G.R. No. L-28742 April 30, 1982
VIRGILIO CAPATI, plaintiff-appellant, vs. DR. JESUS P. OCAMPO, defendant-appellee.

FACTS

Plaintiff Virgilio Capati, a resident of Bacolor, Pampanga, subcontracted with defendant Dr. Jesus Ocampo, a resident of Naga City, for the construction of parts of a bank building in Iriga, Camarines Sur. The contract stipulated that time was essential, with completion due by June 5, 1967. Alleging that Ocampo finished the work only on June 20, 1967, Capati filed an action for consequential damages in the Court of First Instance (CFI) of Pampanga.
The defendant moved to dismiss the complaint on grounds of improper venue, citing a printed stipulation at the back of the contract, paragraph 14, which stated: “That all actions arising out, or relating to this contract may be instituted in the Court of First Instance of the City of Naga.” The plaintiff opposed, arguing the use of the word “may” made the venue stipulation optional. The lower court dismissed the complaint, reasoning that the stipulation would be senseless if the parties retained the discretion to file in their respective residences under the general venue rule.

ISSUE

Whether the contractual stipulation on venue is restrictive (mandatorily confining suits to the CFI of Naga City) or merely permissive (allowing suits there but not waiving the general venue options under the Rules of Court).

RULING

The Supreme Court set aside the dismissal order, ruling the venue stipulation was merely permissive. The Court’s legal logic centered on statutory construction and precedent. The general rule on venue for personal actions, under Section 2(b), Rule 4 of the Rules of Court, allows the plaintiff to elect to file where the defendant resides, may be found, or where the plaintiff resides. This rule is qualified by Section 3 of the same Rule, which permits parties to change venue by written agreement.
The pivotal interpretation concerned the word “may” in the contract. The Court held that “may” is permissive, indicating possibility, liberty, or option, not certainty or obligation. It does not impose an exclusive or mandatory restriction. This interpretation aligns with the Court’s prior ruling in Nicolas vs. Reparations Commission, which involved a similar “may be brought in” clause and was deemed non-mandatory. Consequently, the stipulation did not waive the parties’ rights under Section 2(b), Rule 4. Since the plaintiff, Capati, resided in Pampanga, filing the action in the CFI of Pampanga was a proper exercise of his elective right under the general venue rule. The case was remanded to the court of origin for further proceedings.