Radiowealth Finance Company, Inc. vs. Pineda

The Regional Trial Court erred in motu proprio dismissing a complaint for sum of money based on alleged lack of jurisdiction where it actually had jurisdiction under Section 19(8) of BP 129, as amended by RA 7691, and where the dismissal was premised on a confusion between the substantive concept of jurisdiction and the procedural concept of venue; moreover, venue stipulations in contracts must be strictly construed, and courts cannot dismiss cases motu proprio for improper venue as objections thereto are waivable.

Radiowealth Finance Company, Inc. extended a loan to spouses Alfonso and Josephine Pineda secured by a chattel mortgage on their vehicle. The promissory note contained a restrictive venue stipulation designating courts in the National Capital Judicial Region or any place where Radiowealth had a branch office as the exclusive venues for actions arising from the contract. After the borrowers defaulted on the loan with an outstanding balance of over P510,000, Radiowealth filed a collection suit before the RTC of San Mateo, Rizal, alleging it maintained a branch there.

• On October 23, 2014, petitioner Radiowealth Finance Company, Inc. extended a loan to respondents Alfonso O. Pineda, Jr. and Josephine C. Pineda in the amount of P557,808.00, payable in 24 equal monthly installments of P23,242.00.
• The loan was evidenced by a Promissory Note and secured by a Chattel Mortgage constituted on a vehicle owned by respondents.
• The Promissory Note contained a venue stipulation stating that "[a]ny action to enforce payment of any sums due under this Note shall exclusively be brought in the proper court within [the] National Capital Judicial Region or in any place where Radiowealth Finance Company, Inc. has a branch/office, a[t] its sole option."
• Respondents defaulted on their payments, leaving an outstanding balance of P510,132.00 as of June 8, 2015, excluding penalty charges.
• Petitioner demanded payment, but respondents failed to pay or surrender the mortgaged vehicle.
• Petitioner filed a complaint for sum of money and damages with application for a Writ of Replevin before the RTC of San Mateo, Rizal, alleging that it has a branch in San Mateo, Rizal.
• The RTC initially issued a Writ of Replevin on March 28, 2016.
• The RTC subsequently issued an Amended Order dated July 21, 2016 recalling the writ and dismissing the complaint on the ground of lack of jurisdiction, noting that petitioner's principal place of business was in Mandaluyong City and respondents' residence was in Porac, Pampanga.
• The RTC denied petitioner's motion for reconsideration in an Order dated September 1, 2016.

• The petitioner argued that the RTC erred in dismissing the complaint for lack of jurisdiction when it clearly had jurisdiction under Section 19(8) of BP 129, as amended by RA 7691, since the claim involved P510,132.00, exceeding the jurisdictional threshold.
• The petitioner contended that the RTC confused the concept of jurisdiction with venue, which are distinct legal concepts.
• The petitioner maintained that the venue stipulation in the Promissory Note was restrictive in nature, limiting venue to courts in the National Capital Judicial Region or any place where petitioner has a branch office, and since it alleged having a branch in San Mateo, Rizal, venue was properly laid.
• The petitioner argued that even if venue was improperly laid, the RTC could not motu proprio dismiss the case as objections to venue must be raised by the defendant at the earliest opportunity, otherwise they are deemed waived.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the RTC correctly dismissed petitioner's complaint on the ground of lack of jurisdiction.
  • Whether the venue stipulation in the Promissory Note was restrictive or permissive.
  • Whether the RTC could motu proprio dismiss the case for improper venue.

• Procedural: N/A
• Substantive:
  • The Supreme Court held that the RTC erred in dismissing the complaint for lack of jurisdiction. Jurisdiction is determined by the allegations in the complaint, the law in effect when the action is filed, and the character of the relief sought. Under Section 19(8) of BP 129, as amended by RA 7691, the RTC has jurisdiction over civil cases where the demand exceeds the statutory threshold. Since the claim was for P510,132.00, the RTC had jurisdiction.
  • The Court distinguished jurisdiction from venue: jurisdiction is the power to hear and determine cases and is a matter of substantive law, while venue is the place of trial and is a matter of procedural law. Objections to jurisdiction cannot be waived and may be raised at any stage, while objections to venue must be raised at the earliest opportunity or are deemed waived.
  • The Court ruled that the venue stipulation in the Promissory Note was restrictive, not merely permissive, because it used the word "exclusively," limiting actions to courts in the National Capital Judicial Region or any place where petitioner has a branch office. Since petitioner alleged it has a branch in San Mateo, Rizal, venue was properly laid.
  • The Court held that even assuming venue was improperly laid, the RTC could not motu proprio dismiss the case. Citing Radiowealth Finance Company, Inc. v. Nolasco, the Court emphasized that venue is waivable and the trial court cannot pre-empt the defendant's prerogative to object. The defendant must raise the objection in a motion to dismiss or in the answer; otherwise, it is deemed waived.

• Jurisdiction vs. Venue — Jurisdiction is the authority to hear and determine a cause and is a matter of substantive law; venue is the place or geographical location where a case is filed and is a matter of procedural law. Objections to jurisdiction cannot be waived and may be raised at any stage, while objections to venue must be raised at the earliest opportunity or are deemed waived. The RTC confused these concepts by dismissing the case for lack of jurisdiction when the issue was actually venue.
• Restrictive vs. Permissive Venue Stipulations — Written stipulations as to venue may be restrictive (suit may be filed only in the place agreed upon) or merely permissive (parties may file suit not only in the place agreed upon but also in places fixed by law). In the absence of qualifying or restrictive words such as "exclusively," "waiving for this purpose any other venue," "shall only," or "to the exclusion of the other courts," the stipulation should be deemed merely an agreement on an additional forum. Here, the use of "exclusively" made the stipulation restrictive.
• Waiver of Venue Objections — Objections to venue must be brought at the earliest opportunity either in a motion to dismiss or in the answer; otherwise, the objection shall be deemed waived. Courts cannot motu proprio dismiss cases for improper venue.
• Non-exercise of Motu Proprio Dismissal for Venue — The trial court cannot pre-empt the defendant's prerogative to object to the improper laying of venue by motu proprio dismissing the case. Unless and until the defendant objects to the venue, the venue cannot be truly said to have been improperly laid.

• "Jurisdiction is defined as the authority to hear and determine a cause or the right to act in a case."
• "Jurisdiction is a matter of substantive law, while venue is a matter of procedural law."
• "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."
• "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."
• "The trial court cannot pre-empt the defendant's prerogative to object to the improper laying of the venue by motu proprio dismissing the case."
• "Thus, unless and until the defendant objects to the venue in a motion to dismiss, the venue cannot be truly said to have been improperly laid, as for all practical intents and purposes, the venue, though technically wrong, may be acceptable to the parties for whose convenience the rules on venue had been devised."

• Pilipinas Shell Petroleum Corporation v. Royal Ferry Services, Inc. — Cited for the exhaustive differentiation between jurisdiction and venue, emphasizing that jurisdiction is substantive while venue is procedural.
• City of Lapu-Lapu v. Philippine Economic Zone Authority — Quoted for definitions of jurisdiction and venue.
• Briones v. Court of Appeals — Cited for the discussion on restrictive versus permissive venue stipulations and the requirement of qualifying words to make a stipulation restrictive.
• Legaspi v. Republic of the Philippines — Cited for the principle that parties may agree in writing on an exclusive venue.
• Radiowealth Finance Company, Inc. v. Nolasco — Cited as controlling precedent holding that dismissal on the ground of improper venue is not appropriate where the defendant failed to challenge venue timely, and that trial courts cannot motu proprio dismiss cases for improper venue.
• Dacoycoy v. Intermediate Appellate Court — Cited in Radiowealth v. Nolasco for the principle that venue objections not raised timely are deemed waived.
• Home Guaranty Corporation v. R-II Builders, Inc. — Cited for the definition of jurisdiction and the rule that jurisdiction is determined by the allegations in the complaint, the law in effect, and the character of relief sought.

• Section 19(8) of Batas Pambansa Blg. 129 (The Judiciary Reorganization Act of 1980) — Grants Regional Trial Courts exclusive original jurisdiction over civil cases where the demand, exclusive of interest, damages, attorney's fees, litigation expenses, and costs, exceeds the statutory amount (as amended).
• Section 5 of Republic Act No. 7691 — Amended the jurisdictional amounts in BP 129, adjusting them to higher thresholds after specified periods.
• Rule 4 of the Rules of Court (Venue of Actions) — Governs the rules on venue, including Sections 1 (real actions), 2 (personal actions), 3 (actions against nonresidents), and 4 (when rule not applicable, including valid written agreements on exclusive venue).