Bautista v. Borja
REITERATIONFacts
1. The Antecedents: G. A. Machineries, Inc. (G.A.M.) filed a complaint against Marino A. Bautista for the recovery of personal properties purchased by Bautista, valued at P83,800.00. Bautista made a down payment and agreed to pay the balance in installments, securing the unpaid amount with a chattel mortgage over the properties. G.A.M. alleged that Bautista failed to pay his obligations and refused to surrender the properties for foreclosure, leading G.A.M. to seek delivery of the properties, liquidated damages, and attorney's fees, or the full payment of the outstanding balance if delivery was not possible. 2. Procedural History: Bautista moved to dismiss the complaint, citing a pending action between the same parties in Manila and multiplicity of suits. He later filed a supplemental motion to dismiss, arguing improper venue based on an express stipulation in the contracts that litigation should be held in Manila. The trial court initially suspended proceedings pending the resolution of the Manila case but later set aside that order, denied the supplemental motion to dismiss, and reset the hearing. Bautista moved for reconsideration, which was denied, and he filed a manifestation of his intent to petition the Supreme Court, attaching his answer to the complaint. The trial court denied reconsideration, admitted Bautista's answer, but allowed G.A.M. to present evidence ex parte due to the absence of Bautista and his counsel. The trial continued, and the case was submitted for decision despite Bautista's filing of the instant petition in the Supreme Court. 3. The Petition: Bautista filed an original petition for certiorari and prohibition, seeking to annul the trial court's orders denying his motions to dismiss and to prohibit further proceedings. He argued that the trial court gravely abused its discretion by denying his motions, particularly the one based on improper venue due to the contractual stipulation fixing Manila as the venue. Bautista contended that this stipulation was for his benefit and constituted a waiver by G.A.M. of its right to choose the venue. He also argued that the judge should have desisted from proceeding once Bautista indicated his intention to seek relief from the Supreme Court. G.A.M. countered that the venue stipulation was for its convenience and it retained the option to choose venue, and that improper venue is not a jurisdictional issue, making certiorari and prohibition inappropriate.
Issue(s)
Whether the trial court committed grave abuse of discretion in denying the motion to dismiss based on improper venue despite a contractual stipulation fixing the venue in Manila.
Ruling
The Supreme Court granted the writ of prohibition, ordering the dismissal of the complaint without prejudice to its refiling in the proper court. The Court ruled that the trial court acted with grave abuse of discretion in denying the motion to dismiss based on improper venue.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that the trial court acted with grave abuse of discretion in denying the motion to dismiss. Under Section 3, Rule 4 of the Revised Rules of Court, parties may agree in writing to change or transfer the venue of an action from one province to another. In this case, the contracts explicitly stated that the venue "shall be in the City of Manila." The Court observed that neither party reserved the right to choose the venue fixed by law, such as the place of residence of the plaintiff or defendant. Applying the doctrine in Central Azucarera de Tarlac v. De Leon, the Court held that such an agreement constitutes a valid waiver of legal venue as it is a personal privilege and not contrary to public policy. Since the action was brought in Bulacan rather than the stipulated City of Manila, the venue was clearly improper. Furthermore, because the ground of improper venue was patent on the record and timely raised, the respondent Judge was legally bound to dismiss the case. A writ of prohibition is the appropriate remedy when a trial court erroneously assumes jurisdiction or proceeds with a case despite a valid objection to venue.
Main Doctrine
A stipulation in a contract fixing the venue of actions arising therefrom is valid and binding, and a court that entertains a case filed in violation of such stipulation commits a grave abuse of discretion.