Planters Development Bank vs Ramos (2017) Action Filed By Venue Decision

[Reyes] petition for certiorari PDB CA denied

Petition for Review on PDB SC Granted.
I. FACTS:
Certiorari under Rule 45
July 2012. Spouses Ramos was granted several credit lines secured
by REM with Planters Development Bank (PDB) for the construction
of a warehouse in Nueva Ecija. They defaulted and their request for a
III. ISSUES:
restructuring scheme was denied for the parties failed to reach an
agreement. WON venue was improperly laid? (yes, should have been Makati)
April 2014. PDB filed a Petition for Extra-Judicial Foreclosure of Real IV. RATIONALE:
Estate Mortgage before RTC Nueva Ecija, and a Notice to Parties of
Sheriff's Public Auction Sale dated May 7, 2014 was thereafter issued. Rule 4, RCP provides the rules on venue in filing an action
RULE 4 Venue of Actions
June 2014. Spouses Ramos filed a complaint for Annulment of Real
Section 1. Venue of real actions. — Actions affecting title to or possession of
Estate Mortgages and Promissory Notes, Accounting and Application
real property, or interest therein, shall be commenced and tried in the proper
of Payments, Injunction with Preliminary Injunction and TRO against court which has jurisdiction over the area wherein the real property involved,
PDB and its officers, before the RTC of San Jose City, Nueva Ecija. or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the
à Instead of filing an answer, PDB filed an Urgent Motion to Dismiss, municipal trial court of the municipality or city wherein the real property
alleging that the venue of the action was improperly laid considering involved, or a portion thereof, is situated.
that the REM signed by the parties contained a stipulation that any suit Section 2. Venue of personal actions. — All other actions may be commenced
arising shall be filed in Makati City only. 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
RTC denied MTD. One of the contentions of Sps. Ramos is that the non-resident defendant where he may be found, at the election of the plaintiff.
contracts between them and PDB take the form of an adhesion xxx xxx xxx
contract. As such, Section 1, Rule 4 of the 1997 RCP regarding the Section 4. When Rule not applicable. — This Rule shall not apply.
venue of real actions shall be applied (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
PDB filed a MR, instead of filing an answer to the complaint. This the action on the exclusive venue thereof.
prompted Spouses Ramos to file a motion to declare PDB in default.
Sec 4(b) provides for an exception to the venue as provided by law.
RTC: PDB not in default because, as a consequence of the MTD the Stipulations on venue may be either permissive or restrictive:
defendants filed, the running of the period during which the rules à Restrictive: the suit may be filed only in the place agreed upon, or
required PDB to file its Answer was deemed suspended. MR à Permissive: parties may file their suit not only in the place agreed
dismissed because there were no new arguments presented. upon but also in the places fixed by law.
GR: Since convenience is the raison d'etre of the rules of venue, it is
CA affirmed RTC
easy to accept the proposition that venue stipulations should be
II. PROCEDURE SUMMARY deemed permissive merely, and that interpretation should be
adopted which most serves the parties convenience.
Action Filed By Venue Decision à if restrictive, language of the parties must be so clear and
categorical as to leave no doubt of their intention to limit the venue.
Petition for Extra-Judicial PDB RTC Notice to
Foreclosure of Real Estate San parties of Parties provided for a restrictive stipulation on venue
Mortgage Jose sheriff’s The stipulation in all of the REMs executed provided the ff:
City, public
Nueva auction “18. In the event of suit arising from out of or in connection with this
Ecija was issued mortgage and/or the promissory note/s secured by this mortgage, the
Complaint for Annulment of Sps. ^same Pending parties hereto agree to bring their causes of action exclusively in the
Real Estate Mortgages and Ramos proper court/s of Makati, Metro Manila, the MORTGAGOR waiving
Promissory Notes,
for this purpose any other venue.”
Accounting and Application
of Payments, Injunction with In Spouses Lantin, the Court ruled that "the words exclusively and
Preliminary Injunction and waiving for this purpose any other venue are restrictive." Therefore,
Temporary Restraining the employment of the same language in the subject mortgages
Order
signifies the clear intention of the parties to restrict. Not being contrary
Urgent Motion to Dismiss PDB ^same Denied
to law or public policy, the stipulation on venue, which PDB and
Motion for Reconsideration PDB ^same Denied
Spouses Ramos freely and willingly agreed upon, has the force of law
Motion to declare PDB in Sps. ^same denied
between them, and thus, should be complied with in good faith
default Ramos
RTC argument on validity of REM affecting venue go against
purpose of venue stipulation

RTC denied the MTD in view of the contradicting claim of the parties
on the validity of the mortgage contracts, which, in turn, affects the
enforceability of the stipulation on venue. CA agreed with RTC that the
ruling on the validity of the stipulation on venue depends on whether
the mortgage is valid which means there has to be full-blown hearing.

The ruling of the CA renders meaningless the very purpose of the

stipulation on venue. In Unimasters, the Court emphasized:

“Parties may by stipulation waive the legal venue and such waiver is
valid and effective being merely a personal privilege, which is not
contrary to public policy or prejudicial to third persons. It is a general
principle that a person may renounce any right which the law gives
unless such renunciation would be against public policy.”

Sps. Ramos validly waived their right

SpsRamos had validly waived their right to choose the venue for any
suit or action arising from the mortgages or promissory notes when
they agreed to the limit the same to Makati City only and nowhere else.

Moreover, Spouses Ramos never really assailed the validity of the

REM and PN. What they were only claiming was that the said contracts
contain stipulations which are illegal, immoral, and contrary to public
policy ( unilateral increase in interest, penalty rate unconscionable).

à These matters do not affect the validity of the REM since all the
requisites of a valid contract are still present regardless.

à Spouses Ramos impliedly admitted the authenticity and due

execution of the mortgage contracts. They do not claim to have been
duped into signing the mortgage contracts or that the same was not
their free and voluntary act.

In summary

The ultimate disposition of the RTC and the Court of Appeals is correct.
Nonetheless, petitioners should not be deprived of their prerogatives
under the Rules on Special Proceedings as enunciated in this
decision.

V. DISPOSITIVE:

WHEREFORE, the Decision dated July 5, 2016 and Resolution dated

December 7, 2016 of the Court of Appeals in CA-G.R. SP No. 140264
are REVERSED and SET ASIDE. Civil Case No. 2014-485-SJC is
hereby DISMISSED on the ground of improper venue.