Pamaran vs.
Bank of Commerce
Facts: Rosa Pamaran alleged that her children, Rhodora, and spouses Bernabe, owned adjacent
lots respectively covered by (a) TCT No. 213130, and (b) TCT No. 124149. Purportedly, Rosa
built her residential house on these lots with the consent of Rhodora and spouses Bernabe.
Southmarine International Ltd. Co. obtained loans from the Bank of Commerce. To secure these
loans, Rhodora and spouses Bernabe constituted real estate mortgages on their lots. Rosa claimed
that Bankcom neither included her house in determining the loan amount nor obtained her
consent to the REM. She added that Bankcom was aware of the existence of her house on these
lots.
Rosa asserted that eventually, these lots were foreclosed and their ownership was consolidated in
favor of Bankcom. Later, Bankcom filed petitions for issuance of writs of possession, which
were granted.
Rosa averred that because of these writs, she was dispossessed of her house. Thus, she prayed
that Bankcom be ordered to pay her damages amounting to P3 million for the value of her house,
P300,000.00 for its violation of her right to due process and equal protection of law, and
P100,000.00 for attorney's fees.
Bankcom, on its end, raised in its Answer with Compulsory Counterclaim the following
affirmative defenses: (1) Rosa has no cause of action against it; (2) the Complaint is a collateral
attack on its title and an interference with the jurisdiction of the RTC Muntinlupa; (3) Rosa was
not deprived of due process; and, (4) the venue was improperly laid.
In addition, Bankcom insisted that the Complaint interfered with the jurisdiction of RTC
Muntinlupa, which already granted in its favor writs of possession over the properties. It argued
that while the Complaint is captioned as one for "Damages and Restitution of Value of
Residential House Unlawfully Taken," the same is a real action because it concerns Rosa's claim
of ownership over the subject house. It posited that the Complaint should have been filed before
the RTC Muntinlupa where such property is located.
In her Reply, Rosa argued that she did not authorize her children to encumber her house. She
also stated that the REM was a contract of adhesion, thus, its stipulation that "the mortgage
included all the buildings and improvements on the land" pertained to improvements belonging
to the mortgagors, not to third persons.
Issue: Whether the court erred in justifying its dismissal of petitioners' complaint on a thesis
that its initiation interfered with the exercise of jurisdiction of a co-equal court in ex
parte proceedings for the issuance of writ of possession under Act 3135?
Ruling: The Court grants the Petition. The position of me RTC Olongapo is unjustified. In the
Complaint, and in her Comment to Bankcom's Affirmative Defenses, the late Rosa made it clear
that this is a personal action for damages arising from Bankcom's violation of her right to due
process and equal protection; and her right to enjoy her house. She clarified that she does not
question the writs issued by the RTC Muntinlupa, but she assails Bankcom's use thereof in
depriving her of the right to enjoy said house. She also stressed that since this is a personal
action, then it was properly filed in RTC Olongapo, as she is a resident of Olongapo.
Section 1, Rule 4 of the Rules of Court, in relation to Section 2 thereof, defines a real action as
one "affecting title to or possession of real property or interest therein;" and, all other actions are
personal actions. A real action must be filed in the proper court which has jurisdiction over the
subject real property, while a personal action may be filed where the plaintiff or defendant
resides, or if the defendant is a non-resident, where he may be found, at the election of the
plaintiff. Personal actions include those filed for recovery of personal property, or for
enforcement of contract or recovery of damages for its breach, or for the recovery of damages for
injury committed to a person or property.
The Complaint stated that this case is one for recovery of damages relating to the injury
committed by Bankcom for violating Rosa's right to due process, and right to enjoy her house.
Rosa repeatedly averred that she does not seek recovery of its possession or title. Her interest to
the house is merely incidental to the primary purpose for which the action is filed, that is, her
claim for damages.
Clearly, this action involves Rosa's interest in the value of the house but only in so far as to
determine her entitlement to damages. She is not interested in the house itself. Indeed, the
primary objective of the Complaint is to recover damages, and not to regain ownership or
possession of the subject property. Hence, this case is a personal action properly filed in the RTC
Olongapo, where Rosa resided.
Finally, this action does not interfere with the jurisdiction of the RTC Muntinlupa. One, the
nature of this action, which is for damages, is different from the petition before the RTC
Muntinlupa, which is for issuance of writs of possession. Two, the laws relied upon in these
actions vary; this damage suit is based on Rosa's reliance on her right emanating from Article
32 of the Civil Code; while Bankcom's Petition is pursuant to Act No. 3135, as amended.
Third, this case involves a claim arising from Bankcom's alleged violation of Rosa's right to due
process, and to the enjoyment of her house. On the other hand, the one for issuance of writs of
possession involves Bankcom's application to be placed in possession of the subject properties.
Last, as already discussed, the former is a personal action while the latter is a real action
affecting title to and possession of a real property.
Given these, the RTC erred in dismissing the Complaint on the grounds of lack of cause of
action, and of improper venue.
Radiowealth Finance Co. vs. Nolasco
Facts: The respondents secured a loan from the petitioner in the amount of P1,908,360.00,
payable in installments within a period of 36 months, as evidenced by a Promissory
Note executed on the same day. To secure the payment of the loan, the respondents constituted a
Chattel Mortgage over a Fuso Super Great Dropside Truck, 2001 Model.
Unfortunately, the respondents defaulted in the payment of the installments which caused the
entire amount to become due and demandable. The petitioner repeatedly demanded from the
respondents the payment of the balance of the loan, but they would not take heed and even
refused to surrender the possession of the motor vehicle which stood as security for the loan.
Thus, the petitioner filed a complaint for Sum of Money and Damages with Application for Writ
of Replevin with the RTC of San Mateo, Rizal, praying that the respondents be ordered to pay
their balance of P1,600,153.02 or, in the alternative, surrender the possession of the motor
vehicle subject of the Chattel Mortgage so that the same may be put up on sale to answer for the
obligation and the deficiency, if any, may be determined.
After an ex parte hearing, the RTC issued an Order directing the issuance of the Writ of
Replevin. Subsequently, however, the RTC of San Mateo, Rizal issued an Amended Order
dismissing motu proprio the case for lack of jurisdiction. Citing Section 2, Rule 4 of the 1997
Rules of Civil Procedure, it ruled that since neither the petitioner nor the respondents reside
within the jurisdiction of the trial court, that is, either in San Mateo or Rodriguez, Rizal, the case
must be dismissed.
On August 16, 2016, the petitioner filed a Motion for Reconsideration arguing that the RTC of
San Mateo, Rizal has jurisdiction over the case. It pointed out that the sum of money involved
amounting to P1,600,153.02 is well within the jurisdiction of the RTC. Further, the venue is also
proper, considering that there is a provision in the promissory note which states that any action to
enforce payment of any sums due shall exclusively be brought in the proper court within the
National Capital Judicial Region or in any place where the petitioner has a branch or office at its
sole option. The RTC reiterated its earlier ruling and denied the petitioner’s motion for
reconsideration.
Issue: Whether the RTC erred when (1) it concluded that it had no jurisdiction over the case and
(2) in motu proprio dismissing the same on the ground of improper venue?
Ruling: The petition is meritorious. A reading of the questioned orders shows that the RTC
confused the terms jurisdiction and venue, which are completely different concepts. There is no
question that the RTC has jurisdiction over the complaint filed by the petitioner considering the
nature of the case and the amount involved.
It bears noting that “‘jurisdiction’ is the court’s authority to hear and determine a case. The
court’s jurisdiction over the nature and subject matter of an action is conferred by law.” Section
19(8) of Batas Pambansa Bilang 129, as amended by R.A. No. 7691, provides:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive
original jurisdiction:
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(8) In all other cases in which the demand, exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and costs or the value of
the property in controversy exceeds P100,000.00 or, in such other cases in
Metro Manila, where the demand, exclusive of the abovementioned items,
exceeds P200,000.00.
This had been amended by Section 5 of R.A. No. 7691 which reads:
SEC. 5. After 5 years from the effectivity of this Act, the jurisdictional amounts
mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as
amended by this Act, shall be adjusted to P200,000.00. Five years thereafter, such
jurisdictional amounts shall be adjusted further to P300,000.00: Provided, however, That
in the case of Metro Manila, the abovementioned jurisdictional amounts shall be adjusted
after 5 years from the effectivity of this Act to P400,000.00.
The amount of P1,600,153.02 involved in the instant case is undoubtedly within the jurisdiction
of the RTC, as all money claims exceeding P400,000.00 are within its authority to hear and
decide. It is an error, therefore, for the RTC to claim lack of jurisdiction over the case.
Section 2, Rule 4 of the 1997 Rules of Civil Procedure, which was relied upon by the RTC to
support its ruling of dismissal, reads as follows:
Section 2. Venue of personal actions. – All other 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, or in the case of a non-resident defendant where he
may be found, at the election of the plaintiff.
The foregoing provision is not restrictive. A plain reading of the provision shows that it is merely
permissive as manifested by the use of the term “may.” Moreover, the clear language of the
ensuing provision of Section 4 expressly allows the venue of personal actions to be subjected to
the stipulation of the parties. It reads, thus:
Section 4. When rule not applicable. – This Rule shall not apply.
(a) In those cases where a specific rule or law provides otherwise;
Or
(b) Where the parties have validly agreed in writing before the filing of the
action on the exclusive venue thereof.
Clearly, stipulation on venue is permitted and must be recognized for as long as it does not defeat
the purpose of the Rules which primarily aims for the convenience of the parties to the dispute.
There is, therefore, nothing that prohibits the parties to decide on a different venue for any
dispute or action that may arise from their agreement. In this case, in the promissory note
executed and signed by the parties, there is a provision which states that “any action to enforce
payment of any sums due under this Note shall exclusively be brought in the proper court within
the National Capital Judicial Region or in any place where the petitioner has a branch/office, at
its sole option.” Thus, the petitioner’s filing of the case in San Mateo, Rizal, where it maintains a
branch is proper and should have been respected by the RTC especially when there appears no
objection on the part of the respondents.
Briones vs. CA
Facts: A complaint was filed by Briones for Nullity of Mortgage Contract, Promissory Note,
Loan Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of Title No.
290846, and damages against Cash Asia before the RTC. In his complaint, Briones alleged that
he is the owner of a property covered by TCT No. 160689, and that on July 15, 2010, his sister
informed him that his property had been foreclosed and a writ of possession had already been
issued in favor of Cash Asia. Upon investigation, Briones discovered that: (a) on December 6,
2007, he purportedly executed a promissory note, loan agreement, and deed of real estate
mortgage covering the subject property in favor of Cash Asia in order to obtain a loan in the
amount of P3,500,000.00 from the latter; and (b) since the said loan was left unpaid, Cash Asia
proceeded to foreclose his property. In this relation, Briones claimed that he never contracted any
loans from Cash Asia as he has been living and working in Vietnam since October 31, 2007. He
further claimed that he only went back to the Philippines on December 28, 2007 until January 3,
2008 to spend the holidays with his family, and that during his brief stay in the Philippines,
nobody informed him of any loan agreement entered into with Cash Asia. Essentially, Briones
assailed the validity of the foregoing contracts claiming his signature to be forged.
For its part, Cash Asia filed a Motion to Dismiss praying for the outright dismissal of Briones's
complaint on the ground of improper venue. In this regard, Cash Asia pointed out the venue
stipulation in the subject contracts stating that "all legal actions arising out of this notice in
connection with the Real Estate Mortgage subject hereof shall only be brought in or submitted to
the jurisdiction of the proper court of Makati City." In view thereof, it contended that all actions
arising out of the subject contracts may only be exclusively brought in the courts of Makati City,
and as such, Briones's complaint should be dismissed for having been filed in the City of Manila.
Issue: Whether Briones should not be covered by the venue stipulation in the subject contracts as
he was never a party therein?
Ruling: The Court finds that the CA gravely abused its discretion in ordering the outright
dismissal of Briones's complaint against Cash Asia, without prejudice to its re-filing before the
proper court in Makati City.
The general rule is that the venue of real actions is the court which has jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated; while the venue of personal
actions is the court which has jurisdiction where the plaintiff or the defendant resides, at the
election of the plaintiff. As an exception, jurisprudence in Legaspi vs. Rep. of the Phils. instructs
that the parties, thru a written instrument, may either introduce another venue where actions
arising from such instrument may be filed, or restrict the filing of said actions in a certain
exclusive venue.
As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown that
such stipulation is exclusive. In the absence of qualifying or restrictive words, such as
"exclusively," "waiving for this purpose any other venue," "shall only" preceding the designation
of venue, "to the exclusion of the other courts," or words of similar import, the stipulation should
be deemed as merely an agreement on an additional forum, not as limiting venue to the specified
place.
In this relation, case law likewise provides that in cases where the complaint assails only the
terms, conditions, and/or coverage of a written instrument and not its validity, the exclusive
venue stipulation contained therein shall still be binding on the parties, and thus, the complaint
may be properly dismissed on the ground of improper venue. Conversely, therefore, a complaint
directly assailing the validity of the written instrument itself should not be bound by the
exclusive venue stipulation contained therein and should be filed in accordance with the general
rules on venue. To be sure, it would be inherently consistent for a complaint of this nature to
recognize the exclusive venue stipulation when it, in fact, precisely assails the validity of the
instrument in which such stipulation is contained.
In this case, the venue stipulation found in the subject contracts is indeed restrictive in nature,
considering that it effectively limits the venue of the actions arising therefrom to the courts of
Makati City. However, it must be emphasized that Briones's complaint directly assails the
validity of the subject contracts, claiming forgery in their execution. Given this circumstance,
Briones cannot be expected to comply with the aforesaid venue stipulation, as his compliance
therewith would mean an implicit recognition of their validity. Hence, pursuant to the general
rules on venue, Briones properly filed his complaint before a court in the City of Manila where
the subject property is located.
Vidal, et al. vs. Escueta
Facts: An estate - a parcel of land and the house thereon, was leased to Rainier Llanera, who
sublet the same to 25 persons. When the owners decided to sell the property, Ma. Teresa Escueta,
attorney-in-fact and as a co-owner of the property, filed an ejectment case against Llanera and
the sub-lessees before the Lupon of Barangay. On May 1999, Escueta, Llanera, and the sub-
lessees, executed an “Amicable Settlement,” where they agreed among others that lessee and
sub-lessee shall vacate the property on or before December 1999. The parties did not repudiate
the amicable settlement within 10 days from the execution thereof. In the meantime, the property
was sold but the full payment was not yet handed to the sellers since the lessee and the
sublessees have not yet vacated the property. Later, Llanera and 20 of the sub-lessees also
vacated the property except petitioners who remained in the property and refused to vacate the
property despite extensions given to them, thus, prompting Escueta to file a verified “Motion for
Execution” against the sub-lessees with the MTC for the enforcement of the amicable settlement
and the issuance of a writ of execution. The Motion was denied. The court held that the plaintiff
was not the real party-in-interest as the subject property had already been sold.
Issue: Whether the plaintiff is a real party-in-interest?
Ruling: No. The respondent is the real party-in-interest to enforce the amicable settlement. The
party-in-interest applies not only to the plaintiff but also to the defendant. “Interest”, within the
meaning of the rules 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. A real
party in interest is one who has a legal right. Since a contract may be violated only by the parties
thereto as against each other, in an action upon that contract, the real parties-in-interest, either as
plaintiff or as defendant, must be parties to the said contract. The action must be brought by the
person who, by substantive law, possesses the right sought to be enforced. In this case, the
respondent was the party in the amicable settlement. She is the real party-in-interest to enforce
the terms of the settlement because unless the petitioners vacate the property, the balance of the
purchase price will not be paid to them.
