You are on page 1of 8

1.

Hoechst Philippines, Inc. vs. Torres, 83 SCRA 297 , May 18, 1978
Case Title : HOECHST PHILIPPINES, INC., petitioner, vs. FRAN-CISCO
TORRES and the Honorable PROCORO J. DONATO, Judge of the Court of First
Instance of Isabela, respondents.Case Nature : ORIGINAL ACTION in the
Supreme Court. Certiorari and prohibition.
Syllabi Class : Remedial Law|Venue|Improper venue
Syllabi:
1. Remedial Law; Venue; Improper venue; Change of venue from that
fixed in the rules may be effected upon written agreement of the parties not
only before actual filing of action but even after the same has been filed;
Written agreement of the parties as to venue binding and enforceable by the
courts; After action has been filed, transfer of venue by agreement of the
parties is at courts discretion.+
2. Remedial Law; Venue; Improper venue; Exceptions from application
of transfer of venue by agreement of the parties; Agreement as to venue is
oppressive when venue stipulation works injustice or deny the party
concerned access to the courts by reason of poverty.+
3. Remedial Law; Venue; Improper venue; Economic conditions of
contending parties as well as practical reasons do not warrant change of
venue; Case at bar.+

Docket Number: No. L-44351

Counsel: Manuel S. Fornacier, Jr.

Ponente: BARREDO

Dispositive Portion:
IN VIEW OF ALL THE FOREGOING, the petition is granted, the orders of
respondent judge of May 13, 1976 and July 12, 1976 are hereby set aside,
and petitioners motion to dismiss private respondents complaint in question
is granted. Costs against private respondent Francisco Torres.

Citation Ref:
63 SCRA 77 | 63 SCRA 469 | 3 SCRA 311 | 33 SCRA 252 | 64 SCRA 524 | 8
SCRA 661 | 63 SCRA 77 |63 SCRA 469 | 8 SCRA 661 | 18 SCRA 474 | 30
SCRA 187 | 6 SCRA 960 | 56 Phil. 169 |

VOL. 83, MAY 18, 1978


297
Hoechst Philippines, Inc. vs. Torres
No. L-44351. May 18, 1978.
HOECHST PHILIPPINES, INC., petitioner, vs. FRAN-CISCO TORRES and the Honorable
PROCORO J. DONATO, Judge of the Court of First Instance of Isabela, respondents.
Remedial Law; Venue; Improper venue; Change of venue from that fixed in the rules
may be effected upon written agreement of the parties not only before actual filing
of action but even after the same has been filed; Written agreement of the parties
as to venue binding and enforceable by the courts; After action has been filed,
transfer of venue by agreement of the parties is at courts discretion.The pose
taken by respondents does evoke sympathy, but it can hardly carry the day for
them. Change or transfer of venue from that fixed in the rules may be effected upon
written agreement of the parties not only before the actual filing of the action but
even after the same has been filed. The settled rule of jurisprudence in this
jurisdiction is that a written agreement of the parties as to venue, as authorized by
Section 3, Rule 4, is not only binding between the parties but also enforceable by
the courts. It is only after the action has been filed already that change or transfer
of venue by agreement of the parties is understandably controllable in the
discretion of the court. The agreement in this case was entered into long before the
petitioners * SECOND DIVISION.
298

298
SUPREME COURT REPORTS ANNOTATED
Hoechst Philippines, Inc. vs. Torres
action was filed. It is clear and unequivocal. The parties therein stipulated that (I)n
case of any litigation arising out of this agreement, the venue of any action shall he
in the competent courts of the Province of Rizal. No further stipulations are
necessary to elicit the thought that both parties agreed that any action by either of
them would be filed only in the competent courts of Rizal province exclusively.
Same; Same; Same; Exceptions from application of transfer of venue by agreement
of the parties; Agreement as to venue is oppressive when venue stipulation works
injustice or deny the party concerned access to the courts by reason of poverty.
We have given due attention to this posture of respondents. Indeed, there may be
instances when an agreement as to venue may be so oppressive as to effectively
deny to the party concerned access to the courts by reason of poverty. The
difficulties pictured by respondents that a poor plaintiff from a distant province may
have to encounter in filing suit in a particular place can indeed happen. In such an
eventuality and depending on the peculiar circumstances of the case, the Court
may declare the agreement as to venue to be in effect contrary to public policy,
despite that in general, changes and transfers of venue by written agreement of the
parties is allowablewhenever it is shown that a stipulation as to venue works
injustice by practically denying to the party concerned a fair opportunity to file suit
in the place designated by the rules.
Same; Same; Same; Economic conditions of contending parties as well as practical
reasons do not warrant change of venue; Case at bar.But a cursory inquiry into
the respective economic conditions of the parties herein as reflected in the record
before Us does not show that private respondent Francisco Torres is really in no
position to carry on a litigation in the Province of Rizal, because of this residence or
place of business being in Isabela province. The volume of business covered by the
Distributorship Agreement in question, Annex C of the Petition, and to be handled
by private respondent Torres is P700,000. The amount sought to be covered by said
respondent in his complaint, Annex A of the Petition, totals more than P300,000.
These circumstances preclude, in Our view, the need to apply equitable
considerations to the case of respondent Torres. It is quite obvious that his economic
condition does not warrant non-enforcement of the stipulation as to venue that he
has agreed to. We are persuaded that his pretension that he had no alternative but
to agree, even if true, does not merit relief. Considering the nature and volume
299

VOL. 83, MAY 18, 1978


299
Hoechst Philippines, Inc. vs. Torres
of the business he has with petitioner, there is nothing oppressive in his being
required to litigate out of his province. After all, for practical reasons, there seems to
be justification also for petitioner to see to it that all suits against it be concentrated
in the Province of Rizal, as otherwise, considering the nationwide extent of its
business, it would be greatly inconvenienced if it has to appear in so many
provinces everytime an action is filed against it. We are convinced both parties
agreed to the venue in controversy with eyes wide open. Melanio T. Singson for
private respondent.
ORIGINAL ACTION in the Supreme Court. Certiorari and prohibition.

The facts are stated in the opinion of the Court.


Manuel S. Fornacier, Jr. for petitioner.
BARREDO, J.:

Petition for certiorari and prohibition to declare respondent court without authority
to take cognizance of private respondents action for Breach of Contract with
Preliminary Injunction and to enjoin said court from further taking any action in
said case upon the ground of improper laying of the venue.
On April 8, 1976, private respondent, Francisco Torres, filed with respondent Court of
First Instance of Isabela complaint in Civil Case No. V-296 alleging breach of a
distributorship contract on the part of petitioner, Hoechst Philippines, Inc. On April
14, 1976, petitioner filed a motion to dismiss said complaint based on the ground
that as the contract, the very actionable document invoked in the complaint,
provides that (I)n case of any litigation arising out of this agreement, the venue of
any action shall be in the competent courts of the Province of Rizal, venue has
been improperly laid in respondent court, petitioner citing in his said motion
principaly the ruling of this Supreme Court in Bautista vs. De Borja, 18 SCRA 474.
Respondent court nevertheless denied the said motion to dismiss as well as the
motion for reconsideration of that denial, hence the present petition.
Respondent do not deny in their respective answers the clear tenor of the above-
quoted stipulation as to venue in the
300

300
SUPREME COURT REPORTS ANNOTATED
Hoechst Philippines, Inc. vs. Torres
contract in dispute. It is the position of respondent judge, however, that inasmuch
as the contract was a prepared standard form for the defendant-company, wherein
blanks were merely filled up after the party-distributor agreed on the valuation of
products which he may order from the company for one year and all stipulations
were standard and pre-made by the company, prepared by, as your Respondent can
safely and rightly assume, its legal department and it (only) remains upon party-
distributor to stamp his approval to the whole contract, hence plaintiff distributor
was given no option whatsoever except to take it or leave it , the word shall in
the stipulation in question should be construed to be merely permissive and not
mandatory. It is argued that this construction serves not only the exclusive interests
of petitioner but also that of private respondent.
It is further contended in said answer that reading the terms of the contract, it can
be gathered that most likely, it would be petitioner who would have to sue private
respondent, and, therefore, the stipulation as to venue was meant to apply only to
suits to be filed by petitioner. Finally, it is maintained that there are no words in the
contract expressly restricting the venue to the courts of Rizal.
Upon the other hand, in the answer of private respondent, he capitalizes on the
theory that inasmuch as petitioner is a multinational company, it is against public
policy for it to stipulate in any contract that the venue of actions thereunder should
be in any particular place, much less its place of residence, to the prejudice of
small-time distributors, the private respondent. It is urged that to give effect to the
stipulation in controversy is to serve the convenience and the purpose of the
petitioner only; its effect is to discourage, to deter, to render expensive and
uneconomical the filing of suits by small-time company distributors against the
petitioner even for extremely meritorious cases of latters breach or violation of
such distribution agreement.
The pose taken by respondents does evoke sympathy, but it can hardly carry the
day for them. Change or transfer of venue from that fixed in the rules may be
effected upon written agreement of the parties not only before the actual filing of
the
301

VOL. 83, MAY 18, 1978


301
Hoechst Philippines, Inc. vs. Torres
action but even after the same has been filed. The settled rule of jurisprudence in
this jurisdiction is that a written agreement of the parties as to venue, as authorised
by Section 3, Rule 4, is not only binding between the parties but also enforceable by
the courts.1 It is only after the action has been filed already that change or transfer
of venue by agreement of the parties is understandably controllable in the
discretion of the court.2
The agreement in this case was entered into long before the petitioners action was
filed It is clear and unequivocal. The parties therein stipulated that (I)n case of any
litigation arising out of this agreement, the venue of any action shall be in the
competent courts of the Province of Rizal. No further stipulations are necessary to
elicit the thought that both parties agreed that any action by either of them would
be filed only in the competent courts of Rizal province exclusively.
Respondent judge rather vehemently argues, however, that under the
circumstances obtaining between the parties, as earlier stated in this decision, it is
permissible, notwithstanding Our ruling in Bautista, supra, that the word shall in
the agreement in question be construed as may, hence not strictly obligatory.
Private respondent points out that he had no choice but to sign the Distributorship
Agreement in question, he being practically at the mercy of petitioner company
which is allegedly a multinational corporation. He maintains that to enforce the
agreement literally would amount to a denial to him, and to other distributors
similarly situated, of the opportunity to file any suit against petitioner.
We have given due attention to this posture of respondents. Indeed, there may be
instances when an agreement as to venue may be so oppressive as to effectively
deny to the party concerned access to the courts by reason of poverty. The
difficulties pictured by respondents that a poor plaintiff from a distant province may
have to encounter in filing suit in a par-
______________

1 Central Azucarera de Tarlac vs. De Leon, 56 Phil. 169; Bautista vs. De Borja et al.,
18 SCRA 474.
2 Zubiri vs. Ramos, 52 O.G. 6585, Res. of July 2, 1956 of the Court of Appeals citing
56 American Jurisprudence pp. 73-74.
302

302
SUPREME COURT REPORTS ANNOTATED
Hoechst Philippines, Inc. vs. Torres
ticuiar place can indeed happen. In such an eventuality and depending on the
peculiar circumstances of the case, the Court may declare the agreement as to
venue to be in effect contrary to public policy,despite that in general, changes
and transfers of venue by written agreement of the parties is allowablewhenever
it is shown that a stipulation as to venue works injustice by practically denying to
the party concerned a fair opportunity to file suit in the place designated by the
rules.
But a cursory inquiry into the respective economic conditions of the parties herein
as reflected in the record before Us does not show that private respondent Francisco
Torres is really in no position to carry on a litigation in the Province of Rizal, because
of his residence or place of business being in Isabela province. The volume of
business covered by the Distributorship Agreement in question, Annex C of the
Petition, and to be handled by private respondent Torres is P700,000. The amount
sought to be recovered by said respondent in his complaint, Annex A of the Petition,
totals more than P300,000. These circumstances preclude, in Our view, the need to
apply equitable considerations to the case of respondent Torres. It is quite obvious
that his economic condition does not warrant non-enforcement of the stipulation as
to venue that he has agreed to. We are persuaded that his pretension that he had
no alternative but to agree, even if true, does not merit relief. Considering the
nature and volume of the business he has with petitioner, there is nothing
oppressive in his being required to litigate out of his province. After all, for practical
reasons, there seems to be justification also for petitioner to see to it that all suits
against it be concentrated in the Province of Rizal, as otherwise, considering the
nationwide extent of its business, it would be greatly inconvenienced if it has to
appear in so many provinces everytime an action is filed against it. We are
convinced both parties agreed to the venue in controversy with eyes wide open.
IN VIEW OF ALL THE FOREGOING, the petition is granted, the orders of respondent
judge of May 13, 1976 and July 12, 1976 are hereby set aside, and petitioners
motion to
303

VOL. 83, MAY 18, 1978


303
Hoechst Philippines, Inc. vs. Torres
dismiss private respondents complaint in question is granted. Costs against private
respondent Francisco Torres.
Fernando (Chairman), Antonio, Aquino, Concepcion Jr., and Santos, JJ., concur.
Petition granted.
Notes.The reason why a judgment based on a compromise agreement is final and
immediately executory is that when the parties agree to settle their differences to
end a litigation and request the court to render judgment on the basis of their
agreement, there is an implied waiver of their right to appeal from the judgment.
(Samonte vs. Samonte, 64 SCRA 524).
Where all the parties to a civil case express conformity to a partys prayer for
modification of the trial courts amended judgment, the same will be approved by
the court. (Figueroa vs. Jimenez, 66 SCRA 274).
Where the trial court itself is undertain whether there was any factual basis for
inclusion in the compromise judgment of a portion objected to by one of the parties,
it is best that before they are made to comply with the terms thereof said objecting
parties be assured that they would not be prejudiced thereby. (International Hotel
Corporation vs. Asuncion, 63 SCRA 77).
An unfair labor practice suit may be validly withdrawn upon a compromise
settlement whereby the employees are given severance pay. (Adame vs. Court of
Industrial Relations, 63 SCRA 469).
The venue of civil actions in the Court of First Instance is where the plaintiff resides
or where the defendant resides or found (Section 1, Rule 5, Rules of Court), but the
latter phrase (may be found) applies only to cases where the defendant has no
residence in the Philippines. (Portillo vs. Reyes, 3 SCRA 311.)
In ordinary civil case the failure to object on the ground of venue improperly laid
would be deemed a waiver, but in naturalization cases such rule cannot be invoked
and applied. (Chin Guan Go vs. Republic, 6 SCRA 960; Board of Commissioners vs.
Domingo, 8 SCRA 661.)
304

304
SUPREME COURT REPORTS ANNOTATED
Hoechst Philippines, Inc. vs. Torres
The stipulation that the parties agree to sue and be sued in the courts of Manila,
does not preclude the filing of suits in the residence of plaintiff or defendant under
Section 2(b), Rule 4, Rules of Court, in the absence of qualifying or restrictive words
in the agreement which would indicate that Manila alone is the venue agreed upon
by the parties. (Polytrade Corporation vs. Blanco, 30 SCRA 187).
Wrong venue is merely a waivable procedural defect, and, such waiver may occur
by laches where, a party had been served notice of the filing of the probate petition
for about a year and allowed the proceedings to continue for such time before filing
a motion to dismiss the same. (Uriarte vs. Court of First Instance of Negros
Occidental, 33 SCRA 252).
o0o

305

Copyright 2017 Central Book Supply, Inc. All rights reserved. Hoechst Philippines,
Inc. vs. Torres, 83 SCRA 297, No. L-44351 May 18, 1978