has been filed.
HERE, respondent is deemed to have waived his right to raise the issue of improper venue.

3. Paglaum Management v. Union Bank

Paglaum Management owned 3 parcels of land in Cebu
The said lots were co-owned by Benjamin Dy, the president of HealthTech, and his family.
Union Bank extended HealthTech a credit line, secured by 3 Real Estate Mortgages executed by
Pagluam.
The original REM stipulated that the venue of all suits and actions which could arise out of or in
connection therewith shall be in Makati or in the place where any of the properties is located, at the
option of the Mortgagee, the parties waiving any other venue.
But the 2nd REM subsequently made provided that the venue would be in Cebu.
3rd REM did not provide for a specific venue.
HealthTech could not pay, hence the parties entered into a Restructuring Agreement.
The Restructuring Agreement provided that any action or proceeding arising out of or in
connection therewith shall be commenced in Makati, with both parties waiving any other venue.
But HealthTech was still unable to settle its obligation, even after demand, hence Union Bank
extrajudicially foreclosed the mortgaged properties.
HealthTech filed before the RTC of Makati a complaint for Annulment of Sale and Titles with Damages
and application for TRO & Injunction.
Union Bank filed a Motion to Dismiss based on:
lack of jurisdiction over the issuance of the injunctive relief
improper venue
etc hehe
RTC granted the MTD and dismissed the complaint.
MRs denied.
CA affirmed.
Petition for Review on Certiorari under Rule 45.
Issue: WON Makati is the proper venue to assail the foreclosure of the REM
Held: YES
Being an action for Annulment of Sale and Titles resulting from extrajudicial foreclosure, the action is a
real action.
GR: real actions shall be commenced and tried in the court that has jurisdiction over the area where the
property is situated.
However, the GR does not apply where the parties have validly agreed in writing before the filing of
the action on the exclusive venue thereof.
The parties must be able to show that such stipulation is exclusive. In the absence of qualifying or
restrictive words, the stipulation should be deemed as merely an agreement on an additional forum, not
as limiting venue to the specified place.
HERE: all the mortgaged properties are located in Cebu.
Following the GR, the case should have been field in Cebu and not in Makati.
BUT: since the parties previously and validly agreed in writing on the exclusive venue in the
Restructuring Agreement, said stipulated venue should be controlling.
The Restructuring Agreement was entered into by the parties to modify the entire loan obligation.
The phrase waiving any other venue plainly shows that the choice of Makati as the venue for actions
arising out of or in connection with the Restructuring Agreement, being explicitly defined as such, is
exclusive.
Petition granted.

Rule 5 Uniform Procedure/Summary Procedure

4. Republic v. Sunvar Realty Development
Republic and NAPOCOR (NPC) co-owned several parcels of land in Makati.
Lot A: ownership 80% - Republic, 20% NPC
Republic represented by Privatization Management office (PMO).
TRCFI leased the 4 parcels of land for 25 years, ending on December 31, 2002.
TRCFI was granted the right to sublease any portion of the 4 parcels.
Sunvar Realty occupied several portions of the lots by virtue of sublease agreements.
Although the agreements commenced on different dates, they were all set to expire on Dec.
31, 2002, but subject to renewal at the option of Sunvar.
Under the sublease agreement, Sunvar agreed to return/surrender the land, without any delay
whatsoever upon termination/expiration of the contract.
The government was reorganized, TRCFI was dissolved and was assumed by Philippine Devt
Alternatives Foundation (PDAF).
April 2002 -