FACTS:

Virgilio C. Briones filed a Complaint before the RTC Manila, for nullity of contracts, and damages against Cash Asia, alleging that he is the owner of the subject property, and that his sister informed him that his property had been foreclosed and a writ of possession had already been issued in favor of Cash Asia.

Upon investigation, Briones discovered that: (a) he purportedly executed a promissory note, loan agreement, and deed of real estate mortgage covering the subject property in favor of Cash Asia in order to obtain a loan from the latter; and (b) since the said loan was left unpaid, Cash Asia proceeded to foreclose his property.

Briones claimed that he never contracted any loans from Cash Asia, and assailed the validity of the contracts claiming his signature to be forged.

Cash Asia filed a Motion to Dismiss, praying for the outright dismissal of Briones’s complaint on the ground of improper venue. Cash Asia pointed out the venue stipulation in the subject contracts stating that “all legal actions arising out of this notice in connection with the Real Estate Mortgage subject hereof shall only be brought in or submitted to the jurisdiction of the proper court of Makati City.”

The RTC denied Cash Asia’s motion to dismiss for lack of merit.

On appeal, the CA annulled the RTC Orders, and accordingly dismissed Briones’s complaint without prejudice to the filing of the same before the proper court in Makati City.

Briones moved for reconsideration, which was denied, hence, this petition.

ISSUE:

Whether or not the CA gravely abused its discretion in ordering the outright dismissal of Briones’s complaint on the ground of improper venue.

RULING:

The petition is meritorious.

Rule 4 of the Rules of Court governs the rules on venue of civil actions.

Under Rule 4, the general rule is that the venue of real actions is the court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated; while the venue of personal actions is the court which has jurisdiction where the plaintiff or the defendant resides, at the election of the plaintiff.

As an exception, jurisprudence in Legaspi v. Republic instructs that the parties, thru a written instrument, may either introduce another venue where actions arising from such instrument may be filed, or restrict the filing of said actions in a certain exclusive venue, viz.:

The parties, however, are not precluded from agreeing in writing on an exclusive venue, as qualified by Section 4 of the same rule. Written stipulations as to venue may be restrictive in the sense that the suit may be filed only in the place agreed upon, or merely permissive in that  the parties may file their suit not only in the place agreed upon but also in the places fixed by law. As in any other agreement, what is essential is the ascertainment of the intention of the parties respecting the matter.

As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown that such stipulation is exclusive. In the absence of qualifying or restrictive words, such as “exclusively,” “waiving for this purpose any other venue,” “shall only” preceding the designation of venue, “to the exclusion of the other courts,” or words of similar import, the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place.

Conversely, a complaint directly assailing the validity of the written instrument itself should not be bound by the exclusive venue stipulation contained therein and should be filed in accordance with the general rules on venue.

In this case, the venue stipulation found in the subject contracts is indeed restrictive in nature, effectively limiting the venue of the actions arising therefrom to the courts of Makati City. However, given this circumstance, Briones cannot be expected to comply with the aforesaid venue stipulation, as his compliance therewith would mean an implicit recognition of their validity. Hence, pursuant to the general rules on venue, Briones properly filed his complaint before a court in the City of Manila where the subject property is located.