FACTS:

Virgilio C. Briones (Briones) filed a complaint seeking nullity of mortgage contract, promissory note, loan agreement, foreclosure of mortgage, cancellation of transfer certificate of title, and damages against Cash Asia Credit Corporation (Cash Asia). Briones alleged that he is the owner of a property covered by a certain transfer certificate of title and that he discovered that his property had been foreclosed and a writ of possession had been issued in favor of Cash Asia. Briones claimed that he never contracted any loans with Cash Asia and that his signatures in the subject contracts were forged. Cash Asia filed a motion to dismiss based on improper venue. The Regional Trial Court (RTC) denied the motion, stating that the parties must be heard on the substance of Briones's cause of action. The Court of Appeals (CA) annulled the RTC's orders and dismissed Briones's complaint without prejudice to filing the same before the proper court in Makati City. The CA held that the subject contracts clearly provide for exclusive jurisdiction of the courts of Makati City and that the complaint should have been dismissed for improper venue despite Briones's claim of forgery. Briones filed a petition for certiorari before the Supreme Court questioning the CA's dismissal of his complaint on the ground of improper venue.

ISSUES:

1. Whether or not the Court of Appeals (CA) gravely abused its discretion in ordering the outright dismissal of Briones's complaint on the ground of improper venue.

RULING:

The petition is meritorious. The Court held that Briones's complaint directly assails the validity of the subject contracts, claiming forgery in their execution. Thus, Briones cannot be expected to comply with the venue stipulation, as his compliance would imply recognition of the contracts' validity. Consequently, the CA committed grave abuse of discretion in dismissing Briones's complaint on the ground of improper venue. The proper venue for Briones's complaint, as per general rules on venue, is a court in the City of Manila where the subject property is located.

PRINCIPLES:

1. Grave abuse of discretion: To justify the grant of the extraordinary remedy of certiorari, grave abuse of discretion must be shown, characterized by judgment exercised in a capricious and whimsical manner tantamount to lack of jurisdiction.

2. Venue stipulations: Written stipulations as to venue can be restrictive or permissive. Restrictive stipulations must include qualifying words to indicate exclusivity.

3. General rule on venue: For real actions, the venue is the court where the property is situated. For personal actions, it is where the plaintiff or defendant resides, at the plaintiff's election.

4. Exception to venue stipulations: If the validity of a written instrument is directly assailed, the exclusive venue stipulation therein does not bind the parties, and the general rules on venue apply.