Uniwide Holdings v. Cruz
REITERATIONFacts
The Antecedents: Petitioner Uniwide Holdings, Inc. (UHI) entered into a Franchise Agreement with respondent Alexander M. Cruz (Cruz) for the operation of a "Uniwide Family Store." The agreement stipulated a monthly service fee and an interest charge for delayed payments. Cruz also purchased goods from UHI's affiliated companies, First Paragon Corporation (FPC) and Uniwide Sales Warehouse Club, Inc. (USWCI). In August 2002, FPC and USWCI executed Deeds of Assignment in favor of UHI, assigning their rights over Cruz's accounts payable to them. As of August 13, 2002, Cruz had outstanding obligations totaling P1,358,531.89 with UHI, FPC, and USWCI. UHI sent Cruz a demand letter for settlement, which remained unheeded. Procedural History: UHI filed a complaint for collection of sum of money against Cruz before the Regional Trial Court (RTC) of Parañaque, alleging four causes of action: (1) unpaid monthly service fees under the Franchise Agreement; (2) unpaid accounts assigned by FPC; (3) unpaid accounts assigned by USWCI; and (4) attorney's fees. Cruz filed a motion to dismiss based on improper venue, invoking Article 27.5 of the Franchise Agreement which stipulated exclusive jurisdiction of the courts of Quezon City. The RTC of Parañaque granted the motion to dismiss. The Petition: UHI filed a petition before the Supreme Court, raising the sole issue of whether a case based on several causes of action is dismissible on the ground of improper venue when only one of the causes of action arises from a contract with an exclusive venue stipulation.
Issue(s)
Whether a case based on several causes of action is dismissible on the ground of improper venue where only one of the causes of action arises from a contract with an exclusive venue stipulation. Whether the exclusive venue stipulation in the Franchise Agreement binds the causes of action arising from the Deeds of Assignment.
Ruling
The petition is granted. The December 12, 2005 Order of the Regional Trial Court of Parañaque City, Branch 258, is set aside. The case is remanded to the said court for reinstatement and further proceedings.
Ratio Decidendi
On the issue of venue for a case with multiple causes of action: The general rule on venue for personal actions is that it may be commenced and tried where the plaintiff or defendant resides, or where a non-resident defendant may be found, at the election of the plaintiff. This rule is qualified by Section 4 of Rule 4 of the Rules of Court, which allows parties to agree in writing on an exclusive venue. However, where there is a joinder of causes of action between the same parties, and only one of these causes of action arises from a contract with an exclusive venue stipulation, the complaint may be brought before other venues. This is permissible provided that such other cause of action falls within the jurisdiction of the court and the venue lies therein. The exclusive venue stipulation should be strictly confined to the specific undertaking or agreement it embodies. On whether the exclusive venue stipulation binds the causes of action from the Deeds of Assignment: The Court held that the second and third causes of action, based on the Deeds of Assignment executed by FPC and USWCI in favor of UHI, are not bound by the exclusive venue stipulation in the Franchise Agreement. These causes of action are based on separate, distinct, and independent contracts (the deeds of assignment) and are not based on a breach of the Franchise Agreement between UHI and Cruz. Therefore, any action arising from these deeds of assignment cannot be subjected to the exclusive venue stipulation embodied in the Franchise Agreement. The Court emphasized that restrictive stipulations on venue are in derogation of the general policy and should be strictly construed as relating solely to the agreement for which they are embodied, to avoid creating unintended or oppressive restrictions on a contracting party's access to justice.
Main Doctrine
Where there is a joinder of causes of action between the same parties, one of which arises from a contract with an exclusive venue stipulation and another does not, the complaint may be brought before other venues provided that such other cause of action falls within the jurisdiction of the court and the venue lies therein. The exclusive venue stipulation should be strictly confined to the specific undertaking or agreement.