G.R. No. 111399 - Pecho vs. Sandiganbayan

Petitioner Paglaum Management & Development Corp. (Paglaum) is the registered owner of three parcels of land in Cebu Province covered by TCT Nos. 112488, 112489 and T-68516, co-owned by Benjamin B. Dy (president of Health Marketing Technologies, Inc.) and his family.
Health Marketing Technologies, Inc. (HealthTech) is a corporate borrower; respondent Union Bank of the Philippines (Union Bank) is the mortgagee.

On February 3, 1994, Union Bank granted HealthTech a P10,000,000 credit line, subsequently renewed and increased to P36,500,000.
To secure HealthTech’s obligation, Paglaum executed three Real Estate Mortgages (REMs) in favor of Union Bank:

Two REMs dated February 11, 1994, each originally providing venue in “Makati, Metro Manila or where the mortgaged property is located, at the absolute option of the Mortgagee, the parties hereto waiving any other venue,” but in the executed instruments the words “waiving any other venue” were struck.
One REM dated April 22, 1998, containing a blank for venue and including the “waiving any other venue” phrase.

On December 11, 1998, HealthTech and Union Bank entered into a Restructuring Agreement modifying the loan and expressly continuing the three REMs as security for all “renewal, extension, amendment or novation” of the indebtedness.
Section 20 of the Agreement fixed venue exclusively in Makati City for “any action or proceeding arising out of or connected with this Restructuring Agreement, the Note, the Collateral and any and all related documents,” with both parties “waiving any other venue.”
HealthTech defaulted; Union Bank extrajudicially foreclosed the REMs, became sole bidder at auction (Certificate of Sale May 24, 2001) and filed a petition for consolidation of title.

Paglaum and HealthTech filed Civil Case No. 01-1567 in RTC Makati, seeking annulment of sale and titles, damages, and injunctive relief; Branch 134 issued a writ of preliminary injunction.
Union Bank moved to dismiss for lack of jurisdiction, improper venue and lack of authority of the signatory; on March 11, 2003, RTC granted the motion and dissolved the injunction, denying reconsideration.
The Court of Appeals affirmed both orders (Decision May 31, 2007; Resolution July 24, 2007). Paglaum and HealthTech petitioned this Court for certiorari under Rule 45.

Whether Makati City — as stipulated in the Restructuring Agreement — is the proper and exclusive venue to assail the extrajudicial foreclosure of the mortgaged properties.