GENEROSA ALMEDA LATORRE V.

LUIS ESTEBAN LATORRE

G.R. No. 183926, March 29, 2010

1. on September 28, 1999, respondent and Ifzal entered into a Contract of Lease[4] over a 1,244square meter real property,
situated at No. 1366 Caballero St., Dasmarias Village, MakatiCity (subject property). Under the said contract,
respondent, as lessor, declared that he was the absolute and registered owner of the subject property. Petitioner alleged
that respondent's declaration therein was erroneous because she and respondent were co-owners of the subject
property in equal shares.
2. Petitioner insisted, however, that respondent was fully aware that the subject property was owned in common by both
of them. To protect her rights as co-owner, petitioner formally demanded from Ifzal the payment of her share of the
rentals, which the latter, however, refused to heed.
3. petitioner averred that, on or about August 16, 2000, she discovered that respondent caused the annotation of an
adverse claim on the TCT of the subject property, claiming full ownership over the same by virtue of a Deed of
Absolute Sale[6] dated March 21, 2000, allegedly executed by petitioner in favor of respondent. Petitioner claimed that
the deed was a falsified document; that her signature thereon was forged by respondent; and that she never received
P21 Million.
4. Respondent immediately filed a Motion to Dismiss[7] on the sole ground that the venue of the case was improperly laid.
Since the subject property is located in Makati City, respondent argued that petitioner should have filed the case before
the RTC of Makati City and not of MuntinlupaCity.
5. Ifzal also filed his motion to dismiss on the ground of want of jurisdiction, asserting that he was immune from suit because
he was an officer of the Asian Development Bank, an international organization.
6. RTC denied respondent's motion to dismiss. The RTC ruled that the nature of an action whether real or personal was
determined by the allegations in the complaint, irrespective of whether or not the plaintiff was entitled to recover upon
the claims asserted - a matter resolved only after, and as a result of, a trial. Thus, trial on the merits ensued.
7. Respondent asseverated that he and his wife took good care of petitioner and that they provided for her needs, spending
a substantial amount of money for these needs; that because of this, and the fact that the rentals paid for the use of the
subject property went to petitioner, both parties agreed that petitioner would convey her share over the subject property
to respondent; and that, on March 21, 2000, petitioner executed a Deed of Absolute Sale in favor of respondent
8. In the meantime, in its Order dated May 15, 2003, the RTC dismissed petitioner's claim against Ifzal because the dispute
was clearly between petitioner and respondent.
9. On April 29, 2008, the RTC ruled in favor of respondent, disposing of the case in this wise:
“While the case herein filed by the plaintiff involves recovery of possession of a real property situated at 1366 Caballero
St., Dasmarias Village, Makati City, the same should have been filed and tried in the Regional Trial Court of Makati City
who, undoubtedly, has jurisdiction to hear the matter as aforementioned the same being clearly a real action. “
10. Hence, this Petition, claiming that the RTC erred in treating the venue as jurisdiction and in treating petitioner's
complaint as a real action.

Issue:
WON the rtc erred in treating the venue as jurisdiction and in treating petirioner’s complaint as a real action?

Held:
Sections 1 and 2, Rule 4 of the 1997 Rules of Civil Procedure provide an answer to the issue of venue. [16] Actions affecting
title to or possession of real property or an interest therein (real actions) shall be commenced and tried in the proper court
that has territorial jurisdiction over the area where the real property is situated. On the other hand, all other actions (personal
actions) shall be commenced and tried in the proper courts where the plaintiff or any of the principal plaintiffs resides or
where the defendant or any of the principal defendants resides.[17] The action in the RTC, other than for Collection, was for
the Declaration of Nullity of the Deed of Absolute Sale involving the subject property, which is located at No. 1366 Caballero
St., DasmariasVillage, Makati City. The venue for such action is unquestionably the proper court of Makati City, where the
real property or part thereof lies, not the RTC of
Muntinlupa City.[18]
In this jurisdiction, we adhere to the principle that the nature of an action is determined by the allegations in the Complaint
itself, rather than by its title or heading.[19] It is also a settled rule that what determines the venue of a case is the primary
objective for the filing of the case.[20] In her Complaint, petitioner sought the nullification of the Deed of Absolute Sale on the
strength of two basic claims that (1) she did not execute the deed in favor of respondent; and (2) thus, she still owned one
half () of the subject property. Indubitably, petitioner's complaint is a real action involving the recovery of the subject
property on the basis of her co-ownership thereof.
POLYTRADE CORP vs
Victoriano Blanco

Suit before the Court of First Instance of Bulacan on four causes of action to recover the purchase price of rawhide
delivered by plaintiff to defendant.1 Plaintiff corporation has its principal office and place of business in Makati, Rizal.
Defendant is a resident of Meycauayan, Bulacan. Defendant moved to dismiss upon the ground of improper venue.
He claims that by contract suit may only be lodged in the courts of Manila. The Bulacan court overruled him. He did
not answer the complaint. In consequence, a default judgment was rendered against him on September 21, 1966,
thus:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant ordering defendant to
pay plaintiff the following amounts:
First Cause of Action — P60,845.67, with interest thereon at 1% a month from May 9, 1965 until th

Second Cause of Action — P51,952.55, with interest thereon at 1% a month from March 30, 1965 unt

Third Cause of Action — P53,973.07, with interest thereon at 1% a month from July 3, 1965 until th

Fourth Cause of Action — P41,075.22, with interest thereon at 1% a month2 until the full amount is p
In addition, defendant shall pay plaintiff attorney's fees amounting to 25% of the principal amount due in each
cause of action, and the costs of the suit. The amount of P400.00 shall be deducted from the total amount
due plaintiff in accordance with this judgment.
Defendant appealed.
1. The forefront question is whether or not venue was properly laid in the province of Bulacan where defendant is a
resident.
Section 2 (b), Rule 4 of the Rules of Court on venue of personal actions triable by courts of first instance — and this is
one — provides that such "actions may be commenced and tried where the defendant or any of the defendants resides
or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff." Qualifying this
provision in Section 3 of the same Rule which states that venue may be stipulated by written agreement — "By written
agreement of the parties the venue of an action may be changed or transferred from one province to another."
Defendant places his case upon Section 3 of Rule 4 just quoted. According to defendant, plaintiff and defendant, by
written contracts covering the four causes of action, stipulated that: "The parties agree to sue and be sued in the Courts
of Manila." This agreement is valid.3 Defendant says that because of such covenant he can only be sued in the courts
of Manila. We are thus called upon to shake meaning from the terms of the agreement just quoted.
But first to the facts. No such stipulation appears in the contracts covering the first two causes of action. The general
rule set forth in Section 2 (b), Rule 4, governs, and as to said two causes of action, venue was properly laid in Bulacan,
the province of defendant's residence.
The stipulation adverted to is only found in the agreements covering the third and fourth causes of action. An accurate
reading, however, of the stipulation, "The parties agree to sue and be sued in the Courts of Manila," does not preclude
the filing of suits in the residence of plaintiff or defendant. The plain meaning is that the parties merely consented to
be sued in Manila. Qualifying or restrictive words which would indicate that Manila and Manila alone is the venue are
totally absent therefrom. We cannot read into that clause that plaintiff and defendant bound themselves to file suits
with respect to the last two transactions in question only or exclusively in Manila. For, that agreement did not change
or transfer venue. It simply is permissive. The parties solely agreed to add the courts of Manila as tribunals to which
they may resort. They did not waive their right to pursue remedy in the courts specifically mentioned in Section 2(b) of
Rule 4. Renuntiatio non praesumitur.
Illuminating on this point is Engel vs. Shubert Theatrical Co., 151 N.Y.S. 593, 594. And this, became there the
stipulation as to venue is along lines similar to the present. Said stipulation reads: "In case of dispute, both contracting
parties agree to submit to the jurisdiction of the Vienna courts." And the ruling is: "By the clause in question the parties
do not agree to submit their disputes to the jurisdiction of the Viennese court, and to those courts only. There is nothing
exclusive in the language used. They do agree to submit to the Viennese jurisdiction, but they say not a word in
restriction of the jurisdiction of courts elsewhere; and whatever may be said on the subject of the legality of contracts
to submit controversies to courts of certain jurisdictions exclusively, it is entirely plain that such agreements should be
strictly construed, and should not be extended by implication."
Venue here was properly laid.
2. Defendant next challenges the lower court's grant to plaintiff of interest at the rate of one per centum per
month. Defendant says that no such stipulation as to right of interest appears in the sales confirmation orders which
provided: "TERMS — 60 days after delivery with interest accruing on postdated cheques beyond 30 days." The flaw in
this argument lies in that the interest and the rate thereof are expressly covenanted in the covering trust receipts
executed by defendant in favor of plaintiff, as follows: "All obligations of the undersigned under this agreement of trust
shall bear interest at the rate of one per centum (1%) per month from the date due until paid."
On this score, we find no error.
3. Defendant protests the award of attorneys' fees which totals P51,961.63, i.e., 25% of the total principal
indebtedness of P207,846.51 (exclusive of interest). Defendant's thesis is that the foregoing sum is "exorbitant and
unconscionable."
To be borne in mind is that the attorneys' fees here provided is not, strictly speaking, the attorneys' fees recoverable
as between attorney and client spoken of and regulated by the Rules of Court. Rather, the attorneys' fees here are in
the nature of liquidated damages and the stipulation therefor is aptly called a penal clause. 4 It has been said that so
long as such stipulation does not contravene law, morals, or public order, it is strictly binding upon defendant.5 The
attorneys' fees so provided are awarded in favor of the litigant, not his counsel. It is the litigant, not counsel, who is
the judgment creditor entitled to enforce the judgment by execution. 6
The governing law then is Article 2227 of the Civil Code, viz.: "Liquidated damages, whether intended as an indemnity
or a penalty, shall be equitably reduced if they are iniquitous or unconscionable." For this reason, we do not really have
to strictly view the reasonableness of the attorneys' fees in the light of such factors as the amount and character of the
services rendered, the nature and importance of the litigation, and the professional character and the social standing
of the attorney. We do concede, however, that these factors may be an aid in the determination of the iniquity or
unconscionableness of attorneys' fees as liquidated damages.
May the attorneys' fees (P51,961.63) here granted be tagged as iniquitous or unconscionable? Upon the
circumstances, our answer is in the negative. Plaintiff's lawyers concededly are of high standing. More important is that
this case should not have gone to court. It could have been easily avoided had defendant been faithful in complying
with his obligations. It is not denied that the rawhide was converted into leather and sold by defendant. He raises no
defense. In fact, he did not even answer the complaint in the lower court, and was thus declared in default. Nor does
he deny the principal liability. Add to all these the fact that the writ of attachment issued below upon defendant's
properties yielded no more than P400 and the picture is complete. The continued maintenance by defendant of the
suit is plainly intended for delay. The attorneys' fees awarded cannot be called iniquitous or unconscionable.
In the very recent case of Universal Motors Corporation vs. Dy Hian Tat (1969), 28 SCRA 161, 170, we allowed
attorneys' fees in the form of liquidated damages at the rate of 25% of the total amount of the indebtedness. Here, the
trial court has already reduced the attorneys' fees from the stipulated 25% "of the total amount involved, principal and
interest, then unpaid" to only 25% of the principal amount due. There is no reason why such judgment should be
disturbed.
FOR THE REASON GIVEN, the appealed judgment is hereby affirmed, except that interest granted, in reference to
the fourth cause of action, should start from March 24, 1965.
Costs against defendant-appellant. So ordered.
 UNIMASTERS CONGLOMERATION, INC., petitioner, vs.
COURT OF APPEALS and KUBOTA AGRI MACHINERY PHILIPPINES, INC., respondents.

G.R. No. 119657 February 7, 1997

FACTS: On October 8, 1988 Kubota Agri-Machinery Philippines, Inc. and Unimasters Conglomeration,
Inc. entered into a “Dealership Agreement for Sales and Services” of the former’s product in Samar and
Leyte Provinces. The contract stipulated that all suits arising out of the said Agreement shall be filed within
the proper courts of Quezon City and that UNIMASTERS was to obtain a credit line with Metropolitan
Bank and Trust Co.-Tacloban Branch in the amount of P2, 000,000.00 to answer for its obligations to
KUBOTA. Five years later, UNIMASTERS filed an action on the Regional Trial Court of Tacloban against
KUBOTA, Reynaldo Go, and Metrobank for damages for breach of contract, and injunction with prayer
for temporary restraining order. On the same day the Trial Court issued a restraining order and set the
application for preliminary injunction for hearing. KUBOTA then filed-two motions, one prayed for
dismissal of the case on the ground of improper venue, and the other for the transfer of the date of the
injunction hearing due to the unavailability of respondent’s counsel on the date first agreed upon.
Notwithstanding KUBOTA’s claim that its motion to transfer hearing has been granted, the Trial Court
went ahead with the hearing on the injunction incident. On January 13, 1994, the Trial Court handed down
an Order authorizing the issuance of the preliminary injunction prayed for, upon a bond of P2,
000,000.00. 3 And on February 3, 1994, the same Court promulgated an Order denying KUBOTA's motion
to dismiss. Both orders were challenged by KUBOTA by a petition of certiorari and prohibition filed with
the CA. The Appellate Court agreed with KUBOTA. After its motion for reconsideration was turned down
by the CA, UNIMASTERS appealed to this Court.

The question is whether this stipulation had the effect of effectively eliminating the latter as an optional
venue and limiting litigation between UNIMASTERS and KUBOTA only and exclusively to Quezon City.

ISSUE: WON THE STIPULATION REGARDING THE VENUE HAD THE EFFECT OF
EFFECTIVELY ELIMINATING THE LATTER AS AN OPTIONAL VENUE AND LIMITING
LITIGATION BETWEEN UNIMASTERS AND KUBOTA ONLY AND EXCLUSIVELY TO
QUEZON CITY.

HELD: No. Absent additional words and expressions definitely and unmistakably denoting the parties'
desire and intention that actions between them should be ventilated only at the place selected by them,
Quezon City — or other contractual provisions clearly evincing the same desire and intention — the
stipulation should be construed, not as confining suits between the parties only to that one place, Quezon
City, but as allowing suits either in Quezon City or Tacloban City, at the option of the plaintiff. The
invariable construction placed on venue stipulations is that they do not negate but merely complement or
add to the codal standards of Rule 4 of the Rules of Court. In other words, unless the parties make very
clear, by employing categorical and suitably limiting language, that they wish the venue of actions between
them to be laid only and exclusively at a definite place, and to disregard the prescriptions of Rule 4,
agreements on venue are not to be regarded as mandatory or restrictive, but merely permissive, or
complementary of said rule. The fact that in their agreement the parties specify only one of the venues
mentioned in Rule 4, or fix a place for their actions different from those specified by said rule, does not,
without more, suffice to characterize the agreement as a restrictive one.
Gochan vs Gochan

Respondents were stockholders of the Felix Gochan and Sons Realty Corporation and the Mactan Realty Development
Corporation. Sometime in 1996, respondents offered to sell their shares in the two corporations to the individual petitioners, the
heirs of the late Ambassador Esteban Gochan, for and in consideration of the sum of P200,000,000.00. Petitioners accepted and
paid the said amount to respondents. Accordingly, respondents issued to petitioners the necessary Receipts. [3]In addition,
respondents executed their respective Release, Waiver and Quitclaim,[4]wherein they undertook that they would not initiate any
suit, action or complaint against petitioners for whatever reason or purpose.