Universal Robina Corp. v. Lim, G.R. No.154338, October 5, 2007 Sec. 4. When Rule not applicable.

n Rule not applicable. This Rule shall not apply

Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 (a) In those cases where a specific rule or law provides otherwise; or
Rules of Civil Procedure, as amended, assailing the Resolutions
dated January 16, 2002 and July 1, 2002 of the Court of Appeals in CA-G.R. (b) Where the parties have validly agreed in writing before the
SP No. 67368. filing of the action on the exclusive venue thereof.

Facts: Clearly, in personal actions, the plaintiff may commence an action either in
The present controversy stemmed from a contract of sale between
Universal Robina Corporation, petitioner, and Albert Lim, the place of his or her residence or the place where the defendant resides.
respondent. Pursuant to the contract, petitioner sold to respondent grocery However, the parties may agree to a specific venue which could be in a place
products in the total amount of P808,059.88. After tendering partial
where neither of them resides.
payments, respondent refused to settle his obligation despite petitioners
repeated demands.
Rule 9, Section 1 of the 1997 Rules of Civil
Petitioner filed with the Regional Trial Court, Branch 227, Quezon
Procedure states that defenses and objections not pleaded
City, a complaint against respondent for a sum of money. The trial court
either in a motion to dismiss or in the answer are deemed
issued an Order dismissing the complaint motu proprio on grounds of lack of
waived. The court may only dismiss an action motu
jurisdiction and improper venue. Summons was served upon respondent. For
his failure to file an answer seasonably and upon motion of petitioner, the proprio in case of lack of jurisdiction over the subject
matter, litis pendentia, res judicata and
trial court issued an Order declaring him in default and allowing petitioner to
prescription. Therefore, the trial court in this case erred
present its evidence ex parte.[
when it dismissed the petition motu proprio. It should
The trial court, still unsure whether venue was properly laid, issued
have waited for a motion to dismiss or a responsive
an Order directing petitioner to file a memorandum of authorities on whether
pleading from respondent, raising the objection or
it can file a complaint in Quezon City. Subsequently, the trial court again
affirmative defense of improper venue, before dismissing
issued an Order dismissing the complaint on the ground of improper venue,
the petition.
Petitioner filed a motion for reconsideration but it was denied
Petitioner then filed with the Court of Appeals a petition for review. But it
was dismissed due to petitioners failure to attach thereto an explanation
why copies of the petition were not served by personal service but by In the instant case, respondent, despite proper service of summons, failed to
registered mail, in violation of Section 11, Rule 14 of the 1997 Rules of Civil file an answer and was thus declared in default by the trial court. Verily,
Procedure, as amended.
having been declared in default, he lost his standing in court and his right to
Issue: May the court dismiss the complaint motu proprio on the ground adduce evidence and present his defense, including his right to question the
of improper venue?
propriety of the venue of the action.
Held: NO. Sections 2 and 4, Rule 4 of the same Rules provide:

Sec. 2. Venue of personal actions. All other actions may be commenced and WHEREFORE, the Petition for Review is GRANTED.
tried where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a non-
resident defendant where he may be found, at the election of the plaintiff.
G.R. Nos. 159669 & 163521 March 12, 2007
UNITED OVERSEAS BANK PHILS. (formerly WESTMONT
BANK), Petitioner,
vs.
ROSEMOORE MINING & DEVELOPMENT CORP. and DRA.
LOURDES PASCUAL, Respondents
FACTS:
Respondent Rosemoor Mining and Development Corporation (Rosemoor), a
Philippine mining corporation with offices at Quezon City, applied for and
was granted by petitioner Westmont Bank (Bank) a credit facility in the total
amount of ₱80 million consisting of ₱50,000,000.00 as long term loan and
₱30,000,000.00 as revolving credit line.
To secure the credit facility, a lone real estate mortgage agreement was
executed by Rosemoor and Dr. Lourdes Pascual (Dr. Pascual), Rosemoor’s
president, as mortgagors in favor of the Bank as mortgagee in the City of
Manila.The agreement, however, covered six (6) parcels of land located in
San Miguel, Bulacan (Bulacan properties), all registered under the name of
Rosemoor, and two (2) parcels of land situated in Gapan, Nueva Ecija
(Nueva Ecija properties), owned and registered under the name of Dr.
Pascual.
Rosemoor defaulted which caused the extrajudicial foreclosure of the
properties. The bank was the highest bidder in all of the properties.
The Bank caused the annotation of the Notarial Certificate of Sale covering
the Nueva Ecija properties on the certificates of title concerned. Later, the
Notarial Certificate of Sale covering the Bulacan properties was annotated on
the certificates of title of said properties.
The foregoing facts led to Rosemoor’s filing of separate complaints against
the Bank, one before the Regional Trial Court of Manila (Manila RTC) and
the other before the Regional Trial Court of Malolos, Bulacan (Malolos
RTC).
Manila RTC: (Personal Action) Rosemoor filed an action to receive the
remaining proceeds of the loan. However, the bank filed a motion to dismiss
the case because it contends Rosemoor is violating forum shopping, having
initiated a case in Malolos RTC. However the motion to dismiss was denied,
likewise it was dismissed by the CA holding that there was no forum
shopping.
Malolos RTC (G.R. No. 159669): (Real Action) Rosemoor second action
was filed her to restrain the foreclosure of the properties mortgaged to secure
the loan which was not due yet. As it here, the bank filed a motion to dismiss
the case due to violation of forum shopping but the likewise it was denied by
the RTC and CA. Hence the two petitions were consolidated by the Supreme
Court. Hence the case
ISSUE: WON The venue of the filing of the cases resulted to forum
shopping
HELD. NO.
Moreover, the Malolos case is an action to annul the foreclosure sale that is
necessarily an action affecting the title of the property sold. It is therefore a
real action which should be commenced andtried in the province where the
property or part thereof lies. The Manila case, on the other hand, is a personal
actioninvolving as it does the enforcement of a contract between Rosemoor,
whose office is in Quezon City, and the Bank, whose principal office is in
Binondo, Manila. Personal actions may be commenced and tried where the
plaintiff or any of the principal plaintiffs resides, or where the defendants or
any of the principal defendants resides, at the election of the plaintiff.
It was subsequent to the filing of the Manila case that Rosemoor and Dr.
Pascual saw the need to secure a writ of injunction because the consolidation
of the titles to the mortgaged properties in favor of the Bank was in the
offing. But then, this action can only be commenced where the properties, or
a portion thereof, is located. Otherwise, the petition for injunction would be
dismissed for improper venue. Rosemoor, therefore, was warranted in filing
the Malolos case and cannot in turn be accused of forum-shopping.
The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997
Rules of Civil Procedure, which reads in part: Section 1. Venue of Real
Actions. Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has
jurisdiction over the area wherein the real property involved, or a portion
thereof, is situated.
The venue of the action for the nullification of the foreclosure sale is
properly laid with the Malolos RTC although two of the properties together
with the Bulacan properties are situated in Nueva Ecija. Following the above-
quoted provision of the Rules of Court, the venue of real actions affecting
properties found in different provinces

is determined by the singularity or plurality of the transactions involving said

parcels of land. Where said parcels are the object of one and the same
transaction, the venue is in the court of any of the provinces wherein a parcel
of land is situated.

Ironically, the Bank itself correctly summarized the applicable jurisprudential

rule in one of the pleadings before the Court. Yet the Bank itself has
provided the noose on which it would be hung. Resorting to deliberate
misrepresentation, the Bank stated in the same pleading that "the Bulacan
and Nueva Ecija [p]roperties were not the subject of one single real estate
mortgage contract."

In the present case, there is only one proceeding sought to be nullified and
that is the extra-judicial mortgage foreclosure sale. And there is only one
initial transaction which served as the basis of the foreclosure sale and that is
the mortgage contract. Indeed, Rosemoor, through Dr. Pascual, executed a
lone mortgage contract where it undertook to "mortgage the land/real
property situated in Bulacan and Nueva Ecija," with the list of mortgaged
properties annexed thereto revealing six (6) properties in Bulacan and two (2)
properties in Nueva Ecija subject of the mortgage.

This apparent deliberate misrepresentation cannot simply pass without

action. The real estate mortgage form supplied to Rosemoor is the Bank’s
standard pre-printed form. Yet the Bank perpetrated the misrepresentation.
Blame must be placed on its doorstep. But as the Bank’s pleading was
obviously prepared by its counsel, the latter should also share the blame. A
lawyer shall not do any falsehood, nor consent to the doing of any in court;
nor shall he mislead, or allow the Court to be misled by any artifice. Both the
Bank’s president and counsel should be made to explain why they should not
be sanctioned for contempt of court.

WHEREFORE, considering the foregoing, the Decision of the Court of

Appeals in G.R. 163521 dated 26 February 2004 and in G.R No. 159669
dated 20 June 2003 are AFFIRMED.