Facts:

The case involves Virgilio Capati as the plaintiff-appellant and Dr. Jesus P. Ocampo as the defendant-appellee. The events leading to the case began on May 23, 1967, when Capati, a contractor residing in Bacolor, Pampanga, entered into a subcontract with Ocampo, a resident of Naga City. The subcontract was for the construction of vault walls, exterior walls, and columns for the Feati Bank building located in Iriga, Camarines Sur. The agreed amount for the work was P2,200.00, with a stipulation that the construction was to be completed by June 5, 1967, emphasized by the phrase "TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE '67," which Ocampo signed. However, Ocampo completed the construction only on June 20, 1967. Consequently, Capati filed a complaint in the Court of First Instance of Pampanga, seeking recovery of consequential damages amounting to P85,000.00, along with interest, attorney's fees, and costs. The complaint asserted that Ocampo's delay constitu...

Facts:

1. Parties Involved:

   • Plaintiff-Appellant: Virgilio Capati, a resident of Bacolor, Pampanga.
   • Defendant-Appellee: Dr. Jesus P. Ocampo, a resident of Naga City.

2. Contractual Agreement:

   • Plaintiff was the contractor for the construction of Feati Bank's building in Iriga, Camarines Sur.
   • On May 23, 1967, plaintiff entered into a sub-contract with defendant for the construction of vault walls, exterior walls, and columns of the building for P2,200.00.
   • The contract stipulated that the construction must be completed by June 5, 1967, with the phrase "TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE '67" written in bold letters.

3. Alleged Breach:

   • Defendant allegedly completed the construction on June 20, 1967, causing a delay of 15 days.
   • Plaintiff filed a complaint in the Court of First Instance of Pampanga, seeking recovery of consequential damages amounting to P85,000.00, plus interest, attorney's fees, and costs.

4. Venue Dispute:

   • The contract contained a stipulation (Paragraph 14) stating: "That all actions arising out, or relating to this contract may be instituted in the Court of First Instance of the City of Naga."
   • Defendant filed a motion to dismiss the complaint, arguing that the venue was improperly laid in Pampanga and should be in Naga City.
   • Plaintiff opposed the motion, claiming the use of the word "may" in the stipulation made the venue optional, not exclusive.

5. Lower Court Decision:

   • The Court of First Instance of Pampanga dismissed the complaint, ruling that the stipulation on venue was mandatory and required the case to be filed in Naga City.

Issue:

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Ruling:

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Ratio:

1. Interpretation of the Word "May":

   • The word "may" in legal stipulations is permissive, not mandatory. It confers discretion and does not impose an obligation.
   • The stipulation in the contract stating that actions "may be instituted in the Court of First Instance of the City of Naga" does not exclude other venues allowed by law.

2. Rule on Venue:

   • Under Section 2(b), Rule 4 of the Rules of Court, personal actions may be filed where the defendant or plaintiff resides, at the election of the plaintiff.
   • Section 3 of the same rule allows parties to change or transfer venue by written agreement, but such agreements must be explicit to be considered restrictive.

3. Precedent:

   • The Court cited Nicolas vs. Reparations Commission, where a similar stipulation using the word "may" was held to be permissive, not mandatory.

4. Application to the Case:

   • The stipulation in the contract did not waive the plaintiff's right to file the action in the court where he resides.
   • Since the plaintiff filed the complaint in the Court of First Instance of Pampanga, where he resides, the venue was properly laid.

Conclusion:

The Supreme Court ruled in favor of the plaintiff, holding that the venue stipulation in the contract was permissive. The case was remanded to the Court of First Instance of Pampanga for further proceedings.