Surigao Century Sawmill, Co., Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Standard Plywood Corporation (STANDARD) leased a barge, LCT "Tantoy," from Surigao Century Sawmill Co., Inc. (SURIGAO) for the delivery of plywood from Butuan City to Surigao City. The lease was covered by a Contract of Lease and a bill of lading. The shipment failed to reach its consignee, resulting in damages to STANDARD amounting to P490,000.00. The cargo was insured by STANDARD with Phoenix Assurance Co., Inc. (PHOENIX), which settled its obligation and was subrogated to STANDARD's rights. Procedural History: PHOENIX filed a complaint with the Regional Trial Court (RTC) of Manila against SURIGAO for the damages. SURIGAO filed a Motion to Dismiss on the ground of improper venue, citing a stipulation in the lease contract that any dispute arising from the lease shall be settled in the proper court in the Province of Surigao del Norte. The trial court denied the motion, citing Section 2, Rule 4 of the Rules of Court, which gives the plaintiff the choice of venue. The Court of Appeals affirmed the trial court's order. The Petition: SURIGAO filed a petition for review on certiorari, seeking to nullify the decision of the Court of Appeals, arguing that the lease contract, not the bill of lading, should govern the venue.
Issue(s)
Whether the bill of lading should prevail over the lease contract for purposes of determining the venue. Whether a stipulation in a contract regarding venue precludes the plaintiff from filing suit in another venue allowed by the Rules of Court.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, holding that the respondent (PHOENIX) had the choice of venue where to file its complaint for a sum of money and damages against the petitioner (SURIGAO). The case was remanded to the court of origin for further proceedings.
Ratio Decidendi
On the issue of whether the bill of lading should prevail over the lease contract for purposes of venue: The Court held that the cause of action was based on the bill of lading, which serves as a contract of carriage, and not on the lease agreement. The complaint explicitly claimed damages for the non-delivery of the shipment covered by the bill of lading, and did not assert any violation of the terms of the lease contract. Therefore, the provisions of the bill of lading, particularly concerning the carriage of goods, were the basis of the litigation. The Court distinguished the present case from Home Insurance Co. v. American Steamship Agencies, Inc., noting the absence of a stipulation on the bill of lading that it was subject to all terms and conditions of the charter party, which was present in the cited case. The Court emphasized that a bill of lading serves as a receipt for the goods, a contract of carriage, and documentary evidence of title, and the reliance on its function as a contract of carriage to support the cause of action was well-taken. On the issue of whether a stipulation regarding venue precludes filing suit in another allowed venue: The Court reiterated its ruling in Polytrade Corporation v. Blanco, stating that a stipulation on venue does not preclude the filing of suits at the election of the plaintiff unless it clearly and explicitly states the intention of the parties to restrict the filing of actions to a particular court to the exclusion of others. In this case, the stipulation in the lease contract provided that disputes should be settled in the proper court in Surigao del Norte. However, the Court found that the cause of action was not based on a dispute arising out of the lease, but rather on the bill of lading. Even if the lease contract were to prevail, the stipulation on venue was not sufficiently restrictive to exclude other venues allowed by law. The Court noted that Section 3, Rule 4 of the Rules of Court allows parties to agree in writing to change or transfer the venue, but such agreement must clearly indicate an exclusive intent. The stipulation in the lease contract did not contain qualifying or restrictive words indicating that Surigao del Norte was the only venue. Therefore, the plaintiff retained the right to pursue remedies in other courts specified in Section 2(b) of Rule 4, such as the RTC of Manila where the insurer had its offices.
Main Doctrine
The choice of venue for filing a complaint for damages arising from a contract of carriage, as evidenced by a bill of lading, rests with the plaintiff, even if a lease contract for the vessel contains a stipulation on venue, provided that the cause of action is based on the bill of lading and not on the lease agreement.