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UNIMASTERS CONGLOMERATION, INC. vs.

COURT OF APPEALS and KUBOTA AGRI-


MACHINERY PHILIPPINES, INC.
G.R. No. 119657, February 7, 1997.
Facts:
Kubota and Unimasters entered into a dealership agreement for sales and services
of Kubotas products in Samar and Leyte. It was stipulated in their contract that all suits
arising out of such agreement shall be fled in the proper courts of Quezon City and that
Unimasters is bound to obtain a credit line with Metrobank-Tacloban branch in the amount
of P2M to answer for its obligations to Kubota.
Five years later, Unimasters fled an action in RTC of Tacloban against Kubota,
Reynaldo Go and Metro bank for damages for breach of contract and injuction for TRO.
RTC of Tacloban issued a restraining order enjoining Metrobank from authorizing or
efecting payment of alleged obligations of Unimasters to Kubota. Kubota fled a motion for
dismissal of the case on the ground of improper venue. RTC of Tacloban denied Kubotas
motion holding that it is the proper venue for reasons that although Kubotas principal ofce
is in Quezon City, Unimasters is holding its principal ofce in Tacloban; that the proper
venue pursuant to ROC would either be Tacloban or Quezon City at the election of the
plaintif.
Kubota fled a special civil action of certiorari and prohibition with CA contending
that RTC of Tacloban has no jurisdiction to take cognizance of the action considering that
venue was impropoerly laid and that RTC of Tacloban erred in denying the motion to
dismiss. CA ruled in favor of Kubota holding that the agreement on venue between Kubota
and Unimasters limited the venue of any complaint fled arising from the dealership
agreement between them to the proper courts of Quezon City.
Issue:
Whether the stipulation on venue of any complaint arising from the dealership
agreement between Kubota and Unimasters had the efect of eliminating Tacloban as an
optional venue and limiting litigation between parties only and exclusively to Quezon City.
Ruling:
No. The record of the case at bar discloses that Unimasters has its principal place
of business in Tacloban, and Kubota, in Quezon City. Under Rule 4, the venue of any
personal action between them is where the defendant or any of the defendants resides or
may be found, or where the plaintif or any of the plaintifs resides, at the election of the
plaintif. In other words, Rule 4 of ROC gives Unimasters the option to sue Kubota for
breach of contract in the Regional Trial Court of either Tacloban or Quezon City. But the
contract between them provides that "**All suits arising out of this Agreement shall be fled
with/in the proper Courts of Quezon City", without mention of Tacloban. Absent additional
words and expressions defnitely and unmistakably denoting the parties' desire and
intention that actions between them should be ventilated only at the place selected by
them (Quezon City) or other contractual provisions clearly evincing the same desire and
intention -- the stipulation should be construed, not as confning suits between the parties
only to that one place (Quezon City) but as allowing suits either in Quezon City or
Tacloban City, at the option of the plaintif (Unimasters).
With regards Kubota's theory that the RTC had "no jurisdiction to take cognizance of
Unimasters action considering that venue was improperly laid." This is not an accurate
statement of legal principle. It equates venue with jurisdiction; but venue has nothing to do
with jurisdiction, except in criminal actions. The action at bar, for the recovery of damages
in an amount considerably in excess of P20K, is assuredly within the jurisdiction of a RTC.
Assuming that venue were improperly laid in the Court where the action was instituted, the
RTC of Tacloban, that would be a procedural, not a jurisdictional impediment -- precluding
ventilation of the case before that Court of wrong venue notwithstanding that the subject
matter is within its jurisdiction. However, if the objection to venue is waived by the failure to
set it up in a motion to dismiss, the RTC would proceed in perfectly regular fashion if it then
tried and decided the action.

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