HSBC vs SHERMAN 176 SCRA 331 (1989)

Facts: Eastern Book & Supply Service (Singapore) was granted by HSBC Singapore an overdraft facility. Sherman, et. al. and directors of Eastern Book executed a Joint and Several Guarantee in favor of HSBC. Eastern Book defaulted. Hence, HSBC filed a suit for collection against them before the Regional Trial Court of Quezon City. Sherman filed a Motion to Dismiss on the ground of lack of jurisdiction over the complaint and persons of the defendants. The guarantee provides:  “This guarantee and all rights, obligations and liabilities arising hereunder shall be construed and determined under and may be enforced in accordance with the laws of the Republic of Singapore.”

Held:  Philippine courts have jurisdiction over the suit. The stipulation shall be liberally construed. A stipulation as to venue does not preclude the filing of suits in the residence of plaintiff or defendant under Sec 2 (b), Rule 4 of the Rules of Court, in the absence of qualifying or restrictive words in the agreement which indicate that the place named is the only venue agreed upon by the parties. The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all the rest, have jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the right of a state to exercise authority over persons and things within its boundaries subject to certain exceptions. This authority, which finds its source in the concept of sovereignty, is exclusive within and throughout the domain of the state. A state is competent to take hold of any judicial matter it sees fit by making its courts and agencies assume jurisdiction over all kinds of cases brought before them.