GR 44683; (November, 1938) (Digest)
G.R. No. 44683 ; November 28, 1938
JOAQUIN NAVARRO, plaintiff-appellee, vs. FERNANDO AGUILA and JUANITA AGUILA VIUDA DE REYES, defendants-appellants.
FACTS
The defendants executed a mortgage deed in favor of the plaintiff for a loan of P2,500, secured by two parcels of land located in Batangas. The deed contained a stipulation that any action for collection or execution of the mortgage credit could be filed in the Court of First Instance of Manila, to whose jurisdiction the mortgagor submitted. When the defendants defaulted, the plaintiff filed a foreclosure suit in the Court of First Instance of Manila. The defendants contested the Manila court’s jurisdiction, arguing that under Section 254 of the Code of Civil Procedure, a foreclosure action must be brought in the province where the mortgaged property is located.
ISSUE
Whether the parties to a real estate mortgage contract may validly agree, by stipulation, to submit to the jurisdiction of a court other than that of the province where the mortgaged property is situated, for the foreclosure action.
RULING
Yes. The Supreme Court affirmed the decision of the trial court. The provision in Section 254 of the Code of Civil Procedure, which requires a foreclosure action to be instituted in the province where the land lies, is procedural and established for the benefit and protection of the mortgagor. This right can be waived by the mortgagor. The stipulation in the mortgage deed submitting to the jurisdiction of the Court of First Instance of Manila constitutes a valid waiver. The purpose of the law—to protect the mortgagor’s interest by ensuring a sale in the locality to attract more bidders—is not defeated, as any foreclosure sale must still be conducted in the province where the property is located by the sheriff of that province, in accordance with the law. The Manila court had jurisdiction over the subject matter, and the parties’ agreement on venue was permissible.
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