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PBC Vs Tensuan

The Philippine Banking Corporation filed a complaint against Circle Finance Co. and eight individuals to collect on promissory notes in Makati RTC. Circle Finance had included a stipulation in the notes that any legal actions must be filed in Valenzuela courts. Judge Tensuan granted a motion to dismiss, citing the stipulation and requiring venue in Valenzuela. However, the Supreme Court ruled the stipulation was permissive and did not require exclusive venue in Valenzuela, only authorizing suit there. The stipulation did not deprive either party of their right to choose another competent court under the Rules of Court. The Supreme Court found error in Judge Tensuan's decision.

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200 views2 pages

PBC Vs Tensuan

The Philippine Banking Corporation filed a complaint against Circle Finance Co. and eight individuals to collect on promissory notes in Makati RTC. Circle Finance had included a stipulation in the notes that any legal actions must be filed in Valenzuela courts. Judge Tensuan granted a motion to dismiss, citing the stipulation and requiring venue in Valenzuela. However, the Supreme Court ruled the stipulation was permissive and did not require exclusive venue in Valenzuela, only authorizing suit there. The stipulation did not deprive either party of their right to choose another competent court under the Rules of Court. The Supreme Court found error in Judge Tensuan's decision.

Uploaded by

Stephanie Valentine
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PBC vs TENSUAN

PHILIPPINE BANKING CORPORATION vs TENSUAN


Facts:
Petitioner is a commercial banking corporation with principal office at Makati. The bank instituted a
complaint for the collection of sum of money, with a prayer for preliminary attachment at the RTC of
Makati. Circle Finance Co obtained a number of loans from petitioner and delivered to petitioner
bank four (4) promissory noted that contained the stipulation that any legal actions shall be filed in
the courts of Valenzuela.
As security of the re-payment by Circle, eight individuals were impleaded as defendants in the
complaint and undertook to pay jointly and severally. Only 5 out of 8 are obligors in the present
case.
Circle failed to pay its obligations under the promissory notes. The bank then demanded payment
from the eight individuals. Petitioner moved for issuance of a writ of preliminary attachment,
alleging that respondent Circle had become insolvent and had been placed under receivership by
the Central Bank. The trial judge granted the motion and issued a writ of preliminary attachment.
The sheriff noted that no properties of the bank or the obligors can be found. The sheriff failed to
serve summons to four of the defendants for various reasons such as death and unknown
whereabouts.
A motion to dismiss was filed by the respondents and averred that the venue of the action was
improperly laid since an agreement has fixed the actions to Valenzuela, Metro Manila.
Judge TENSUAN granted the motion citing Sec. 13, Rule 14 if the rules of court where the proper
venue for an action is that stipulated in a document "in case of any litigation herefrom or in
connection herewith" upon a rationale that had the parties intended to reserve the right to choose
venue under Section 2 (b), Rule 4 of the Rules of Court, such reservation should have been
reflected in the document as against the rationale in Polytrade Corporation vs. Blanco (30 SCRA
187) which should allow choice of venue where an actionable document does not set forth
qualifying or restrictive words in point, and
In order to more clearly define the parameters of the rule on proper venue vis-a-vis a clear
perception that a stipulation to "expressly submit to the jurisdiction of the Courts of Valenzuela,
Metro Manila" amount to unequivocal agreement to sue and be sued in Valenzuela, Metro Manila.
Petitioner moved for reconsideration without success hence the petition.
ISSUE: Whether or not there was an error in the judgement of TENSUAN
RULING:
Petition is meritorious.
Jurisdiction may change or transfer the venue of action from one province to another. The Bank
contends that the stipulation is merely an agreement to add the courts of Valenzuela to the
tribunals to which the parties may resort but private respondents argue that the stipulation is clear
and unambiguous.
A careful reading of the terms of the stipulation "I/We hereby expressly submit to the jurisdiction
of the courts of Valenzuela any legal action which may arise out of this promissory note" shows
that the stipulation does not require the laying of venue in Valenzuela exclusively or mandatorily.

The plain or ordinary import of the stipulation is the authorizing of, or permission to bring, suit in
Valenzuela; there is not the slightest indication of an intent to bar suit in other competent courts.
Permissive stipulations like the one here considered have invariably received judicial approval and
we have declared that either of the parties is authorized to lay venue of an action in the court
named in the stipulation. The stipulation her does not purport to deprive either party of it right to
elect, or option to have resort to, another competent court as expressly permitted by Section 2(b)
of Rule 4 of the Rules of Court, should such party choose to initiate a suit.

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