G.R. No. 160053 August 28, 2006
SPS. RENATO & ANGELINA LANTIN, Petitioners, vs. HON. JANE AURORA C. LANTION, et al., Respondents.

FACTS

Petitioners Renato and Angelina Lantin obtained loans from respondent Planters Development Bank, secured by real estate mortgages and promissory notes. Upon default, the bank foreclosed and purchased the mortgaged properties at a public auction. Subsequently, petitioners filed a complaint with the Regional Trial Court (RTC) of Lipa City for annulment of sale/mortgage, reconveyance, and damages. They alleged that only their peso loans were covered by the mortgages and that these had been fully paid, while the foreclosure was based on unpaid dollar loans not covered by the mortgages.
Private respondents moved to dismiss the complaint on the ground of improper venue, citing stipulations in the loan documents that any suit must be filed exclusively in the proper courts of Makati or Metropolitan Manila. The RTC granted the motion and dismissed the case. Petitioners’ motion for reconsideration was denied, prompting this petition for certiorari.

ISSUE

Whether the respondent judge committed grave abuse of discretion in dismissing the case for improper venue based on the exclusive venue stipulations in the loan documents.

RULING

The Supreme Court dismissed the petition, finding no grave abuse of discretion. The Court applied Section 4(b), Rule 4 of the 1997 Rules of Civil Procedure, which suspends the general rules on venue when parties have validly agreed in writing on an exclusive venue before filing the action. For a stipulation to be considered exclusive, it must employ restrictive language clearly limiting venue to a definite place.
Examining the contracts, the Court found the stipulations to be unequivocally exclusive. The real estate mortgages stated the parties agree to bring suit “exclusively” in the proper court of Makati, Metro Manila, “waiving for this purpose any other venue.” Similarly, the promissory notes provided the venue “shall exclusively be” at the proper court of Metropolitan Manila, “waiving for this purpose any other venue.” This language meets the categorical and limiting requirement established in jurisprudence.
The Court rejected petitioners’ argument that enforcing the venue stipulation would prejudge the validity of the underlying contracts. The complaint did not assail the validity of the mortgage contracts themselves but rather their terms and coverage—specifically whether the mortgages secured the dollar loans and whether the peso loans were paid. These issues indisputably arose out of or were connected to the loan documents containing the venue stipulation. Therefore, the stipulation was applicable. The RTC’s orders were in accord with law, and no grave abuse of discretion attended its dismissal of the case on procedural grounds.