Briones v. Cash Asia Credit Corporation
REITERATIONFacts
The Antecedents: Virgilio C. Briones (Briones) filed a Complaint for Nullity of Mortgage Contract, Promissory Note, Loan Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of Title (TCT) No. 290846, and Damages against Cash Asia Credit Corporation (Cash Asia). Briones alleged that he is the owner of a property covered by TCT No. 160689. He discovered that his property had been foreclosed and a writ of possession issued in favor of Cash Asia. Briones claimed that he never contracted any loans from Cash Asia and that the subject contracts (promissory note, loan agreement, deed of real estate mortgage) covering his property, purportedly executed on December 6, 2007, were forgeries, as he had been living and working in Vietnam since October 31, 2007, and only returned to the Philippines from December 28, 2007, to January 3, 2008, during which time he was not informed of any loan agreement. Procedural History: Cash Asia filed a Motion to Dismiss based on improper venue, citing a 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." Briones opposed, asserting he was not a party to the contracts and that his signatures were forged. The Regional Trial Court (RTC) of Manila, Branch 173, denied the motion to dismiss, opining that parties must be afforded the right to be heard given the substance of Briones's cause of action. The RTC denied Cash Asia's motion for reconsideration. Cash Asia then filed a petition for certiorari before the Court of Appeals (CA). The CA annulled the RTC Orders and dismissed Briones's complaint without prejudice to its re-filing in Makati City, holding that the RTC gravely abused its discretion in denying the motion to dismiss due to the exclusive venue stipulation. The Petition: Briones filed the present petition for certiorari, assailing the CA's decision and resolution, arguing that the CA gravely abused its discretion in ordering the outright dismissal of his complaint on the ground of improper venue.
Issue(s)
Whether the Court of Appeals gravely abused its discretion in ordering the outright dismissal of Briones’s complaint on the ground of improper venue.
Ruling
The petition is meritorious. The Court of Appeals 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.
Ratio Decidendi
On Whether the Court of Appeals gravely abused its discretion in ordering the outright dismissal of Briones’s complaint on the ground of improper venue: The Court held that to justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show that the court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes judgment exercised in a capricious and whimsical manner that is tantamount to lack of jurisdiction, or a patent and gross evasion of a positive duty or a virtual refusal to perform the duty enjoined by law. The Court found that the CA gravely abused its discretion in ordering the outright dismissal of Briones's complaint on the ground of improper venue. Rule 4 of the Rules of Court governs the venue of civil actions. Section 4(b) provides that the Rule on venue shall not apply where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof. Jurisprudence clarifies that written stipulations as to venue may be restrictive, limiting the suit to the place agreed upon, or merely permissive, allowing suit in the agreed place or in places fixed by law. For a stipulation to be restrictive, it must be shown to be exclusive, using qualifying or restrictive words such as "exclusively," "waiving for this purpose any other venue," "shall only," or words of similar import. Furthermore, case law 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. Conversely, 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. It would be inherently inconsistent 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, while the venue stipulation in the subject contracts was restrictive, limiting the venue to Makati City, Briones's complaint directly assailed the validity of these contracts, claiming forgery in their execution. Given this circumstance, Briones could not be expected to comply with the venue stipulation, as compliance therewith would mean an implicit recognition of the contracts' validity. Therefore, 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. The CA patently erred and hence committed grave abuse of discretion in dismissing Briones's complaint on the ground of improper venue.
Main Doctrine
A complaint directly assailing the validity of a written instrument, which contains an exclusive venue stipulation, should not be bound by such stipulation and should be filed in accordance with the general rules on venue, as compliance therewith would imply an implicit recognition of the instrument's validity.