CAPATI vs. OCAMPOG.R. No.

L-28742 April 30, 1982 It is well settled that the word “may” is merely permissive and operates to confer
Directory statute. It is permissive or discretionary in nature and merely outlines
the act to be done in such a way that no injury can result from ignoring it or that
its purpose can be accomplished in a manner other than that prescribed and
substantially the same result can be obtained.
Facts:
Plaintiff Virgilio Capati, a resident of Bacolor, Pampanga, was the contractor of the
Feati Bank for the construction of its building in Iriga, Camarines Sur. He entered
into a sub-contract with the defendant Jesus Ocampo, a resident of Naga City
where he undertook to construct the vault walls, exterior walls and columns of
the said Feati building in accordance with the specifications indicated therein.
Defendant further bound himself to complete said construction on or before June
5, 1967. To emphasize this time frame Ocampo affixed his signature below the
discretion upon a party. Under ordinary circumstances, the term “may be”
connotes possibility; it does not connote certainty. “May” is an auxiliary verb
indicating liberty, opportunity, permission or possibility. The stipulation as to
venue in the contract in question is simply permissive. By the said stipulation, the
parties did not agree to file their suits solely and exclusively with the Court of First
Instance of Naga. They merely agreed to submit their disputes to the said court,
without waiving their right to seek recourse in the court specifically indicated in
Section 2 (b), Rule 4 of the Rules of Court. Since the complaint has been filed in
the Court of First Instance of Pampanga, where the plaintiff resides, the venue of
action is properly laid in accordance with Section 2 (b), Rule 4 of the Rules of
Court.

following stipulation in bold letters: “TIME IS ESSENTIAL, TO BE FINISHED 5

JUNE’ 67.”

At the back of the contract which reads:

“14. That all actions arising out, or relating to this contract may be instituted in
the Court of First Instance of the City of Naga.”

Claiming that defendant finished the construction in question only on June 20,
1967, plaintiff filed in the Court of First Instance of Pampanga an action for
recovery of consequential damages. Ocampo (defendant) filed a motion to
dismiss the complaint on the ground that venue of action was improperly laid.
Capati (plaintiff) filed an opposition to the motion, claiming that their agreement
to hold the venue in the Court of First Instance of Naga City was merely optional
to both contracting parties. CFI of Pampanga decided that it is an improper venue.

Issue:

WON the venue of action was improper (CFI of Pampanga)?

Held:

NO, it made use of the word “may”, hence only directory.

Unimaster Conglomeration Inc. vs. Court of Appeals
FACTS:
1.Kubota Agri-Machinery Philippines, Inc.and Unimasters Conglomeration, Inc.
entered into a Dealership Agreement for Sales and Services of the
former's products in Samar and Leyte Provinces.
2. The Dealership Agreement contained a stipulation that “All suits arising out of
this Agreement shall be filed with / in the proper Courts of Quezon City”
3.Five years later, Umimasters filed an action in the RTC of Tacloban against
Kubota, Reynaldo Go and Metrobank for damages and breach of contracts, and
injunction with prayer for temporary restraining order.
4. Kubota filed two motions One for the dismissal of the case on the ground of
improper venue. The other prayed for the transfer of the injunction hearing its
counsel was not available.
5. The court issued an order allowing the issuance of preliminary injunction and a
motion denying the motion to dismiss on the reason that Umimasters’ place of
business is in TaclobanCity while Kubota’s principal place of business is in Quezon
City. In accord with the the Rules of Court, the proper venue would either be
Quezon City or Tacloban City at the election of the plaintiff. Hence, the filing
in the RTC of Tacloban is proper.
6. Kubota appealed both orders on the grounds they were issued with grave
abuse of discretion in a special action for certiorari and prohibition filed with the
CA. Kubota asserted that RTC of Tacloban had no jurisdiction was improperly laid.
7. The Court ofAppeals decided in favor of Kubota and it held that: “the
stipulation respecting venue in its Dealership Agreement with UNIMASTERS did in
truth limit the venue of all suits arising thereunder only and exclusively to the
proper courts of Quezon City”
8. Subsequently, Unimasters filed a motion for reconsideration but was
turned down by the appellate court.
ISSUE:
WON the venue stipulations in a contract has the effect of limiting the venue to a
specified place.
RULING:
NO. The Polytrade doctrine was applied in the case at bar. This doctrine
enunciated that as long as the stipulation does not set forth qualifying or
restrictive words to indicate that the agreed place alone and none other is the
venue of the action, the parties do not lose the option of choosing the venue
Absence of qualifying or restrictive words, venue stipulations in a contract
should be considered merely as agreement on additional forum, not as
limiting venue to the specified place.
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.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 (UNIMASTERS in this case)