UNITED ALLOY PHILIPPINES CORPORATION VS UCPB

Facts:
-Unialloy, a domestic corporation engaged in the business of manufacturing and trading on
wholesale basis of alloy products entered into a Lease Purchase Agreement with UCPB, a
banking corporation,
- In the said agreement, Unialloy leased several parcels of land which it will purchase upon the
expiration of the agreement on a staggered basis
- However, it did not materialize because Unialloy filed a complaint against their own Chairman,
Jakob Van Der Sluis, and UCPB
- According to Unialloy, Sluis and UCPB connived with one another to obtain fictitious loans for
Unoalloy and that UCPB unilaterally rescinded the agreement
- Unialloy then prayed for the nullification of the unilateral rescission and as ancillary relief, the
issuance of a temporary restraining order and/or writ of preliminary injunction
- The RTC Cagayan de Oro issued a 72-hour TRO directing UCPB to cease and desist from taking
possession of the disputed premises
- Van der Sluis and UCPB filed separate motions to dismiss the case and Opposition to the
Application for Injunction or TRO on the grounds of improper venue, forum-shopping, litis
pendentia, and for being a harassment suit
- Van der Sluis argued that the agreement specifically provides that any legal action arising
therefrom should be brought exclusively in the proper courts of Makati City
- The RTC directed the parties to maintain the status quo by not disturbing the possession of the
present occupants of the properties in question pending resolution of respondents’ motion
- The RTC, acting as Special Commercial Court, issued an order granting the motions to dismiss
on the grounds of improper venue, forum-shopping and for being a harassment suit
- Upon UCPB’s motion, the RTC issued an order directing the issuance of a writ of execution to
enforce the decision of the RTC (acting as SCC), which was executed and satisfied, evicting the
employees of Unialloy from the leased premises and placing it under the possession of UCPB
- Unialloy filed with the Court of Appeals in Manila a petition for certiorari
- The CA Manila issued a TRO and granted the issuance of a writ of preliminary injunction upon
posting of a bond on a later date 8 Feb 2002
- Unialloy posted the bond but no writ of preliminary injunction was issued by the CA Manila
because of another resolution restraining it from enforcing its 8 Feb 2002 decision
- The resolution prohibiting it is a petition for Certiorari initiated by UCPB assailing said
resolution of CA Manila, hence, restraining it from taking further action until the said petition of
UCPB has been resolved
- UCPB’s petition was then denied and after it attained finality, Unialloy filed with the CA Manila
a Motion to Issue and Implement Writ of Preliminary Mandatory Injunction
- The records of the case were forwarded to CA CDO pursuant to RA 8246
- CA CDO issued a resolution denying Unialloy’s motion because it found that the latter had lost
its right to remain in possession of the disputed premises for defaulting in the payment of the
lease rentals. Further, the Unialloy employees had already vacated the premised and UCPB was
already in actual
physical possession thereof
- Unialloy filed a Motion for Reconsideration which was denied by the CA CDO ruling that
Unialloy erred in resorting to a Rule 65 petition because its proper recourse should have been to
appeal
Issue:
Whether or not the Court of Appeals CDO erred in affirming the dismissal of the
Unialloy’s complaint on the grounds of improper venue, forum-shopping, and for
being a harassment suit
Ruling:
The Court of Appeals CDO did not err in affirming the dismissal of Unialloy’s complaint on the
grounds of improper venue, forum-shopping and for being a harassment suit

In general, personal actions must be commenced and tried:

i. Where the plaintiff or any of the principal plaintiffs resides;
ii. Where the defendant or any of the principal defendants resides; or
iii. In the case of a resident defendant where he may be found, at the
election of the plaintiff

Nevertheless, the parties may agree in writing to limit the venue of future actions between them
to a specified place.
In the case at bench, par. 18 of the Leased Purchase Agreement expressly provides that
“any legal action arising out of or in connection with this Agreement shall be brought exclusively
in the proper courts of Makati City”. Hence, Unialloy should have filed its complaint before the
RTC of Makati and not with the RTC of CDO.

Unialloy insisted that the subject matter of its complaint is not the LPA but the fictitious
loans. Its complaint sought to declare as null and void the unilateral rescission made by
defendant UCPB of its subsisting LPA with Unialloy. What UCPB unilaterally rescinded is the LPA
ad without it there can be no unilateral rescission to speak of. Hence, the LPA is the subject
matter of the complaint. Moreover, and to paraphrase the aforecited paragraph 18 of the LPA,
as long as the controversy arises out of or is connected therewith, any legal action should be
filed exclusively before the proper courts of Makati City.
Thus, even assuming that the LPA is not the main subject matter, considering that what is
being sought to be annulled is an act connected and inseparably related thereto, the Complaint
should have been filed before the proper courts in Makati City.
With regard to the forum-shopping, the review of the case revealed that it did not
disclose in the verification that there is a pending case. The trial court took judicial notice of its
pendency as said case is also assigned and pending before it. The two civil cases have identical
causes, subject matter, and issues.