G. R. No. 156966 May 7, 2004 PILIPINO TELEPHONE CORPORATION, petitioner, vs. DELFINO TECSON, respondent.

TOPIC: Stipulation as to venue of adhesion contract, valid

Nature of the Case: The SC, through this petition, clarifies the query on whether a stipulation as to venue of suits in a contract of adhesion is immediately deemed invalid.

Facts: Delfin Tecson applied for 6 cellular phone subscriptions with PILTEL on various dates in 1996, which were all approved and later on covered by 6 mobiline service agreements. However, in 2001, Tecson filed with the RTC of Iligan City a complaint against PILTEL for “Sum of Money and Damages”.

PILTEL: Moved to dismiss the case on the ground of improper venue, citing a common provision in the mobiline service agreements to the effect that -

"Venue of all suits arising from this Agreement or any other suit directly or indirectly arising from the relationship between PILTEL and subscriber shall be in the proper courts of Makati, Metro Manila. Subscriber hereby expressly waives any other venues.”

RTC of Iligan: Denied the motion to dismiss and required PILTEL to file an answer on the complaint within 15 days from receipt thereof. It also denied PILTEL’s subsequent MFR.

PILTEL: Appealed to the CA

CA: Affirmed the Decision of the RTC and denied the subsequent MFR filed by PILTEL.

ISSUE: WON the provision in the mobiline service agreements fixing the venue of all suits arising from the contract is clear and binding and that the venue of the complaint was improperly laid.

HELD: Yes, the provision is clear and binding, and the venue was improperly laid.  Section 4, Rule 4, of the Revised Rules of Civil Procedure allows the parties to agree and stipulate in writing, before the filing of an action, on the exclusive venue of any litigation between them. Such an agreement would be valid and binding provided that the stipulation on the chosen venue is exclusive in nature or in intent, that it is expressed in writing by the parties thereto, and that it is entered into before the filing of the suit.

So, the added stipulation that the subscriber "expressly waives any other venue" should indicate, clearly enough, the intent of the parties to consider the venue stipulation as being preclusive in character.

Although such is a clearly a contract of adhesion, it doesn’t invalidate the subject stipulation. The rule is that, should there be ambiguities in a contract of adhesion, such ambiguities are to be construed against the party that prepared it. If, however, the stipulations are not obscure, but are clear and leave no doubt on the intention of the parties, the literal meaning of its stipulations must be held controlling.

A contract of adhesion is just as binding as ordinary contracts. It is true that the SC struck down such contracts as being assailable when the weaker party is left with no choice by the dominant bargaining party and is thus completely deprived of an opportunity to bargain effectively. Nevertheless, contracts of adhesion are not prohibited even as the courts remain careful in scrutinizing the factual circumstances underlying each case to determine the respective claims of contending parties on their efficacy.

In the case at bar, respondent secured six (6) subscription contracts for cellular phones on various dates. It would be difficult to assume that, during each of those times, respondent had no sufficient opportunity to read and go over the terms and conditions embodied in the agreements. Respondent continued, in fact, to acquire in the pursuit of his business subsequent subscriptions and remained a subscriber of petitioner for quite sometime.

A contract duly executed is the law between the parties, and they are obliged to comply fully and not selectively with its terms. A contract of adhesion is no exception.

Hence, PETITION IS GRANTED.