Philippine Bank of Communications (PBCOM) v Elena Lim, Ramon Calderon and Trio-

Orio International Trading & Manufacturing Corp

Date: April 12 2005

Ponente: J Panganiban
Nature: Rule 45 Petition for Review

Facts:

 PBCOM (P) filed a complaint against (R) Elena Lim, Ramon Calderon and
Trio Orio before RTC Manila for collection of deficiency amounting to
4,014,297.23 exclusive of interest
o P alleges that R obtained a loan from it and executed a continuing surety
agreement for all loans, credit, etc. that were extended or may be
extended in the future
o P granted a renewal of a loan evidenced by a promissory note renewal in
the amount of 3M pesos
 It was stipulated therein that the venue for any legal action
that may arise out of the said promissory note shall be
Makati City to the exclusion of other courts
o R allegedly failed to pay said oblig upon maturity
o P foreclosed the real property mortgaged by R valued at 1,081,600
leaving a deficiency of 4,014,297.23 as of Aug 31,1999
o R moved to dismiss the complaint on the ground of improper venue
invoking the stipulation contained with respect to restrictive/exclusive
venue
o TC denied the motion – ruled that P had a separate cause of action arising
from the promissory note ant the continuing surety agreement
 Supported its order with cases where venue was held to be merely
permissive
o CA Ruled
 that R alleged debt was based on the Promissory Note which had
provided an exclusionary stipulation on venue “to the exclusion of
all other courts”
 Surety agreement even if silent as to venue, was an accessory
contract that should have been interpreted in consonance with the
Promissory Note
Issue: WON stipulation in venue is applicable in this case

Held:
 As will be discussed below, the cause of action to recover on the basis of the
Surety Agreement is inseperable from that which is based on the PN
 Rule on Venue
o Sec 2 Rule 4 provides that personal actions must be commenced and tried
 (1) in the place where the plaintiff resides
 (2) where the defendant resides
 (3) in case of non-resident defendantsm where they may be found,
art the choice of the plaintiff
o This rule on venue does not apply when the law specifically provides
otherwise or when before the filing of the action – the contracting
parties agree in writing on the exclusive venue
o Venue is not jurisdictional and may be waived by the parties
  A stipulation on venue does not preclude the filing of the action in
other places, unless qualifying or restrictive words are used in the
agreement
 As applied
o P arguments
 claims no restrictions were stipulated on the Surety Agreement and
thus, an action on the Surety Agreement may be fiked in Manila, P
place of residence
 complaint filed in TC had 2 causes of action and merely joined the
causes of action as per Rule 2 sec 5
 breach of Promissory note
 violation of the Surety Agreement
o SC
 Even if surety acts as secondary to the principal obligation, the
surety assumes liability as a regular party to the undertaking
 In enforcing a surety contract, the “the complementary
contracts construed together” doctrine finds application
 An accessory contract must be read in its entirety and
together with the principal agreement
 This principle is used in construing contractual stipulations in
order to arrive ath their true meaning
 Certain stipulation cannot be segregated
 Based on Art 1374
 Surety can only be enforced in conjunction with the Promissory note
 Surety on existing and future loans
 Circumstances of promissory and Surety are so intertwined
that cannot be separated
 Promissory note was a contract of adhesion – “the venue for any
legal action that may arise out of the Promissory Note”
 the legal action against the sureties arose not only from the
Surety agreement but also on the promissory
 other issues
o cause of action
 P was correct in stating that it had 2 causes of action
 However, the vital issue present in this case is WON the action
against the sureties is covered by the restriction on venue stipulated
on the Promissroy notes (resolved above^)
o Liberal Construction
 Contract of adhesion so ambiguities should be construed against the
maker
 Created the Promissory and surety agremment
 Blame yourself for this