G.R. No. 151037 - San Miguel Corporation vs. Monasterio

On August 1, 1993, San Miguel Corporation (SMC) entered into an Exclusive Warehouse Agreement (EWA) with SMB Warehousing Services (SMB), represented by Troy Francis L. Monasterio.
Under the EWA, SMB undertook to provide land, physical structures, equipment, and personnel for storage, warehousing, and related services.
The services included segregation of empty bottles, stock handling, and the receipt of SMC products for route operations in Sorsogon, Sorsogon and Daet, Camarines Norte.
The contract contained a mandatory venue clause stipulating that any actions to enforce the contract or its terms be filed exclusively in either Makati or Pasig, Metro Manila.

Beyond warehousing, respondent Monasterio claimed that he rendered additional cashiering services for SMC’s sales offices in Sorsogon and Camarines Norte.
He performed these services concurrently with his warehousing duties, which reportedly involved handling cash and checks amounting to high volumes, and he assumed risks such as pilferage, theft, robbery, and hold-up.
Monasterio alleged that for the cashiering services, separate fees were promised and partially paid only starting on December 1, 1997, whereas his initial claim was for unpaid cashiering fees totaling P900,600.

On November 3, 1998, Monasterio filed a complaint (Civil Case No. RTCa98-4150) in the Regional Trial Court (RTC) of Naga City, Branch 20, seeking collection of the alleged unpaid fees.
The complaint included claims for warehousing fees, cashiering fees for September 1998, exemplary damages, and attorney’s fees.
Shortly thereafter, on November 19, 1998, SMC filed a Motion to Dismiss on the ground of improper venue, arguing that the EWA’s exclusive clause designated the appropriate venue as the courts of Makati or Pasig.

The RTC of Naga City, Branch 20, denied SMC’s Motion to Dismiss, holding that the claim for cashiering services was separate from the warehousing services agreed upon in the EWA.
The RTC determined that since the cashiering service was not documented under the EWA, it constituted an independent cause of action not subject to the exclusive venue provision.
SMC’s subsequent Motion for Reconsideration was also denied by the RTC.

SMC raised the controversy to the Court of Appeals (CA) by filing a special civil action for certiorari, which also sought a Temporary Restraining Order and/or Writ of Preliminary Injunction.
SMC objected to the RTC’s decision on venue while contesting the amended pleading filed by Monasterio that omitted the warehousing claim and focused solely on the cashiering fees.
The CA, in its decision dated July 16, 2001, ruled that Monasterio’s claims for cashiering services were inseparable from those for warehousing services, thus applying the venue stipulated in the EWA.

The CA noted that, due to the filing of Monasterio’s amended complaint and SMC’s answer ex abundanti cautela, the special civil action for certiorari was “moot and academic.”
SMC filed a motion for reconsideration with the CA, which was denied.
Ultimately, the Supreme Court focused on two major issues concerning whether the RTC erred in denying the venue objection and whether the CA erred in declaring the petition for certiorari moot.
The Supreme Court resolved that the RTC’s determination on venue was correct and remanded the case back to the RTC of Naga City, Branch 20, for further proceedings on respondent Monasterio’s amended complaint.

Whether the Regional Trial Court of Naga City, Branch 20, erred in denying SMC’s Motion to Dismiss on the ground of improper venue.

The issue centers on whether the venue stipulated in the Exclusive Warehouse Agreement applies solely to disputes arising from the contract (warehousing services) or extends to the separate claim for cashiering services.

Whether the Court of Appeals gravely erred in ruling that SMC’s petition for certiorari became moot and academic due to the filing of Monasterio’s amended complaint and SMC’s subsequent answer ex abundanti cautela.

The question involves the proper application and interpretation of the exclusive venue clause in contexts where multiple services (contractual and non-contractual) are claimed.
An ancillary issue is whether judicial discretion should permit a recharacterization of the suit when the amended complaint narrows the cause of action.