G.R. No.

104175 June 25, 1993

YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners,

vs.
THE HONORABLE COURT OF APPEALS (THIRTEENTH DIVISION) AND GEORGE
CHIONG ROXAS,respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioners.

Antonio Nuyles for private respondent.

QUIASON, J.:

Petitioners seek to set aside the decision of respondent Court of Appeals in CA-G.R. SP No.
25237, which reversed the Order dated February 8, 1991 issued by the Regional Trial Court,
Branch 11, Cebu City in Civil Case No. CEB 6967. The order of the trial court denied the
motion to dismiss filed by respondent George C. Roxas of the complaint for collection filed by
petitioners.

It appears that sometime on October 28, 1987, Young Auto Supply Co. Inc. (YASCO)
represented by Nemesio Garcia, its president, Nelson Garcia and Vicente Sy, sold all of their
shares of stock in Consolidated Marketing & Development Corporation (CMDC) to Roxas.
The purchase price was P8,000,000.00 payable as follows: a downpayment of
P4,000,000.00 and the balance of P4,000,000.00 in four post dated checks of P1,000,000.00
each.

Immediately after the execution of the agreement, Roxas took full control of the four markets
of CMDC. However, the vendors held on to the stock certificates of CMDC as security
pending full payment of the balance of the purchase price.

The first check of P4,000,000.00, representing the down-payment, was honored by the
drawee bank but the four other checks representing the balance of P4,000,000.00 were
dishonored. In the meantime, Roxas sold one of the markets to a third party. Out of the
proceeds of the sale, YASCO received P600,000.00, leaving a balance of P3,400,000.00
(Rollo, p. 176).

Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to the
proceeds of the sale of the CMDC shares to Nemesio Garcia.

On June 10, 1988, petitioners filed a complaint against Roxas in the Regional Trial Court,
Branch 11, Cebu City, praying that Roxas be ordered to pay petitioners the sum of
P3,400,00.00 or that full control of the three markets be turned over to YASCO and Garcia.
The complaint also prayed for the forfeiture of the partial payment of P4,600,000.00 and the
payment of attorney's fees and costs (Rollo, p. 290).

Roxas filed two motions for extension of time to submit his answer. But despite said motion,
he failed to do so causing petitioners to file a motion to have him declared in default. Roxas
then filed, through a new counsel, a third motion for extension of time to submit a responsive
pleading.

On August 19, 1988, the trial court declared Roxas in default. The order of default was,
however, lifted upon motion of Roxas.

On August 22, 1988, Roxas filed a motion to dismiss on the grounds that:

1. The complaint did not state a cause of action due to non-joinder of

indispensable parties;

2. The claim or demand set forth in the complaint had been waived,
abandoned or otherwise extinguished; and

3. The venue was improperly laid (Rollo, p. 299).

After a hearing, wherein testimonial and documentary evidence were presented by both
parties, the trial court in an Order dated February 8, 1991 denied Roxas' motion to dismiss.
After receiving said order, Roxas filed another motion for extension of time to submit his
answer. He also filed a motion for reconsideration, which the trial court denied in its Order
dated April 10, 1991 for being pro-forma (Rollo, p. 17). Roxas was again declared in default,
on the ground that his motion for reconsideration did not toll the running of the period to file
his answer.

On May 3, 1991, Roxas filed an unverified Motion to Lift the Order of Default which was not
accompanied with the required affidavit or merit. But without waiting for the resolution of the
motion, he filed a petition for certiorari with the Court of Appeals.

The Court of Appeals sustained the findings of the trial court with regard to the first two
grounds raised in the motion to dismiss but ordered the dismissal of the complaint on the
ground of improper venue (Rollo, p. 49).

A subsequent motion for reconsideration by petitioner was to no avail.

Petitioners now come before us, alleging that the Court of Appeals
erred in:

1. holding the venue should be in Pasay City, and not in Cebu City (where
both petitioners/plaintiffs are residents;

2. not finding that Roxas is estopped from questioning the choice of venue
(Rollo, p. 19).

The petition is meritorious.

In holding that the venue was improperly laid in Cebu City, the Court of Appeals relied on the
address of YASCO, as appearing in the Deed of Sale dated October 28, 1987, which is "No.
1708 Dominga Street, Pasay City." This was the same address written in YASCO's letters
and several commercial documents in the possession of Roxas (Decision, p. 12; Rollo, p.
48).
In the case of Garcia, the Court of Appeals said that he gave Pasay City as his address in
three letters which he sent to Roxas' brothers and sisters (Decision, p. 12; Rollo, p. 47). The
appellate court held that Roxas was led by petitioners to believe that their residence is in
Pasay City and that he had relied upon those representations (Decision, p. 12, Rollo, p. 47).

The Court of Appeals erred in holding that the venue was improperly laid in Cebu City.

In the Regional Trial Courts, all personal actions are 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 [Sec. 2(b) Rule 4,
Revised Rules of Court].

There are two plaintiffs in the case at bench: a natural person and a domestic corporation.
Both plaintiffs aver in their complaint that they are residents of Cebu City, thus:

1.1. Plaintiff Young Auto Supply Co., Inc., ("YASCO") is a domestic

corporation duly organized and existing under Philippine laws with principal
place of business at M. J. Cuenco Avenue, Cebu City. It also has a branch
office at 1708 Dominga Street, Pasay City, Metro Manila.

Plaintiff Nemesio Garcia is of legal age, married, Filipino citizen and with
business address at Young Auto Supply Co., Inc., M. J. Cuenco Avenue,
Cebu City. . . . (Complaint, p. 1; Rollo, p. 81).

The Article of Incorporation of YASCO (SEC Reg. No. 22083) states:

THIRD That the place where the principal office of the corporation is to be
established or located is at Cebu City, Philippines (as amended on December
20, 1980 and further amended on December 20, 1984) (Rollo, p. 273).

A corporation has no residence in the same sense in which this term is applied to a natural
person. But 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 (Cohen v.
Benguet Commercial Co., Ltd., 34 Phil. 256 [1916] Clavecilla Radio System v. Antillon, 19
SCRA 379 [1967]). The Corporation Code precisely requires each corporation to specify in
its articles of incorporation the "place where the principal office of the corporation is to be
located which must be within the Philippines" (Sec. 14 [3]). The purpose of this requirement
is to fix the residence of a corporation in a definite place, instead of allowing it to be
ambulatory.

In Clavencilla Radio System v. Antillon, 19 SCRA 379 ([1967]), this Court explained why
actions cannot be filed against a corporation in any place where the corporation maintains its
branch offices. The Court ruled that to allow an action to be instituted in any place where the
corporation has branch offices, would create confusion and work untold inconvenience to
said entity. By the same token, a corporation cannot be allowed to file personal actions in a
place other than its principal place of business unless such a place is also the residence of a
co-plaintiff or a defendant.

If it was Roxas who sued YASCO in Pasay City and the latter questioned the venue on the
ground that its principal place of business was in Cebu City, Roxas could argue that YASCO
was in estoppel because it misled Roxas to believe that Pasay City was its principal place of
business. But this is not the case before us.

With the finding that the residence of YASCO for purposes of venue is in Cebu City, where its
principal place of business is located, it becomes unnecessary to decide whether Garcia is
also a resident of Cebu City and whether Roxas was in estoppel from questioning the choice
of Cebu City as the venue.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals appealed
from is SET ASIDE and the Order dated February 8, 1991 of the Regional Trial Court is
REINSTATED.

SO ORDERED.

Cruz, Grio-Aquino and Bellosillo, JJ., concur.

[G.R. No. 111685. August 20, 2001]

DAVAO LIGHT & POWER CO., INC., petitioner, vs. THE HON.
COURT OF APPEALS, HON. RODOLFO M. BELLAFLOR,
Presiding Judge of Branch 11, RTC-Cebu and FRANCISCO
TESORERO,respondents.

DECISION
DE LEON, JR., J.:

Before us is a petition for review on certiorari assailing the Decision dated August
31, 1993 rendered by the Sixteenth Division of the Court of Appeals in CA-G.R. SP No.
[1]

29996, the dispositive portion of which states:

WHEREFORE,thepetitionforreviewfiledbyDavaoLight&PowerCo.,Inc.isherebyDENIEDDUE
COURSEandthesameisDISMISSED.

ITISSOORDERED.

The antecedent facts are:

On April 10, 1992, petitioner Davao Light & Power Co., Inc. filed a complaint for
damages against private respondent Francisco Tesorero before the Regional Trial Court
[2]

of Cebu City, Branch 11. Docketed as CEB-11578, the complaint prayed for damages in
the amount of P11,000,000.00.
 In lieu of an answer, private respondent filed a motion to dismiss claiming that: (a)
[3]

the complaint did not state a cause of action; (b) the plaintiffs claim has been
extinguished or otherwise rendered moot and academic; (c) there was non-joinder of
indispensable parties; and (d) venue was improperly laid. Of these four (4) grounds, the
last mentioned is most material in this case at bar.
On August 3, 1992, the trial court issued a Resolution dismissing petitioners [4]

complaint on the ground of improper venue. The trial court stated that:

TheplaintiffbeingaprivatecorporationundoubtedlyBanilad,CebuCityistheplaintiffsprincipalplaceof
businessasallegedinthecomplaintandwhichforpurposesofvenueisconsideredasitsresidence.xxx.

However,indefendantsmotiontodismiss,itisallegedandsubmittedthattheprincipalofficeofplaintiffis
at163165P.ReyesStreet,DavaoCityasborneoutbytheContractofLease(Annex2ofthemotion)and
anotherContractofLeaseofGeneratingEquipment(Annex3ofthemotion)executedbytheplaintiffwith
theNAPOCOR.

Therepresentationmadebytheplaintiffinthe2aforementionedLeaseContractsstatingthatitsprincipal
officeisat163165P.ReyesStreet,DavaoCitybarstheplaintifffromdenyingthesame.

Thechoiceofvenueshouldnotbelefttoplaintiffswhimorcaprises[sic].Hemaybeimpelledbysome
ulteriormotivationinchoosingtofileacaseinacourtevenifnotallowedbytherulesofvenue.

AnotherfactorconsideredbytheCourtsindecidingcontroversiesregardingvenueareconsiderationsof
judicialeconomyandadministration,aswellastheconvenienceofthepartiesforwhichtherulesof
procedureandvenuewereformulatedxxx.

Consideringtheforegoing,theCourtisoftheopinionthattheprincipalofficeofplaintiffisatDavaoCity
whichforpurposesofvenueistheresidenceofplaintiff.

Hence,thecaseshouldbefiledinDavaoCity.

ThemotiononthegroundofimpropervenueisgrantedandthecomplaintDISMISSEDonthatground.

SOORDERED.

Petitioners motion for reconsideration was denied in an Order dated October 1,

[5] [6]

1992.
From the aforesaid resolution and order, petitioner originally filed before this Court
on November 20, 1992 a petition for review on certiorari docketed as G.R. No. 107381.
We declined to take immediate cognizance of the case, and in a Resolution dated
[7]

January 11, 1993, referred the same to the Court of Appeals for resolution. The petition
[8]

was docketed in the appellate court as CA-G.R. SP No. 29996.

On August 31, 1993, the Court of Appeals rendered the assailed judgment denying [9]

due course and dismissing the petition. Counsel for petitioner received a copy of the
decision on September 6, 1993. Without filing a motion for reconsideration, petitioner
[10]

filed the instant petition, assailing the judgment of the Court of Appeals on the following
grounds:
5.01.RespondentCourtofAppealsdeniedpetitionerproceduraldueprocessbyfailingtoresolvethethird
oftheabovestatedissues.

5.02.PetitionersrighttofileitsactionfordamagesagainstprivaterespondentinCebuCitywhereits
principalofficeislocated,andforwhichitpaidP55,398.50indocketfees,maynotbenegatedbya
supposedestoppelabsenttheessentialelementsofthefalsestatementhavingbeenmadetoprivate
respondentandhisrelianceongoodfaithonthetruththereof,andprivaterespondentsactionorinaction
basedthereonofsuchcharacterastochangehispositionorstatustohisinjury,detrimentorprejudice.

The principal issue in the case at bar involves a question of venue. It is to be

distinguished from jurisdiction, as follows:

Venueandjurisdictionareentirelydistinctmatters.Jurisdictionmaynotbeconferredbyconsentorwaiver
uponacourtwhichotherwisewouldhavenojurisdictionoverthesubjectmatterofanaction;butthevenue
ofanactionasfixedbystatutemaybechangedbytheconsentofthepartiesandanobjectionthatthe
plaintiffbroughthissuitinthewrongcountymaybewaivedbythefailureofthedefendanttomakea
timelyobjection.Ineithercase,thecourtmayrenderavalidjudgment.Rulesastojurisdictioncanneverbe
lefttotheconsentoragreementoftheparties,whetherornotaprohibitionexistsagainsttheiralteration. [11]

It is private respondents contention that the proper venue is Davao City, and not
Cebu City where petitioner filed Civil Case No. CEB-11578. Private respondent argues
that petitioner is estopped from claiming that its residence is in Cebu City, in view of
contradictory statements made by petitioner prior to the filing of the action for
damages. First, private respondent adverts to several contracts entered into by petitioner
[12]

with the National Power Corporation (NAPOCOR) where in the description of personal
circumstances, the former states that its principal office is at 163-165 P. Reyes St., Davao
City. According to private respondent the petitioners address in Davao City, as given in
the contracts, is an admission which should bind petitioner.
In addition, private respondent points out that petitioner made several judicial
admissions as to its principal office in Davao City consisting principally of allegations in
pleadings filed by petitioner in a number of civil cases pending before the Regional Trial
Court of Davao in which it was either a plaintiff or a defendant. [13]

Practically the same issue was addressed in Young Auto Supply Co. v. Court of
Appeals. In the aforesaid case, the defendant therein sought the dismissal of an action
[14]

filed by the plaintiff, a corporation, before the Regional Trial Court of Cebu City, on the
ground of improper venue. The trial court denied the motion to dismiss; on certiorari
before the Court of Appeals, the denial was reversed and the case was
dismissed. According to the appellate tribunal, venue was improperly laid since the
address of the plaintiff was supposedly in Pasay City, as evidenced by a contract of sale,
letters and several commercial documents sent by the plaintiff to the defendant, even
though the plaintiffs articles of incorporation stated that its principal office was in Cebu
City. On appeal, we reversed the Court of Appeals. We reasoned out thus:

IntheRegionalTrialCourts,allpersonalactionsarecommencedandtriedintheprovinceorcitywherethe
defendantoranyofthedefendantsresidesormaybefound,orwheretheplaintifforanyoftheplaintiffs
resides,attheelectionoftheplaintiffxxx.
Therearetwoplaintiffsinthecaseatbench:anaturalpersonandadomesticcorporation.Bothplaintiffs
averintheircomplaintthattheyareresidentsofCebuCity,thus:

xxx xxx xxx

TheArticleofIncorporationofYASCO(SECReg.No.22083)states:

THIRD.Thattheplacewheretheprincipalofficeofthecorporationistobeestablishedorlocatedisat
CebuCity,Philippines(asamendedonDecember20,1980andfurtheramendedonDecember20,1984)
xxx.

Acorporationhasnoresidenceinthesamesenseinwhichthistermisappliedtoanaturalperson.Butfor
practicalpurposes,acorporationisinametaphysicalsensearesidentoftheplacewhereitsprincipaloffice
islocatedasstatedinthearticlesofincorporation(Cohenv.BenguetCommercialCo.,Ltd.,34Phil.526
[1916]ClavecillaRadioSystemv.Antillo,19SCRA379[1967]).TheCorporationCodepreciselyrequires
eachcorporationtospecifyinitsarticlesofincorporationtheplacewheretheprincipalofficeofthe
corporationistobelocatedwhichmustbewithinthePhilippines(Sec.14[3]).Thepurposeofthis
requirementistofixtheresidenceofacorporationinadefiniteplace,insteadofallowingittobe
ambulatory.

InClavecillaRadioSystemv.Antillon,19SCRA379([1967]),thisCourtexplainedwhyactionscannotbe
filedagainstacorporationinanyplacewherethecorporationmaintainsitsbranchoffices.TheCourtruled
thattoallowanactiontobeinstitutedinanyplacewherethecorporationhasbranchoffices,wouldcreate
confusionandworkuntoldinconveniencetosaidentity.Bythesametoken,acorporationcannotbe
allowedtofilepersonalactionsinaplaceotherthanitsprincipalplaceofbusinessunlesssuchaplaceis
alsotheresidenceofacoplaintifforadefendant.

IfitwasRoxaswhosuedYASCOinPasayCityandthelatterquestionedthevenueonthegroundthatits
principalplaceofbusinesswasinCebuCity,RoxascouldarguethatYASCOwasinestoppelbecauseit
misledRoxastobelievethatPasayCitywasitsprincipalplaceofbusiness.Butthisisnotthecasebefore
us.

WiththefindingthattheresidenceofYASCOforpurposesofvenueisinCebuCity,whereitsprincipal
placeofbusinessislocated,itbecomesunnecessarytodecidewhetherGarciaisalsoaresidentofCebu
CityandwhetherRoxaswasinestoppelfromquestioningthechoiceofCebuCityasthevenue.[italics
supplied]

The same considerations apply to the instant case. It cannot be disputed that
petitioners principal office is in Cebu City, per its amended articles of incorporation and [15]

by-laws. An action for damages being a personal action, venue is determined pursuant
[16] [17]

to Rule 4, section 2 of the Rules of Court, to wit:

Venueofpersonalactions.Allotheractionsmaybecommencedandtriedwheretheplaintifforanyofthe
principalplaintiffsresides,orwherethedefendantoranyoftheprincipaldefendantsresides,orinthecase
ofanonresidentdefendantwherehemaybefound,attheelectionoftheplaintiff. [18]

Private respondent is not a party to any of the contracts presented before us. He is a
complete stranger to the covenants executed between petitioner and NAPOCOR, despite
his protestations that he is privy thereto, on the rather flimsy ground that he is a member
of the public for whose benefit the electric generating equipment subject of the contracts
were leased or acquired. We are likewise not persuaded by his argument that the
allegation or representation made by petitioner in either the complaints or answers it filed
in several civil cases that its residence is in Davao City should estop it from filing the
damage suit before the Cebu courts. Besides there is no showing that private respondent
is a party in those civil cases or that he relied on such representation by petitioner.
WHEREFORE, the instant petition is hereby GRANTED. The appealed decision is
hereby REVERSED and SET ASIDE. The Regional Trial Court of Cebu City, Branch 11
is hereby directed to proceed with Civil Case No. CEB-11578 with all deliberate
dispatch. No pronouncement as to costs.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

Justice Jaime M. Lantin, ponente; Justice Fermin A. Martin, Jr. and Justice Ramon Mabutas, Jr.,
[1]

concurring.
[2]
Rollo, pp. 312-320.
[3]
Annex D of the Petition, Id., pp. 61-110.
[4]
Annex H of the Petition, Id., pp. 146-148.
[5]
Annex I of the Petition, Id., pp. 149-167.
[6]
Annex M of the Petition, Id., pp. 269-270.
[7]
Records, pp. 19-247.
[8]
Records, p. 248.
[9]
Records, pp. 325-334.
[10]
Records, p. 335.
Santos III v. Northwest Orient Airlines, 210 SCRA 256 (1992) cited in Heirs of Pedro Lopez, et al. v. de
[11]

Castro, et. al., 324 SCRA 591, 609 (2000).

Rollo, pp. 82-107. Private respondent refers to the following: (1) contract dated July 30, 1979 for the
[12]

lease of electric generating equipment; (2) contract dated September 4, 1974 also for the lease of electric
generating equipment; and (3) undated 1984 contract of sale of electric generating equipment.
[13]
Rollo, pp. 186-212. Cases where petitioner is plaintiff:
Case No. Title Br. Pending
Civil Case No. 17-195 DLPC v. Cesar Maglalang (unstated)
Civil Case No. 18,128 DLPC v. Industrial Rubber Manufacturing Corp. Br. 15
Civil Case No. 19,513-89 DLPC v. Queensland Hotel Br. 8
Cases in which petitioner is a defendant:
Case No. Title Br. Pending
Civil Case No. 20,330-90 Peter Arellano v. DLPC Br. 11
Civil Case No. 19520-89 Fidelino Memorial Homes v. DLPC Br. 9
Civil Case No. 20,771-91 V.S. Pichon Realty and Dev. Corp. v. DLPC Br. 9
Civil Case No. 19,640-89 Davao Unicar Corporation v. DLPC Br. 8
Civil Case No. 21-274-92 Ma. Corazon Relon Priego v. DLPC Br. 14
[14]
223 SCRA 670, 674 (1993).
[15]
Rollo, pp. 128-129.
[16]
Rollo, p. 131.
[17]
Baritua v. Court of Appeals, 267 SCRA 331, 335 (1997).

[18]
Priortothe1997amendment,theprovisionread:

HYATT ELEVATORS AND G.R. No. 161026

ESCALATORS CORPORATION,
Petitioner, Present:
Panganiban, J.,
Chairman,
Sandoval-Gutierrez,
- versus - Corona,
Carpio Morales, and
Garcia, JJ
GOLDSTAR ELEVATORS, Promulgated:
PHILS., INC.,*
Respondent. October 24, 2005
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
-- -- -- -- -- x

DECISION

PANGANIBAN, J.:

W
ell established in our jurisprudence is the rule that
the residence of a corporation is the place where its
principal office is located, as stated in its Articles of
Incorporation.
 The Case

Before us is a Petition for Review[1] on

Certiorari, under Rule 45 of the Rules of Court,
assailing the June 26, 2003 Decision[2] and the
November 27, 2003 Resolution[3] of the Court of
Appeals (CA) in CA-GR SP No. 74319. The decretal
portion of the Decision reads as follows:
WHEREFORE, in view of the foregoing, the assailed
Orders dated May 27, 2002 and October 1, 2002 of the RTC,
Branch 213, Mandaluyong City in Civil Case No. 99-600, are
hereby SET ASIDE. The said case is hereby
ordered DISMISSED on the ground of improper venue.[4]

The assailed Resolution denied petitioners Motion

for Reconsideration.

The Facts

The relevant facts of the case are summarized

by the CA in this wise:
Petitioner [herein Respondent] Goldstar Elevator
Philippines, Inc. (GOLDSTAR for brevity) is a domestic
corporation primarily engaged in the business of marketing,
distributing, selling, importing, installing, and maintaining
elevators and escalators, with address at 6th Floor, Jacinta II
Building, 64 EDSA, Guadalupe, Makati City.
 On the other hand, private respondent [herein petitioner]
Hyatt Elevators and Escalators Company (HYATT for brevity)
is a domestic corporation similarly engaged in the business of
selling, installing and maintaining/servicing elevators,
escalators and parking equipment, with address at the
6th Floor, Dao I Condominium, Salcedo St., Legaspi Village,
Makati, as stated in its Articles of Incorporation.

On February 23, 1999, HYATT filed a Complaint for

unfair trade practices and damages under Articles 19, 20 and
21 of the Civil Code of the Philippines against LG Industrial
Systems Co. Ltd. (LGISC) and LG International Corporation
(LGIC), alleging among others, that: in 1988, it was appointed
by LGIC and LGISC as the exclusive distributor of LG
elevators and escalators in the Philippines under a
Distributorship Agreement; x x x LGISC, in the latter part of
1996, made a proposal to change the exclusive distributorship
agency to that of a joint venture partnership; while it looked
forward to a healthy and fruitful negotiation for a joint venture,
however, the various meetings it had with LGISC and LGIC,
through the latters representatives, were conducted in utmost
bad faith and with malevolent intentions; in the middle of the
negotiations, in order to put pressures upon it, LGISC and
LGIC terminated the Exclusive Distributorship Agreement; x x
x [A]s a consequence, [HYATT] sufferedP120,000,000.00 as
actual damages, representing loss of earnings and business
opportunities, P20,000,000.00 as damages for its reputation
and goodwill, P1,000,000.00 as and by way of exemplary
damages, and P500,000.00 as and by way of attorneys fees.

On March 17, 1999, LGISC and LGIC filed a Motion to

Dismiss raising the following grounds: (1) lack of jurisdiction
over the persons of defendants, summons not having been
served on its resident agent; (2) improper venue; and (3)
failure to state a cause of action. The [trial] court denied the
said motion in an Order dated January 7, 2000.

On March 6, 2000, LGISC and LGIC filed an Answer

with Compulsory Counterclaim ex abundante cautela.
Thereafter, they filed a Motion for Reconsideration and to
Expunge Complaint which was denied.
 On December 4, 2000, HYATT filed a motion for leave
of court to amend the complaint, alleging that subsequent to
the filing of the complaint, it learned that LGISC transferred all
its organization, assets and goodwill, as a consequence of a
joint venture agreement with Otis Elevator Company of the
USA, to LG Otis Elevator Company (LG OTIS, for brevity).
Thus, LGISC was to be substituted or changed to LG OTIS, its
successor-in-interest. Likewise, the motion averred that x x x
GOLDSTAR was being utilized by LG OTIS and LGIC in
perpetrating their unlawful and unjustified acts against HYATT.
Consequently, in order to afford complete relief, GOLDSTAR
was to be additionally impleaded as a party-defendant. Hence,
in the Amended Complaint, HYATT impleaded x x x
GOLDSTAR as a party-defendant, and all references to
LGISC were correspondingly replaced with LG OTIS.

On December 18, 2000, LG OTIS (LGISC) and LGIC

filed their opposition to HYATTs motion to amend the
complaint. It argued that: (1) the inclusion of GOLDSTAR as
party-defendant would lead to a change in the theory of the
case since the latter took no part in the negotiations which led
to the alleged unfair trade practices subject of the case; and
(b) HYATTs move to amend the complaint at that time was
dilatory, considering that HYATT was aware of the existence of
GOLDSTAR for almost two years before it sought its inclusion
as party-defendant.

On January 8, 2001, the [trial] court admitted the

Amended Complaint. LG OTIS (LGISC) and LGIC filed a
motion for reconsideration thereto but was similarly rebuffed
on October 4, 2001.

On April 12, 2002, x x x GOLDSTAR filed a Motion to

Dismiss the amended complaint, raising the following grounds:
(1) the venue was improperly laid, as neither HYATT nor
defendants reside in Mandaluyong City, where the original
case was filed; and (2) failure to state a cause of action
against [respondent], since the amended complaint fails to
allege with certainty what specific ultimate acts x x x Goldstar
performed in violation of x x x Hyatts rights. In the Order dated
May 27, 2002, which is the main subject of the present
petition, the [trial] court denied the motion to dismiss,
ratiocinating as follows:
 Upon perusal of the factual and legal arguments
raised by the movants-defendants, the court finds that
these are substantially the same issues posed by the
then defendant LG Industrial System Co. particularly
the matter dealing [with] the issues of improper
venue, failure to state cause of action as well as this
courts lack of jurisdiction. Under the circumstances
obtaining, the court resolves to rule that the complaint
sufficiently states a cause of action and that the venue
is properly laid. It is significant to note that in the
amended complaint, the same allegations are
adopted as in the original complaint with respect to
the Goldstar Philippines to enable this court to
adjudicate a complete determination or settlement of
the claim subject of the action it appearing
preliminarily as sufficiently alleged in the plaintiffs
pleading that said Goldstar Elevator Philippines Inc.,
is being managed and operated by the same Korean
officers of defendants LG-OTIS Elevator Company
and LG International Corporation.

On June 11, 2002, [Respondent] GOLDSTAR filed a

motion for reconsideration thereto. On June 18, 2002, without
waiving the grounds it raised in its motion to dismiss, [it] also
filed an Answer Ad Cautelam. On October 1, 2002, [its] motion
for reconsideration was denied.

From the aforesaid Order denying x x x Goldstars

motion for reconsideration, it filed the x x x petition for
certiorari [before the CA] alleging grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the
[trial] court in issuing the assailed Orders dated May 27, 2002
and October 1, 2002.[5]

Ruling of the Court of Appeals

 The CA ruled that the trial court had committed
palpable error amounting to grave abuse of
discretion when the latter denied respondents
Motion to Dismiss. The appellate court held that the
venue was clearly improper, because none of the
litigants resided in Mandaluyong City, where the
case was filed.
 According to the appellate court, since Makati
was the principal place of business of both
respondent and petitioner, as stated in the latters
Articles of Incorporation, that place was controlling
for purposes of determining the proper venue. The
fact that petitioner had abandoned its principal
office in Makati years prior to the filing of the
original case did not affect the venue where
personal actions could be commenced and tried.

Hence, this Petition.[6]

The Issue

In its Memorandum, petitioner submits this sole

issue for our consideration:

Whether or not the Court of Appeals, in reversing the

ruling of the Regional Trial Court, erred as a matter of law and
jurisprudence, as well as committed grave abuse of discretion,
in holding that in the light of the peculiar facts of this case,
venue was improper[.][7]
 This Courts Ruling

The Petition has no merit.

Sole Issue:
Venue

The resolution of this case rests upon a proper

understanding of 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.[8]
 Residence is the permanent home -- the place to
which, whenever absent for business or pleasure,
one intends to return.[9] Residence is vital when
dealing with venue.[10] 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[11] 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.[12] Even before this ruling, it has
already been established that the residence of a
corporation is the place where its principal office is
established.[13]

This Court has also definitively ruled that for

purposes of venue, the term residence is
synonymous with domicile.[14] Correspondingly, the
Civil Code provides:

Art. 51. When the law creating or recognizing them, or

any other provision does not fix the domicile of juridical
persons, the same shall be understood to be the place where
their legal representation is established or where they exercise
their principal functions.[15]
 It now becomes apparent that the residence or
domicile of a juridical person is fixed by the law
creating or recognizing it. Under Section 14(3) of
the Corporation Code, the place where the principal
office of the corporation is to be located is one of the
required contents of the articles of incorporation,
which shall be filed with the Securities and
Exchange Commission (SEC).

In the present case, there is no question as to

the residence of respondent. What needs to be
examined is that of petitioner. Admittedly, [16] the
latters 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 petitioners articles of incorporation
becomes controlling in determining the venue for
this case.

Petitioner argues that the Rules of Court do not

provide that when the plaintiff is a corporation, the
complaint should be filed in the location of its
principal office as indicated in its articles of
incorporation.[17] 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.[18] This ruling is
important in determining the venue of an action by
or against a corporation,[19] as in the present case.

Without merit is the argument of petitioner that

the locality stated in its Articles of Incorporation
does not conclusively indicate that its principal
office is still in the same place. We agree with the
appellate court in its observation that the
requirement to state in the articles the place where
the principal office of the corporation is to be
located is not a meaningless requirement. That
proviso would be rendered nugatory if corporations
were to be allowed to simply disregard what is
expressly stated in their Articles of Incorporation.[20]

Inconclusive are the bare allegations of

petitioner that it had closed its Makati office and
relocated to Mandaluyong City, and that respondent
was well aware of those circumstances.
Assumingarguendo that they transacted business
with each other in the Mandaluyong office of
petitioner, the fact remains that, in law, the latters
residence was still the place indicated in its Articles
of Incorporation. Further unacceptable is its faulty
reasoning that the ground for the CAs dismissal of
its Complaint was its failure to amend its Articles of
Incorporation so as to reflect its actual and present
principal office. The appellate court was clear
enough in its ruling that the Complaint was
dismissed because the venue had been improperly
laid, not because of the failure of petitioner to
amend the latters Articles of Incorporation.

Indeed, 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
plaintiffs caprice; the matter is regulated by the
Rules of Court.[21] Allowing petitioners arguments
may lead precisely to what this Court was trying to
avoid inYoung Auto Supply Company v. CA:[22] the
creation of confusion and untold inconveniences to
party litigants. Thus enunciated the CA:

x x x. To insist that the proper venue is the actual

principal office and not that stated in its Articles of
Incorporation would indeed create confusion and work untold
inconvenience. Enterprising litigants may, out of some ulterior
motives, easily circumvent the rules on venue by the simple
expedient of closing old offices and opening new ones in
another place that they may find well to suit their needs.[23]
 We find it necessary to remind party litigants,
especially corporations, as follows:
The rules on venue, like the other procedural rules, are
designed to insure a just and orderly administration of justice
or the impartial and evenhanded determination of every action
and proceeding. Obviously, this objective will not be attained if
the plaintiff is given unrestricted freedom to choose the court
where he may file his complaint or petition.

The choice of venue should not be left to the plaintiffs

whim or caprice. He may be impelled by some ulterior
motivation in choosing to file a case in a particular court even
if not allowed by the rules on venue.[24]

WHEREFORE, the Petition is

hereby DENIED, and the assailed Decision and
Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.