Case Summary (G.R. No. 161265)
Petitioner
Virgilio C. Briones filed a complaint in the Regional Trial Court (RTC) of Manila for nullity of mortgage contract, promissory note, loan agreement, foreclosure of mortgage, cancellation of Transfer Certificate of Title No. 290846, and damages, alleging that his signatures on the subject contracts were forged and that he never contracted any loan with Cash Asia.
Respondent
Cash Asia Credit Corporation moved to dismiss the complaint for improper venue, relying on a venue stipulation in the written instruments 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.”
Key Dates
Complaint filed: August 2, 2010. RTC Orders denying motion to dismiss: September 20, 2010 and October 22, 2010. Court of Appeals Decision annulling RTC Orders and dismissing complaint: March 5, 2012. CA Resolution denying reconsideration: October 4, 2012. Supreme Court decision: January 14, 2015. (1987 Constitution applied as the operative constitution.)
Applicable Law
1987 Philippine Constitution (as the decision was rendered after 1990); Rules of Court — Rule 4 on venue (Sections 1–4) as quoted and applied by the courts; relevant jurisprudence on venue stipulations including Legaspi v. Republic of the Philippines and Spouses Lantin; standards on certiorari and grave abuse of discretion (Omni Hauling Services, Inc. v. Bon; Ramos v. BPI Family Savings Bank, Inc.).
Facts
Briones alleges ownership of the subject property and asserts that, although documents purportedly executed on December 6, 2007 (promissory note, loan agreement, deed of real estate mortgage) show his signature in favor of Cash Asia for a P3,500,000 loan, he was actually living and working in Vietnam from October 31, 2007 onward and only returned briefly for the holidays. He claims the signatures are forged and that he was not informed of any loan agreement. Cash Asia foreclosed the mortgage after alleged nonpayment.
Procedural History
Cash Asia filed a motion to dismiss for improper venue based on the Makati exclusive venue clause. The RTC denied the motion (September 20, 2010) and denied reconsideration (October 22, 2010). Cash Asia elevated the matter to the Court of Appeals by certiorari, which annulled the RTC Orders and dismissed the complaint without prejudice on the ground that the written instruments restricted venue to Makati. The CA also denied Briones’s motion for reconsideration. Briones petitioned to the Supreme Court by certiorari.
Issue Presented
Whether the Court of Appeals gravely abused its discretion in ordering outright dismissal of Briones’s complaint on the ground of improper venue, despite Briones’s allegation that the written instruments were forged and thus invalid.
Standard of Review: Grave Abuse of Discretion
The extraordinary remedy of certiorari requires showing grave abuse of discretion, defined as capricious and whimsical exercise of judgment tantamount to lack of jurisdiction — a despotic exercise of discretion so patent and gross as to amount to refusal to perform duty or to act in contemplation of law. The Supreme Court applied this standard to review the CA’s dismissal.
Venue Rule and Contractual Venue Stipulations
Rule 4 of the Rules of Court governs venue: (1) actions affecting title to or possession of real property shall be commenced in the court having jurisdiction over the area where the real property is situated; (2) personal actions may be filed where the plaintiff or defendant resides or is found; and (3) Section 4 provides exceptions, including valid written stipulations on exclusive venue. Jurisprudence (Legaspi) distinguishes restrictive (exclusive) venue stipulations from permissive (additional forum) clauses: restrictive language requires explicit exclusive or limiting words (e.g., “exclusively,” “to the exclusion of other courts,” “shall only”), otherwise the clause is presumed merely permissive.
Legal Principle Applied to Forgery Claims
Existing case law further instructs that where a complaint directly assails the validity of the written instrument containing the venue stipulation (for example, alleging forgery), the plaintiff should not be bound by that stipulation because compliance would implicitly accept the instrument’s validity. Conversely, when a suit attacks only the terms, conditions, or coverage of an instrument but not its validity, an exclusive venue clause in the instrument remains binding and may justify dismissal for improper venue.
Analysis by the Supreme Court
The Supreme Court found that although the venue clause in the subject contracts uses restrictive language (thereby nominally limiting actions to Makati co
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Case Citation and Parties
- Reported at 750 Phil. 891, First Division, G.R. No. 204444, January 14, 2015.
- Petitioner: Virgilio C. Briones.
- Respondents: Court of Appeals and Cash Asia Credit Corporation (Cash Asia).
- Decision penned by Justice Perlas-Bernabe; concurrence by Chief Justice Sereno (Chairperson), and Justices Leonardo-De Castro, Bersamin, and Perez.
Nature of the Action and Relief Sought
- Complaint filed before the Regional Trial Court (RTC), Manila, Branch 173, Civil Case No. 10-124040.
- Causes of action asserted in the Complaint dated August 2, 2010: nullity of mortgage contract, promissory note, loan agreement; foreclosure of mortgage; cancellation of Transfer Certificate of Title (TCT) No. 290846; and damages.
- Relief sought: annulment/cancellation of instruments and damages in relation to alleged foreclosure and alleged forgery.
Material Facts as Alleged by Petitioner (Briones)
- Briones alleged ownership of the property covered by TCT No. 160689 (the subject property). [Rollo, pp. 51-53]
- On July 15, 2010, Briones was informed by his sister that his property had been foreclosed and that a writ of possession had been issued in favor of Cash Asia. [Rollo, pp. 51-52]
- Upon investigation, Briones discovered documents purporting to have been executed on December 6, 2007: a promissory note, a loan agreement, and a deed of real estate mortgage (collectively, the subject contracts) in favor of Cash Asia to secure a loan of P3,500,000.00. [Rollo, pp. 52, 59-66]
- Briones alleged that the loan was unpaid and that Cash Asia proceeded to foreclose the property. [Rollo, p. 52]
- Briones asserted that he never contracted any loans with Cash Asia, claiming residency and employment in Vietnam since October 31, 2007, and a brief return to the Philippines only from December 28, 2007 to January 3, 2008. He stated that during his brief stay no one informed him of any loan agreement with Cash Asia. [Rollo, p. 52]
- Central allegation: Briones assailed the validity of the subject contracts, claiming that his signature on them was forged. [Rollo, p. 52]
Cash Asia’s Procedural Response and Grounds for Dismissal
- Cash Asia filed a Motion to Dismiss dated August 25, 2010, seeking outright dismissal of Briones’s complaint on the ground of improper venue. [Rollo, pp. 81-84]
- Cash Asia relied on a venue stipulation contained in the subject contracts which provided 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.” [Rollo, p. 81]
- Cash Asia’s contention: actions arising from the subject contracts could only be brought exclusively in the courts of Makati City; hence, the complaint filed in the City of Manila was improper and should be dismissed. [Rollo, pp. 82-83]
Briones’s Opposition to the Motion to Dismiss
- Briones filed an Opposition/Comment to the Motion to Dismiss dated September 7, 2010. [Rollo, pp. 169-171]
- Arguments included: Briones should not be bound by the venue stipulation because he was never a party to the subject contracts; reiteration of his claim that his signatures were forged. [Rollo, p. 169]
RTC Proceedings and Orders
- RTC, Manila, Branch 173 issued an Order dated September 20, 2010 denying Cash Asia’s Motion to Dismiss. [Rollo, p. 86]
- RTC reasoning: parties must be afforded the right to be heard in view of the substance of Briones’s cause of action as stated in the complaint. [Rollo, p. 86]
- Cash Asia filed a motion for reconsideration (not attached to the records), which was denied in an Order dated October 22, 2010. [Rollo, p. 88]
- Cash Asia elevated the matter to the Court of Appeals by petition for certiorari (petition not attached to records). [Rollo, pp. 23-24]
Court of Appeals Decision and Resolution
- Court of Appeals rendered a Decision dated March 5, 2012 in CA-G.R. SP No. 117474, annulling the RTC Orders and dismissing Briones’s complaint without prejudice to refiling in Makati City. [Rollo, pp. 23-30]
- CA’s holding: RTC gravely abused its discretion in denying the motion to dismiss because the subject contracts clearly provided exclusive venue in Makati City; therefore, complaint should have been dismissed for improper venue notwithstanding Briones’s forgery claim. [Rollo, pp. 25-29]
- Briones moved for reconsideration of the CA De