GR L 28649; (May, 1975) (Digest)
G.R. No. L-28649 May 21, 1975
FRANCISCO J. NICOLAS, petitioner-appellant, vs. THE REPARATIONS COMMISSION and PEDRO PASTORAL, respondents-appellees.
FACTS
Petitioner Francisco J. Nicolas entered into a Contract of Conditional Purchase and Sale with the Reparations Commission for a fishing vessel. The contract contained a stipulation that “all legal actions arising out of this contract … may be brought in and submitted to the jurisdiction of the proper courts in the City of Manila.” Subsequently, the Commission, alleging an unauthorized sale of the vessel by Nicolas, passed resolutions ordering repossession and reawarding the vessel to respondent Pedro Pastoral. Nicolas filed a suit for breach of contract with damages in the Court of First Instance of Rizal. The respondents moved to dismiss on grounds of improper venue, arguing the stipulation restricted filing to Manila courts. The trial court granted the motion to dismiss, holding the venue stipulation was compulsory.
ISSUE
Whether the contractual stipulation on venue is restrictive, confining suits exclusively to Manila courts, or merely permissive, allowing filing in other competent courts at the plaintiff’s option.
RULING
The Supreme Court ruled the stipulation is permissive, not restrictive. The legal logic rests on the interpretation of the word “may” and the absence of exclusivity. The Court applied the principle that stipulations on venue are not deemed to restrict the filing of actions to the place specified unless explicitly exclusive. The phrase “may be brought in” indicates an option or permission, not a mandatory command. For a venue stipulation to be restrictive, it must employ clear, unequivocal, and exclusive language, such as “shall only” or “exclusively.” The clause in question lacks such definitive wording. Furthermore, the Court noted that the Reparations Commission, as a government entity, is not disadvantaged by a permissive interpretation, as it can be sued in any court under the rules. The trial court’s dismissal was reversed, and the case was remanded for proceedings on the merits, upholding the plaintiff’s right to institute the action in a court other than Manila when the contractual language does not clearly prohibit it.