Marcos-Araneta vs.
CA o Respondent Benedicto and Francisca filed a motion to
G.R. 154096
Aug. 22, 2008
Velasco, Jr., J.
Summary: petitioner filed a complaint for conveyance of shares of stock,
accounting and receivership against respondents before the RTC of Batuc,
Ilocos Norte, Respondents assailed for improper venue. RTC dismissed
the case for improper venue. Pending MR, petitioner amended the
complaint to include several co-plaintiffs who live in the area. RTC
granted and admitted the amended complaint. CA reversed.
Held: For personal actions, venue shall be where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in case of non-resident, where he may be found, at
the election of plaintiff. If there is more than one plaintiff, the residence of
the principal parties should be the basis. This is to prevent the plaintiff
from choosing the residence of a minor plaintiff or defendant as a venue.
Facts:
- Sometime in 1968 and 1972, Roberto Benedicto (Benedicto) and his
business associates—Benedicto Group—organized Far East
Managers and Investors, Inc. (FEMII) and Universal Equity
Corporation (UEC), respectively.
- Several years later, petitioner Irene Marcos-Araneta (Irene) alleged
that both corporations were organized pursuant to a contract whereby
Benedicto, as trustor, placed in his name and in the name of the
Benedicto group, as trustees, the shares of stocks of FEMII and UEC
with the obligation to hold their fruits in trust for the benefit of Irene
to the extent of 65% of such shares. Through her trustee-husband
(Gregorio Araneta III), she demanded the reconveyance of said
stockholdings. Benedicto Group refused.
- Irene then instituted before the RTC of Batac, Ilocos Norte the
complaints for conveyance of shares of stock, accounting and
receivership against the Benedicto Group. Impleaded in the
complaints are Benedicto, his daughter Francisca, and other
defendants.
dismiss, stating, among other things, that the venue was
improperly laid.
- During the preliminary proceedings on their motions to dismiss,
Benedicto and Francisca, to bolster their claim on improper venue,
presented the joint affidavit of several of the household staff of the
Marcos Mansion in Batac, Ilocos Norte, who attested that Irene did
not maintain residence in the said place as she had only visited the
mansion at least twice in 1999; that she did not vote in Batac during
the 1998 national elections; and that she was staying at her husband’s
house in Makati City.
o Irene: presented her community tax certificate.
- In the meantime, Benedicto died and was substituted by his wife,
Julita.
- June 29, 2000: RTC: dismissed the complaints for improper venue.
o Irene interposed a Motion for Reconsideration.
- Pending the MR, on July 17, 2000, Irene filed a motion to admit
Amended Complaint, attaching therein the names of additional
plaintiffs who were Irene’s new trustees and who all resided in Ilocos
Norte.
- August 25, 2000: RTC denied Irene’s MR, but deferred action on her
motion to admit amended complaint.
- Oct. 9, 2000: RTC accepted the amended complaint.
- CA: reversed.
Hence, this petition.
Held:
- RTC has no jurisdiction on the Ground of Improper Venue
o Julita and Francisca: What is involved here is a real action
(because the corporation hold some real properties), and is
outside the territorial jurisdiction of the RTC in Batac.
o Personal Action the plaintiff seeks the recovery of
personal property, the enforcement of a contract, or the
recovery of damages. Proper court is where the plaintiff or
any of the principal plaintiffs resides, or where the defendant
or any of the principal defendants resides, or in case of non-
resident, where it may be found, at the election of the
plaintiff. (Rule 4, sec. 2)
 Real Action those affecting title to or possession of real
property or interest therein. Proper court is the one which has
territorial jurisdiction over the property.
o The amended complaint is an action in personam, it being a
suit against Francisca and the Benedicto (now Julita) on the
basis of their alleged personal liability to Irene upon an
alleged trust constituted in 1968/1972.
 The fact that FEMII’s assets include real properties
does not materially change the nature of the action.
o It has been categorically found by the RTC that Irene is not a
resident of Batac, Ilocos Norte. Accordingly, Irene cannot
opt for Batac as venue of her reconveyance complaint.
 Even if her co-plaintiffs in the amended complaint
all live in the said place, Rule 4 sec.2 indicates
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. “Principal” has been added in the rule in
order to prevent the plaintiff from choosing the
residence of a minor plaintiff or defendant as the
venue. As Irene stands undisputedly as the principal
plaintiff, the subject civil cases ought to be
commenced at the place where she resides.
o As a Motion to Dismiss is not a responsive pleading, the
RTC did not err in admitting Irene’s amended complaint.
- Respondents Julita and Francisca did not waive the attack on
improper venue by filing numerous pleadings thereafter.
o The ground on improperly laid venue must be raised
seasonably, else it would be deemed waived.
o Where the defendant failed to either file a motion to dismiss
on the ground of improper venue or include the same as an
affirmative defense, he is deemed to have waived the same.
 In the present case, Benedicto and Francisca raised
the same “within the time for but before filing the
answer to the complaint”. They also pursued it in
their answer to the amended complaints and in their
petition for certiorari before the CA. Hence, they
cannot be deemed to have waived.
Petition Dismissed.

(Other issues)
- Verification and certification of non-forum shopping is not
jurisdictional but merely a formal requirement which the Court may
direct a party to comply with or to correct.
- CA overstepped its boundaries when, in disposing the respondents’
petition for certiorari (under rule 65), it passed on factual issues.
o CA virtually resolved petitioner’s case for reconveyance on
its substantive merits even before evidence on the matter
could be adduced.
- Admission of amended complaint is proper; in fact, it is a matter of
right under Rule 10 sec.2.
o Rule 10, sec. 2: Amendment as a matter of right.—A party
may amend his pleading once as a matter of right at any time
before a responsive pleading is served or in the case of a
reply, at any time within 10 days after it is served.