IRENE MARCOS ARANETA v. CA (SORIANO, A.
)
August 22, 2008 |V Velasco Jr., J. | Rule 4 - Venue
Flow of the case: (RTC - MR - CA - MR - SC)
PETITIONER: Irene Marcos Araneta, Daniel Rubio, Orlando Reslin, Jose Reslin
RESPONDENTS: Court of Appeals, Julita Benedicto, and Francisca Benedicto-
Paulino
SUMMARY:
 Petitioner Irene Marcos-Araneta instituted before the RTC-Batac Ilocos Norte 2
similar complaints for conveyance of shares of stock, accounting and
receivership against the Benedicto Group (respondents) with prayer for the
issuance of a TRO
o Irene seeks to compel recognition of the trust arrangement she has with
the Benedicto Group
 Respondents filed MTD in both complaints, one of which venue was improperly
laid
 Both cases were consolidated upon Benedicto’s motion
 Benedito died (the original) and was substituted by his wife Julita
 RTC dismissed both complaints, stating that these partly constituted real action
and that Irene did not actually reside in Ilocos Norte so venue was improperly
laid
 Petitioner filed MR – denied
o Pending resolution of P’s MR, she filed a Motion to Admit Amended
Complaint and included Rubio and the 2 Oslin as co-trustees
o RTC dictated in open court denying her MR but deferred action on her
motion to admit amended complain
o RTC later on admitted amended complain
 Respondents moved to dismiss the amended complaint – DENIED
 Respondents filed their Answer to the amended complaint but at the same time
filed Rule 65 Petition for Certiorari to the CA to nullify the RTC Orders
 CA issued TRO and then writ of preliminary injunction enjoining RTC from
conducting further proceedings
 CA decided in favor of Respondents
 Petitioner filed MR, CA denied. Petitioner filed Petition for Review on
Certiorari to SC
 SC ruled in favor of Respondents and affirmed CA decision
o It held that Irene is the principal plaintiff therefore the proper venue is
the plaintiff’s residence. Irene is not a resident of Ilocos Norte, but is a
resident of Forbes Park, Makati.
 This is a PERSONAL ACTION. So proper venue is where the
principal plaintiffs reside
o Respondents did not waive improper venue as they raised at the earliest
time possible, meaning “within the time for but before the filing the
answer to the complaint”
DOCTRINE:
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. According to the late Justice Jose Y. Feria, "the word
'principal' has been added [in the uniform procedure rule] in order to prevent the
plaintiff from choosing the residence of a minor plaintiff or defendant as the venue."
Eliminate the qualifying term "principal" and the purpose of the Rule would, to
borrow from Justice Regalado, "be defeated where a nominal or formal party is
impleaded in the action since the latter would not have the degree of interest in the
subject of the action which would warrant and entail the desirably active
participation expected of litigants in a case."
FACTS:
1. Benedicto and his business associates (Benedicto Group, organized Far East
Managers and Investors, Inc (FEMII) and Universal Equity Corporation (UEC),
respectively. Both corporations, as alleged by Irene, were organized pursuant to
a contract or arrangement 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 for the benefit of
Irene to the extent of 65% of such shares.
2. Several years after, Irene, through her trustee-husband, Gregorio Araneta III,
demanded the reconveyance of said 65%
3. Benedicto Group refused.
4. Petitioner Irene Marcos-Araneta instituted before the RTC-Batac Ilocos Norte 2
similar complaints for conveyance of shares of stock, accounting and
receivership against the Benedicto Group (respondents) with prayer for the
issuance of a TRO
a. 1st case covers the UEC shares
b. 2nd – sought the recovery of 65% of FEMII shares
5. Respondents filed MTD in both complaints, one of which venue was improperly
laid
a. They alleged that Irene did not maintain residence in Ilocos as she in
fact only visited the mansion twice in 1999; did not vote in Batac in the
1998 national elections; and that she was staying at her husband’s
house in Makati City
6. Both cases were consolidated upon Benedicto’s motion
7. Benedito died (the original) and was substituted by his wife Julita
8. RTC dismissed both complaints, stating that these partly constituted real action
and that Irene did not actually reside in Ilocos Norte so venue was improperly
laid
9. Petitioner filed MR – denied
a. Pending resolution of Petitioner’s MR, she filed a Motion to Admit
Amended Complaint and included Rubio and the 2 Oslin as co-trustees
 b. RTC dictated in open court denying her MR but deferred action on her
motion to admit amended complaint
c. RTC later on admitted amended complaint
i. Reasoned out that the inclusion of co-plaintiffs/trustees cured
the defect of improper venue
10. Respondents moved to dismiss the amended complaint – DENIED
11. Respondents filed their Answer to the amended complaint but at the same time
filed Rule 65 Petition for Certiorari to the CA to nullify the RTC Orders
12. CA issued TRO and then writ of preliminary injunction enjoining RTC from
conducting further proceedings
13. CA decided in favor of Respondents
14. Petitioner filed MR, CA denied. Petitioner filed Petition for Review on
Certiorari to SC
ISSUE/s:
1. WON venue had properly been laid in this case – No.
RULING: SC dismissed the petition on the ground of lack of jurisdiction due to
improper venue. Respondents won. SC affirmed CA’s decision, but not for all the
reasons.
Why not for all the reasons? SC did not agree on this part of the CA’s decision:
 Amended complaints can be admitted because MR wasn’t decided yet before the
amendment so it was a matter of right. CA in this case said the amended
complaints should be dismissed. [irrelevant naman with the venue issue but in
case lang sir asks]
RATIO:
1. SC ruled in favor of Respondents and affirmed CA decision
a. It held that Irene is the principal plaintiff therefore the proper venue is
the plaintiff’s residence. Irene is not a resident of Ilocos Norte, but is a
resident of Forbes Park, Makati.
i. This is a PERSONAL ACTION. So proper venue is where the
principal plaintiffs reside
b. Respondents did not waive improper venue as they raised at the earliest
time possible, meaning “within the time for but before the filing the
answer to the complaint”
2. Subject civil cases are personal actions as opposed to the posture of
respondents that it is a real action.
a. In the instant case, petitioners are basically asking Benedicto and his
Group, as defendants a quo, to acknowledge holding in trust Irene's
purported 65% stockownership of UEC and FEMII, inclusive of the
fruits of the trust, and to execute in Irene's favor the necessary
conveying deed over the said 65% shareholdings. In other words, Irene
seeks to compel recognition of the trust arrangement she has with the
Benedicto Group. The fact that FEMII's assets include real properties
does not materially change the nature of the action, for the ownership
interest of a stockholder over corporate assets is only inchoate as the
corporation, as a juridical person, solely owns such assets. It is only
upon the liquidation of the corporation that the stockholders, depending
on the type and nature of their stockownership, may have a real
inchoate right over the corporate assets, but then only to the extent of
their stockownership.
3. We point out at the outset that Irene, as categorically and peremptorily found by
the RTC after a hearing, is not a resident of Batac, Ilocos Norte, as she claimed.
The Court perceives no compelling reason to disturb, in the confines of this
case, the factual determination of the trial court and the premises holding it
together. As to her, Batac, Ilocos Norte is not what Sec. 2, Rule 4 of the Rules of
Court adverts to as the place "where the plaintiff or any of the principal plaintiffs
resides" at the time she filed her amended complaint. That Irene holds CTC No.
17019451 issued sometime in June 2000 in Batac, Ilocos Norte and in which she
indicated her address as Brgy. Lacub, Batac, Ilocos is really of no moment. Let
alone the fact that one can easily secure a basic residence certificate practically
anytime in any Bureau of Internal Revenue or treasurer's office and dictate
whatever relevant data one desires entered.
4. Venue is improperly laid!
a. There can be no serious dispute that the real party-in-interest plaintiff is
Irene. As self-styled beneficiary of the disputed trust, she stands to be
benefited or entitled to the avails of the present suit. It is undisputed too
that petitioners Daniel Rubio, Orlando G. Reslin, and Jose G. Reslin,
all from Ilocos Norte, were included as co-plaintiffs in the amended
complaint as Irene's new designated trustees. As trustees, they can only
serve as mere representatives of Irene.
b. 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. According to
the late Justice Jose Y. Feria, "the word 'principal' has been added [in
the uniform procedure rule] in order to prevent the plaintiff from
choosing the residence of a minor plaintiff or defendant as the venue."
Eliminate the qualifying term "principal" and the purpose of the Rule
would, to borrow from Justice Regalado, "be defeated where a nominal
or formal party is impleaded in the action since the latter would not
have the degree of interest in the subject of the action which would
warrant and entail the desirably active participation expected of
litigants in a case."
c. In the final analysis, the residences of Irene's co-plaintiffs cannot be
made the basis in determining the venue of the subject suit. This
conclusion becomes all the more forceful considering that Irene herself
initiated and was actively prosecuting her claim against Benedicto, his
heirs, assigns, or associates, virtually rendering the impleading of the
trustees unnecessary.