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Ley Construction v. Sedano
Ley Construction v. Sedano
MARVIN MEDEL SEDANO, doing business under the name and style
"LOLA TABA LOLO PATO PALENGKE AT PALUTO SA SEASIDE" ,
respondent (third-party plaintiff), vs. PHILIPPINE NATIONAL
CONSTRUCTION CORPORATION , respondent (third-party defendant).
DECISION
PERLAS-BERNABE , J : p
Assailed in this petition for review on certiorari 1 are the Orders dated June 15,
2015 2 and January 27, 2016 3 of the Regional Trial Court (RTC) of Valenzuela City,
Branch 75 (Valenzuela-RTC) in Civil Case No. 40-V-12, which dismissed petitioner Ley
Construction and Development Corporation's (as represented by its President, Janet C.
Ley; petitioner) complaint for collection of sum of money and damages, without
prejudice, on the ground of improper venue. HTcADC
The Facts
On March 13, 2012, petitioner led a Complaint for Collection of Sum of Money
and Damages 4 against respondent Marvin Medel Sedano (respondent), doing business
under the name and style "Lola Taba Lolo Pato Palengke at Paluto sa Seaside," before
the Valenzuela-RTC, docketed as Civil Case No. 40-V-12. In its complaint, petitioner
alleged that on January 14, 2005, it leased 5 a 50,000-square meter (sq.m.) parcel of
land located at Financial Center Area, Pasay City (now, Lot 5-A Diosdado Macapagal
Boulevard, Pasay City) from respondent third-party defendant, the Philippine National
Construction Corporation (PNCC). 6 On September 11, 2006, petitioner subleased 7 the
14,659.80-sq.m. portion thereof to respondent for a term of ten (10) years beginning
November 15, 2005, for a monthly rent of P1,174,780.00, subject to a ten percent (10%)
increase beginning on the third year and every year thereafter (lease contract). 8
Respondent allegedly failed to pay the rent due for the period August 2011 to
December 2011, amounting to a total of P8,828,025.46, and despite demands, 9
refused to settle his obligations; 1 0 hence, the complaint.
In his Answer with Third-Party Complaint, 1 1 respondent countered that he
religiously paid rent to petitioner until PNCC demanded 1 2 that the rent be paid directly
to it, in view of the petitioner's eviction from the subject property by virtue of a court
order. 1 3 Thus, during the period from August 2011 until December 2011, he remitted
the rentals to PNCC. 1 4 Should he be found liable to petitioner, respondent maintained
that the RTC should hold PNCC liable to reimburse to him the amounts he paid as
rentals; hence, the third-party complaint. 1 5
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Respondent likewise pointed out that the venue was improperly laid since
Section 21 1 6 of the lease contract provides that "[a]ll actions or case[s] led in
connection with this case shall be led with the Regional Trial Court of Pasay City,
exclusive of all others." 1 7 Hence, the complaint should be dismissed on the ground of
improper venue.
Finally, respondent argued that he paid petitioner the amounts of P3,518,352.00
as deposit and advance rentals under the lease contract, and that he made a
P400,000.00 overpayment, all of which amounts were not liquidated or credited to
respondent during the subsistence of the lease contract. Thus, respondent interposed
a counterclaim, seeking petitioner to reimburse the said amounts to him, and to pay
him moral and exemplary damages, including litigation expenses, in view of petitioner's
filing of such baseless suit. 1 8
In its Comment/Opposition 1 9 to respondent's a rmative defense of improper
venue, petitioner argued that Section 21 of the lease contract is not a stipulation as to
venue, but a stipulation on jurisdiction which is void. 2 0 This is because such stipulation
deprives other courts, i.e., the Municipal Trial Courts, of jurisdiction over cases which,
under the law, are within its exclusive original jurisdiction, such as an action for unlawful
detainer. 2 1 Petitioner further posited that respondent had already submitted himself to
the jurisdiction of the Valenzuela-RTC and had waived any objections on venue, since he
sought a rmative reliefs from the said court when he asked several times for
additional time to le his responsive pleading, set-up counterclaims against petitioner,
and impleaded PNCC as a third-party defendant. 2 2
Meanwhile, in its Answer to Third Party Complaint with Counterclaim, 2 3 PNCC
contended that respondent has no cause of action against it, since he acknowledged
PNCC's right to receive rent, as evidenced by his direct payment thereof to PNCC. 2 4
Respondent also entered into a contract of lease with PNCC after learning that
petitioner had been evicted from the premises by virtue of a court ruling. 2 5
The Valenzuela-RTC Ruling
In an Order 2 6 dated June 15, 2015, the Valenzuela-RTC granted respondent's
motion and dismissed the complaint on the ground of improper venue. It held that
Section 21 of the lease contract between petitioner and respondent is void insofar as it
limits the ling of cases with the RTC of Pasay City, even when the subject matter
jurisdiction over the case is with the Metropolitan Trial Courts. 2 7 However, with respect
to the ling of cases cognizable by the RTCs, the stipulation validly limits the venue to
the RTC of Pasay City. 2 8 Since petitioner's complaint is one for collection of sum of
money in an amount that is within the jurisdiction of the RTC, petitioner should have
filed the case with the RTC of Pasay City. 2 9
The Valenzuela-RTC also found no merit in petitioner's claim that respondent
waived his right to question the venue when he led several motions for extension of
time to le his answer. It pointed out that improper venue was among the defenses
raised in respondent's Answer. As such, it was timely raised and, therefore, not waived.
30
Notably, the fact that this stipulation generalizes that all actions or cases of the
aforementioned kind shall be led with the RTC of Pasay City, to the exclusion of all
other courts, does not mean that the same is a stipulation which attempts to curtail the
jurisdiction of all other courts. It is fundamental that jurisdiction is conferred by law and
not subject to stipulation of the parties. 4 0 Hence, following the rule that the law is
deemed written into every contract, 4 1 the said stipulation should not be construed as a
stipulation on jurisdiction but rather, one which merely limits venue. Moreover, "[t]he
parties are charged with knowledge of the existing law at the time they enter into the
contract and at the time it is to become operative." 4 2 Thus, without any clear showing
in the contract that the parties intended otherwise, the questioned stipulation should be
considered as a stipulation on venue (and not on jurisdiction), consistent with the basic
principles of procedural law.
In this case, it is undisputed that petitioner's action was one for collection of sum
of money in an amount 4 3 that falls within the exclusive jurisdiction of the RTC. 4 4 Since
the lease contract already provided that all actions or cases involving the breach
thereof should be led with the RTC of Pasay City, and that petitioner's complaint
purporting the said breach fell within the RTC's exclusive original jurisdiction, the latter
should have then followed the contractual stipulation and led its complaint before the
RTC of Pasay City. However, it is undeniable that petitioner led its complaint with the
Valenzuela-RTC; hence, the same is clearly dismissible on the ground of improper
venue, without prejudice, however, to its refiling in the proper court.
That respondent had led several motions for extension of time to le a
responsive pleading, or that he interposed a counterclaim or third-party complaint in his
answer does not necessarily mean that he waived the a rmative defense of improper
venue. The prevailing rule on objections to improper venue is that the same must be
raised at the earliest opportunity, as in an answer or a motion to dismiss; otherwise, it
is deemed waived. 4 5 Here, respondent timely raised the ground of improper venue
since it was one of the a rmative defenses raised in his Answer with Third-Party
Complaint. 4 6 As such, it cannot be said that he had waived the same.
Further, it should be pointed out that the case of Pangasinan Transportation Co.,
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Inc. v. Yatco (Pantranco) 4 7 cited in the instant petition 4 8 should not apply to this case,
considering that the invocation of the ground of improper venue therein was not based
on a contractual stipulation, but rather on respondent Elpidio O. Dizon's alleged
violation of the Rules of Court, as he filed his case for damages before the Court of First
Instance of Rizal, Branch IV (Quezon City), despite testifying that he was actually a
resident of Dagupan City. In that case, the Court ruled that the ling of a counterclaim
and third party-complaint, and additionally, the introduction of evidence of petitioner
Pantranco (respondent in the case for damages) after the denial of its motion to
dismiss on the ground of improper venue, "necessarily implied a submission to the
jurisdiction of [the trial court therein], and, accordingly, a waiver of such right as
Pantranco may have had to object to the venue, upon the ground that it had been
improperly laid." 4 9 The rationale for the Pantranco ruling is that a party cannot invoke a
violation of a rule on venue against his counter-party, when he himself is bound by the
same rule, but nonetheless, seeks his own relief and in so doing, violates it. aDSIHc
** On leave.
1. Rollo, pp. 20-44.
2. Id. at 54-61. Penned by Presiding Judge Lilia Mercedes Encarnacion A. Gepty.
3. Id. at 62-63.
4. Dated February 24, 2012. Id. at 68-77.
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5. See Contract of Lease dated January 5, 2005; id. at 80-83.
25. Id.
26. Id. at 54-61.
27. Id. at 57.
28. Id.
29. Id. at 59.
42. Communication Materials and Design, Inc. v. Court of Appeals , 329 Phil. 487, 508 (1996),
citing Topweld Manufacturing, Inc. v. ECED, S.A., 222 Phil. 424, 435 (1985).