View full case

SPS. RENATO v. JANE AURORA C. LANTION

FACTS:

The petitioners, Renato and Angelina Lantin, took several peso and dollar loans from respondent Planters Development Bank and executed real estate mortgages and promissory notes to cover the loans. They defaulted on the payments, so the respondent bank foreclosed the mortgaged lots. The foreclosed properties were sold at a public auction, where the respondent bank was the winning bidder. The petitioners then filed a Complaint for Declaration of Nullity and/or Annulment of Sale and/or Mortgage, Reconveyance, Discharge of Mortgage, Accounting, Permanent Injunction, and Damages against Planters Development Bank and its officers. They alleged that only their peso loans were covered by the mortgages and that these had already been fully paid, and therefore, the mortgages should have been discharged. They also challenged the validity of the foreclosure on the alleged non-payment of their dollar loans as the mortgages did not cover those loans. The private respondents moved to dismiss the complaint on the ground of improper venue, citing that the loan agreements restricted the venue of any suit to Metro Manila. The trial court dismissed the case for improper venue, and the petitioners sought reconsideration, arguing that the trial court prejudged the validity of the loan documents and that the venue stipulation was not exclusive. The motion for reconsideration was denied, and the lower court held that the previous order only ruled on the procedural issue of venue. The petitioners then filed a petition for certiorari with the Supreme Court, alleging grave abuse of discretion on the part of the respondent judge. The main issue in the case is whether the respondent judge committed grave abuse of discretion when she dismissed the case for improper venue.

ISSUES:

  1. Whether the respondent judge committed grave abuse of discretion in holding that the venue stipulations in the loan documents fall within the purview of Section 4(B) of Rule 4 of the 1997 Rules of Civil Procedure

  2. Whether the respondent judge committed grave abuse of discretion in not finding that the word "exclusively" in the venue stipulation does not automatically provide for an exclusive venue

  3. Whether the respondent judge committed grave abuse of discretion in disregarding the fact that the complaint involves several causes of action which do not arise solely from the loan documents and can be filed in other venues

  4. Whether the respondent judge committed grave abuse of discretion in disregarding the principle that the rule on venue of actions is established for the convenience of the plaintiffs

RULING:

  1. The Court held that the respondent judge did not commit grave abuse of discretion. The Court stated that under Section 4(b) of Rule 4 of the 1997 Rules of Civil Procedure, the general rules on venue of actions shall not apply where the parties have validly agreed in writing on an exclusive venue. However, the mere stipulation on venue is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive. In this case, the venue stipulation in the loan agreements clearly used restrictive words like "exclusively" and "waiving for this purpose any other venue," meeting the requirements of an exclusive venue stipulation. The Court also noted that the validity of the loan documents was not put in issue by the petitioners in their complaint. Since the issues raised by the petitioners arose from the loan documents, the venue stipulation was applicable. Therefore, the Court affirmed the dismissal of the case for improper venue.

PRINCIPLES:

  • Under Section 4(B) of Rule 4 of the 1997 Rules of Civil Procedure, the general rules on venue of actions shall not apply where the parties have validly agreed in writing on an exclusive venue.

  • The mere stipulation on venue is not enough to preclude parties from bringing a case in other venues. The parties must be able to show that such stipulation is exclusive.

  • A stipulation on venue that uses restrictive words like "exclusively" and "waiving for this purpose any other venue" meets the requirements of an exclusive venue stipulation.

  • The validity of the loan documents is not put in issue if the complaint only challenges the terms and coverage of the contracts secured by the mortgages.