THIRD DIVISION
[G.R. No. 235494. January 10, 2018.]
SPS. ROGER T. MITRA AND MARIA DE JESUS MITRA, CHRISTIAN J. MITRA, MARI IVY J. MITRA-LOMANTA, ANDREA LIZA J. MITRA-RELUCIO, AND MICHAEL J. MITRA, petitioners,vs. PLANTERS DEVELOPMENT BANK AND EX-OFFICIO RTC CLERK OF COURT-SHERIFF OF DAVAO CITY, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedJanuary 10, 2018, which reads as follows: CAIHTE
"G.R. No. 235494 (Sps. Roger T. Mitra and Maria De Jesus Mitra, Christian J. Mitra, Mari Ivy J. Mitra-Lomanta, Andrea Liza J. Mitra-Relucio, and Michael J. Mitra vs. Planters Development Bank and Ex-Officio RTC Clerk of Court-Sheriff of Davao City). — Assailed in this Petition for Review on certiorari under Rule 45 of the Rules of Court are the June 8, 2017 Decision1 and October 5, 2017 Resolution of the Court of Appeals (CA) in CA G.R. CV No. 04375-MIN. The CA affirmed the dismissal of the petitioners' complaint as the venue was improperly laid.
Facts
Petitioners Roger and Maria Mitra obtained a loan from respondent Planters Development Bank ("the Bank") in the amount of P18,550,000.00. In so doing, the Mitras executed a Promissory Note ("PN") to pay the loan in 84 equal monthly installments. The PN also provides that default in paying any installment renders the entire unpaid amount due and payable. 2 Further, the provision regarding the venue of all suits arising out of the PN states:
I/We further agree that the venue of any legal action arising out of this note shall exclusively be at the proper court of Makati City, Philippines or any other venue chosen by the bank, waiving for this purpose any other venue provided by the Rules of Court.3
To secure payment of the loan, the spouses Mitra executed in favor of the Bank a Deed of Real Estate Mortgage ("REM") over four (4) properties located in Calinan, Davao City, and registered in the names of the their children, their co-petitioners herein, Christian Roger, Mari Ivy, Andrea Liza, and Michael. In turn, the REM contains the following provision:
18. In the event of suit arising out of or in connection with this mortgage and/or promissory note/s secured by this mortgage, the parties hereto agree to bring their causes of action exclusively in the proper court/s of Makati, Metro Manila, the Mortgagor waiving for this purpose any other venue.4
The Mitras failed to pay several installments despite demand from the Bank. Hence, the latter extrajudicially foreclosed the mortgaged properties at a public auction where it emerged as the highest bidder.
In January 2016, the petitioners filed with the Regional Trial Court of Davao City (RTC-Davao) a Complaint for Nullity of Mortgage, Foreclosure Sale and Damages with Injunctive Reliefs against the respondents. Petitioners alleged therein, among others, that the foreclosure is null and void as they had already paid their loan obligations and the publication requirements for the notices of the sale have not been satisfied. 5
The Bank filed a Motion to Dismiss 6 praying for the outright dismissal of the petitioners' Complaint on the ground of improper venue. In the motion, the Bank pointed out that the venue stipulation based on the provision in the PN and the REM is exclusively in Makati, Metro Manila.
Sustaining the Bank's position, RTC-Davao rendered an Order on April 15, 2016 7 dismissing the petitioners' Complaint. Petitioners interposed a Motion for Reconsideration 8 but were soon denied by the RTC-Davao, 9 prompting them to elevate the matter to the CA on appeal.
The CA's Ruling
Before the CA, petitioners argued that the Bank is estopped from asserting the stipulation on the exclusive venue as stated in the PN and the REM considering that the petition for extrajudicial foreclosure as well as the loan mortgage documents were executed in Davao City.
The appellate court denied the appeal and affirmed the dismissal of the petitioners' Complaint by the RTC-DAVAO, disposing as follows:
WHEREFORE, the appeal is hereby DENIED. The assailed Orders dated 15 April 2016 and dated 18 May 2016 rendered by the Regional Trial Court, 11th Judicial Region, Branch 16 of Davao City, in a case docketed as R-DVO-16-00363-CV, are hereby AFFIRMED.
SO ORDERED. 10
To support its Decision, the CA held that the venue stipulation in the PN and then REM, is indeed restrictive in nature, considering that it effectively limits the venue arising therefrom to the courts of Makati City. Thus, RTC-Davao correctly declared that the venue was improperly laid in the instant case. DETACa
Petitioners moved for, but was denied, reconsideration by the CA in the assailed Resolution. Hence, the present petition.
Issue
The essential issue in this case is whether the CA erred in affirming the dismissal of the petitioners' Complaint for improper venue.
Our Ruling
The petition is bereft of merit.
The general rule is that the venue of real actions is the court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated; while the venue of personal actions is the court which has jurisdiction where the plaintiff or the defendant resides, at the election of the plaintiff. 11 As an exception, jurisprudence in Legaspi v. Rep. of the Phils.12 instructs that the parties, thru a written instrument, may either introduce another venue where actions arising from such instrument may be filed, or restrict the filing of said actions in a certain exclusive venue. 13
In this case, as found by both RTC-Davao and the CA, the venue stipulation found in both the PN and REM is indeed restrictive in nature, considering that it effectively limits the venue of the actions arising therefrom to the courts of Makati City. Hence, the venue of the Complaint was improperly laid when it was lodged in Davao.
The petitioners' contention that the Bank has waived the exclusive venue by instituting the foreclosure in Davao is without merit. It fails to consider that petitions for extrajudicial foreclosure sale are, strictly speaking, not judicial proceedings, actions or suits. In Supena v. De la Rosa14 this Court held that:
It is clear that the determinative or operative fact which converts a claim into an "action or suit" is the filing of the same with a "court of justice." Filed elsewhere, as with some other body or office not a court of justice, the claim may not be categorized under either term. Unlike an action, an extrajudicial foreclosure of real estate mortgage is initiated by filing a petition not with any court of justice but with the office of the sheriff of the province where the sale is to be made. By no stretch of the imagination can the office of the sheriff come under the category of a court of justice. And as aptly observed by the complainant, if ever the executive judge comes into the picture, it is only because be exercises administrative supervision over the sheriff. But this administrative supervision, however, does not change the fact that extrajudicial foreclosures are not judicial proceedings, actions or suits. 15
As such, extrajudicial foreclosures are not covered by Rule 4 of the Rules of Court, or by the parties' stipulation in this case. Rather, Section 2 of Act No. 3135 16 governs. It states:
Sec. 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in case the place within said province in which the sale is to be made is subject to stipulation, such sale shall be made in said place or in the municipal building of the municipality in which the property or part thereof is situated. 17
By instituting the foreclosure in Davao, the Bank was not acting in disregard of the venue stipulation in the PN and REM but simply abiding by Sec. 2 of Act 3135. It could not, therefore, be estopped from invoking the exclusive venue, as argued by the petitioners.
WHEREFORE, the petition is DENIED. The June 8, 2017 Decision and October 5, 2017 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 04375-MIN are AFFIRMED.
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1. Penned by Associate Justice Louis P. Acosta and concurred in by Associate Justices Edgardo T. Iloren and Ronaldo B. Martin, Twenty-Third (23rd) Division.
2.Rollo, p. 56.
3.Ibid. Emphasis supplied.
4.Rollo, p. 22. Emphasis supplied.
5.Rollo, pp. 38-41.
6.Rollo, pp. 66-83.
7.Rollo, pp. 84-85.
8.Rollo, pp. 86-88.
9.Rollo, p. 89.
10.Rollo, p. 25.
11. Rule 4, Rules of Court:
SECTION 1. Venue of real actions. — Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the municipality or city wherein the real property involved, or a portion thereof, is situated.
SEC. 2. Venue of personal actions. — All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff.
SEC. 3. Venue of actions against nonresidents. — If any of the defendants does not reside and is not found in the Philippines, and the action affects the personal status of the plaintiff, or any property of said defendant located in the Philippines, the action may be commenced and tried in the court of the place where the plaintiff resides, or where the property or any portion thereof is situated or found.
SEC. 4. When Rule not applicable. — This Rule shall not apply —
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the action on the exclusive venue thereof.
12. 581 Phil. 381 (2008), cited in Briones v. Court of Appeals, G.R. No. 204444, January 14, 2015.
13. Briones v. Court of Appeals, G.R. No. 204444, January 14, 2015.
14. Supena v. Dela Rosa, 334 Phil. 671, 683 (1997).
15. Emphasis and underscoring supplied.
16. "An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real Estate Mortgages."
17. See Office of the Court Administrator v. Fernandez, A.M. No. RTJ-14-2379 (Notice), August 5, 2014.