Sweet lines Vs Hon.

Bernardo Teves

FACTS:

Sweet Lines is a shipping company which transports inter-island passengers and cargoes at
Cagayan de Oro City. Rogelio Tiro, a contractor, and Atty. Leovigildo Tandog bought tickets from Sweet
Lines and were bound to Bohol. When they were about to board M/S “Sweet Hope” which was bound
for Tagbilaran City via the port of Cebu, they were informed that the vessel will not proceed to Bohol
because most of the passengers were bound to Surigao. They were advised to relocate and board to
M/S “Sweet Town”. However, the said vessel was already full and they were forced to agree “ to hide at
the cargo section to avoid inspection of the officers of the Philippine Coastguard." Private respondents
alleged that they were, during the trip," "exposed to the scorching heat of the sun and the dust coming
from the ship's cargo of corn grits.” Further, the tickets they bought at Cagayan de Oro City for
Tagbilaran were not honored and they were constrained to pay for other tickets. Thus, Tandog and Tiro
filed a complaint against Sweet Lines for damages and breach of contract of carriage in the CFI of
Misamis Oriental (Cagayan de Oro is the capital of Misamis Oriental).

SWEET LINES: It moved to dismiss the complaint on the ground of improper venue. This was based on
the condition printed at the back of the tickets purchased by Tandog and Tiro which reads:

14. It is hereby agreed and understood that any and all actions arising out of the conditions and
provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the
City of Cebu.

CFI: Denied the motion to dismiss.

Sweet Lines: Motion for Reconsideration.

CFI: Denied the motion for reconsideration.

---Hence, this petition.

ISSUE:

WON a common carrier engaged in inter-island shipping may stipulate thru condition printed at the back
of passage tickets to its vessels that any and all actions arising out of the contract of carriage should be
filed only in a particular province or city, in this case the City of Cebu, to the exclusion of all others.

WON the venue of the action should be in the City of Cebu as stipulated by the condition in the ticket
bought by Tandog and Tiro.

SWEET LINES: The condition is valid and enforceable since Tandog and Tiro acceded to it when they
purchased the tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for
passage to Tagbilaran, Bohol. Moreover, venue may be validly waived and it is clear that the ticket
stipulates that the condition had fixed the venue in the City of Cebu. Thus, the orders of the CFI Judge
are an unwarranted departure from established jurisprudence governing the case; and that he acted
without or in excess of his jurisdiction in is the orders complained of.

TANDOG AND TIRO: The condition in the ticket is not valid as it is not an essential element of the
contract of carriage, being in itself a different agreement which requires the mutual consent of the
parties to it. Tandog and Tiro had no say in its preparation, the existence of which they could not refuse,
hence, they had no choice but to pay for the tickets and to avail of petitioner's shipping facilities out of
necessity. Further, the carrier "has been exacting too much from the public by inserting impositions in
the passage tickets too burdensome to bear," and the condition which was printed in fine letters is an
imposition on the riding public and does not bind respondents. Lastly, while venue of actions may be
transferred from one province to another, such arrangement requires the "written agreement of the
parties", not to be imposed unilaterally; and that assuming that the condition is valid, it is not exclusive
and does not, therefore, exclude the filing of the action in Misamis Oriental.

HELD: No, the actuations of Sweet Lines (putting a condition at the back of its tickets fixing the venue for
any complaints filed against them in the City of Cebu) is contrary to public policy. Thus, the venue was
not improperly laid in the CFI of Misamis Oriental.

There is no question that there was a valid contract of carriage entered into by petitioner and private
respondents and that the passage tickets, upon which the latter based their complaint, are the best
evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and
object, are present.

However, with respect to the condition which is in issue in this case — printed at the back of the
passage tickets, these are commonly known as "contracts of adhesion," the validity and/or
enforceability of which will have to be determined by the peculiar circumstances obtaining in each case
and the nature of the conditions or terms sought to be enforced. For, "(W)hile generally, stipulations in
a contract come about after deliberate drafting by the parties thereto, ... there are certain contracts
almost all the provisions of which have been drafted only by one party, usually a corporation. Such
contracts are called contracts of adhesion, because the only participation of the party is the signing of
his signature or his 'adhesion' thereto. Insurance contracts, bills of lading, contracts of make of lots on
the installment plan fall into this category"

By the peculiar circumstances under which contracts of adhesion are entered into — namely, that it is
drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the
other party, in this instance the passengers, private respondents, who cannot change the same and who
are thus made to adhere thereto on the "take it or leave it" basis — certain guidelines in the
determination of their validity and/or enforceability have been formulated in order to that justice and
fair play characterize the relationship of the contracting parties.

To the same effect and import, and, in recognition of the character of contracts of this kind, the
protection of the disadvantaged is expressly enjoined in Art. 24 of the New Civil Code —

In all contractual property or other relations, when one of the parties is at a disadvantage on account of
his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the
courts must be vigilant for his

protection.

Considered in the light Of the foregoing norms and in the context of circumstances prevailing in the
inter-island shipping industry in the country today, the SC declared the condition at the back of the
passage to be void and unenforceable. First, under circumstances obligation in the inter-island shipping
industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of
the passage tickets. Second, the condition subverts the public policy on transfer of venue of proceedings
of this nature, since the same will prejudice rights and interests of innumerable passengers in different s
of the country who, under the said condition, will have to file suits against petitioner only in the City of
Cebu.

Moreover, it is hardly just and proper to expect the passengers to examine their tickets received from
crowded/congested counters, more often than not during rush hours, for conditions that may be
printed much charge them with having consented to the conditions, so printed, especially if there are a
number of such conditions m fine print, as in this case. Thus, passengers cannot be expected to read all
the conditions much less consider the public policies that the conditions therein violate.

Additionally, although venue may be changed or transferred from one province to another by
agreement of the parties in writing t to Rule 4, Section 3, of the Rules of Court, such an agreement will
not be held valid where it practically negates the action of the claimants, such as the private
respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the
convenience of the plaintiffs as well as his witnesses and to promote the ends of justice. Considering the
expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the
City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat,
instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the
respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of
the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to,
much less prejudice, petitioner.

Public policy is ". . . that principle of the law which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against the public good ... 22 Under this principle"
... freedom of contract or private dealing is restricted by law for the good of the public. Clearly, the
subject condition, if enforced, will be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger cants outside of Cebu City, thus placing petitioner company at a
decided advantage over said persons, who may have perfectly legitimate claims against it. The said
condition should, therefore, be declared void and unenforceable, as contrary to public policy — to make
the courts accessible to all who may have need of their

Auction in Malinta vs Warren Embes Luyaben

Facts:

Warren Embes Luyaben filed a complaint for damages against Auction in Malinta, Inc. (AIMI) in RTC-
Kalinga where Luyaben resides. AIMI moved to dismiss the complaint on the ground of improper venue
by invoking the following stipulation in their agreement: ALL COURT LITIGATION PROCEDURES SHALL BE
CONDUCTED IN THE APPROPRIATE COURTS OF VALENZUELA CITY, METRO MANILA.

Issue:

Did the stipulation in the Agreement effectively limit the venue of the case exclusively to the proper
court of Valenzuela City?

Held:
No. Mere stipulation on the venue of an action is not enough to preclude parties from bringing a case in
other venues. It must be shown that such stipulation is exclusive. In the absence of qualifying or
restrictive words, such as “exclusively” and “waiving for this purpose any other venue, “shall only”
preceding the designation of venue, “to the exclusion of the other courts,” or words of similar import,
the stipulation should be deemed as merely an agreement on an additional forum, not as limiting venue
to the specified place.

United Overseas Bank Phils. v. Rosemoore Mining & Development Corp.

Facts: Rosemoore Mining & Development Corporation (Hereon Rosemoor) in order to secure a credit
facility amounting to 80Million executed a mortgage agreement with United Overseas Bank Phils.
(Hereon Bank) which covered six (6) parcels of land all registered under Rosemoor. Rosemoor defaulted
which caused the extrajudicial foreclosure of the properties. The bank was the highest bidder in all of
the properties. Hence the filing of the case by Rosemoor before the Manila RTC and Malolos RTC. (The
issue of the case, filing of 2 actions in 2 different courts) Manila RTC: (Personal Action) Rosemoor filed
an action to receive the remaining proceeds of the loan. However, the bank filed a motion to dismiss the
case because it contends Rosemoor is violating forum shopping, having initiated a case in Malolos RTC.
However the motion to dismiss was denied, likewise it was dismissed by the CA holding that there was
no forum shopping. Malolos RTC: (Real Action) Rosemoor second action was filed her to restrain the
foreclosure of the properties mortgaged to secure the loan which was not due yet. As it here, the bank
filed a motion to dismiss the case due to violation of forum shopping but the likewise it was denied by
the RTC and CA. Hence the two petitions were consolidated by the Supreme Court. Hence the case.

Issue: WON venue of the filing of the cases resulted to forum shopping.

Held: The Supreme Court ruled in favor of Rosemoor, and affirming the ruling of the lower courts that
there was no violation of forum shopping Ratio: The Malolos case was filed for the purpose of
restraining the Bank from proceeding with the consolidation of the titles over the foreclosed Bulacan
properties because the loan secured by the mortgage had not yet become due and demandable. While
the right asserted in the Manila case is to receive the proceeds of the loan, the right sought in the
Malolos case is to restrain the foreclosure of the properties mortgaged to secure a loan that was not yet
due. Moreover, the Malolos case is an action to annul the foreclosure sale that is necessarily an action
affecting the title of the property sold. It is therefore a real action which should be commenced and
tried in the province where the property or part thereof lies. The Manila case, on the other hand, is a
personal action involving as it does the enforcement of a contract between Rosemoor, whose office is in
Quezon City, and the Bank, whose principal office is in Binondo, Manila. Personal actions may be
commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the
defendants or any of the principal defendants resides, at the election of the plaintiff. It was subsequent
to the filing of the Manila case that Rosemoor and Dr. Pascual saw the need to secure a writ of
injunction because the consolidation of the titles to the mortgaged properties in favor of the Bank was
in the offing. But then, this action can only be commenced where the properties, or a portion thereof, is
located. Otherwise, the petition for injunction would be dismissed for improper venue. Rosemoor,
therefore, was warranted in filing the Malolos case and cannot in turn be accused of forum-shopping