G.R. No.
89747 July 20, 1990
MAERSK-TABACALERA SHIPPING AGENCY (FILIPINAS),
INC., petitioner,
vs.
THE HON. COURT OF APPEALS, MONET'S EXPORT AND
MANUFACTURING CORPORATION AND/OR VICENTE
TAGLE, respondents.
Bito, Lozada, Ortega & Castillo for petitioner.
Jesus F. Salazar for private respondent.
GRIÑO-AQUINO, J.:
This is a petition for review on certiorari of the decision dated
July 12, 1989 of the Court of Appeals in CA-G.R. CV No. 18124
affirming that of the Regional Trial Court of Legaspi City in Civil
Case No. 7480 which awarded damages to the plaintiff, now
private respondent, Monet's Export and Manufacturing (Monet
for short) against the petitioner Maersk- Tabacalera Shipping
Agency (Filipinas), Inc., (Maersk for short) for breach of a
(contract of carriage. The facts are stated in the decision of the
Court of Appeals as follows:
On May 21, 1985, a complaint for damages
was filed by plaintiff Monet's Export and
Manufacturing Corporation (Monet's) and/or
Vicente Tagle against defendants Maersk
Tabacalera Shipping (Maersk) and the New
Asia Enterprises (New Asia) and/or Manuel
Ranola, alleging, among other things, that
plaintiff, like defendant New Asia, is engaged
in the export of locally-made handicrafts and
products, while defendant Maersk Line is
engaged in furnishing containerized services
through which Monet's and New Asia
normally ship their goods; that on March 11,
1984, plaintiff, after complying with all the
export and custom requirements, loaded its
goods in Maersk's container to be delivered
on or before March 15, 1984 to Manila for
immediate trans-shipment to its port of
destination; that through fraud and malice,
and without prior notice to Monet's, Maersk
unloaded the goods at New Asia's factory site
at Tagas, Daraga, Albay to give way to the
latter's own export shipment; that Monet's
shipment was later returned to its warehouse
at Banag, Daraga, Albay; and that because of
this occurrence, Monet's had to secure
another shipper, thereby incurring
unnecessary expenses as well as suffering
mental anguish, worry and sleepless nights
thinking of the possibility of losing its trading
partners which would seriously doubt Monet's
capacity as a respectable exporter. Monet's
likewise alleged having suffered actual, moral
and exemplary damages (p. 1, Record).
Answering the complaint, Maersk contended
that contrary to Monet's allegations, the
latter's shipment was loaded on March 10,
1984 in Maersk container subject to the
condition that the bill of lading would be
issued upon Monet's compliance with all the
necessary export papers prior to the
departure of the truck bearing said container
for Manila on March 11, 1984. Maersk further
alleged that Monet's knew that the subject
goods would not be brought to Manila without
submitting all the necessary export papers, as
without them, Maersk would incur charges on
the cargo when deposited at the customs
warehouse in Manila and would subsequently
be not allowed to export the goods by custom
authorities. (p. 16, Record).i•t•c-aüsl
Defendant New Asia, for its part, denied any
liability in favor of Monet's, alleging that
Monet's has no cause of action against it not
being a party to the contract of carriage
between Monet and Maersk (p. 24, Record).
Defendants during the hearing of February
17, 1986 were considered as in default for
their failure to attend the scheduled pre-trial
conference despite proper notice.
Subsequently, the order of default in regard to
defendant Maersk was lifted and the latter
was allowed to cross-examine all the
witnesses of Monet's. Defendant New Asia
did not move for the lifting of the order of
default and accordingly remained as in
default. (p. 204, Record.)
On March 28, 1988, the appealed judgment was rendered:
WHEREFORE, premises considered,
defendant Maersk Shipping Line is found to
be liable to plaintiff for damages in the
following amounts: For breach of contract of
carriage, P50,000.00; for moral damages
brought about by the wanton bad faith
employed by defendant shipping line in the
performance of its contractual obligation,
P50,000.00; and as exemplary damages,
another P50,000.00 and for attomey's fees,
P20,000.00.
Defendant New Asia Enterprises is
exonerated of any liability, there being no
valid cause of action by plaintiff against it.
New Asia Enterprises cannot be made
answerable for whatever action or violation of
contracted obligation defendant Maersk Line
may have committed against plaintiff because
they are 2 separate corporations and there is
no proof of any collusion between them. (pp.
27-28, Rollo.)
Maersk appealed to the Court of Appeals
which affirmed the judgment of the trial court
on July 12, 1989.
Hence, the instant petition wherein Maersk
raises the following issues:
1. Respondent court erred in affirming the
judgment of the trial court despite the obvious
 fact that the trial court never acquired
jurisdiction over the subject-matter of the
action because private respondents did not
specify their claims for damages and the
correct filing fees were not paid.
2. It was error for respondent court to have
awarded P50,000.00 for "breach of contract"
because this is not a form of damage and
petitioner has a right to know for what it is
being made to pay.
3. Respondent court erred also in awarding
moral damages to a corporation that was not
shown to have a good reputation that was
damaged.
4. Again, respondent court erred in awarding
exemplary damages in the absense of
evidence that petitioner acted in a wanton or
malevolent manner.
5. Finally, respondent court erred in awarding
attorney's fees without any explanation for
such an award. (pp. 13-14, Rollo.)
Petitioner's allegation that the decisions of the
trial court and the Court of Appeals were void
for lack of jurisdiction (p. 75, Rollo) as Monet
did not pay the correct filing fee on its claims
for actual, moral and exemplary damages, the
amounts of which were not specified in the
body and prayer of its complaint, is anchored
in the following ruling of this Court
in Manchester Development Corporation vs.
CA (149 SCRA 526 [1987]) —
... the trial court did not acquire jurisdiction
over the case by the payment of only P410.00
as docket fee. ...
To put a stop to this irregularity, henceforth all
complaints, petitions, answers and other
similar pleadings should specify the amount
of damages being prayed for not only in the
body of the pleading but also in the prayer,
and said damages shall be considered in the
assestment of the filing fees in any case. Any
pleading that fails to comply with the
requirement shall not be accepted nor
admitted, or shall otherwise be expunged
from the record.
The Court acquires jurisdiction over any case
only upon the payment of the prescribed
docket fee. An amendment of the complaint or
similar pleading will not thereby vest
jurisdiction in the court, much less the
payment of the docket fee based on the
amounts sought in the amended pleading.
(Emphasis supplied; pp. 568-569.)
Unlike Manchester, however, where the jurisdictional issue
arising from insufficiency of the docket fee paid, was seasonably
raised in the answer of the defendant in the trial court, in this
case the issue is being raised for the first time in this Court.
Petitioner submitted to the jurisdiction of the trial court without
question. It filed a counterclaim seeking affirmative reliefs, and
actively took part in the trial (p. 53, Rollo). A party who voluntarily
participates in the trial cannot later on raise the issue of the
court's lack of jurisdiction (Tan Boon Bee & Co. v. Judge
Jarencio, 163 SCRA 205).
Maersk should have raised its objection to the trial court s
jurisdiction when the case was still in that court. It should not
have waited for an adverse decision by the Court of Appeals
before waking up to raise the question of jurisdiction. As this
Court remarked in Tijam v. Sibonghanoy, 23 SCRA 29, 37:
Were we to sanction such conduct on its part,
We would in effect be declaring as useless all
the proceedings had in the present case since
it was commenced ... and compel the
judgment creditors to go up their Calvary once
more. The inequity and unfairness of this is
not only patent but revolting.
A party may be barred by laches from
invoking his plea (of lack of jurisdiction) for the
first time on appeal for the purpose of
annulling everything done in the case with the
active participation of said party invoking the
plea. (Tijam vs. Sibonghanoy, 23 SCRA 29,
34.)
Since this is a case where some of the claims (for moral and
exemplary damages) were not specified in the plaintiff s
pleading and were left for determination by the court, the
applicable rule is the third rule set out in the decision of this Court
in Sun Insurance Office Ltd., et al. vs. Hon. Maximiano
Asuncion, et al., 170 SCRA 274, to wit:
3. Where the trial court acquires jurisdiction
over a claim by the filing of the appropriate
pleading and payment of the prescribed filing
fee but, subsequently, the judgment awards a
claim not specified in the pleading, or if
specified the same has been left for
determination by the court, the additional filing
fee therefore shall constitute a lien on the
judgment. It shall be the responsibility of the
Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the
additional fee.
The Clerk of Court of the trial court shall assess and collect the
proper additional fees on the totality of the judgment for the
private respondent (Id).
Monet's counsel in the trial court, Attorney Jesus Salazar, is
hereby reprimanded for his unethical practice of not specifying
the amount of damages sought in the body and prayer of his
complaint in order to defraud the Government of the proper fee
for docketing said complaint. He is warned that a repetition of
that malpractice will be dealt with more severely.
WHEREFORE, the petition for certiorari is denied for lack of
merit. However, the Clerk of Court of the trial court shall assess
and collect the fees due on the judgment as if the same amounts
were specified in the complaint. Costs against the petitioner.
SO ORDERED.
G.R. No. L-52179 April 8, 1991
MUNICIPALITY OF SAN FERNANDO, LA UNION, petitioner
vs.
HON. JUDGE ROMEO N. FIRME, JUANA RIMANDO-
BANIÑA, IAUREANO BANIÑA, JR., SOR MARIETA BANIÑA,
MONTANO BANIÑA, ORJA BANIÑA, AND LYDIA R.
BANIÑA, respondents.
Mauro C. Cabading, Jr. for petitioner.
Simeon G. Hipol for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari with prayer for the issuance of a
writ of preliminary mandatory injunction seeking the nullification
or modification of the proceedings and the orders issued by the
respondent Judge Romeo N. Firme, in his capacity as the
presiding judge of the Court of First Instance of La Union,
Second Judicial District, Branch IV, Bauang, La Union in Civil
Case No. 107-BG, entitled "Juana Rimando Baniña, et al. vs.
Macario Nieveras, et al." dated November 4, 1975; July 13,
1976; August 23,1976; February 23, 1977; March 16, 1977; July
26, 1979; September 7, 1979; November 7, 1979 and December
3, 1979 and the decision dated October 10, 1979 ordering
defendants Municipality of San Fernando, La Union and Alfredo
Bislig to pay, jointly and severally, the plaintiffs for funeral
expenses, actual damages consisting of the loss of earning
capacity of the deceased, attorney's fees and costs of suit and
dismissing the complaint against the Estate of Macario Nieveras
and Bernardo Balagot.
The antecedent facts are as follows:
Petitioner Municipality of San Fernando, La Union is a municipal
corporation existing under and in accordance with the laws of
the Republic of the Philippines. Respondent Honorable Judge
Romeo N. Firme is impleaded in his official capacity as the
presiding judge of the Court of First Instance of La Union, Branch
IV, Bauang, La Union. While private respondents Juana
Rimando-Baniña, Laureano Baniña, Jr., Sor Marietta Baniña,
Montano Baniña, Orja Baniña and Lydia R. Baniña are heirs of
the deceased Laureano Baniña Sr. and plaintiffs in Civil Case
No. 107-Bg before the aforesaid court.
At about 7 o'clock in the morning of December 16, 1965, a
collision occurred involving a passenger jeepney driven by
Bernardo Balagot and owned by the Estate of Macario Nieveras,
a gravel and sand truck driven by Jose Manandeg and owned
by Tanquilino Velasquez and a dump truck of the Municipality of
San Fernando, La Union and driven by Alfredo Bislig. Due to the
impact, several passengers of the jeepney including Laureano
Baniña Sr. died as a result of the injuries they sustained and four
(4) others suffered varying degrees of physical injuries.
On December 11, 1966, the private respondents instituted a
compliant for damages against the Estate of Macario Nieveras
and Bernardo Balagot, owner and driver, respectively, of the
passenger jeepney, which was docketed Civil Case No. 2183 in
the Court of First Instance of La Union, Branch I, San Fernando,
La Union. However, the aforesaid defendants filed a Third Party
Complaint against the petitioner and the driver of a dump truck
of petitioner.
Thereafter, the case was subsequently transferred to Branch IV,
presided over by respondent judge and was subsequently
docketed as Civil Case No. 107-Bg. By virtue of a court order
dated May 7, 1975, the private respondents amended the
complaint wherein the petitioner and its regular employee,
Alfredo Bislig were impleaded for the first time as defendants.
Petitioner filed its answer and raised affirmative defenses such
as lack of cause of action, non-suability of the State, prescription
of cause of action and the negligence of the owner and driver of
the passenger jeepney as the proximate cause of the collision.
In the course of the proceedings, the respondent judge issued
the following questioned orders, to wit:
(1) Order dated November 4, 1975 dismissing the
cross-claim against Bernardo Balagot;
(2) Order dated July 13, 1976 admitting the Amended
Answer of the Municipality of San Fernando, La Union
and Bislig and setting the hearing on the affirmative
defenses only with respect to the supposed lack of
jurisdiction;
(3) Order dated August 23, 1976 deferring there
resolution of the grounds for the Motion to Dismiss until
the trial;
(4) Order dated February 23, 1977 denying the motion
for reconsideration of the order of July 13, 1976 filed by
the Municipality and Bislig for having been filed out of
time;
(5) Order dated March 16, 1977 reiterating the denial
of the motion for reconsideration of the order of July 13,
1976;
(6) Order dated July 26, 1979 declaring the case
deemed submitted for decision it appearing that parties
have not yet submitted their respective memoranda
despite the court's direction; and
(7) Order dated September 7, 1979 denying the
petitioner's motion for reconsideration and/or order to
recall prosecution witnesses for cross examination.
On October 10, 1979 the trial court rendered a decision, the
dispositive portion is hereunder quoted as follows:
IN VIEW OF ALL OF (sic) THE FOREGOING,
judgment is hereby rendered for the plaintiffs, and
defendants Municipality of San Fernando, La Union
and Alfredo Bislig are ordered to pay jointly and
severally, plaintiffs Juana Rimando-Baniña, Mrs.
Priscilla B. Surell, Laureano Baniña Jr., Sor Marietta
Baniña, Mrs. Fe B. Soriano, Montano Baniña, Orja
Baniña and Lydia B. Baniña the sums of P1,500.00 as
funeral expenses and P24,744.24 as the lost expected
earnings of the late Laureano Baniña Sr., P30,000.00
as moral damages, and P2,500.00 as attorney's fees.
Costs against said defendants.
The Complaint is dismissed as to defendants Estate of
Macario Nieveras and Bernardo Balagot.
SO ORDERED. (Rollo, p. 30)
Petitioner filed a motion for reconsideration and for a new trial
without prejudice to another motion which was then pending.
However, respondent judge issued another order dated
November 7, 1979 denying the motion for reconsideration of the
order of September 7, 1979 for having been filed out of time.
Finally, the respondent judge issued an order dated December
3, 1979 providing that if defendants municipality and Bislig
further wish to pursue the matter disposed of in the order of July
26, 1979, such should be elevated to a higher court in
accordance with the Rules of Court. Hence, this petition.
Petitioner maintains that the respondent judge committed grave
abuse of discretion amounting to excess of jurisdiction in issuing
the aforesaid orders and in rendering a decision. Furthermore,
petitioner asserts that while appeal of the decision maybe
available, the same is not the speedy and adequate remedy in
the ordinary course of law.
On the other hand, private respondents controvert the position
of the petitioner and allege that the petition is devoid of merit,
utterly lacking the good faith which is indispensable in a petition
for certiorari and prohibition. (Rollo, p. 42.) In addition, the
private respondents stress that petitioner has not considered
that every court, including respondent court, has the inherent
power to amend and control its process and orders so as to
make them conformable to law and justice. (Rollo, p. 43.)
The controversy boils down to the main issue of whether or not
the respondent court committed grave abuse of discretion when
it deferred and failed to resolve the defense of non-suability of
the State amounting to lack of jurisdiction in a motion to dismiss.
In the case at bar, the respondent judge deferred the resolution
of the defense of non-suability of the State amounting to lack of
jurisdiction until trial. However, said respondent judge failed to
resolve such defense, proceeded with the trial and thereafter
rendered a decision against the municipality and its driver.
The respondent judge did not commit grave abuse of discretion
when in the exercise of its judgment it arbitrarily failed to resolve
the vital issue of non-suability of the State in the guise of the
municipality. However, said judge acted in excess of his
jurisdiction when in his decision dated October 10, 1979 he held
the municipality liable for the quasi-delict committed by its
regular employee.
The doctrine of non-suability of the State is expressly provided
for in Article XVI, Section 3 of the Constitution, to wit: "the State
may not be sued without its consent."
Stated in simple parlance, the general rule is that the State may
not be sued except when it gives consent to be sued. Consent
takes the form of express or implied consent.
Express consent may be embodied in a general law or a special
law. The standing consent of the State to be sued in case of
money claims involving liability arising from contracts is found in
Act No. 3083. A special law may be passed to enable a person
to sue the government for an alleged quasi-delict, as in Merritt
v. Government of the Philippine Islands (34 Phil 311). (see
United States of America v. Guinto, G.R. No. 76607, February
26, 1990, 182 SCRA 644, 654.)
Consent is implied when the government enters into business
contracts, thereby descending to the level of the other
contracting party, and also when the State files a complaint, thus
opening itself to a counterclaim. (Ibid)
Municipal corporations, for example, like provinces and cities,
are agencies of the State when they are engaged in
governmental functions and therefore should enjoy the
sovereign immunity from suit. Nevertheless, they are subject to
suit even in the performance of such functions because their
charter provided that they can sue and be sued.
(Cruz, Philippine Political Law, 1987 Edition, p. 39)
A distinction should first be made between suability and liability.
"Suability depends on the consent of the state to be sued,
liability on the applicable law and the established facts. The
circumstance that a state is suable does not necessarily mean
that it is liable; on the other hand, it can never be held liable if it
does not first consent to be sued. Liability is not conceded by
the mere fact that the state has allowed itself to be sued. When
the state does waive its sovereign immunity, it is only giving the
plaintiff the chance to prove, if it can, that the defendant is liable."
(United States of America vs. Guinto, supra, p. 659-660)
Anent the issue of whether or not the municipality is liable for the
torts committed by its employee, the test of liability of the
municipality depends on whether or not the driver, acting in
behalf of the municipality, is performing governmental or
proprietary functions. As emphasized in the case of Torio vs.
Fontanilla (G. R. No. L-29993, October 23, 1978. 85 SCRA 599,
606), the distinction of powers becomes important for purposes
of determining the liability of the municipality for the acts of its
agents which result in an injury to third persons.
Another statement of the test is given in City of Kokomo vs. Loy,
decided by the Supreme Court of Indiana in 1916, thus:
Municipal corporations exist in a dual capacity, and
their functions are twofold. In one they exercise the
right springing from sovereignty, and while in the
performance of the duties pertaining thereto, their acts
are political and governmental. Their officers and
agents in such capacity, though elected or appointed
by them, are nevertheless public functionaries
performing a public service, and as such they are
officers, agents, and servants of the state. In the other
capacity the municipalities exercise a private,
proprietary or corporate right, arising from their
existence as legal persons and not as public agencies.
Their officers and agents in the performance of such
functions act in behalf of the municipalities in their
corporate or individual capacity, and not for the state or
sovereign power." (112 N.E., 994-995) (Ibid, pp. 605-
606.)
It has already been remarked that municipal corporations are
suable because their charters grant them the competence to sue
and be sued. Nevertheless, they are generally not liable for torts
committed by them in the discharge of governmental functions
and can be held answerable only if it can be shown that they
were acting in a proprietary capacity. In permitting such entities
to be sued, the State merely gives the claimant the right to show
that the defendant was not acting in its governmental capacity
when the injury was committed or that the case comes under the
exceptions recognized by law. Failing this, the claimant cannot
recover. (Cruz, supra, p. 44.)
In the case at bar, the driver of the dump truck of the municipality
insists that "he was on his way to the Naguilian river to get a load
of sand and gravel for the repair of San Fernando's municipal
streets." (Rollo, p. 29.)

In the absence of any evidence to the contrary, the regularity of

the performance of official duty is presumed pursuant to Section
3(m) of Rule 131 of the Revised Rules of Court. Hence, We rule
that the driver of the dump truck was performing duties or tasks
pertaining to his office.

We already stressed in the case of Palafox, et. al. vs. Province

of Ilocos Norte, the District Engineer, and the Provincial
Treasurer (102 Phil 1186) that "the construction or maintenance
of roads in which the truck and the driver worked at the time of
the accident are admittedly governmental activities."

After a careful examination of existing laws and jurisprudence,

We arrive at the conclusion that the municipality cannot be held
liable for the torts committed by its regular employee, who was
then engaged in the discharge of governmental functions.
Hence, the death of the passenger –– tragic and deplorable
though it may be –– imposed on the municipality no duty to pay
monetary compensation.

All premises considered, the Court is convinced that the

respondent judge's dereliction in failing to resolve the issue of
non-suability did not amount to grave abuse of discretion. But
said judge exceeded his jurisdiction when it ruled on the issue
of liability.

ACCORDINGLY, the petition is GRANTED and the decision of

the respondent court is hereby modified, absolving the petitioner
municipality of any liability in favor of private respondents.

SO ORDERED.
G.R. No. 78646 July 23, 1991
PABLO RALLA, substituted by his wife and co-defendant
CARMEN MUÑOZ-RALLA, and his legal heirs, HILDA
RALLA-ALMINE, BELISTA, RENE RALLA-BELISTA and
GERARDO M. RALLA, petitioners,
vs.
PEDRO RALLA, substituted by his legal heirs, LEONI,
PETER, and MARINELA all surnamed RALLA, and COURT
OF APPEALS, respondents.
Rafael Triunfante and Teodorico C. Almine, Jr. for petitioners.
Ruben R. Basa for private respondents.
CRUZ, J.:
Rosendo Ralla had two sons, Pablo and Pedro. The father
apparently loved the former but not the latter, Pablo and his
family lived with Rosendo, who took care of all the household
expenses. Pablo administered part of the family properties and
received a monthly salary of P250.00 plus part of the produce of
the land. Pedro lived with his mother, Paz Escarella, in another
town. He was not on good terms with his father.
Paz Escarella died in 1957 and the two brothers partitioned 63
parcels of land she left as her paraphernalia property. The
partition was sustained by this Court in G.R. Nos. 63253-54 on
April 27, 1989.1 Meanwhile, on December 22, 1958, Rosendo
executed a will disinheriting Pedro and leaving everything he
owned to Pablo, to whom he said he had earlier sold a part of
his property for P10,000.00. Rosendo himself filed for the
probate of the will but pendente lite died on October 1, 1960.
On November 3, 1966, the probate judge converted SP 564 into
an intestate proceeding. On February 28, 1978, a creditor of the
deceased filed a petition for the probate of Rosendo's will in SP
1106, which was heard jointly with SP 564. On August 3, 1979,
the order of November 3, 1966, was set aside.
The last will and testament of Rosendo Ralla was allowed on
June 7, 19822 but on October 20, 1982, the disinheritance of
Pedro was disapproved.3 This order was elevated to the Court
of Appeals in AC-G.R. Nos. 00472, 00489.
In a decision dated July 25, 1986, the Court of
Appeals4 reversed the trial court and reinstated the
disinheritance clause after finding that the requisites of a valid
disinheritance had been complied with in the will. The appellate
court noted that Pedro had threatened to kill his father, who was
afraid of him and had earlier sued him for slander and grave oral
defamation.
The decision was assailed before this Court in G.R. Nos. 76657-
58, which was dismissed in our resolution of August 26, 1987,
reading as follows:
. . . Assuming that, as claimed, the petitioners' counsel
received a copy of the questioned decision only on
August 15, 1986 (although it should have been earlier
because it was mailed to him at his address of record
on July 28, 1986), they had 15 days, or until August 30,
1986, within which to move for its reconsideration or
appeal therefrom by certiorari to this Court. Instead,
they filed on August 28, 1986, a motion for extension
of time to file a motion for reconsideration, which was
not allowed under our ruling in Habaluyas Enterprises,
Inc. v. Japson, 142 SCRA 208, and so did not interrupt
the running of the reglementary period. Indeed, even if
the period were to be counted from October 7, 1986,
when notice of the denial of the motion for extension
was received by the petitioners, the petition would still
be 30 days late, having been filed on December 8,
1986. Moreover, the petitioners have not shown that
the questioned decision is tainted with grave abuse of
discretion or that it is not in accord with law and
jurisprudence. For these reasons, the Court Resolved
to DISMISS the petition.
The motion for reconsideration was denied with finality in the
following resolution dated October 26, 1987:
. . . The Court, after deliberation, Resolved to DENY
with finality the motion for reconsideration, wherein the
petitioners pray that they be relieved from the effects of
our ruling in Habaluyas Enterprises, Inc. v. Japson, 142
SCRA 208, under which the petition was denied for
tardiness. Counsel are expected to be abreast of
current developments in law and jurisprudence and
cannot plead ignorance thereof as an excuse for non-
compliance with the same. As earlier observed, the
petition was filed extremely late, and, moreover, it was
inadequate even on the merits, same having failed to
show that the questioned decision was tainted with
grave abuse of discretion or reversible error.
What is involved in the present petition is the correctness of the
decision of the respondent court annulling the deed of sale
executed by Rosendo Ralla in favor of Pablo over 149 parcels
of land. Pedro had filed on May 19, 1972, a complaint to annul
the transaction on the ground that it was simulated.5 The original
decision of the trial court declared the sale null and void. 6 In the
resolution of the motion for reconsideration, however, Judge
Jose F. Madara completely reversed himself and held the deed
of sale to be valid.7 This order was in turn set aside by the
respondent court, which reinstated the original decision
invalidating the deed of sale.
It is indeed intriguing that the trial judge should, in resolving the
motion for reconsideration, make a complete turnabout on the
basis of the same evidence and jurisprudence that he
considered in rendering the original decision. It is no less
noteworthy that the respondent court, after studying the two
conclusions reached by him, saw fit to sustain his original
findings as the correct appreciation of the evidence and the
applicable law.
But we find that, regardless of these curious resolutions, the
petition must nevertheless be sustained albeit not on the ground
that the deed of sale was indeed valid. The Court is inclined to
support the findings of the respondent court. However, we do
not and cannot make any decision on this matter because of one
insuperable obstacle. That obstacle is the proper party
personality of Pedro Ralla to question the transaction.
The decision of the Court of Appeals in AC-G.R. Nos. 00472,
00489 approved the disinheritance of Pedro Ralla. That decision
was appealed to this Court, but the petition for review was
dismissed as above related. The decision has long since
become final. Since then, Pedro Ralla no longer had the legal
standing to question the validity of the sale executed by
Rosendo in favor of his other son Pablo.

The real party-in-interest is the party who stands to be benefited

or injured by the judgment or the party entitled to the avails of
the suit. "Interest" within the meaning of the rule means material
interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a
mere incidental interest. As a general rule, one having no right
or interest to protect cannot invoke the jurisdiction of the court
as a party-plaintiff in an action.

As the sole heir, Pablo Ralla had the right to inherit the totality
of his father's estate after payment of all its debts. Even if it be
assumed that the deed of sale was indeed invalid, the subject-
matter thereof nevertheless devolved upon Pablo as the
universal successor of his father Rosendo. In his wig, Rosendo
claimed the 149 parcels as "part of my property" –– as
distinguished from the conjugal estate –– which he had earlier
sold to Pablo. Significantly, Pedro did not deny this description
of the property in his Comment to the present petition, confining
himself to assailing the validity of the sale.

The Court must note the lackadaisical attitude of the heirs of

Pedro Ralla, who substituted him upon his death.1âwphi1 They
seem to have lost interest in this litigation, probably because of
the approval of their father's disinheritance by the respondent
court. When the parties were required to submit their respective
memoranda after we gave due course to this petition, the
petitioners did but not the private respondents. Although the
period to do so had already expired, the Court relaxed its rules
to give the private respondents another opportunity to comply
with the requirement. When the resolution of August 22, 1990,
could not be served upon the private respondents' counsel, we
directed that it be served on the private respondents
themselves.9 On January 18, 1991, the heirs of Pedro Ralla
informed the Court that they were retaining another counsel and
asked that they be furnished a copy of the petition and given 30
days within which to file their memorandum.10 This motion was
granted. The records show that they received a copy of the
petition on February 26, 1991, but their memorandum was never
filed. On May 29, 1991, the Court, noting this omission, finally
resolved to dispense with the memorandum and to decide this
case on the basis of the available records.

Our decision is that as a validly disinherited heir, and not

claiming to be a creditor of his deceased father, Pedro Ralla had
no legal personality to question the deed of sale dated
November 29, 1957, between Rosendo Ralla and his son Pablo.
Legally speaking, Pedro Ralla was a stranger to the transaction
as he did not stand to benefit from its annulment. His
disinheritance had rendered him hors de combat.

WHEREFORE, the decision of the respondent court dated

January 23, 1987, is set aside and another judgment is hereby
rendered dismissing Civil Case 194 (originally Civil Case 4624)
in this Regional Trial Court of Ligao, Albay, Branch 5.

SO ORDERED.
G.R. No. L-22909 January 28, 1925
VICTORIANO BORLASA, ET AL., plaintiffs-appellants,
vs.
VICENTE POLISTICO, ET AL., defendants-appellees.
Sumulong and Lavides for appellants.
Ramon Diokno for appellees.
STREET, J.:
This action was instituted in the Court of First Instance of Laguna
on July 25, 1917, by Victoriano Borlasa and others against
Vicente Polistico and others, chiefly for the purpose of securing
the dissolution of a voluntary association named Turuhan
Polistico & Co., and to compel the defendants to account for and
surrender the money and property of the association in order
that its affairs may be liquidated and its assets applied according
to law. The trial judge having sustained a demurrer for defect of
parties and the plaintiffs electing not to amend, the cause was
dismissed, and from this order an appeal was taken by the
plaintiffs to this court.
The material allegations of the complaint, so far as affects the
present appeal, are to the following effect: In the month of April,
1911, the plaintiffs and defendants, together with several
hundred other persons, formed an association under the name
of Turuhan Polistico & Co. Vicente Polistico, the principal
defendant herein, was elected president and treasurer of the
association, and his house in Lilio, Laguna, was made its
principal place of business. The life of the association was fixed
at fifteen years, and under the by-laws each member obligated
himself to pay to Vicente Polistico, as president-treasurer,
before 3 o'clock in the afternoon of every Sunday the sum of 50
centavos, except that on every fifth Sunday the amount was P1,
if the president elected to call this amount, as he always did. It
is alleged that from April, 1911, until April, 1917, the sums of
money mentioned above were paid weekly by all of the
members of the society with few irregularities. The inducement
to these weekly contributions was found in provisions of the by-
laws to the effect that a lottery should be conducted weekly
among the members of the association and that the successful
member should be paid the amount collected each week, from
which, however, the president-treasurer of the society was to
receive the sum of P200, to be held by him as funds of the
society.
It is further alleged that by virtue of these weekly lotteries Vicente
Polistico, as president-treasurer of the association, received
sums of money amounting to P74,000, more or less, in the
period stated, which he still retains in his power or has applied
to the purchase of real property largely in his own name and
partly in the names of others. The defendants in the complaint
are the members of the board of directors of the association,
including Vicente Polistico, as president-treasurer, Alfonso
Noble, secretary, Felix Garcia and Vivencio Zulaybar, as
promoter (propagandistas), and Afroniano de la Peña and
Tomas Orencia, as members (vocales) of the board.
In an amended answer the defendants raised the question of
lack of parties and set out a list of some hundreds of persons
whom they alleged should be brought in as parties defendant on
the ground, among others, that they were in default in the
payment of their dues to the association. On November 28,
1922, the court made an order requiring the plaintiffs to amend
their complaint within a stated period so as to include all of the
members of the Turnuhan Polistico & Co. either as plaintiffs or
defendants. The plaintiffs excepted to this order, but acquiesced
to the extent of amending their complaint by adding as additional
parties plaintiff some hundreds of persons, residents of Lilio,
said to be members of the association and desirous of being
joined as plaintiffs. Some of these new plaintiffs had not been
named in the list submitted by the defendants with their
amended answer; and on the other hand many names in said
list were here omitted, it being claimed by the plaintiffs that the
persons omitted were not residents of Lilio but residents of other
places and that their relation to the society, so far as the plaintiffs
could discover, was fictitious. The defendants demurred to the
amended complaint on the ground that it showed on its face a
lack of necessary parties and this demurrer was sustained, with
the ultimate result of the dismissal of the action, as stated in the
first paragraph of this opinion.
The trial judge appears to have supposed that all the members
of the Turnuhan Polistico & Co. should be brought in either
plaintiffs or defendants. This notion is entirely mistaken. The
situation involved is precisely the one contemplated in section
118 of the Code of Civil Procedure, where one or more may sue
for the benefit of all. It is evident from the showing made in the
complaint, and from the proceedings in the court below, that it
would be impossible to make all of the persons in interest parties
to the cases and to require all of the members of the association
to be joined as parties would be tantamount to a denial of justice.
The general rule with reference to the making of parties in a civil
action requires, of course, the joinder of all necessary parties
wherever possible, and the joinder of all indispensable parties
under any and all conditions, the presence of those latter being
a sine qua non of the exercise of judicial power. The class suit
contemplates an exceptional situation where there are
numerous persons all in the same plight and all together
constituting a constituency whose presence in the litigation is
absolutely indispensable to the administration of justice. Here
the strict application of the rule as to indispensable parties would
require that each and every individual in the class should be
present. But at this point the practice is so far relaxed as to
permit the suit to proceed, when the class is sufficient
represented to enable the court to deal properly and justly with
that interest and with all other interest involved in the suit. In the
class suit, then, representation of a class interest which will be
affected by the judgment is indispensable; but it is not
indispensable to make each member of the class an actual
party.
A common illustration in American procedure of the situation
justifying a class suit is that presented by the creditors' bill, which
is filed by one party interested in the estate of an insolvent, to
secure the distribution of the assets distributable among all the
creditors. In such cases the common practice is for one creditor
to sue as plaintiff in behalf of himself and other creditors.
(Johnson vs. Waters, 111 U.S., 640; 28 Law. ed., 547.) Another
illustration is found in the case of Smith vs. Swormstedt (16
How., 288; 14 Law. ed., 942), where a limited number of
individuals interested in a trust for the benefit of superannuated
preachers were permitted to maintain an action in their own
names and as representatives of all other persons in the same
right.
His Honor, the trial judge, in sustaining this demurrer was
possibly influenced to some extent by the case of Rallonza vs.
Evangelista (15 Phil., 531); but we do not consider that case
controlling, inasmuch as that was an action for the recovery of
real property and the different parties in interest had
determinable, though undivided interests, in the property there
in question. In the present case, the controversy involves an
indivisible right affecting many individuals whose particular
interest is of indeterminate extent and is incapable of separation.

The addition of some hundreds of persons to the number of the

plaintiffs, made in the amendment to the complaint of December
13, 1922, was unnecessary, and as the presence of so many
parties is bound to prove embarrassing to the litigation from
death or removal, it is suggested that upon the return of this
record to the lower court for further proceedings, the plaintiff
shall again amend their complaint by dismissing as to
unnecessary parties plaintiffs, but retaining a sufficient number
of responsible persons to secure liability for costs and fairly to
present all the members of the association.

There is another feature of the complaint which makes a slight

amendment desirable, which is, that the complaint should be
made to show on its face that the action is intended to be
litigated as a class suit. We accordingly recommend that the
plaintiffs further amend by adding after the names of the parties
plaintiffs the words, "in their own behalf and in behalf of other
members of Turuhan Polistico & Co."

The order appealed from is reversed, the demurrer of the

defendants based upon supposed lack of parties is overruled,
and the defendants are required to answer to the amended
complaint within the time allowed by law and the rules of the
court. The costs of this appeal will be paid by the defendants.
So ordered.
G.R. No. 91879 July 6, 1992
HEIRS OF MAXIMO REGOSO, petitioners,
vs.
THE HON. COURT OF APPEALS and BELEN CRUZ
REGOSO, respondents.
GRIÑO-AQUINO, J.:
The heirs of Maximo Regoso seek a review of the resolution
dated October 9, 1989 of the Court of Appeals in CA-G.R. No.
20183 dismissing the appeal filed by Regoso's former counsel.
The case involves an action for judicial partition of property with
accounting and damages (Civil Case No. 1464-V-81), which was
filed by Belen Cruz-Regoso against her husband, Maximo
Regoso, in the Regional Trial Court, Branch XV of Malolos,
Bulacan.
On November 14, 1988, the trial court rendered a decision, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered
in favor of the plaintiff and against the
defendant, as follows:
1. Declaring the land situated at Sampalukan,
Calvario, Meycauayan, Bulacan as
paraphernal of the plaintiff and the building
and improvement thereon as conjugal
property of the parties;
2. Declaring the properties situated at Galas,
Quezon City and Echague, Isabela as
conjugal properties of the parties;
3. Requiring the defendant to render an
accounting of all income derived from the
aforementioned properties; and
4. Adjudging the defendant to pay the
following amounts:
a) P5,000.00 as moral
damages;
b) P5,000.00 as exemplary
damages; and
c) P5,000.00 as attorney's
fees.
With costs against the defendant. (p.
25, Rollo.)
Regoso died on January 17, 1985 after the case had been
submitted for decision, but he was not substituted as defendant
by his heirs because, apparently, the trial court was not informed
of his death until the decision had been promulgated on
November 14, 1988.
On November 29, 1988, Regoso's counsel, Attorney Adriano
Javier, Sr., filed a notice of appeal which the trial court approved.
The appeal was docketed in the Court of Appeals as CA-G.R.
No. 20183.
The plaintiff, Belen Cruz-Regoso, through counsel, moved to
dismiss the appeal on the ground that the deceased defendant
ceased to have legal personality and that Attorney Javier's
authority to represent him was terminated or expired upon his
demise, hence, the notice of appeal filed by said counsel was
invalid, a worthless piece of paper.
The Court of Appeals issued a resolution on October 6, 1989,
dismissing the appeal. It held:
It is a well-established rule that a lawyer-client
relationship is terminated upon the death of
the client. The lawyer's authority to appear for
his client automatically ceases (5 Am. Jur.
282). The only exceptions are when there is a
contract for the lawyer's services up to
judgment, or when his fees are on a
contingent basis, and also when his
appearance is coupled with an interest (7 CJS
945, 946). Since not one of the above
exceptions obtains in this case, it is obvious
that when Attorney Javier filed the notice of
appeal after his client's death, he no longer
had any authority to appear for him. Hence,
the notice of appeal filed by him was a mere
scrap of paper and without any legal effect.
WHEREFORE, the instant appeal is hereby
DISMISSED. (pp.
27-28, Rollo.)
The Motion for reconsideration filed by the heirs' new counsel
was likewise denied by the Court of Appeals.
Hence, the present petition in which the petitioners, as heirs of
the late Maximo Regoso, allege that the Appellate Court erred
in dismissing their appeal and in not declaring that the judgment
which the trial court rendered after the death of said defendant,
was null and void.
The petition has no merit.
Under the rules, it is the duty of the attorney for the deceased
defendant to inform the court of his client's death and to furnish
the court with the names and residences of the executor,
administrator, or legal representative of the deceased. Sections
16 and 17, Rule 3 of the Rules of Court provide:
Sec. 16. Duty of attorney upon death,
incapacity, or incompetency of party.—
Whenever a party to a pending case dies,
becomes incapacitated or incompetent, it
shall be the duty of his attorney to inform the
court promptly of such death, incapacity or
incompetency, and to give the name and
residence of his executor, administrator,
guardian or other legal representative.
Sec. 17. Death of party.— After a party dies
and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal
 representative of the deceased to appear and
to be substituted for the deceased, within a
period of thirty (30) days, or within such time
as may be granted. If the legal representative
fails to appear within said time, the court may
order the opposing party to procure the
appointment of a legal representative of the
deceased within a time to be specified by the
court, and the representative shall
immediately appear for and on behalf of the
interest of the deceased. The court charges
involved in procuring such appointment, if
defrayed by the opposing party, may be
recovered as costs. The heirs of the deceased
may be allowed to be substituted for the
deceased, without requiring the appointment
of an executor or administrator and the court
may appoint guardian ad litem for the minor
heirs.
The rules operate on the presumption that the attorney for the
deceased party is in a better position than the attorney for the
adverse party to know about the death of his client and to inform
the court of the names and addresses of his legal representative
or representatives.
jurisdiction to pronounce the judgment or
order, maybe as follows:
xxx xxx xxx
(b) In other cases the judgment or order is,
with respect to the matter directly adjudged or
as to any other matter that could have been
raised in relation thereto, conclusive between
the parties and their successors-in-interest by
title subsequent to the commencement of the
action or special proceeding, litigating for the
same thing and under the same title and in the
same capacity. (Section 49(b), Rule 39, New
Rules of Court.)
Thus, a judgment in an ejectment case may be enforced not only
against defendants therein but also against the members of their
family, their relatives, or privies who derived their right of
possession from the defendants (Ariem vs. De los Angeles, 49
SCRA 343). The same rule applies to the successors-in-interest
of a deceased party in an action that survives, if the decision
should go against the latter (Florendo, Jr. vs. Coloma, 129
SCRA 304, 305.)

In the case at bar, no such notice of death, nor a motion for WHEREFORE, the petition for review is hereby DENIED.
substitution of the deceased defendant, was ever made. Hence,
the trial court could not be expected to know or take judicial SO ORDERED.
notice of the death of defendant, Maximo Regoso, without the
proper manifestation from his counsel. It must be remembered
that the fault or negligence was Attorney Javier's alone (Llantero
vs. Court of Appeals, 105 SCRA 609; Chittick vs. Court of
Appeals, 166 SCRA 219; Pulido vs. CA, 122 SCRA 63).

The supervening death of the defendant, Maximo Regoso, did

not extinguish his wife's action for partition of their conjugal
assets, for it is an action that survives. The trial of the case on
the merits was already finished before the defendant died. Since
it was not informed about that event, the trial court may not be
faulted for proceeding to render judgment without ordering the
substitution of the deceased defendant. Its judgment is valid and
binding upon the defendant's legal representatives or
successors-in-interest, insofar as his interest in the property
subject of the action is concerned (Florendo, et al. vs. Coloma,
et al., 129 SCRA 304).

Attorney Javier's appeal from the decision of the trial court was
correctly dismissed by the appellate court for upon the death of
Maximo Regoso, Attorney Javier's authority to represent him
also expired. Then notice of appeal, which Attorney Javier filed
on behalf of the decedent was an unauthorized pleading, hence,
invalid (Barrameda, et al. vs. Barbara, et al., 90 Phil. 718;
Caseñas vs. Rosales, 19 SCRA 462).

However, the validity of the judgment of the trial court was not
affected by the defendant's demise for the action survived. The
decision is binding and enforceable against the successors-in-
interest of the deceased litigant by title subsequent to the
commencement of the action [Section 49(b) Rule 39, Rules of
Court; Florendo, et al. vs. Coloma, et al., 129 SCRA 304].

This is in line with the following provisions of the Rules of Court:

Sec. 49. EFFECT OF JUDGMENTS.—The

effect of a judgment or final order rendered by
a court or judge of the Philippines, having
G.R. No. L-31095 June 18, 1976
JOSE M. HERNANDEZ, petitioner,
vs.
DEVELOPMENT BANK OF THE PHILIPPINES and COURT
OF FIRST INSTANCE OF BATANGAS, LIPA CITY
BRANCH, respondents.
Tomas Yumol for petitioners.
Graciano V. Sebastian for respondent Development Bank of the
Philippines.
MARTIN, J.:
This is a case which involves the question of proper venue in a
real action.
Petitioner Jose M. Hernandez was an employee of private
respondent Development Bank of the Philippines in its Legal
Department for twenty-one (21) years until his retirement on
February 28, 1966 due to illness. On August 12, 1964, in due
recognition of his unqualified service as Assistant Attorney in its
Legal Department, the private respondent awarded to the
petitioner a lot, identified as Lot No. 15, Block No. W-21, in the
private respondent's Housing Project at No. 1 West Avenue,
Quezon City, containing an area of 810 square meters with a
Type E house. On August 31, 1968, after the petitioner received
from the private respondent's Housing Project Committee a
statement of account of the purchase price of the said lot and
house in the total amount of P21,034.56, payable on a monthly
amortization of P153.32 for a term of fifteen (15) years, he sent
to the said Committee a Cashier's Check No. 77089 CC, dated
-October 21, 1968, issued by the Philippine Banking Corporation
in the name of his wife in the sum of P21,500.00 to cover the
cash and full payment of the purchase price of the lot and house
awarded to him. However, more than a week thereafter, or on
October 29, 1968, the Chief Accountant and Comptroller of the
private respondent returned to the petitioner ,the
aforementioned check, informing him that the private
respondent, through its Committee on Organization, Personnel
and Facilities, had cancelled the award of the lot and house
previously awarded to him on the following grounds: (1) that he
has already retired; (2) that he has only an option to purchase
said house and lot; (3) that there are a big number of employees
who have no houses or lots; (4) that he has been given his
retirement gratuity; and (5) that the awarding of the
aforementioned house and lot to an employee of the private
respondent would better subserve the objective of its Housing
Project. Petitioner protested against the cancellation of the
award of the house and lot in his favor and demanded from
private respondent the restoration of all his rights to said award.
However, private respondent refused.
On May 15, 1969 the petitioner filed a complaint in the Court of
First Instance of Batangas against the private respondent
seeking the annulment of the cancellation of the award of the lot
and house in his favor and the restoration of all his rights thereto.
He contends that the cancellation of said award was
unwarranted and illegal for he has already become the owner of
said house and lot by virtue of said award on August 12, 1964
and has acquired a vested right thereto, which cannot be
unilaterally cancelled without his consent; that he. had
requested the private respondent to restore to him all his rights
to said award but the latter refused and failed and still refuses
and fails to comply with said request.
Private respondent filed a motion to dismiss the complaint on the
ground of improper venue, contending that since the petitioner's
action affects the title to a house and lot situated in Quezon City,
the same should have been commenced in the Court of First
Instance of Quezon City where the real property is located and
not in the Court of First Instance of Batangas where petitioner
resides. On July 24, 1969, the respondent Court sustained the
motion to dismiss filed by private respondent on the ground of
improper venue.
Hence, the instant petition to review the order of respondent
Court.
The only issue in this petition is whether the action of the
petitioner was properly filed in the Court of First Instance of
Batangas. It is a well settled rule that venue of actions or, more
appropriately, the county where the action is triable 1 depends
to a great extent on the nature of the action to be filed, whether
it is real or personal. 2 A real action is one brought for the specific
recovery of land, tenements, or hereditaments. 3 A personal
action is one brought for the recovery of personal property, for
the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an
injury to the person or property. 4 Under Section 2, Rule 4 of the
Rules of Court, "actions affecting title to, or for recovery of
possession, or for partition, or condemnation of , or foreclosure
of mortgage in real property, shall be commenced and tried
where the defendant or any of the defendants resides or may be
found, or where the plaintiff or any of the plaintiffs resides, at the
election of the plaintiff".
A close scrutiny of the essence of the petitioner's complaint in
the court a quo would readily show that he seeks
the annulment of the cancellation of the award of the Quezon
City lot and house in his favor originally given him by respondent
DBP in recognition of his twenty-one years of service in its Legal
Department, in pursuance of his contention that he had acquired
a vested right to the award which cannot be unilaterally
cancelled by respondent without his consent.
The Court agrees that petitioner's action is not a real but a
personal action. As correctly insisted by petitioner, his action is
one to declare null and void the cancellation of the lot and house
in his favor which does not involve title and ownership over said
properties but seeks to compel respondent to recognize that the
award is a valid and subsisting one which it cannot arbitrarily
and unilaterally cancel and accordingly to accept the proffered
payment in full which it had rejected and returned to petitioner.
Such an action is a personal action which may be properly
brought by petitioner in his residence, as held in the case
of Adamus vs. J.M. Tuason & Co., Inc. 5 where this Court
speaking through former Chief Justice Querube C. Makalintal
distinguished the case from an earlier line of J.M. Tuaxon & Co.,
Inc. cases involving lot purchasers from the Deudors 6, as
follows:
... All the allegations as well as the prayer in
the complaint show that this is not a real but a
personal action — to compel the defendants
to execute the corresponding purchase
contracts in favor of the plaintiffs and to pay
damages. The plaintiffs do not claim
ownership of the lots in question: they
 recognize the title of the defendant J.M.
Tuason & Co., Inc. They do not ask that
possession be delivered to them, for they
allege to be in possession. The case cited by
the defendants (Abao, et al. vs. J. M. Tuason
& Co., Inc. G.R. No. L-16796, Jan. 30, 1962)
is therefore not in point. In that case, as stated
by this Court in its decision, the 'plaintiffs'
action is predicated on the theory that they are
'occupants, landholders,' and 'most' of them
owners by purchase' of the residential lots in
question; that, in consequence of the
compromise agreement adverted to above,
between the Deudors; and defendant
corporations, the latter had acknowledged the
right and title of the Deudors in and to said
lots; and hence, the right and title of the
plaintiffs, as successors-in-interest of the
Deudors; that, by entering into said
agreement, defendant corporations had, also,
waived their right to invoke the indefeasibility
of the Torrens title in favor of J. M. Tuason &
Co., Inc.; and that defendants have no right,
therefore, to oust plaintiffs from the lots
respectively occupied by them and which they
claim to be entitled to hold. Obviously, this
action affects, therefore, not only the
possession of real property, but, also, the title
thereto. Accordingly, it should have been
instituted in the Court of First Instance of the
Province of Rizal in which said property is
situated (Section 3, Rule 5 of the Rules of
Court).

WHEREFORE, the order of dismissal appealed from is set aside

and the case is remanded for further proceedings and
disposition on the merits. No costs.
G.R. No. 119657 February 7, 1997
UNIMASTERS CONGLOMERATION, INC., petitioner,
vs.
COURT OF APPEALS and KUBOTA AGRI MACHINERY
PHILIPPINES, INC., respondents.
NARVASA, C.J.:
The appellate proceeding at bar turns upon the interpretation of
a stipulation in a contract governing venue of actions thereunder
arising.
On October 8, 1988 Kubota Agri-Machinery Philippines, Inc.
(hereafter, simply KUBOTA) and Unimasters Conglomeration,
Inc. (hereafter, simply UNIMASTERS) entered into a
"Dealership Agreement for Sales and Services" of the former's
products in Samar and Leyte Provinces.1 The contract
contained, among others:
1) a stipulation reading: ". . . All suits arising out of this
Agreement shall be filed with/in the proper Courts of Quezon
City," and
2) a provision binding UNIMASTERS to obtain (as it did in fact
obtain) a credit line with Metropolitan Bank and Trust Co.-
Tacloban Branch in the amount of P2,000,000.00 to answer for
its obligations to KUBOTA.
Some five years later, or more precisely on December 24, 1993,
UNIMASTERS filed an action in the Regional Trial Court of
Tacloban City against KUBOTA, a certain Reynaldo Go, and
Metropolitan Bank and Trust Company-Tacloban Branch
(hereafter, simply METROBANK) for damages for breach of
contract, and injunction with prayer for temporary restraining
order. The action was docketed as Civil Case No. 93-12-241 and
assigned to Branch 6.
On the same day the Trial Court issued a restraining order
enjoining METROBANK from "authorizing or effecting payment
of any alleged obligation of . . (UNIMASTERS) to defendant . .
KUBOTA arising out of or in connection with purchases made
by defendant Go against the credit line caused to be established
by . . (UNIMASTERS) for and in the amount of P2 million
covered by defendant METROBANK . . or by way of charging .
. (UNIMASTERS) for any amount paid and released to
defendant . . (KUBOTA) by the Head Office of METROBANK in
Makati, Metro-Manila . . ." The Court also set the application for
preliminary injunction for hearing on January 10, 1994 at 8:30
o'clock in the morning.
On January 4, 1994 KUBOTA filed-two motions. One prayed for
dismissal of the case on the ground of improper venue (said
motion being set for hearing on January 11, 1994). The other
prayed for the transfer of the injunction hearing to January 11,
1994 because its counsel was not available on January 10 due
to a prior commitment before another court.
KUBOTA claims that notwithstanding that its motion to transfer
hearing had been granted, the Trial Court went ahead with the
hearing on the injunction incident on January 10, 1994 during
which it received the direct testimony of UNIMASTERS' general
manager, Wilford Chan; that KUBOTA's counsel was "shocked"
when he learned of this on the morning of the 11th, but was
nonetheless instructed to proceed to cross-examine the witness;
that when said counsel remonstrated that this was unfair, the
Court reset the hearing to the afternoon of that same day, at
which time Wilford Chan was recalled to the stand to repeat his
direct testimony. It appears that cross-examination of Chan was
then undertaken by KUBOTA's lawyer with the "express
reservation that . . (KUBOTA was) not (thereby) waiving and/or
abandoning its motion to dismiss;" and that in the course of the
cross-examination, exhibits (numbered from 1 to 20) were
presented by said attorney who afterwards submitted a
memorandum in lieu of testimonial evidence.2
On January 13, 1994, the Trial Court handed down an Order
authorizing the issuance of the preliminary injunction prayed for,
upon a bond of P2,000,000.00.3 And on February 3, 1994, the
same Court promulgated an Order denying KUBOTA's motion
to dismiss. Said the Court:
The plaintiff UNIMASTERS Conglomeration
is holding its principal place of business in the
City of Tacloban while the defendant . .
(KUBOTA) is holding its principal place of
business in Quezon City. The proper venue
therefore pursuant to Rules of Court would
either be Quezon City or Tacloban City at the
election of the plaintiff. Quezon City and
Manila (sic), as agreed upon by the parties in
the Dealership Agreement, are additional
places other than the place stated in the Rules
of Court. The filing, therefore, of this complaint
in the Regional Trial Court in Tacloban City is
proper.
Both orders were challenged as having been issued with grave
abuse of discretion by KUBOTA in a special civil action of
certiorari and prohibition filed with the Court of Appeals,
docketed as CA-G.R. SP No. 33234. It contended, more
particularly, that (1) the RTC had "no jurisdiction to take
cognizance of . . (UNIMASTERS') action considering that venue
was improperly laid," (2) UNIMASTERS had in truth "failed to
prove that it is entitled to the . . writ of preliminary injunction;"
and (3) the RTC gravely erred "in denying the motion to
dismiss."4
The Appellate Court agreed with KUBOTA that — in line with the
Rules of Court5 and this Court's relevant rulings6 — the
stipulation respecting venue in its Dealership Agreement with
UNIMASTERS did in truth limit the venue of all suits arising
thereunder only and exclusively to "the proper courts of Quezon
City."7 The Court also held that the participation of KUBOTA's
counsel at the hearing on the injunction incident did not in the
premises operate as a waiver or abandonment of its objection to
venue; that assuming that KUBOTA's standard printed invoices
provided that the venue of actions thereunder should be laid at
the Court of the City of Manila, this was inconsequential since
such provision would govern "suits or legal actions between
petitioner and its buyers" but not actions under the Dealership
Agreement between KUBOTA and UNIMASTERS, the venue of
which was controlled by paragraph No. 7 thereof; and that no
impediment precludes issuance of a TRO or injunctive writ by
the Quezon City RTC against METROBANK-Tacloban since the
same "may be served on the principal office of METROBANK in
Makati and would be binding on and enforceable against,
METROBANK branch in Tacloban."
After its motion for reconsideration of that decision was turned
down by the Court of Appeals, UNIMASTERS appealed to this
Court. Here, it ascribes to the Court of Appeals several errors
which it believes warrant reversal of the verdict, namely:8
1) "in concluding, contrary to decisions of this . . Court, that the
agreement on venue between petitioner (UNIMASTERS) and
private respondent (KUBOTA) limited to the proper courts of
Quezon City the venue of any complaint filed arising from the
dealership agreement between . . (them);"
2) "in ignoring the rule settled in Philippine Banking Corporation
vs. Tensuan,9 that 'in the absence of qualifying or restrictive
words, venue stipulations in a contract should be considered
merely as agreement on additional forum, not as limiting venue
to the specified place;" and in concluding, contrariwise, that the
agreement in the case at bar "was the same as the agreement
on venue in the Gesmundo case," and therefore,
the Gesmundo case was controlling; and
3) "in concluding, based solely on the self-serving narration of .
. (KUBOTA that its) participation in the hearing for the issuance
of a . . preliminary injunction did not constitute waiver of its
objection to venue."
The issue last mentioned, of whether or not the participation by
the lawyer of KUBOTA at the injunction hearing operated as a
waiver of its objection to venue, need not occupy the Court too
long. The record shows that when KUBOTA's counsel appeared
before the Trial Court in the morning of January 11, 1994 and
was then informed that he should cross-examine
UNIMASTERS' witness, who had testified the day before, said
counsel drew attention to the motion to dismiss on the ground of
improper venue and insistently attempted to argue the matter
and have it ruled upon at the time; and when the Court made
known its intention (a) "to (resolve first the) issue (of) the
injunction then rule on the motion to dismiss," and (b)
consequently its desire to forthwith conclude the examination of
the witness on the injunction incident, and for that purpose reset
the hearing in the afternoon of that day, the 11th, so that the
matter might be resolved before the lapse of the temporary
restraining order on the 13th, KUBOTA's lawyer told the Court:
"Your Honor, we are not waiving our right to submit the Motion
to Dismiss." 10 It is plain that under these circumstances, no
waiver or abandonment can be imputed to KUBOTA.
The essential question really is that posed in the first and second
assigned errors, i.e., what construction should be placed on the
stipulation in the Dealership Agreement that" (a)ll suits arising
out of this Agreement shall be filed with/in the proper Courts of
Quezon City."
Rule 4 of the Rules of Court sets forth the principles generally
governing the venue of actions, whether real or personal, or
involving persons who neither reside nor are found in the
Philippines or otherwise. Agreements on venue are explicitly
allowed. "By written agreement of the parties the venue of an
action may be changed or transferred from one province to
another." 11 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. 12
Written stipulations as to venue may be restrictive in the sense
that the suit may be filed only in the place agreed upon, or
merely permissive in that the parties may file their suit not only
in the place agreed upon but also in the places fixed by law (Rule
4, specifically). As in any other agreement, what is essential is
the ascertainment of the intention of the parties respecting the
matter.
Since convenience is the raison d'etre of the rules of venue, 13 it
is easy to accept the proposition that normally, venue
stipulations should be deemed permissive merely, and that
interpretation should be adopted which most serves the parties'
convenience. In other words, stipulations designating venues
other than those assigned by Rule 4 should be interpreted as
designed to make it more convenient for the parties to institute
actions arising from or in relation to their agreements; that is to
say, as simply adding to or expanding the venues indicated in
said Rule 4.
On the other hand, because restrictive stipulations are in
derogation of this general policy, the language of the parties
must be so clear and categorical as to leave no doubt of their
intention to limit the place or places, or to fix places other than
those indicated in Rule 4, for their actions. This is easier said
than done, however, as an examination of precedents involving
venue covenants will immediately disclose.
In at least thirteen (13) cases, this Court construed the venue
stipulations involved as merely permissive. These are:
1. Polytrade Corporation v. Blanco, decided in 1969. 14 In this
case, the venue stipulation was as follows:
The parties agree to sue and be sued in the
Courts of Manila.
This Court ruled that such a provision "does not preclude the
filing of suits in the residence of the plaintiff or the defendant.
The plain meaning is that the parties merely consented to be
sued in Manila. Qualifying or restrictive words which would
indicate that Manila and Manila alone is the venue are totally
absent therefrom. It simply is permissive. The parties solely
agreed to add the courts of Manila as tribunals to which they
may resort. They did not waive their right to pursue remedy in
the courts specifically mentioned in Section 2(b) of Rule 4."
The Polytrade doctrine was reiterated expressly or implicitly in
subsequent cases, numbering at least ten (10).
2. Nicolas v. Reparations Commission, decided in 1975. 15 In
this case, the stipulation on venue read:
. . . (A)ll legal actions arising out of this
contract . . may be brought in and submitted
to the jurisdiction of the proper courts in the
City of Manila.
This Court declared that the stipulation does not clearly show
the intention of the parties to limit the venue of the action to the
City of Manila only. "It must be noted that the venue in personal
actions is fixed for the convenience of the plaintiff and his
witnesses and to promote the ends of justice. We cannot
conceive how the interest of justice may be served by confining
the situs of the action to Manila, considering that the residences
or offices of all the parties, including the situs of the acts sought
to be restrained or required to be done, are all within the
territorial jurisdiction of Rizal. . . Such agreements should be
construed reasonably and should not be applied in such a
manner that it would work more to the inconvenience of the
parties without promoting the ends of justice.
3. Lamis Ents. v. Lagamon, decided in 1981. 16 Here, the
stipulation in the promissory note and the chattel mortgage
specified Davao City as the venue.
The Court, again citing Polytrade, stated that the provision "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 the place named is the only venue
agreed upon by the parties. The stipulation did not deprive . .
(the affected party) of his right to pursue remedy in the court
specifically mentioned in Section 2(b) of Rule 4, Rules of
Court. Renuntiato non praesumitur."
4. Capati v. Ocampo, decided in 1982 17 In this case, the
provision of the contract relative to venue was as follows:
. . . (A)ll actions arising out, or relating to this
contract may be instituted in the Court of First
Instance of the City of Naga.
The Court ruled that the parties "did not agree to file their suits
solely and exclusively with the Court of First Instance of Naga;"
they "merely agreed to submit their disputes to the said court
without waiving their right to seek recourse in the court
specifically indicated in Section 2 (b), Rule 4 of the Rules of
Court."
5. Western Minolco v. Court of Appeals, decided in
1988. 18 Here, the provision governing venue read:
The parties stipulate that the venue of the
actions referred to in Section 12.01 shall be in
the City of Manila.
The court restated the doctrine that a stipulation in a contract
fixing a definite place for the institution of an action arising in
connection therewith, does not ordinarily supersede the general
rules set out in Rule 4, and should be construed merely as an
agreement on an additional forum, not as limiting venue to the
specified place.
6. Moles v. Intermediate Appellate Court, decided in 1989. 19 In
this proceeding, the Sales Invoice of a linotype machine stated
that the proper venue should be Iloilo.
This Court held that such an invoice was not the contract of sale
of the linotype machine in question; consequently the printed
provisions of the invoice could not have been intended by the
parties to govern the sale of the machine, especially since said
invoice was used for other types of transactions. This Court said:
"It is obvious that a venue stipulation, in order to bind the parties,
must have been intelligently and deliberately intended by them
to exclude their case from the reglementary rules on venue. Yet,
even such intended variance may not necessarily be given
judicial approval, as, for instance, where there are no restrictive
or qualifying words in the agreement indicating that venue
cannot be laid in any place other than that agreed upon by the
parties, and in contracts of adhesion."
7. Hongkong and Shanghai Banking Corp. v. Sherman, decided
in 1989. 20 Here the stipulation on venue read:
. . (T)his guarantee and all rights, obligations
and liabilities arising hereunder shall be
construed and determined under and may be
enforced in accordance with the laws of the
Republic of Singapore. We hereby agree that
the Courts in Singapore shall have jurisdiction
over all disputes arising under this guarantee.
..
This Court held that due process dictates that the stipulation be
liberally construed. The parties did not thereby stipulate that only
the courts of Singapore, to the exclusion of all the others, had
jurisdiction. The clause in question did not operate to divest
Philippine courts of jurisdiction.
8. Nasser v. Court of Appeals, decided in 1990, 21 in which the
venue stipulation in the promissory notes in question read:
. . (A)ny action involving the enforcement of
this contract shall be brought within the City of
Manila, Philippines.
The Court's verdict was that such a provision does not as a rule
supersede the general rule set out in Rule 4 of the Rules of
Court, and should be construed merely as an agreement on an
additional forum, not as limiting venue to the specified place.
9. Surigao Century Sawmill Co., Inc. v. Court of Appeals,
decided in 1993: 22 In this case, the provision concerning venue
was contained in a contract of lease of a barge, and read as
follows:
. . . (A)ny disagreement or dispute arising out
of the lease shall be settled by the parties in
the proper court in the province of Surigao del
Norte.
The venue provision was invoked in an action filed in the
Regional Trial Court of Manila to recover damages arising out of
marine subrogation based on a bill of lading. This Court declared
that since the action did not refer to any disagreement or dispute
arising out of the contract of lease of the barge, the venue
stipulation in the latter did not apply; but that even assuming the
contract of lease to be applicable, a statement in a contract as
to venue does not preclude the filing of suits at the election of
the plaintiff where no qualifying or restrictive words indicate that
the agreed place alone was the chosen venue.
10. Philippine Banking Corporation, v. Hon. Salvador
Tensuan, etc., Circle Financial Corporation, at al., decided in
1993. 23 Here, the stipulation on venue was contained in
promissory notes and read as follows:
I/We hereby expressly submit to the
jurisdiction of the courts of Valenzuela any
legal action which may arise out of this
promissory note.
This Court held the stipulation to be merely permissive since it
did not lay the venue in Valenzuela exclusively or mandatorily.
The plain or ordinary import of the stipulation is the grant of
authority or permission to bring suit in Valenzuela; but there is
not the slightest indication of an intent to bar suit in other
competent courts. The Court stated that there is no necessary
or customary connection between the words "any legal action"
and an intent strictly to limit permissible venue to the Valenzuela
courts. Moreover, since the venue stipulations include no
qualifying or exclusionary terms, express reservation of the right
to elect venue under the ordinary rules was unnecessary in the
case at bar. The Court made clear that "to the extent Bautista
and Hoechst Philippines are inconsistent with Polytrade (an en
banc decision later in time than Bautista) and subsequent cases
reiterating Polytrade, Bautista and Hoechst Philippines have
been rendered obsolete by the Polytrade line of cases."
11. Philippine Banking Corporation v. Hon. Salvador Tensuan,
etc., Brinell Metal Works Corp., et al., decided in 1994: 24 In this
case the subject promissory notes commonly contained a
stipulation reading:
I/we expressly submit to the jurisdiction of the
courts of Manila, any legal action which may
arise out of this promissory note.
the Court restated the rule in Polytrade that venue
stipulations in a contract, absent any qualifying or
restrictive words, should be considered merely as an
agreement on additional forum, not limiting venue to
the specified place. They are not exclusive, but rather,
permissive. For to restrict venue only to that place
stipulated in the agreement is a construction purely
based on technicality; on the contrary, the stipulation
should be liberally construed. The Court stated: "The
later cases of Lamis Ents v. Lagamon [108 SCRA
1981], Capati v. Ocampo [113 SCRA 794
[1982], Western Minolco v. Court of Appeals [167
SCRA 592 [1988], Moles v. Intermediate Appellate
Court [169 SCRA 777 [1989], Hongkong and Shanghai
Banking Corporation v. Sherman [176 SCRA
331], Nasser v. Court of Appeals [191 SCRA 783
[1990] and just recently, Surigao Century Sawmill
Co. v. Court of Appeals [218 SCRA 619 [1993], all
treaded the path blazed by Polytrade. The conclusion
to be drawn from all these is that the more recent
jurisprudence shall properly be deemed modificatory of
the old ones."
The lone dissent observed: "There is hardly any question that a
stipulation of contracts of adhesion, fixing venue to a specified
place only, is void for, in such cases, there would appear to be
no valid and free waiver of the venue fixed by the Rules of
Courts. However, in cases where both parties freely and
voluntarily agree on a specified place to be the venue of actions,
if any, between them, then the only considerations should be
whether the waiver (of the venue fixed by the Rules of Court) is
against public policy and whether the parties would suffer, by
reason of such waiver, undue hardship and inconvenience;
otherwise, such waiver of venue should be upheld as binding on
the parties. The waiver of venue in such cases is sanctioned by
the rules on jurisdiction."
Still other precedents adhered to the same principle.
12. Tantoco v. Court of Appeals, decided in 1977. 25 Here, the
parties agreed in their sales contracts that the courts of Manila
shall have jurisdiction over any legal action arising out of their
transaction. This Court held that the parties agreed merely to
add the courts of Manila as tribunals to which they may resort in
the event of suit, to those indicated by the law: the courts either
of Rizal, of which private respondent was a resident, or of
Bulacan, where petitioner resided.
13. Sweet Lines, Inc. v. Teves, promulgated in 1987. 26 In this
case, a similar stipulation on venue, contained in the shipping
ticket issued by Sweet Lines, Inc. (as Condition 14) —
. . that any and all actions arising out or the
condition and provisions of this ticket,
irrespective of where it is issued, shall be filed
in the competent courts in the City of Cebu
— was declared unenforceable, being subversive of
public policy. The Court explained that the philosophy
on transfer of venue of actions is the convenience of
the plaintiffs as well as his witnesses and to promote
the ends of justice; and considering the expense and
trouble a passenger residing outside of Cebu City
would incur to prosecute a claim in the City of Cebu, he
would most probably decide not to file the action at all.
On the other hand, in the cases hereunder mentioned,
stipulations on venue were held to be restrictive, or
mandatory.
1. Bautista vs. De Borja, decided in 1966. 27 In this case, the
contract provided that in case of any litigation arising therefrom
or in connection therewith, the venue of the action shall be in the
City of Manila. This Court held that without either party reserving
the right to choose the venue of action as fixed by law, it can
reasonably be inferred that the parties intended to definitely fix
the venue of the action, in connection with the contract sued
upon in the proper courts of the City of Manila only,
notwithstanding that neither party is a resident of Manila.
2. Gesmundo v. JRB Realty Corporation, decided in
1994. 28 Here the lease contract declared that
. . (V)enue for all suits, whether for breach
hereof or damages or any cause between the
LESSOR and LESSEE, and persons claiming
under each, . . (shall be) the courts of
appropriate jurisdiction in Pasay City. . .
This Court held that: "(t)he language used leaves no room for
interpretation. It clearly evinces the parties' intent to limit to the
'courts of appropriate jurisdiction of Pasay City' the venue for all
suits between the lessor and the lessee and those between
parties claiming under them. This means a waiver of their right
to institute action in the courts provided for in Rule 4, sec. 2(b)."
3. Hoechst Philippines, Inc. v. Torres, 29 decided much earlier,
in 1978, involved a strikingly similar stipulation, which read:
. . (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.
This Court held: "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."
4. Villanueva v. Mosqueda, decided in 1982. 30 In this case, it
was stipulated that if the lessor violated the contract of lease he
could be sued in Manila, while if it was the lessee who violated
the contract, the lessee could be sued in Masantol, Pampanga.
This Court held that there was an agreement concerning venue
of action and the parties were bound by their agreement. "The
agreement as to venue was not permissive but mandatory."
5. Arquero v. Flojo, decided in 1988. 31 The condition respecting
venue — that any action against RCPI relative to the transmittal
of a telegram must be brought in the courts of Quezon City alone
— was printed clearly in the upper front portion of the form to be
filled in by the sender. This Court held that since neither party
reserved the right to choose the venue of action as fixed by
Section 2 [b], Rule 4, as is usually done if the parties mean to
retain the right of election so granted by Rule 4, it can reasonably
be inferred that the parties intended to definitely fix the venue of
action, in connection with the written contract sued upon, in the
courts of Quezon City only.
An analysis of these precedents reaffirms and emphasizes the
soundness of the Polytrade principle. Of the essence is the
ascertainment of the parties' intention in their agreement
governing the venue of actions between them. That
ascertainment must be done keeping in mind that convenience
is the foundation of venue regulations, and that construction
should be adopted which most conduces thereto. Hence, the
invariable construction placed on venue stipulations is that they
do not negate but merely complement or add to the codal
standards of Rule 4 of the Rules of Court. In other words, unless
the parties make very clear, by employing categorical and
suitably limiting language, that they wish the venue of actions
between them to be laid only and exclusively at a definite place,
and to disregard the prescriptions of Rule 4, agreements on
venue are not to be regarded as mandatory or restrictive, but
merely permissive, or complementary of said rule. The fact that
in their agreement the parties specify only one of the venues
mentioned in Rule 4, or fix a place for their actions different from
those specified by said rule, does not, without more, suffice to
characterize the agreement as a restrictive one. There must, to
repeat, be accompanying language clearly and categorically
expressing their purpose and design that actions between them
be litigated only at the place named by them, 32 regardless of the
general precepts of Rule 4; and any doubt or uncertainty as to
the parties' intentions must be resolved against giving their
agreement a restrictive or mandatory aspect. Any other rule
would permit of individual, subjective judicial interpretations
without stable standards, which could well result in precedents
in hopeless inconsistency.
The record of the case at bar discloses that UNIMASTERS has
its principal place of business in Tacloban City, and KUBOTA, in
Quezon City. Under Rule 4, the venue of any personal action
between them is "where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of the
plaintiffs resides, at the election of the plaintiff." 33 In other
words, Rule 4 gives UNIMASTERS the option to sue KUBOTA
for breach of contract in the Regional Trial Court of either
Tacloban City or Quezon City.
But the contract between them provides that " . . All suits arising
out of this Agreement shall be filed with / in the proper Courts of
Quezon City," without mention of Tacloban City. The question is
whether this stipulation had the effect of effectively eliminating
the latter as an optional venue and limiting litigation between
UNIMASTERS and KUBOTA only and exclusively to Quezon
City.
In light of all the cases above surveyed, and the general
postulates distilled therefrom, the question should receive a
negative answer. Absent additional words and expressions
definitely and unmistakably denoting the parties' desire and
intention that actions between them should be ventilated only at
the place selected by them, Quezon City — or other contractual
provisions clearly evincing the same desire and intention — the
stipulation should be construed, not as confining suits between
the parties only to that one place, Quezon City, but as allowing
suits either in Quezon City or Tacloban City, at the option of the
plaintiff (UNIMASTERS in this case).
One last word, respecting KUBOTA's theory that the Regional
Trial Court had "no jurisdiction to take cognizance of . .
(UNIMASTERS') action considering that venue was improperly
laid." This is not an accurate statement of legal principle. It
equates venue with jurisdiction; but venue has nothing to do with
jurisdiction, except in criminal actions. This is
fundamental. 34 The action at bar, for the recovery of damages
in an amount considerably in excess of P20,000,00, is assuredly
within the jurisdiction of a Regional Trial Court. 35 Assuming that
venue were improperly laid in the Court where the action was
instituted, the Tacloban City RTC, that would be a procedural,
not a jurisdictional impediment — precluding ventilation of the
case before that Court of wrong venue notwitstanding that the
subject matter is within its jurisdiction. However, if the objection
to venue is waived by the failure to set it up in a motion to
dismiss, 36 the RTC would proceed in perfectly regular fashion if
it then tried and decided the action.
This is true also of real actions. Thus, even if a case "affecting
title to, or for recovery of possession, or for partition or
condemnation of, or foreclosure of mortgage on, real
property" 37 were commenced in a province or city other than
that "where the property or any part thereof lies," 38 if no
objection is seasonably made in a motion to dismiss, the
objection is deemed waived, and the Regional Trial Court would
be acting entirely within its competence and authority in
proceeding to try and decide the suit. 39
WHEREFORE, the appealed judgment of the Court of Appeals
is REVERSED, the Order of the Regional Trial Court of
Tacloban City, Branch 6, dated February 3, 1994, is
REINSTATED and AFFIRMED, and said Court is DIRECTED to
forthwith proceed with Civil Case No. 93-12-241 in due course.
SO ORDERED.