Briones vs. Court of Appeals

An exclusive venue stipulation in a written instrument is inapplicable to actions directly assailing the validity of the instrument itself (e.g., alleging forgery or lack of consent), and such actions must be filed in accordance with the general rules on venue under Rule 4 of the Rules of Court, not the contractual stipulation.

Virgilio C. Briones owned real property covered by Transfer Certificate of Title No. 160689. He had been residing and working in Vietnam since October 31, 2007, returning only briefly from December 28, 2007 to January 3, 2008 to spend the holidays with his family. On July 15, 2010, his sister informed him that the property had been foreclosed and a writ of possession issued in favor of Cash Asia Credit Corporation. Investigation revealed that on December 6, 2007, documents purportedly executed by Briones—including a promissory note, loan agreement, and deed of real estate mortgage—secured a ₱3,500,000.00 loan from Cash Asia using the subject property as collateral.

• The Alleged Contracts: On December 6, 2007, Cash Asia Credit Corporation allegedly obtained a ₱3,500,000.00 loan secured by Briones's property through a promissory note, loan agreement, and deed of real estate mortgage purportedly executed by Briones.
• Discovery of Foreclosure: On July 15, 2010, Briones learned from his sister that the property had been foreclosed and a writ of possession issued in favor of Cash Asia.
• Allegations of Forgery: Briones claimed he never contracted any loans from Cash Asia, having been in Vietnam since October 31, 2007, and that his signatures on the subject contracts were forgeries.
• Venue Stipulation: The subject contracts contained a provision 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."
• Procedural Posture: Cash Asia filed a Motion to Dismiss before the RTC on August 25, 2010, invoking the venue stipulation. Briones opposed, claiming he was not a party to the contracts due to the alleged forgery.

• Inapplicability of Venue Stipulation: Briones maintained that he should not be covered by the venue stipulation in the subject contracts as he was never a party thereto, his signatures having been forged.
• Grave Abuse of Discretion: Petitioner argued that the Court of Appeals gravely abused its discretion in ordering the outright dismissal of his complaint, as the complaint directly assailed the validity of the contracts themselves.

• Exclusive Venue Agreement: Cash Asia countered that the subject contracts clearly and exclusively limited the venue of actions arising therefrom to the courts of Makati City, and that Briones was bound by this stipulation.
• Improper Venue: Respondent argued that Briones's complaint was improperly filed in Manila and should have been dismissed outright based on the contractual venue stipulation, notwithstanding the allegation of forgery.

• Venue in Actions Assailing Validity of Contracts: Whether the Court of Appeals gravely abused its discretion in ordering the outright dismissal of Briones's complaint on the ground of improper venue, notwithstanding his claim that the contracts were forged and thus invalid.

• Grave Abuse of Discretion: The Court of Appeals committed grave abuse of discretion in ordering the dismissal of Briones's complaint. Dismissal on the ground of improper venue was improper where the complaint directly assailed the validity of the written instrument containing the venue stipulation.
• Inapplicability of Exclusive Venue Stipulation: A complaint directly assailing the validity of a written instrument itself—such as by alleging forgery—should not be bound by the exclusive venue stipulation contained therein. Compliance with such a stipulation would be inherently inconsistent with the claim that the instrument is invalid, as it would constitute implicit recognition of the contract's validity. Therefore, the action must be filed in accordance with the general rules on venue under Rule 4 of the Rules of Court.
• Proper Venue: Pursuant to Rule 4, Section 1 (venue of real actions), Briones properly filed his complaint before the Regional Trial Court of Manila, where the subject property is situated.

• Exclusive versus Permissive Venue Stipulations — Parties may validly agree in writing on an exclusive venue (restrictive) or merely a permissive venue (additional forum). A stipulation is deemed restrictive or exclusive only when qualified by words such as "exclusively," "shall only," "waiving for this purpose any other venue," "to the exclusion of the other courts," or words of similar import. Absent such qualifying or restrictive words, the stipulation is deemed merely permissive, allowing suit to be filed not only in the place agreed upon but also in the places fixed by law.
• Effect of Validity Challenge on Venue Stipulations — When a complaint directly assails the validity of the written instrument itself (e.g., alleging forgery, lack of consent, or simulation), the exclusive venue stipulation contained therein does not apply. The action must be filed in accordance with the general rules on venue under Rule 4 of the Rules of Court. Conversely, where the complaint assails only the terms, conditions, or coverage of a written instrument and not its validity, the exclusive venue stipulation remains binding.

• "Conversely, therefore, 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. To be sure, it would be inherently inconsistent for a complaint of this nature to recognize the exclusive venue stipulation when it, in fact, precisely assails the validity of the instrument in which such stipulation is contained."
• "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."

• Legaspi v. Republic of the Philippines, 581 Phil. 381 (2008) — Controlling precedent establishing the distinction between restrictive (exclusive) and permissive venue stipulations; held that restrictive stipulations must contain qualifying words of exclusivity to be enforceable as such.
• Spouses Lantin v. Judge Lantion, 531 Phil. 318 (2006) — Cited for the principle that where a complaint assails only the terms, conditions, or coverage of a written instrument (and not its validity), the exclusive venue stipulation remains binding on the parties.

• Rule 4, Section 1, Rules of Court — Governs venue of real actions, which shall be commenced and tried in the proper court having jurisdiction over the area wherein the real property involved is situated.
• Rule 4, Section 4(b), Rules of Court — Provides that the rule on venue shall not apply where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof.

Maria Lourdes P.A. Sereno (Chief Justice, Chairperson), Teresita J. Leonardo-De Castro, Lucas P. Bersamin, Jose Portugal Perez.