PHILIPPINE INTERNATIONAL TRADING CORPORATION, PETITIONER, VS. M.V. ZILEENA, ZILEENA NAVIGATION CO., S.A. AND MARINE MANNING AND MANAGEMENT CORPORATION, RESPONDENTS.

The legal query raised in the petition for review on certiorari before Us is whether the venue
of the collection case was properly laid in the Regional Trial Court of Makati,
bearing in mind the stipulation of the parties embodied in the agreement dated
November 3, 1990 which reads:

“10. This Agreement shall be governed by and
construed in accordance with Singapore Law and all disputes arising hereunder
shall be subject to the exclusive jurisdiction of the High Court of Singapore.”
(p. 5, Agreement, p. 69, Rollo)

When the bags of portland cement belonging to petitioner were
supposedly lost or damaged while the same
were on board respondents’ vessel for shipment from Lianyungang, China
to Manila, petitioner Philippine International Trading Corporation sued for
recovery of the value thereof. The
complaint, with the corollary prayer for the issuance of the writ of
preliminary attachment, was raffled to Branch 138 of the Regional Trial Court
of the National Capital Judicial Region stationed at Makati whose presiding
judge issued a writ of preliminary attachment against M/V Zileena, the vessel
of respondents on the same day the suit was initiated.

Six days thereafter, respondents as the defendants, moved to lift
the writ of attachment (pp. 70-76, Rollo) and on January 18, 1991 petitioner
filed its amended complaint with an application for the issuance of a new writ
of attachment. The provisional relief
sought by petitioner was opposed by respondents to no avail. A new writ of preliminary attachment was
issued.

On January 22, 1991, respondents moved to lift the writ of
attachment (p. 8, Comment; p. 45, Rollo; pp. 92-95, Rollo) and on January 25,
1991, the court a quo resolved to discharge the attachment upon
the filing of a counterbond by respondents. On January 28, 1991, the court of origin ordered the discharge of the
writ of attachment when respondents posted the requisite counterbond.

Thereafter, respondents moved to dismiss the suit against them on
three grounds, to wit:

“I.

VENUE HAS BEEN IMPROPERLY LAID CONSIDER­ING
THAT THE PARTIES HAVE AGREED TO SUB­MIT THEIR CONTRACTUAL DISPUTES EXCLUSIVELY
TO THE HIGH COURT OF SINGAPORE IN ACCORDANCE WITH SINGAPORE LAW.

II.

THE CLAIM SET FORTH IN THE COMPLAINT HAS
BEEN WAIVED, ABANDONED AND/OR OTHERWISE EXTINGUISHED CONSIDERING THAT:

(A) BASED ON THE ACTIONABLE AGREEMENT ATTACHED
TO THE COMPLAINT, PLAINTIFF EXPRESSLY AGREED NOT TO ATTACH OR ARREST THE VESSEL
WHILST SHE WAS IN THE PHILIPPINES.

(B)
UNDER THE AGREEMENT, PLAINTIFF’S CARGO WAS EXPRESSLY CARRIED UNDER ‘FIOS’ TERMS;
THUS, THE RESPONSIBILITY FOR THE LOADING, HANDLING, STOWING AND DISCHARGING THE
CARGO RESTED WITH THE PLAINTIFF.

III.

PLAINTIFF HAS NO CAUSE OF ACTION AGAINST
DEFENDANT MARINE MANNING AND MANAGEMENT CORPORATION IN THAT THE SAID DEFENDANT
IS NOT A REAL PARTY-IN-INTEREST.” (pp. 103-104, Rollo)

On November 26, 1991, the assailed order of dismissal was issued
on the following justification:

“But, whatever may be the correct interpretation of paragraph 7 of
the Agreement, the Court action calling for such an interpretation must be
institu­ted in the Courts of Singapore pursuant to the agreement of the parties
as to the venue of all court actions arising from the agreement. This stipulation in the agreement is not a
stipulation on jurisdiction as claimed by the plaintiff but an agreement on the
venue of all actions between the parties arising out of the agreement. This is in accord with the ruling in the
case of Lingner and Fiser GMBH vs. Intermediate Appellate Court, 125 SCRA
522. In this case of Lingner, the
provision of the contract, involved, reads: ‘All legal settlements within the compass of this Agreement shall fall
under the jurisdiction of Philippine Courts.’ When sued, Lingner moved to
dismiss the complaint on the ground among others that it could not be sued in
Philippine Courts because it was not licensed to do business in the
Philippines. In resolving this issue,
the Supreme Court ruled as follows:

‘x x x Whether Lingner is or is not doing business in the
Philippines will not matter because the parties had expressly stipulated in the
Agreement that all controversies based on the Agreement shall fall under the
jurisdiction of Philippine Courts. In
other words there was a covenant on venue to the effect that Lingner can be
sued by Philcem before Philippine Courts in regards to a controversy related to
the AGREEMENT. (Supra p. 527.
Underscoring ours.)

Thus, when plaintiff stipulated in its Agreement with ‘Zileena’
Navigation Co., S.A. that ‘xxx all disputes arising hereunder shall be subject
to the exclusive jurisdiction of the High Court of Singapore’ it simply agreed
to sue and be sued only in the Courts of Singapore.” (pp. 24-25, Rollo)

In the petition at bar, petitioner insists that paragraph 10 of
the covenant is an illegal agreement on competencia because it deprives
Philippine courts from handling any case that may arise under the
agreement. At any rate, petitioner
asseverates that even granting arguendo that the proviso in
question is an agreement on venue, respondents are nonetheless estopped from
assailing the forum of the collection suit when respondents twice sought the
lifting of the attachment against their vessel and when they posted a
counterbond for the discharge of the writ of attachment.

Instead of directly responding to the basic points raised by
petitioner, respondents mixed the chaff and the grain, so to speak, by infusing
the intrinsic worth of their exculpations into the simple procedural backdrop
of the legal tangle. Scattered on the
face of the Comment to the Petition are piecemeal but subtle defenses which
should not now be addressed in as much as they properly pertain to, and must be
ventilated in, the court of origin.

While We perceive merit in the petition, it must be impressed
upon petitioner that paragraph 10 of the Agreement may not be equated with competencia
and neither does it suggest that Philippine courts are divested of authority by
reason of the parties’ express preference to vest jurisdiction in the High
Court of Singapore. Indeed, it was
emphasized in International Harvester Co. vs. Hamburg American Line, (42
Phil. 845 [1918]):

“The only other point raised by the bill of exceptions, which we
deem it necessary to notice, is based on a provision in the bill of lading to
the effect that all disputes arising under the contract are, at the option of
the defendant company, to be decided according to German law and exclusively by
the Hamburg courts. From this it is
argued that the Court of First Instance erred in assuming jurisdiction of the
action and that the case should have been decided in accordance with the
principles of German law.

It can not be admitted that a pro­vision of this character has the
effect of ousting the jurisdiction of the courts of the Philippine Islands in
the matter now before it. An express
agreement tending to deprive a court of jurisdiction conferred on it by law is
of no effect. (Molina vs. De la Riva, 6
Phil., 12.)” (p. 855)

In resolving this problem, which is analogous to the scenario
that obtained in Atlas Developer and Steel Industries, Inc. vs. Sarmiento
Enterprises, Inc. (184 SCRA 153
[1990]), petitioner must heed the reminder that:

“… Although it provides that the City Court of Manila shall have
‘jurisdiction’ over a legal action arising from the contract, the parties must
have intended to fix the venue only, for jurisdiction over an action is
conferred by law, and may not be changed by mere agreement of the parties
(Calimlim, et al. vs. Ramirez, et al., 118 SCRA 399; De Jesus, et al. vs. Garcia,
et al., 19 SCRA 554).” (p. 155)

On the second point concerning the demeanor of respond­ents in
invoking the authority of the local court, We agree with petitioner’s
contention that respondents are indeed precluded from interposing an objection via
a motion to dismiss grounded on improper venue since the actuations displayed
by respondents before filing the bill of excep­tion are tantamount to voluntary
submission to the juris­diction of the lower court. The filing of two motions for the lifting of the writ of
attachment, the submission of a memorandum in support of the urgent motion to
discharge the writ of attachment (p. 77, Rollo), the posting of a counterbond
to dissolve the writ of attachment, the filing of a demurrer on an additional
ground that petitioner has no cause of action (p. 103, Rollo), the filing of a reply to petitioner’s opposition to
the motion to dismiss (p. 111, Rollo) — all of these can but signify a waiver
of respondent’s objection to improper venue (Marquez Lim Cay vs. Del Rosario,
55 Phil. 962 [1931]). Verily, venue
involves no more and no less than a personal privilege which may be lost by
failure to assert it seasonably, by formal submission in a cause, or by
submission through conduct (56 Am. Jur. 44; 1 Francisco, Revised Rules
of Court in the Philippines 366 [2nd ed., 1973]).

Respondents rely on the pronouncement of this Court in Sy vs. Tyson Enterprises, Inc.
(119 SCRA 367 [1982]) to the effect that the filing therein of a motion for a
bill of particulars, or any pleading for that matter, before submitting a
motion to dismiss cannot be construed as a
waiver of objection to venue since Section 4, Rule 4 of the Revised
Rules of Court does not provide that improper venue should be challenged by a
special appearance or before any pleading is filed. Yet, the Sy case contained an implicit reference to, and
recognition of the doctrine announced in Marquez Lim Cay vs. Del Rosario
(supra) relative to acts of a party
which can give rise to an effective waiver of objection based on improper
venue, thus:

“The case of Marquez Lim Cay vs. Del Rosario, 55 Phil. 962, does
not sus­tain the trial court’s order of denial because in that case the
defendants, before
filing a motion to dismiss on the ground of improper venue, interposed a
demurrer on the ground that the com­plaint does not state a cause of
action. Then, they filed a motion for
the disso­lution of an attachment, posted a bond for its dissolution and later
filed a motion for the assessment of the damages caused by the attachment. All those acts constituted a submission to the trial
court’s jurisdiction and a waiver of the objection based on improper venue
under Section 377 of the Code of Civil Procedure.” (p. 372)

Commenting on Sy, Justice Oscar M. Herrera succinctly says
that even as said case held that “the filing of a motion for bill of
particulars is not a waiver, yet the filing of a demurrer on the ground that
the complaint did not state a cause of action, a motion for dissolution of an
attachment, posting of a bond for dissolution and motion for assessment of
damages constituted a submission to the trial court’s jurisdiction and waiver
of the objection based on venue.” (1
Herrera, Remedial Law 166 [1990]).

In fine, respondents’
objection grounded on improper venue may be deemed waived on the basis of the
following acts they did:

a)
Filing of two motions
for the lift­ing of the writ of attachment;

b)
The submission of a
memorandum in support of the urgent motion to discharge the writ of attachment
(p. 77, Rollo);

c)
The posting of a counterbond
to dis­solve the writ of attachment;

d)
The filing of a
demurrer on an addi­tional ground that petitioner has no cause of action (p.
103, Rollo); and

e)
The filing of a reply
to petitioner’s opposition to the motion to dismiss (p. 111, Rollo).

In view of the foregoing observations, We hereby hold that the
lower court erred in confining its discussions to the issue of whether
paragraph 10 of the covenant refers to jurisdiction or venue, without
considering the more pivotal issue as to whether respondents, vis-a-vis
the demeanor they demonstrated, can still object to improper forum.

WHEREFORE, the petition is hereby GRANTED. The order date November 26, 1991 is SET
ASIDE and the case is hereby REMANDED to the court of origin for further
proceedings.

SO ORDERED.

Gutierrez, Jr., (Chairman), Bidin, Davide, Jr., and Romero, JJ., concur.