Arquero vs. Flojo

A clearly printed exclusive venue stipulation in a telegram service contract is valid and enforceable against a sender who signs it, even if the contract is a printed form, where the sender is a lawyer and municipal mayor and is thus charged with notice; such a stipulation is not contrary to law, public order, public policy, morals, or good customs.

RCPI is a telegraphic transmission company that used a ready printed telegram contract form for messages sent through its Aparri, Cagayan branch. Petitioner Bernoli P. Arquero is a lawyer and the Municipal Mayor of Sta. Teresita, Cagayan. The dispute concerns the enforceability of a condition in that printed form fixing the venue of any action arising from the transmittal in Quezon City alone.

On November 27, 1983, petitioner Bernoli P. Arquero and private respondent Radio Communications of the Philippines, Inc. (RCPI) entered into a contract for services for the transmission of a telegraphic message through RCPI’s branch office in Aparri, Cagayan to Atty. Eleazar S. Calasan at his office address in Quiapo, Manila. The telegram contract form for transmission, as well as the telegram itself, stated that the message was sent subject to the condition that RCPI shall not be liable for any damage howsoever same may arise except for the refund of telegraphic tolls; that the sender agrees that as a condition precedent for a cause of action against RCPI any complaint relative to the transmittal of the telegram must be brought to the attention of the company within three months from date; and that venue thereof shall be in the courts of Quezon City alone and in no other courts. The message itself read: “ATTY. CALASAN ROOM 401 PAYAWAL BLDG. 709 PATERNO, QUIAPO, MANILA CONGRATULATIONS PREPARE ONE XEROX COPY DECISION SEE YOU BONI'S BIRTHDAY. BERNOLI.”

Atty. Eleazar S. Calasan received a copy of the telegram the next day but he was made to pay the sum of P 7.30 for delivery charges. Thereafter, on November 30, 1983, at the birthday party of Asst. Fiscal Bonifacio Sison in Quezon City, Atty. Calasan confronted and censured the petitioner anent the said telegram. Despite the petitioner’s explanation that the telegram had been duly paid for, he was branded as a “stingy mayor who cannot even afford to pay the measely sum of P 7.30 for the telegram,” in the presence of many persons.

Thus, the petitioner filed an action for damages against RCPI before the Regional Trial Court of Aparri, Cagayan.

• Contract of Adhesion / Venue Stipulation: Petitioner argued that the condition with respect to venue appearing on the ready printed form of RCPI’s telegram for transmission is void and unenforceable because he had no hand in its preparation. Citing Sweet Lines, Inc. vs. Bernardo Teves, et al., 83 SCRA 361, he maintained that contracts of adhesion, where the provisions have been drafted only by one party and the only participation of the other party is the signing of his signature or his adhesion thereto, are contrary to public policy as they are injurious to the public or public good.

• Improper Venue: Respondent RCPI contended that the action was filed in the wrong venue because, pursuant to the service contract, the parties had agreed that the venue of any action which may arise out of the transmittal of the telegram shall be in the courts of Quezon City alone.

• Validity of Exclusive Venue Stipulation: Whether the condition in RCPI’s printed telegram form fixing the venue of any action arising from the transmittal exclusively in Quezon City is void and unenforceable as a contract of adhesion.
• Dismissal for Improper Venue: Whether the trial court correctly dismissed the damages action for improper venue based on that stipulation.

• Validity of Exclusive Venue Stipulation: No. The stipulation is valid and enforceable; it is not contrary to law, public order, public policy, morals, or good customs, and Section 3, Rule 4 of the Revised Rules of Court sanctions a written agreement changing venue.
• Dismissal for Improper Venue: Yes. Because the valid stipulation fixed exclusive venue in Quezon City, the action in Aparri, Cagayan was improperly venued, and the petition was dismissed for lack of merit.

• Validity of Exclusive Venue Stipulation: The agreement as to venue is not contrary to law, public order, public policy, morals or good customs. The parties did not dispute that the written contract expressly stipulated that any action relative to the transmittal of the telegram against RCPI must be brought in the Courts of Quezon City alone. Neither party reserved the right to choose the venue fixed by law—where the plaintiff or defendant resides, at the election of the plaintiff under paragraph (b), Section 2, Rule 4, Revised Rules of Court—so it can reasonably be inferred that they intended to definitely fix venue in Quezon City only. Section 3, Rule 4 sanctions such a stipulation by allowing the parties, by written agreement, to change or transfer venue from one province to another, as held in Bautista vs. de Borja. Central Azucarera de Tarlac vs. De Leon teaches that such an agreement waives the legal venue and is valid because it involves merely a personal privilege, not contrary to public policy or prejudicial to third persons; a person may renounce any right unless the renunciation is expressly prohibited or the right is of such nature that its renunciation would be against public policy. Sweet Lines, Inc. vs. Teves, et al. does not apply. In Sweet Lines, the stipulation limiting venue was void because of the peculiar circumstances of adhesion contracts, the shortage of inter-island vessels, the monopoly of shipping companies, and the low-income, less literate passengers. Here, the venue condition was printed clearly in the upper front portion of the telegram form. Considering petitioner’s educational attainment as a lawyer and Municipal Mayor of Sta. Teresita, Cagayan, he must be charged with notice of the condition limiting venue to Quezon City, and by affixing his signature he signified his assent. Thus, the ruling in Sweet Lines is not applicable.
• Dismissal for Improper Venue: Because the venue stipulation is valid and enforceable, the action should have been brought in Quezon City alone. The trial court’s dismissal of the case for improper venue was therefore proper, and the petition was dismissed for lack of merit.

• Contract of Adhesion — A contract where provisions are drafted only by one party and the other party merely signs or adheres to it. Such contracts may be contrary to public policy when injurious to the public or public good, but not every printed condition is invalid. In this case, the Court distinguished Sweet Lines because the venue condition was clearly printed and the petitioner, a lawyer and municipal mayor, signed it, signifying assent.
• Waiver of Legal Venue by Written Stipulation — Under Section 3, Rule 4 of the Revised Rules of Court, parties may by written agreement change or transfer venue from one province to another. The waiver is valid because venue is a personal privilege, not contrary to public policy or prejudicial to third persons, unless renunciation is expressly prohibited or the right is of such nature that its renunciation would be against public policy. Applied to uphold exclusive venue in Quezon City.
• Notice and Assent to Printed Contract Terms — A party who signs a contract with a clearly printed condition is charged with notice of that condition and is deemed to have assented to it. Applied against petitioner due to his educational attainment and public office.

• “The agreement of the parties in the case at bar as to venue is not contrary to law, public order, public policy, morals or good customs.” — This states the ratio decidendi on the validity of the venue stipulation.
• “By said agreement the parties waived the legal venue, and such waiver is valid and legally effective, because it was merely a personal privilege they waived, which is not contrary to public policy or to the prejudice of third persons.” — This is the Court’s relied-upon formulation from Central Azucarera de Tarlac vs. De Leon on the validity of waiving legal venue.
• “In the instant case, the condition with respect to venue in the telegram form for transmission was printed clearly in the upper front portion of the form. Considering the petitioner's educational attainment (being a lawyer by profession and the Municipal Mayor of Sta. Teresita, Cagayan), he must be charged with notice of the condition limiting the venue to Quezon City, and by affixing his signature thereon, he signified his assent thereto. Thus, the ruling in Sweet Lines, Inc. vs. Teves, et al., is not applicable in this case.” — This is the core distinguishing rationale for why the contract-of-adhesion ruling in Sweet Lines did not govern.
• “Section 3, Rule 4, Revised Rules of Court sanctions such stipulation by providing that "by written agreement of the parties the venue of action may be changed or transferred from one province to another."” — This identifies the procedural rule authorizing the exclusive venue stipulation.

• Sweet Lines, Inc. vs. Bernardo Teves, et al., 83 SCRA 361 — Cited by petitioner; distinguished by the Court. The ruling that a venue-limiting stipulation in a contract of adhesion was void did not apply because the condition here was clearly printed and petitioner was a lawyer and municipal mayor who signed it.
• Central Azucarera de Tarlac vs. De Leon, 56 Phil. 169 — Relied upon for the rule that a written waiver of legal venue is valid because it concerns a personal privilege and is not contrary to public policy or prejudicial to third persons.
• Bautista vs. de Borja, 18 SCRA 474 — Cited to support the application of Section 3, Rule 4, Revised Rules of Court, which allows the parties by written agreement to change or transfer venue from one province to another.

• Section 2, Rule 4, Revised Rules of Court — Fixes venue where the plaintiff or defendant resides, at the election of the plaintiff under paragraph (b). The Court noted that neither party reserved the right to choose the venue fixed by law, supporting the inference that they intended to fix venue exclusively in Quezon City.
• Section 3, Rule 4, Revised Rules of Court — Provides that by written agreement of the parties the venue of action may be changed or transferred from one province to another. The Court applied this to uphold the exclusive venue stipulation in RCPI’s telegram form.

Melencio-Herrrera (Chairperson), Padilla, and Regalado, JJ., concurred. Sarmiento, J., was on leave.