G.R. No. 228617 - Planters Development Bank vs. Spouses Ramos

In July 2012, Spouses Victoriano and Melanie Ramos applied for several credit lines with Planters Development Bank (PDB) to finance the construction of a warehouse in Barangay Santo Tomas, Nueva Ecija.
PDB approved a loan amounting to ₱40,000,000.00, secured by a Real Estate Mortgage dated July 25, 2012 over properties covered by Transfer Certificate of Title (TCT) Nos. 048-2011000874 and 048-2011000875.
The Spouses later requested an additional loan, with PDB allegedly promising to extend ₱140,000,000.00; however, only ₱25,000,000.00 was approved and released, secured by another Real Estate Mortgage over four properties covered by TCT Nos. 048-2012000909, 048-2012000443, 048-2012000445, and 048-2012000446.

Due to financial difficulties, the Spouses were unable to pay their obligations and requested deferment and restructuring from PDB, but no agreement was reached.
On April 23, 2014, PDB filed a Petition for Extra-judicial Foreclosure under Act 3135 before the Regional Trial Court (RTC) of San Jose City, Nueva Ecija. A Sheriff’s Public Auction Sale notice was issued on May 7, 2014.

On June 18, 2014, Spouses Ramos filed a Complaint for Annulment of the Real Estate Mortgages and Promissory Notes, Accounting and Application of Payments, Injunction with Preliminary Injunction and Temporary Restraining Order against PDB and its officers before the same RTC, docketed as Civil Case No. 2014-485-SJC.
Instead of answering, PDB filed an Urgent Motion to Dismiss, alleging improper venue since the mortgage contracts stipulated that any suit must be filed exclusively in Makati City. The complaint was also alleged to fail to state a cause of action.

Venue can be waived but the contracts may be adhesion contracts. Hence, the court applied the general venue rule for real actions.
The allegations in the complaint were sufficient to constitute a cause of action since summons were issued.

PDB filed a motion for reconsideration, which was denied on February 20, 2015, and a motion to declare PDB in default was also denied. The RTC held that PDB could file a motion to dismiss before filing an answer and that filing a motion for reconsideration suspends the obligation to file an answer until after denial.

PDB petitioned the CA for certiorari, claiming grave abuse of discretion for denying the motion to dismiss on improper venue grounds.
The CA, in a decision dated July 5, 2016, denied the petition, holding that:

The validity of the mortgage contracts was disputed.
The venue stipulation’s enforceability depended on the mortgage’s validity, requiring full hearing and evidence presentation.
PDB should have filed an answer and pursued trial and appeal if adverse.

PDB elevated the case to the Supreme Court, arguing that the exclusive venue stipulation in the mortgage contracts should control and that the RTC and CA erred in denying the motion to dismiss for improper venue.

Whether the stipulation in the mortgage contracts restricting venue to Makati City is valid, binding, and enforceable.
Whether the RTC erred in denying the motion to dismiss filed by PDB on the ground of improper venue considering the exclusive venue clause.
Whether the CA correctly upheld the RTC's denial of the motion to dismiss based on disputed validity of the mortgage contracts affecting venue.
Whether a party must first file an answer and proceed to trial to contest the enforceability of a venue stipulation.