G.R. No. L-64735; April 5, 1990
ATLAS DEVELOPER & STEEL INDUSTRIES, INC., petitioner, vs. SARMIENTO ENTERPRISES, INC., HON. CICERO C. JURADO, Regional Trial Judge, Pasig, Metro Manila, respondents.

FACTS

On August 25, 1982, respondent Sarmiento Enterprises, Inc. filed a complaint for collection of P8,076 in the Court of First Instance (now Regional Trial Court) of Pasig, Metro Manila, against petitioner Atlas Developer & Steel Industries, Inc. The complaint was based on the cost of steel materials purchased by the petitioner. Attached to the complaint was a sales invoice containing a stipulation that, if legal action is resorted to for collection, the parties “expressly submit to the jurisdiction of the Court of the City of Manila.”
Instead of filing an answer, the petitioner moved to dismiss the complaint on the ground of improper venue, citing the stipulation in the invoice. The trial court, first through Judge Gregorio Pineda and later through Judge Cicero Jurado, denied the motion to dismiss and a subsequent motion for reconsideration. Judge Jurado ruled that the stipulation spoke of “jurisdiction” and not “venue,” and was therefore void and of no legal effect. The petitioner then filed this petition for certiorari directly with the Supreme Court.

ISSUE

Was the venue of the action properly laid in the Regional Trial Court of Pasig, Metro Manila, considering the contractual stipulation and the jurisdictional amount involved?

RULING

No. The Supreme Court granted the petition and ordered the dismissal of the complaint without prejudice to its filing in the proper court. The ruling is based on two key legal points. First, the trial court erred in its overly strict and literal interpretation of the stipulation. While the invoice used the word “jurisdiction,” the parties must have intended to fix the venue only. Jurisdiction over the subject matter of a case is conferred by law and cannot be vested or removed by mere agreement of the parties. A stipulation like this is interpreted as an agreement on venue, which is permissible under the Rules of Court.
Second, and more critically, the Regional Trial Court of Pasig never acquired jurisdiction over the case in the first place. The amount demanded was only P8,076. Under Batas Pambansa Blg. 129, the Regional Trial Court’s exclusive original jurisdiction in civil cases applies where the demand exceeds P20,000. For amounts not exceeding P20,000, exclusive original jurisdiction is vested in the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. Therefore, the complaint should have been filed in the proper inferior court. The agreement on venue, being for the City of Manila, could only be given effect if the case were filed in a court that actually had jurisdiction over the amount claimed. The Supreme Court thus dismissed the complaint from the RTC.