University of the Philippines College of Law

Topic Venue - Effects of stipulations on venue

Case No. G.R. No. 154096 August 22, 2008
Case Name Marcos-Araneta v. CA
Ponente Justice Velasco
Digester Jake Jacinto

RELEVANT FACTS
 Sometime in 1968 and 1972, Ambassador Roberto S. Benedicto, now deceased, and his business
associates (Benedicto Group) organized Far East Managers and Investors, Inc. (FEMII) and
Universal Equity Corporation (UEC), pursuant to a contract whereby Benedicto, as trustor,
placed in his name and in the name of his associates, as trustees, the shares of stocks of FEMII
and UEC with the obligation to hold those shares and their fruits in trust and for the benefit of
Irene to the extent of 65% of such shares. Eventually, petitioner demanded the reconveyance of
said 65% stockholdings, but the Benedicto Group refused to oblige.

 Francisca Benedicto-Paulino then filed a Motion to Dismiss then an Amended Motion to Dismiss
with five grounds with emphasis on:
1. The cases involved an intra-corporate dispute over which the Securities and Exchange
Commission, not the RTC, has jurisdiction;

2. Venue was improperly laid; and

3. The complaint failed to state a cause of action, as there was no allegation therein

 During the preliminary proceedings on their motions to dismiss, Benedicto presented the Joint
Affidavit of Gilmia B. Valdez, Catalino A. Bactat, and Conchita R. Rasco who all attested being
employed as household staff at the Marcos’ Mansion in Brgy. Lacub, Batac, Ilocos Norte and
that Irene did not maintain residence in said place as she in fact only visited the mansion twice in
1999; that she did not vote in Batac in the 1998 national elections; and that she was staying at her
husband’s house in Makati City.

 Petitioner presented her community tax certificate issued on “11/07/99” in Curimao, Ilocos Norte
to support her claimed residency in Batac, Ilocos Norte.

 RTC dismissed both complaints, stating that these partly constituted “real action,” and that Irene
did not actually reside in Ilocos Norte, and, therefore, venue was improperly laid.

 The RTC eventually entertained an amended complaint filed by petitioner, dispositively stating:
(1) Irene may opt to file, as a matter of right, an amended complaint.(2) The inclusion of
additional plaintiffs, one of whom was a Batac, an Ilocos Norte resident, in the amended
complaint setting out the same cause of action cured the defect of improper venue.(3) Secs. 2 and
3 of Rule 3 in relation to Sec. 2 of Rule 4 allow the filing of the amended complaint in question
in the place of residence of any of Irene’s co-plaintiffs.
 University of the Philippines College of Law

 The Benedictos filed on April 10, 2001 their Answer to the amended complaint but also went the
CA via a petition for certiorari, seeking to nullify the following RTC orders. The CA rendered a
Decision, setting aside the assailed RTC orders and dismissing the amended complaints in Civil
Case Nos. 3341-17 and 3342-17.

ISSUE/S
 W/N the CA erred in allowing the submission of an affidavit by Julita as sufficient compliance
with the requirement on verification and certification of non-forum shopping
 W/N the CA erred in ruling on the merits of the trust issue which involves factual and
evidentiary determination, processes not proper in a petition for certiorari under Rule 65 of the
Rules of Court
 W/N the Private Respondents did not Waive Improper Venue
 W/N The RTC has no jurisdiction on the ground of improper venue

RATIO DECIDENDI

Issue Ratio
W/N the CA erred in YES
allowing the submission of
an affidavit by Julita as 1. The Court reiterated that verification of an affidavit is not a
sufficient compliance? jurisdictional issue.
2. It is merely a formal requirement which the court may motu proprio
direct a party to comply with or correct, as the case may be.
3. There was also evidence of substantial compliance which allows for
the lack of the certification of non-forum shopping to be waived.
W/N the CA erred in ruling YES
on the merits of the trust 1. The Supreme Court held that the CA had committed a grave
issue which involves abuse of discretion when it decided upon the factual issue of the
factual and evidentiary existence and enforceability of the asserted trust.
determination, processes 2. The Court opined that the CA virtually resolved petitioner
not proper in a petition for Irene’s case for reconveyance on its substantive merits even
certiorari under Rule 65 of before evidence on the matter could be adduced.
the Rules of Court
W/N the Private NO.
Respondents did not Waive 1. The Court held that Marcos’ contention that the respondents
Improper Venue? were precluded from raising the matter of improper venue due to
the filing of pleadings was at best tenous.
2. The Court reiterated that venue essentially concerns a rule of
procedure which, in personal actions, is fixed for the greatest
convenience possible of the plaintiff and his witnesses.
3. In the case at bar, the respondents raised the impropriety of the
venue at the earliest possible time meaning witin the matter of
time but before the filing of their complaint.
W/N The RTC has no YES.
jurisdiction on the ground 1. The Court held that private respondent’s defense that their action
 University of the Philippines College of Law

of improper venue was one in personam was not tenable as the petitioners demand
to acknowledge their holding in trust Irene’s purpoted 65%
stockownership of FEMII and UEC, inclusive of the fruits
thereof, and to execute a deed of conveyance in favor of Irene is
an action in rem.

2. The Court reiterated that Sec. 2 of Rule 4 provides that the

venue for personal actions is “where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the
principal defendants resides, or in the case of a non-resident
defendant where he may be found, at the election of the plaintiff.

3. It was also held that the aforementioned rule must be read in

conjunction with Sec. 2 and 3 of Rule 3 that provides that
defines a real party in interest and representatives as parties:
a. A real party in interest is the party who stands to gain or loss
by the judgment in the suit. It must be in that party’s name,
every action must be prosecuted or defended
b. A representative may be allowed to prosecute or defend an
action when authorized to do so by the real party in interest.
Such rep may then be included in title of the case and shall
be considered a real party in interest, save when the suit
involves property belonging to the principal.

4. Thus, venue was improperly laid. Sec. 2 of Rule 4 indicates

quite clearly that when there is more than one plaintiff in a
personal action case, the residences of the principal parties
should be the basis for determining proper venue.

5. In this case, Irene is undisputably the real party in interest and

the venue of the action must be at her place of residence. The
residence of the three other plainitffs in the amended complaint
cannot be considered because they cannot be considered
principal party-plaintiffs, although they can prosecute a suit on
behalf of Irene.
6. The findings of the RTC regarding the residence of Irene is to be
followed holding that Irene does not hold residence in Ilocos
Norte but in Makati City (CTC is not sufficient proof of
residence because it is easy to get). Thus, since the complaints
were filed in the RTC of Ilocos Norte and not in Makati City,
there is improper venue.

RULING

WHEREFORE, the petition is hereby DISMISSED. Decision of the RTC in dismissing the complaints for improper venue is upheld.
University of the Philippines College of Law

SEPARATE OPINIONS

NOTES