A restrictive venue stipulation in a contract specifying venue choices (e.g., Place A or Place B) "at the absolute option" of one party (the creditor/mortgagee) does not prevent the other party (debtor/mortgagor) from initiating a lawsuit in either of the specified venues; the "absolute option" primarily governs the venue choice when the party granted the option is the one filing the suit and does not serve as a condition precedent restricting the other party's right to file in a contractually permitted location.

Petitioner Lucille Odilao and her husband entered into loan and real estate mortgage agreements with respondent Union Bank of the Philippines. The petitioner later sought judicial reformation of these agreements, contending they were contracts of adhesion and did not accurately reflect the parties' true intentions concerning various terms, including notices, interest, penalties, and venue procedures.

• Petitioner Lucille Odilao, along with her husband, executed loan and real estate mortgage (REM) agreements with respondent Union Bank, encumbering property located in Davao City.
• The REM included a specific venue clause (Section 8) stating: "The venue of all suits and actions... shall be Pasig City or in the place where any of the Mortgaged properties are located, at the absolute option of the Mortgagee, the parties hereto waiving any other venue."
• Petitioner filed a complaint at the Regional Trial Court (RTC) in Davao City, seeking reformation of the loan and mortgage contracts, alleging they were contracts of adhesion needing revision on terms like notices, interest, penalties, and venue.
• Respondent bank moved to dismiss the complaint, citing improperly laid venue based on the contractual stipulations found in the loan documents.
• The Davao City RTC granted the dismissal, reasoning that the venue clause was restrictive and the phrase "at the absolute option of the Mortgagee" required the bank's explicit choice of Davao City before a suit could proceed there.
• The Court of Appeals upheld the RTC's decision.

• The lower courts incorrectly dismissed the complaint because the venue was properly laid in Davao City, one of the locations specified in the mortgage contract's venue clause.
• Citing Briones v. Court of Appeals, venue stipulations might not be controlling when the contract itself is under scrutiny, although the petitioner here sought reformation rather than invalidation due to forgery as in Briones.
• A venue clause granting an "exclusive option" to choose the venue solely to one party is invalid as it contravenes the Rules of Court, which allow for "exclusive venue" stipulations but not unilateral "options" that unduly restrict the other party's access to courts.

• The venue was improperly laid in Davao City, warranting dismissal under Rule 16, Section 1(c) of the Rules of Court.
• The loan agreements contained restrictive venue clauses specifying either Pasig City or the location of the mortgaged property as the exclusive venues.
• Crucially, the choice between these two venues rested solely "at the absolute option of the Mortgagee" (the bank), and since the bank had not expressly chosen Davao City, the petitioner could not file the suit there.

• Did the petitioner file the complaint in an improper venue by choosing the RTC of Davao City (where the mortgaged property is located) when the mortgage contract stipulated venue as "Pasig City or in the place where any of the Mortgaged properties are located, at the absolute option of the Mortgagee"?
• How should a contractual restrictive venue clause granting one party (the mortgagee) the "absolute option" between two specified locations be interpreted concerning the other party's (the mortgagor's) right to initiate suit?

• The Supreme Court ruled that the venue was properly laid in Davao City and that the lower courts erred in dismissing the complaint.
• The venue stipulation in the REM was correctly identified as restrictive, limiting potential venues to Pasig City or the location of the mortgaged property (Davao City).
• The petitioner's choice of Davao City complied with this restrictive stipulation, as it was one of the two designated venues.
• The phrase "at the absolute option of the Mortgagee" was misinterpreted by the lower courts; it does not function as a condition precedent requiring the mortgagor to seek the mortgagee's venue preference before filing suit. Such an interpretation would unfairly impede the mortgagor's access to judicial remedy.
• The "absolute option" primarily clarifies the mortgagee's right to choose between the specified venues when the mortgagee is the party initiating the action. It does not restrict the mortgagor's right to file in either permitted venue.
• Therefore, the Petition for Review was granted, the CA decision was reversed, and the complaint was reinstated for continuation in the Davao City RTC.

• Venue of Actions (Rules of Court, Rule 4): This rule establishes the general principles for determining the proper geographical court location for civil actions (real actions where property lies, personal actions at plaintiff/defendant residence). The Court applied this rule as the foundation for analyzing the venue issue.
• Stipulations on Venue (Rules of Court, Rule 4, Sec. 4(b)): This section permits parties to agree in writing on an exclusive venue before filing an action, overriding the general rules. The interpretation of such a written agreement in the mortgage contract was the core of the dispute.
• Restrictive vs. Permissive Venue Stipulations: Jurisprudence distinguishes between venue clauses that are merely permissive (adding an optional venue) and those that are restrictive (limiting venue exclusively to specified places). A clause is restrictive only if it contains clear wording of exclusion (e.g., "only," "exclusively," "waiving any other venue"). In this case, the Court found the clause restrictive due to the explicit waiver of other venues, limiting choices to Pasig City or the property's location.
• Interpretation of Contracts (Venue Clauses): The Court emphasized that rules on venue aim for convenience and efficient court business, not to bar access to courts. Contractual clauses, including venue stipulations, must be interpreted reasonably and practically. In this case, the "absolute option" clause was interpreted not to paralyze the mortgagor but to define the mortgagee's choice when initiating suit, ensuring the mortgagor could still sue in either designated venue.

• "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 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... the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue to the specified place."
• "[R]ules on venue are intended to provide convenience to the parties, rather than restrict their access to the courts. It simply arranges for the convenient and effective transaction of business in the courts."
• "[T]o interpret the phrase 'at the absolute option of the Mortgagee' to mean that petitioner should have inquired first from respondent bank which venue it preferred... before she filed the instant action, would mean that she would be left at the mercy of the bank..."

• Briones v. Court of Appeals (2015): Referenced by petitioner, but distinguished by the Supreme Court. Briones involved a direct challenge to the contract's validity (forgery), potentially nullifying the venue clause itself. In Odilao, the contract's authenticity wasn't disputed, only its terms via reformation, making the venue clause generally operative but subject to interpretation. It illustrated the principle that venue clauses might be disregarded if the contract's existence/validity is the core issue.
• Legaspi v. Rep. of the Phils.: Cited as the authority for distinguishing between restrictive and permissive venue stipulations based on the presence or absence of exclusionary language. This precedent guided the Court's analysis of the specific clause in the Odilao mortgage.
• Radiowealth Finance Co., Inc. v. Pineda, Jr. (2018): Cited in connection with the effect of restrictive venue clauses, likely reinforcing the finding that the clause limited venue to the specified locations.
• Gacad, Jr. v. Corpuz (2022): Referenced to support the underlying principle that venue rules prioritize convenience and access to courts, informing the reasonable interpretation of the "absolute option" clause.
• Ley Construction and Development Corp. v. Sedano (2017): Cited to outline the requirements for a valid exclusive venue stipulation (written, exclusive intent, pre-suit agreement), confirming the framework for analyzing such clauses.

• Rules of Court, Rule 16, Section 1(c): Identifies "improperly laid venue" as a ground for a motion to dismiss. This was the basis for the respondent's successful motion in the lower courts.
• Rules of Court, Rule 4 (Venue of Actions): Specifically Sections 1 (Real actions), 2 (Personal actions), and 4 (Exceptions, including written exclusive venue agreements). This rule was extensively applied by the Supreme Court to frame the general rules of venue and the exception allowing contractual stipulations, ultimately leading to the interpretation of the specific clause in this case.