TOPIC: Venue of Personal Actions

HYATT ELEVATORS v. GOLDSTAR ELEVATORS

Facts: In this case, the petitioner is Goldstar Elevator Philippines Inc. and on the other hand the
private respondent, Hyatt Elevators and Escalators Company. Both engaged in installing,
maintaining/servicing of elevators and escalators. Hyatt (herein petitioner) filed an unfair trade
practices and damages against LG industrial systems Co. Ltd, and LG International Corporation
alleging that it was appointed as the exclusive distributor of LG elevators and escalators in the
Philippines under Distributorship Agreement. LG filed a motion to dismiss alleging that lack of
jurisdiction over the persons of defendant, improper venue and failure to state a cause of action.
Hyatt filed a motion for leave of court to amend the complaint, alleging that LG transferred all assets
to a joint venue agreement with Otis elevator Company of the USA to LG Otis Elevator Company
Goldstar filed a Motion to dismiss the amended complaint alleging that venue was improperly laid as
neither the Hyatt, LG or Goldstar itself resided in Mandaluyong city where the case was originally
filed. The RTC denied the motion. The CA dismissed the case and held that Makati was the principal
place of business of both respondent and petitioner, as stated in the latter’s Articles of Incorporation,
that place was controlling for purposes of determining the proper venue.

Issue: Whether or not the venue was improper.

Held: Yes, petition denied.

Section 2 of Rule 4 of the 1997 Revised Rules of Court:

"Sec. 2. Venue of personal actions. – All other actions may be commenced and tried where the
plaintiff or any of the principal plaintiff resides, or where the defendant or any of the principal
defendant resides, or in the case of a non-resident defendant where he may be found, at the election
of the plaintiff."

Since both parties to this case are corporations, there is a need to clarify the meaning of "residence."
The law recognizes two types of persons: (1) natural and (2) juridical. Corporations come under the
latter in accordance with Article 44(3) of the Civil Code.

A corporation, however, has no residence in the same sense in which this term is applied to a natural
person. This is precisely the reason why the Court in Young Auto Supply Company v. Court of
Appeals ruled that "for practical purposes, a corporation is in a metaphysical sense a resident
of the place where its principal office is located as stated in the articles of incorporation."

The residence of a corporation is the place where its principal office is established.

In the present case, there is no question as to the residence of respondent. What needs to be
examined is that of petitioner. the latter’s principal place of business is Makati, as indicated in its
Articles of Incorporation. Since the principal place of business of a corporation determines its
residence or domicile, then the place indicated in petitioner’s articles of incorporation
becomes controlling in determining the venue for this case.

Jurisprudence has, however, settled that the place where the principal office of a corporation
is located, as stated in the articles, indeed establishes its residence. This ruling is important in
determining the venue of an action by or against a corporation.
TOPIC: Venue of Personal Actions

Golden Arches Development Corp. v. St. Francis Square Holding Inc

Facts: Golden Arches Development Corporation (petitioner) entered into a lease contract over a
property owned by Prince City Realty, Inc. located at the corner of Julia Vargas Avenue and Bank
Drive, Ortigas Center, Mandaluyong City. The lease contract commenced on June 27, 1991 and was
to terminate on February 27, 2008. On November 2, 2006, however, petitioner informed St. Francis
Square Holdings, Inc. (respondent), successor-in-interest of ASB Holdings, Inc. by which Prince
Realty, Inc. eventually became known, of its intention to discontinue the lease. Amicable negotiations
between the parties having failed, respondent filed an action for breach of contract and damages
against petitioner before the RegionalTrial Court (RTC) of Mandaluyong. Petitioner filed a Motion to
Dismiss for lack of cause of action and improper venue. It claimed that respondent maintained its
principal address in Makati as records of the Securities and Exchange Commission (SEC) in 2007.
Opposing the Motion to Dismiss, respondent claimed that it had closed down its office
in Makati effective December 31, 2005 as it now holds office in Mandaluyong City of which petitioner
is aware. Mandaluyong RTC denied the motion to dismiss. Petitioner moved to reconsider the denial
of the motion, pointing out that respondent violated SEC Memorandum Circular No.
03 dated February 16, 2006, the relevant portion of which reads: In line with the full disclosure
requirement of existing laws, all corporations and partnerships applying for registration with the
Securities and Exchange Commission should state in their Articles of Incorporation or Articles of
Partnership the (i) specific address of their principal office, which shall include, if feasible, the street
name, barangay, city or municipality; and (ii) specific residence address of each incorporator,
stockholder, director, trustee, or partner. Metro Manila shall no longer be allowed as address of
the principal office.

Issue: Whether venue was proper.

Held: The petition fails. Venue, in essence, concerns a rule of procedure. In personal actions, it is fixed
for the greatest possible convenience of the plaintiff and his witnesses,and to promote the ends of
justice.
Respondents complaint, being one for enforcement of contractual provisions and recovery of
damages, is in the nature of a personal action which, under Section 2, Rule 4 of the Rules of Court,
shall be filed at the plaintiffs residence. Specifically with respect to a domestic corporation, it is in a
metaphysical sense a resident of the place where its principal office is located as stated in the articles
of incorporation.

IN FINE, although respondents Amended Articles of Incorporation of 2007 indicates that its principal
business address is at Metro Manila, venue was properly laid in Mandaluyong since that is where it
had actually been residing (or holding its principal office) at the time it filed its complaint. Section 2,
Rule 4 of the Rules of Court, quoted earlier, authorizes the plaintiff (respondent in this case) to make
a choice of venue for personal actions whether to file the complaint in the place where he resides or
where defendant resides.Respondents choice must be respected as [t]he controlling factor in
determining venue for cases is the primary objective for which said cases are filed.Respondents
purpose in filing the complaint in Mandaluyong where it holds its principal office is obviously for its
convenience and for orderly administration of justice.
TOPIC: Venue of actions against non-residents

Ang v. Ang

Facts: Spouses Alan & Em Ang (respondents) obtained a loan ($300k) from Theodore & Nancy Ang
(petitioners), also, a promissory note was executed in favor of the petitioners wherein they promised
to pay the latter the said amount, with interest at the rate of 10% per year, upon demand. However,
despite repeated demands, the respondents failed to pay the petitioners. Since the loan already
amounted to almost $720k, inclusive of interest, petitioner, who were then resident in LA, executed
their SPA in favor of Atty. Aceron for the purpose of filing an action in court against the respondents.
A complaint for collection of sum of money was then filed with the RTCQC. Respondent moved for
the dismissal of the complaint in the grounds of improper venue and prescription asserting that the
complaint against them may only be filed in the court of the place where either they or the petitioners
reside. Respondent reside in Bacolod while petitioner reside in LA. The RTC denied respondent’s
motion to dismiss. Since Atty. Aceron is the duly appointed attorney-in-fact of petitioners, venue of the
action may lie where re resides as provided in Sec. 2, Rule 4, of the 1997 Rules of Civil Procedure
Respondents claim that Atty. Aceron, being merely a representative of the petitioners, is not a real
party in interest in the case; hence, his residence should not be considered in determining the proper
venue of the said complaint. CA decided that the Complaint should have been filed in Bacolod City.

Issue: Whether the complaint must be dismissed on the ground that venue was not proper.

Held: Yes. It is a legal truism that the rules on the venue of personal actions are fixed for the
convenience of the plaintiffs and their witnesses. Equally settled, however, is the principle that
choosing the venue of an action is not left to a plaintiff’s caprice; the matter is regulated by the Rules
of Court. The petitioners’ complaint for collection of sum of money against the respondents is a
personal action as it primarily seeks the enforcement of a contract.

The Rules give the plaintiff the option of choosing where to file his complaint. He can file it in the
place (1) where he himself or any of them resides, or (2) where the defendant or any of the
defendants resides or may be found. The plaintiff or the defendant must be residents of the place
where the action has been instituted at the time the action is commenced.

If the plaintiff does not reside in the Philippines, the complaint in such case may only be filed in the
court of the place where the defendant resides. In Cohen and Cohen v. Benguet Commercial Co.,
Ltd., 34 Phil. 526 (1916), this Court held that there can be no election as to the venue of the filing of a
complaint when the plaintiff has no residence in the Philippines. In such case, the complaint may only
be filed in the court of the place where the defendant resides.