Young Auto Supply Co. v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Young Auto Supply Co., Inc. (YASCO) and Nemesio Garcia sold their shares in Consolidated Marketing & Development Corporation (CMDC) to respondent George C. Roxas for P8,000,000.00. A downpayment of P4,000,000.00 was made, with the balance of P4,000,000.00 payable through four post-dated checks. Roxas took control of CMDC's markets, but the vendors retained the stock certificates as security. The first check was honored, but the subsequent four checks for the balance were dishonored. Roxas sold one market, from which YASCO received P600,000.00, leaving a balance of P3,400,000.00. Nelson Garcia and Vicente Sy assigned their rights to Nemesio Garcia. Procedural History: Petitioners filed a complaint for collection of the remaining balance or turnover of control of the markets, plus forfeiture of partial payment and attorney's fees. Roxas filed several motions for extension to file an answer. He was declared in default, but the order was lifted. Roxas then filed a motion to dismiss on grounds of non-joinder of indispensable parties, waiver/extinguishment of claim, and improper venue. After hearing, the Regional Trial Court (RTC) denied the motion to dismiss. Roxas filed another motion for extension and a motion for reconsideration, which was denied as pro-forma. Roxas was again declared in default. He filed an unverified motion to lift the order of default and a petition for certiorari with the Court of Appeals (CA). The CA sustained the RTC on the first two grounds but dismissed the complaint based on improper venue, finding that petitioners' addresses indicated Pasay City. The Petition: Petitioners seek to set aside the CA decision, arguing that the CA erred in holding the venue should be in Pasay City and not Cebu City, and in not finding Roxas estopped from questioning the venue.
Issue(s)
Whether the Court of Appeals erred in holding that the venue was improperly laid in Cebu City. Whether respondent Roxas is estopped from questioning the choice of venue.
Ruling
The petition is meritorious. The decision of the Court of Appeals is SET ASIDE, and the Order dated February 8, 1991 of the Regional Trial Court is REINSTATED.
Ratio Decidendi
On the issue of venue: The Court of Appeals erred in holding that the venue was improperly laid in Cebu City. For personal actions, venue can be commenced and tried in the province or city where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff, pursuant to Section 2(b), Rule 4 of the Revised Rules of Court. In this case, both plaintiffs, YASCO and Nemesio Garcia, averred in their complaint that they are residents of Cebu City. YASCO's principal place of business is stated in its articles of incorporation as Cebu City, despite having a branch office in Pasay City. A corporation is considered a resident of the place where its principal office is located as stated in its articles of incorporation, not merely where it maintains branch offices. This principle is established to fix the residence of a corporation in a definite place and avoid confusion. Allowing actions in places other than the principal place of business would create inconvenience. Therefore, YASCO's residence for venue purposes is Cebu City. On the issue of estoppel: Since the venue was properly laid in Cebu City based on the residence of YASCO, it becomes unnecessary to decide whether Garcia is also a resident of Cebu City or whether Roxas was in estoppel from questioning the choice of venue.
Main Doctrine
For purposes of venue in personal actions, a corporation is deemed a resident of the place where its principal office is located as stated in its articles of incorporation, not merely where it maintains a branch office.