Title

Davao Light and Power Co., Inc. vs. Court of Appeals

Case Decision Date

DLPC sued Tesorero in Cebu City; Tesorero claimed improper venue, arguing DLPC’s
principal office was in Davao. SC ruled Cebu City proper venue per DLPC’s articles of
incorporation, rejecting estoppel claims.

415 Phil. 624

SECOND DIVISION

[ 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 Division1 of the Court of Appeals in CA-G.R. SP No. 29996, the
dispositive portion of which states:

WHEREFORE, the petition for review filed by Davao Light & Power Co., Inc. is hereby
DENIED DUE COURSE and the same is DISMISSED.

IT IS SO ORDERED.
The antecedent facts are:

On April 10, 1992, petitioner Davao Light & Power Co., Inc. filed a complaint for damages2
against private respondent Francisco Tesorero before the Regional Trial Court 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 dismiss3 claiming that: (a) the
complaint did not state a cause of action; (b) the plaintiff's 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 Resolution4 dismissing petitioner's complaint on
the ground of improper venue. The trial court stated that:

The plaintiff being a private corporation undoubtedly Banilad, Cebu City is the plaintiff's
principal place of business as alleged in the complaint and which for purposes of venue is
considered as its residence. ....

However, in defendant's motion to dismiss, it is alleged and submitted that the principal
office of plaintiff is at "163-165 P. Reyes Street, Davao City as borne out by the Contract of
Lease (Annex 2 of the motion) and another Contract of Lease of Generating Equipment
(Annex 3 of the motion) executed by the plaintiff with the NAPOCOR.

The representation made by the plaintiff in the 2 aforementioned Lease Contracts stating
that its principal office is at "163-165 P. Reyes Street, Davao City" bars the plaintiff from
denying the same.

The choice of venue should not be left to plaintiff's whim or caprises [sic]. He may be
impelled by some ulterior motivation in choosing to file a case in a court even if not allowed
by the rules of venue.

Another factor considered by the Courts in deciding controversies regarding venue are
considerations of judicial economy and administration, as well as the convenience of the
parties for which the rules of procedure and venue were formulated ....

Considering the foregoing, the Court is of the opinion that the principal office of plaintiff is
at Davao City which for purposes of venue is the residence of plaintiff.

Hence, the case should be filed in Davao City.

The motion on the ground of improper venue is granted and the complaint DISMISSED on
that ground.
SO ORDERED.
Petitioner's motion for reconsideration5 was denied in an Order6 dated October 1, 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. 107381.7 We
declined to take immediate cognizance of the case, and in a Resolution dated January 11,
1993,8 referred the same to the Court of Appeals for resolution. The petition was docketed
in the appellate court as CA-G.R. SP No. 29996.

On August 31, 1993, the Court of Appeals rendered the assailed judgment9 denying due
course and dismissing the petition. Counsel for petitioner received a copy of the decision
on September 6, 1993.10 Without filing a motion for reconsideration, petitioner filed the
instant petition, assailing the judgment of the Court of Appeals on the following grounds:

5.01. Respondent Court of Appeals denied petitioner procedural due process by failing to
resolve the third of the above-stated issues.

5.02. Petitioner's right to file its action for damages against private respondent in Cebu City
where its principal office is located, and for which it paid P55,398.50 in docket fees, may not
be negated by a supposed estoppel absent the essential elements of the false statement
having been made to private respondent and his reliance on good faith on the truth thereof,
and private respondent's action or inaction based thereon of such character as to change
his position or status to his injury, detriment or prejudice.

The principal issue in the case at bar involves a question of venue. It is to be distinguished
from jurisdiction, as follows:

Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by
consent or waiver upon a court which otherwise would have no jurisdiction over the
subject-matter of an action; but the venue of an action as fixed by statute may be changed
by the consent of the parties and an objection that the plaintiff brought his suit in the wrong
county may be waived by the failure of the defendant to make a timely objection. In either
case, the court may render a valid judgment. Rules as to jurisdiction can never be left to the
consent or agreement of the parties, whether or not a prohibition exists against their
alteration.11

It is private respondent's 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 contracts12 entered into by petitioner 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 petitioner's 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.14 In
the aforesaid case, the defendant therein sought the dismissal of an action 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 plaintiff's articles of incorporation
stated that its principal office was in Cebu City. On appeal, we reversed the Court of
Appeals. We reasoned out thus:

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 ....

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:

...

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)" ....
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. 526 [1916] Clavecilla Radio System v.
Antillo, 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 Clavecilla 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. [italics supplied]

The same considerations apply to the instant case. It cannot be disputed that petitioner's
principal office is in Cebu City, per its amended articles of incorporation15 and by-laws.16 An
action for damages being a personal action,17 venue is determined pursuant to Rule 4,
section 2 of the Rules of Court, to wit:

Venue of personal actions.--All other actions may be commenced and tried 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.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.

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

9 Records, pp. 325-334.

10 Records, p. 335.

11 Santos III v. Northwest Orient Airlines, 210 SCRA 256 (1992) cited in Heirs of Pedro Lopez,

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

12 Rollo, pp. 82-107. Private respondent refers to the following: (1) contract dated July 30,
1979 for the 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 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. Br. 9

Civil Case No. 20,771-91 V.S. Pichon Realty and Dev. Br. 9
Corp. v. DLPC

Civil Case No. 19,640-89 Davao Unicar Corporation v. Br. 8

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 Prior to the 1997 amendment, the provision read:

Sec. 2. Venue in Courts of First Instance

...

b) Personal actions--All other actions may be commenced and tried where the defendant or
any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff
resides, at the election of the plaintiff.

...