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Young Auto Supply Co.

vs CA
223 SCRA 670 (1993)
Nature: Petition to review the decision of the Court of Appeals
Ponente: QUIASON, J.

FACTS:
On 28 October 1987, Young auto Supply Co. Inc (YASCO) represented by Nemesio Garcia, its
president, Nelson Garcia and Vicente Sy, sold all their shares of stock in Consolidated Marketing
& Development Corporation (CMDC) to George C. Roxas with a purchase price of P8million
payable with a downpayment of P4M and the balance to be paid in 4 postdated checks of P1M
each.
Immediately after the execution of the agreement, Roxas took full control of the markets of
CMDC, however the vendors held on to the stock certificates as security for the pending
payments. The P4M downpayment was honored but the 4 postdated were dishonored. Roxas on
the other was able to sell one of the markets to a third party for which YASCO received P600,000
leaving the balance of P3.4M.
On 10 June 1988, petitioners filed a complaint in RTC in CEBU CITY praying that Roxas be
ordered to pay the P3.4M or full control of the markets be turned over to YASCO and Garcia,
likewise for the forfeiture of P4.6M. However, after several motions for extension of time, Roxas
was declared to be in default. Roxas on the other hand filed a motion to dismiss on the grounds
that, among others, the venue was improperly laid which was denied by the RTC. On appeal, the
CA dismissed the complaint on the ground of improper venue, (since it relied on the address of
YASCO as appearing in the deed of sale which is in PASAY CITY, however the Articles of
Incorporation of YASCO states that its principal office is to be established or located at Cebu,
City) hence this petition.

ISSUE: Whether or not the venue was improperly laid.

HELD: No, the venue was not improperly laid. Petition is granted, CA decision is set aside.

RULING: Under Sec. 2(b) Rule 4 of the Revised Rules of Court, in RTCs, 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 plaintiffs resides, at the election of the plaintiff. There are 2 plaintiffs in the case at
bench: a natural person and a domestic corporation. A corporation has no residence in the same sense as
it is applied to a natural person but in a metaphysical sense, a resident of the place where its principal
office is located as stated in the articles of incorporation. The purposed of this requirement is to fix the
residence of a corporation in a definite place, instead of allowing it to be ambulatory.

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. Hence, the petition is
GRANTED, CA decision is set aside.