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TOPIC: Test of Sufficiency of Complaint

G.R. No. 165500

August 30, 2006


PONENTE: Chico-Nazario, J.
NATURE OF ACTION: review on certiorari


Petitioner Philippine Bank of Communications (PBCOM[3]), respondent Elenita B. Trazo opened a payroll account with
China Banking Corporation (CBC) under Current Account No. 101-003921-9.

29 December 1997, petitioner Romeo G. dela Rosa, PBCOM assistant vice-president, instructed CBC to credit all
accounts under its payroll with the medical and clothing subsidy for the year 1998

Respondent Trazo resign from petitioner PBCom on 31 December 1997.

Petitioner dela Rosa wrote William Lim, CBC senior assistant vice-president, on 5 January 1997 authorizing/directing
CBC/Lim to debit the sum of P7,000.00 from respondent Trazos current account

Respondent Trazo drew checks against her current account in favor of Bliss Development Corporation (BDC) and the
House of Sara Lee Phils., Inc.However, the checks were dishonored by CBC due to insufficiency of funds, which was
occasioned by the P7,000.00 debit from her current account

Respondent Trazo instituted an action for damages against PBCOM, dela Rosa, CBC, and Lim before the Regional Trial
Court (RTC) of Quezon City (Branch 79) averring that they had no authority to debiting her account.

16 June 1998, CBC and Lim filed a Motion to Dismiss the case on the ground of improper venue. On 24 June 1998,
PBCOM and dela Rosa filed their own Motion to Dismiss on the ground that the complaint failed to state a cause of action.


PREMISES CONSIDERED, the case against defendants China Bank and William Lim is DISMISSED on the ground of
improper venue. The case against defendants Philippine Bank of Communications and Romeo G. dela Rosa is
DISMISSED for lack of cause of action


WHEREFORE, the omnibus order dated October 7, 1998 of the Regional Trial Court of Quezon City (Branch 79) is
REVERSED and SET ASIDE and the complaint REINSTATED. Appellant is given ten (10) days from notice of finality of
this decision within which to amend the complaint


Whether or not the allegations of the complaint are sufficient to constitute a cause of action.
Whether or not the COURT OF APPEALS erred in finding that the venue clause in the application for new current
accounts is exclusive.


Yes. In the case at bar, the allegations in the complaint verily show a cause of action. We carefully scrutinize the
allegations in the Complaint. It provides that defendants PBCOM and ROMEO G. DE LA ROSA had no cause nor
reason to unilaterally order the debitting (sic) of plaintiffs account as it was her personal property and not of defendant
PBCOM. The Complaint also described the action of all defendants, including petitioners PBCOM and dela Rosa,
as unjust and illegal, and done in a wanton, reckless and oppressive manner. The cause of action stated in the
Complaint, therefore, consists in (1) a right in favor of the plaintiff, which in this case consists of a right to her personal
property; (2) an obligation on the part of the named defendant to respect her right to her personal property; and (3) an act
of such defendant violative of the right of the plaintiff, which in this case is the order by petitioners to CBC and Lim to debit

respondent Trazos account, an act which petitioners allege to have caused them damage.
No. The stipulation (In case of litigation hereunder, venue shall be in the City Court or Court of First Instance of Manila as
the case may be for determination of any and all questions arising thereunder) concerning the venue clause did not
contain any restricting words. The parties must be able to show that the stipulation is exclusive. Thus, sans words
expressing the parties intention to restrict the filing of a suit in a particular place, courts will allow the filing of a case in any
of the venues prescribed by law or stipulated by the parties, as long as the jurisdictional requirements are followed.


WHEREFORE, the instant petition is DENIED for lack of merit. The assailed Decision and Resolution of the Court
of Appeals, which reversed and set aside the Regional Trial Court of Quezon Citys 7 October 1998 Omnibus
Order dismissing respondents complaint, are AFFIRMED. Costs against petitioners.


A cause of action exists if the following elements are present, namely: (1) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for
which the latter may maintain an action for recovery of damages