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4-Philippine Bank of Communications v.
Lim (2005)- Rizon
Petitioner filed a complaint against Tri-Oro International Trading & Manufacturing Corporation for the collection of a
deficiency amounting to P4,014,297.23 in the RTC of Manila. Petitioner's cause of action is the alleged failure to pay
the debt in violation of the PN; as against Elena Lim and Ramon Calderon, in violation of the SA.
It was expressly stipulated therein that the venue for any legal action that may arise out of said promissory note shall
be Makati City, 'to the exclusion of all other courts.
[Respondents] moved to dismiss the complaint on the ground of improper venue, invoking the stipulation contained in
the last paragraph of the promissory note with respect to the restrictive/exclusive venue.
Petitioner bank averred that respondents had entered into the Surety Agreement (SA) to guarantee existing and
future credit facilities, and that they had executed the Promissory Note (PN) to document their loan. Petitioner alleged
that the venue provided in the PN does not apply to the SA. Accordingly, the action on the SA may be filed in Manila,
petitioner's place of residence instead of the venue provided in the PN – Makati City.
Petitioner adds that its Complaint filed in the trial court had two causes of action: the first was founded on a breach of
the PN; and the second, on a violation of the SA. Consequently, it was allegedly correct to join the causes of action
and to file the case in Manila, per Section 5 of Rule 2 of the Rules of Court, which reads: (c) Where the causes of action are
between the same parties but pertain to different venue or jurisdictions, the joinder may be allowed in the Regional Trial Court provided one of
the causes of action falls within the jurisdiction of the said court and venue lies therein.
ISSUE: Whether or not the restrictive stipulation on the venue of actions contained in the PN applies to sureties in the
absence of stipulations in SN.
 Yes. A restrictive stipulation on the venue of actions contained in a promissory note applies to the surety
agreement supporting it, because the nature of the two contracts and the factual circumstances surrounding
their execution are intertwined or interconnected. The surety agreement is merely an accessory to the
principal loan agreement embodied in the promissory note. Hence, the enforcement of the former depends
upon the latter.
 In enforcing a surety contract, the "complementary-contracts-construed-together" doctrine finds application.
According to this principle, 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 at their true
meaning; certain stipulations cannot be segregated and then made to control. This no-segregation principle
is based on Article 1374 of the Civil Code. The aforementioned doctrine is applicable to the present case.
Incapable of standing by itself, the SA can be enforced only in conjunction with the PN. The latter
documents the debt that is sought to be collected in the action against the sureties.
 A stipulation as to venue does not preclude the filing of the action in other places, unless qualifying or
restrictive words are used in the agreement.
 The cause of action, however, does not affect the venue of the action. Since the cases pertaining to both
causes of action are restricted to Makati City as the proper venue, petitioner cannot rely on Section 5 of
Rule 2 of the Rules of Court.
 Petitioner's final plea for liberality in applying the rules on venue must be rejected. The PN was a contract of
adhesion. Ambiguities therein are to be construed against the party that prepared the contract. On the same
principle, petitioner can no longer disavow the stipulation on venue, considering that it drafted the Surety
Agreement. Besides, this alleged technicality caused no miscarriage of substantial justice, as petitioner may
refile the case.

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4-Philippine Bank of Communications v.

Lim (2005)- Rizon

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