COMPLEMENTARY-

CONTRACTS-
CONSTRUED-
TOGETHER DOCTRINE
COMPLEMENTARY-CONTRACTS-CONSTRUED-
TOGETHER DOCTRINE
 mandates that the provisions of an accessory
contract must be read in its entirety and
together with the principal contract
between the parties.

 Basis:

Article 1374 of the Civil Code which

provides that, “The various stipulations of a
contract shall be interpreted together,
attributing to the doubtful ones that sense
which may result from all of them taken
jointly.”
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING
and FINANCE CORPORATION,
Respondent.
G.R. No. 136423. August 20, 2002

FACTS:
• Petitioners, Spouses Rigor obtained a loan from
private respondent Consolidated Orix Leasing
and Finance Corporation.

• Petitioners executed a promissory note

(principal) promising to pay the loan in
installment basis. That default in paying any
installment renders the entire unpaid amount due
and payable.
SPOUSES RIGOR, Petitioners, v. CONSOLIDATED
ORIX LEASING and FINANCE CORPORATION,
Respondent.
G.R. No. 136423. August 20, 2002

FACTS:
• To secure payment of the loan, petitioners
executed a deed of chattel mortgage
(accessory) over two dump trucks.

• Petitioners failed to pay several installments.

• Therefore, private respondent filed a complaint

for Replevin with Damages against
petitioners before the RTC of Dagupan City.
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002

FACTS:

• After service of summons, petitioners moved to

dismiss the complaint on the ground of
improper venue based on a provision in the
promissory note which states that, x x x all
legal actions arising out of this note or in
connection with the chattels subject hereof shall
ONLY be brought in or submitted to the proper
court in Makati City, Philippines.
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002
FACTS:

• Private respondent opposed the motion to dismiss

and argued that venue was properly laid in Dagupan
City where it has a branch office based on a
provision in the deed of chattel mortgage which
states that, x x x in case of litigation arising out of
the transaction that gave rise to this contract,
complete jurisdiction is given the proper court of the
city of Makati or any proper court within the
province of Rizal, or any court in the city, or
province where the holder/ mortgagee has a branch
office, waiving for this purpose any proper venue.
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002

FACTS:

• The controversy stems from the conflicting

provisions on venue in the promissory note
and the deed of chattel mortgage.
Consequently, the decisive issue is the
correct interpretation of the venue
provisions in the two contracts.
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002
FACTS:
• Petitioners argue that the promissory note should
prevail over the deed of chattel mortgage because
this is the principal contract being sued upon while
the deed of chattel mortgage merely accompanies
the promissory note. Also, the words “shall only” in
the promissory note makes exclusive and restricts
venue to the proper court in Makati City.

• The private respondent counters that the alternative

venues provided under the deed of chattel
mortgage may not be disregarded as meaningless
verbiage.
SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002

ISSUE:

WHETHER VENUE WAS PROPERLY

LAID UNDER THE PROVISIONS OF
THE CHATTEL MORTGAGE
CONTRACT IN THE LIGHT OF
ARTICLE 1374 OF THE CIVIL CODE
SPOUSES RIGOR, Petitioners, v. CONSOLIDATED
ORIX LEASING and FINANCE CORPORATION,
Respondent.
G.R. No. 136423. August 20, 2002

RULING:
• The petition is bereft of merit.
• The Court finds no reversible error in the Court of Appeals
conclusion that venue was properly laid in the Dagupan
trial court.
• As a general rule, all personal actions may be commenced
and tried where the plaintiff or any of the principal plaintiffs
resides, or where the defendant or any of the principal
defendants resides, at the election of the plaintiff.
• However, by written agreement of the parties, the venue of
an action may be changed or transferred from one place to
another.
SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002

RULING:
The Supreme Court ruled, that there is no
dispute that the words “SHALL ONLY”
preceding the designation of venue in the
promissory note, standing alone, is
mandatory and restrictive. However, the
deed of chattel mortgage executed to secure
the loan obligation provides alternative
venues. Should we disregard the venue
provision in the deed of chattel mortgage as
mere surplusage as contended by
petitioners?
 SPOUSES RIGOR, Petitioners, v.
CONSOLIDATED ORIX LEASING and
FINANCE CORPORATION, Respondent.
G.R. No. 136423. August 20, 2002

RULING:
• The Court answered in the negative holding that the
provisions of an accessory contract must be read in
its entirety and together with the principal contract
between the parties. The private respondent is not
barred from filing its case against petitioners in
Dagupan City where private respondent has a
branch office as provided for in the deed of
chattel mortgage.
• The rules on venue are intended to assure
convenience for the plaintiff and his witnesses
and to promote the ends of justice.
 ADOPTED
ILLUSTRATIONS:
Parties:
• Plaintiff – resides in Manila
• Defendant – resides in Quezon City.

Stipulation of Contract – any suit arising from a violation of the contract “shall be filed “ONLY” in Pasay
City”
Plaintiff sues Defendant for damages from alleged breach of the same contract, the action is filed in
QUEZON CITY.
IS THE VENUE PROPER?
The venue is improper. The Stipulation to file the action “ONLY in PASAY CITY” is restrictive and,
therefore, has the effect of making Pasay City the sole venue of the action.
 ADOPTED
ILLUSTRATIONS:
ASSUMING that the stipulation provides….”SHALL BE FILED IN PASAY CITY,”
WITHOUT any RESTRICTIVE LANGUAGE employed in the agreement. The action
for breach of contract is filed in Quezon City.
IS THE VENUE IMPROPER?
The venue is proper. The stipulation, “SHALL be filed in Pasay City” merely operates to
add Pasay City to the regular venues of Manila and Quezon City and does not preclude
the filing of the action in either the residence of Plaintiff or the residence of the
defendant, at the election of Plaintiff. (Venue for Personal Action)
 ADOPTED
ILLUSTRATIONS:
2. Defendant, a resident of Angeles City, borrowed P100,000.00 from plaintiff, a
resident of Pasay City under an agreement that stipulated that the parties “agree to sue
and be sued in the City of Manila.”
IS PLAINTIFF PRECLUDED FROM FILING THE ACTION EITHER IN
ANGELES OR PASAY CITY?
• The plaintiff is not precluded. The stipulation on venue is not an exclusive stipulation
and its effect is merely to add Manila as an additional venue. He may even file an
action in Manila which became an added option by virtue of stipulation.
 ADOPTED
ILLUSTRATIONS:
• The same conclusion would be reached had the stipulation been: “venue for all suits
arising from this contract shall be the courts in Quezon City.” The action may be
filed also either in Angeles City or Pasay City. It may also be filed in Quezon City.
Note:
• If the parties above failed to stipulate on the venue in the loan agreement, the action
may be filed either in Angeles City or Pasay City, at the election of the plaintiff. The
VENUE of a personal action, such as one to recover a debt under a loan of money, is
a personal action.
SUMMARY:
the provisions of an accessory contract must be read in its entirety and together with the principal
contract between the parties.

General Rule: All personal actions may be commenced and tried where:
1. the plaintiff or any of the principal plaintiffs resides, or
2. where the defendant or any of the principal defendants resides
at the election of the plaintiff. (In Case of Failure to Stipulate Venue in the Contract)
Exception: by written agreement of the parties, the venue of an action may be changed or
transferred from one place to another.

Where the words “SHALL ONLY” preceding the designation of venue in a principal contract, standing
alone, is mandatory and restrictive. However, if an accessory contract provides for alternative venues,
then, such venue will be an additional venue.

Where the stipulations on Venue in a principal contract is restrictive, then such venue will be
followed.