SAN MIGUEL CORPORATION VS. TROY FRANCIS L. MONASTERIO [G.R. NO.

151037] PROMULGATED 23 JUNE 2005

FACTS: On August 1, 1993, SMC entered into an Exclusive Warehouse Agreement (EWA) with SMB Warehousing Services (SMB), represented by its manager, Monasterio. SMB was tasked to provide land, physical structures, equipment and personnel for storage, warehousing and related services. The EWA also provided that the venue of the action for the enforcement or duties/rights of the parties should be the courts in Makati or Pasig, Metro Manila only. On November 3, 1998, Monasterio, a resident of Naga City, filed a complaint against SMC before the Regional Trial Court of Naga City, Branch 20 for unpaid cashiering fees. He alleged that from 1993-1997, aside from rendering service as warehouseman, he was given the additional task of cashiering in SMCs Sorsogon and Camarines Norte sales offices for which he was promised a separate fee. Monasterio added that SMC started paying him P11,400 per month for said services on December 1, 1997. Meanwhile, SMC claimed that the case should be dismissed on the ground of improper venue since the venue, pursuant to paragraph 26(b) of the EWA, should be Pasig or Makati courts. They alleged that Monasterios cashiering services is included in his position as warehouse contractor. The RTC dismissed the Motion to Dismiss of SMC. ISSUE: Did the RTC of Naga City err in denying the motion to dismiss filed by SMC alleging improper venue? HELD: No. The cashiering services of Monasterio is not included in his position as warehouseman. Moreover, the separate consideration of P11400 paid by SMC for his cashiering services supports such conclusion. The Court also held that the exclusive venue stipulation in the EWA restricts the parties to it in suits relating to the breach of the said contract. If the exclusivity clause does not make the stipulation all encompassing to include those not related to the enforcement of the contract, such stipulation should be strictly applied to the specific agreement or undertaking only. If not, it would work against the basic principles of freedom to contract and the right of a weak party to free access to courts. In addition, the expansion of the scope of the restrictive stipulation would result in unwarranted limitation, which may be found to be contrary to the intention of the parties, arbitrary, or oppressive. Consequently, since the present case for the collection of sum of money filed by herein Monasterio is a personal action, there is no compelling reason why it could not be instituted in the RTC of Naga City, the place where plaintiff resides. RELEVANT OBLICON PROVISIONS: Arts. 1159, 1370, 1372. PREPARED BY: NGO, Perpetua Calliope