Golden Arches Development v. St. Francis Square Holdings
REITERATIONFacts
The Antecedents: Petitioner Golden Arches Development Corporation (Golden Arches) entered into a lease contract over a property owned by Prince City Realty, Inc. (later known as ASB Holdings, Inc., and then respondent St. Francis Square Holdings, Inc.) from June 27, 1991, to February 27, 2008. On November 2, 2006, Golden Arches informed respondent of its intention to discontinue the lease. After amicable negotiations failed, respondent filed an action for breach of contract and damages against petitioner before the Regional Trial Court (RTC) of Mandaluyong. Procedural History: Petitioner filed a Motion to Dismiss, asserting lack of cause of action and improper venue, claiming respondent's principal address was in Makati as per SEC records. Respondent opposed, stating it had closed its Makati office and was operating in Mandaluyong. The RTC of Mandaluyong denied the motion, opining that venue was properly laid as respondent's Articles of Incorporation stated its principal office was in Metro Manila, and Mandaluyong is within Metro Manila. Petitioner's motion for reconsideration was also denied. On petition for certiorari and prohibition, the Court of Appeals affirmed the RTC's order. The Petition: Petitioner filed a petition for review on certiorari before the Supreme Court, assailing the Court of Appeals' decision.
Issue(s)
Whether venue was properly laid in the Regional Trial Court of Mandaluyong City. Whether the respondent's Amended Articles of Incorporation, which indicated "Metro Manila" as its principal office address, despite SEC Memorandum Circular No. 03 prohibiting such general address, rendered the venue improper.
Ruling
The petition is DENIED. The Court affirmed the decision of the Court of Appeals, upholding the venue laid in Mandaluyong City.
Ratio Decidendi
On the issue of venue: Venue in personal actions, such as breach of contract and damages, is determined by the residence of the plaintiff or defendant. For a domestic corporation, its residence is the place where its principal office is located as stated in its articles of incorporation. The Court noted that while respondent's Amended Articles of Incorporation in 2007 indicated "Metro Manila" as its principal office address, which was contrary to SEC Memorandum Circular No. 03, the evidence showed that respondent had actually been holding its principal office in Mandaluyong City at the time of the filing of the complaint. Petitioner itself had been notified of respondent's address in Mandaluyong through various correspondence. Therefore, venue was properly laid in Mandaluyong City for the convenience of the respondent and for the orderly administration of justice, as authorized by Section 2, Rule 4 of the Rules of Court, which allows the plaintiff to choose the venue where they reside. On the effect of the Amended Articles of Incorporation: Although respondent's Amended Articles of Incorporation indicated "Metro Manila" as its principal office address, which was a violation of SEC Memorandum Circular No. 03 prohibiting such general addresses, the Court found this not determinative of the venue. The controlling factor was where the corporation was actually holding its principal office at the time of the filing of the complaint. The Court emphasized that the primary objective for which the case was filed, which is the convenience of the plaintiff and the orderly administration of justice, should be respected. The Court reiterated that venue is a rule of procedure fixed for the convenience of the parties and witnesses and to promote the ends of justice. The actual physical location of the principal office, as evidenced by correspondence and the respondent's operational activities, superseded the defective statement in the Amended Articles of Incorporation for the purpose of determining venue.
Main Doctrine
Venue in personal actions involving a corporation is properly laid in the place where its principal office is located, as indicated in its Articles of Incorporation, or where it is actually holding its principal office at the time of the filing of the complaint, for the convenience of the plaintiff and the orderly administration of justice.