G.R. No. 158138. April 12, 2005.
PHILIPPINE BANK OF COMMUNICATIONS, Petitioner, vs. ELENA LIM, RAMON CALDERON, and TRI-ORO INTERNATIONAL TRADING & MANUFACTURING CORPORATION, Respondents.

FACTS

Petitioner Philippine Bank of Communications filed a complaint for collection of a deficiency amounting to ₱4,014,297.23 against respondents Elena Lim, Ramon Calderon, and Tri-Oro International Trading & Manufacturing Corporation with the Regional Trial Court of Manila. The bank alleged that respondents obtained a loan and executed a continuing surety agreement dated November 16, 1995. The loan was renewed, with the most recent renewal evidenced by Promissory Note Renewal BD-Variable No. 8298021001 dated January 21, 1998, which contained an express stipulation that the venue for any legal action arising out of the promissory note shall be Makati City, “to the exclusion of all other courts.” Respondents failed to pay the obligation, leading to foreclosure of a real estate mortgage and a deficiency balance. Respondents moved to dismiss the complaint on the ground of improper venue, invoking the exclusive venue stipulation in the promissory note. The trial court denied the motion, ruling that the bank had separate causes of action arising from the promissory note and the continuing surety agreement, and under Rule 4, Section 2 of the Rules of Court, venue was properly laid in Manila. The Court of Appeals reversed the trial court’s orders and dismissed the case without prejudice to filing in the exclusively stipulated venue, ruling that the surety agreement, though silent on venue, was an accessory contract to the promissory note and should be interpreted in consonance with it.

ISSUE

Whether the Court of Appeals erred in ruling that the restrictive stipulation on venue contained in the promissory note applies to the surety agreement, thereby rendering the filing of the complaint in Manila improper.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision. The Court held that the surety agreement is an accessory contract to the principal loan agreement embodied in the promissory note. Applying the “complementary-contracts-construed-together” doctrine under Article 1374 of the Civil Code, the various stipulations of interrelated contracts must be interpreted together. The factual circumstances surrounding the execution of the surety agreement and the promissory note are intertwined and interconnected; the surety agreement was entered into to facilitate existing and future loans, and the loan covered by the promissory note was approved partly because of the surety agreement. The promissory note, a contract of adhesion prepared by the bank, contained the exclusive venue stipulation for any legal action arising out of it. Since the legal action against the sureties arose not only from the surety agreement but also from the promissory note, the enforcement of the accessory surety agreement depends upon the principal promissory note, and the venue stipulation therein applies. The Court further noted that while the complaint contained two causes of action (one on the promissory note against the principal debtor and another on the surety agreement against the sureties), they pertained to the same venue as stipulated in the promissory note. Therefore, the Makati City stipulation was restrictive and exclusive, and the filing of the case in Manila was improper. The dismissal was without prejudice to refiling in the proper venue.