Universal Insurance v. Cansino
REITERATIONFacts
1. The Antecedents: Age Construction Co., Inc. leased construction equipment to Beatriz Tengsico under a contract stipulating that the equipment be returned in good condition and insured in favor of the lessor. One vibrator, valued at P500.00, was not returned, with the lessee claiming it was lost. Age Construction Co., Inc. filed a complaint against Beatriz Tengsico and her husband for the recovery of the vibrator's value and damages. 2. Procedural History: Following an amended complaint in the City Court of Manila, Universal Insurance and Indemnity Company was impleaded as an alternative defendant based on an insurance policy covering the leased equipment. Universal Insurance filed a motion to dismiss, citing improper venue, failure to state a cause of action, and waiver/prescription of the claim. The motion was denied, and a motion for reconsideration was also turned down. Subsequently, Universal Insurance filed a petition for prohibition in the Court of First Instance of Manila, seeking to halt the City Court proceedings. The Court of First Instance sustained the City Court's order and dismissed the prohibition petition, leading to the present appeal. 3. The Petition: The appeal challenges the Court of First Instance's decision, raising the sole issue of whether venue was properly laid in the City Court of Manila for the action against Universal Insurance. The appellant argues that the insurance policy was executed in Makati, Rizal, and therefore, according to Rule 4, Section 1(b)(2) of the Rules of Court, the action should have been brought in that location, not Manila. The Supreme Court is asked to determine if the lower court erred in denying the motion to dismiss on the grounds of improper venue.
Issue(s)
Whether venue was properly laid in Civil Case No. 111904 as against the herein petitioner. Whether the denial of the petitioner's motion to dismiss by the respondent Judge was without or in excess of jurisdiction and a grave abuse of discretion.
Ruling
The judgment appealed from is reversed, and the writ prayed for is ordered issued, prohibiting whoever is the successor of the respondent Judge from further proceeding in Civil Case No. 111904 of the City Court of Manila insofar as the petitioner, defendant therein, is concerned.
Ratio Decidendi
On the issue of venue: The Court held that the venue for an action on an insurance policy, in the absence of a stipulation to the contrary, is governed by Rule 4, Section 1(b)(2) of the Rules of Court. This rule states that all other civil actions in inferior courts, if there is no agreement, should be brought in the place of execution of the contract as it appears therefrom. The insurance policy clearly indicated Makati, Rizal, as the place of execution. The Court further noted that even if the place of execution were not clear, Rule 4, Section 1(b)(3) would apply, requiring the action to be brought in the municipality where the defendant or any of the defendants resides or may be served with summons. The amended complaint alleged that the petitioner is a corporation with a postal address in Makati, Rizal, and it was served with summons there. Therefore, venue was not properly laid in Manila. On the propriety of prohibition: The Court reiterated its ruling in Enriquez v. Macaraeg that prohibition is the proper remedy against a Judge who proceeds in defiance of the Rules of Court by refusing to dismiss an action which cannot be maintained in his court on the ground of improper venue. The respondent Judge's denial of the motion to dismiss, given the clear provisions on venue, constituted a grave abuse of discretion, justifying the issuance of the writ of prohibition.
Main Doctrine
Venue for an action on an insurance policy, in the absence of a stipulation, is governed by Rule 4, Section 1(b)(2) of the Rules of Court, which dictates that it should be brought in the place of execution of the contract as it appears therefrom. If the contract does not show the place of execution, then it should be brought where the defendant resides or may be served with summons.