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G.R. No. 104175 June 25, 1993YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners,

vs.THE HONORABLE COURT OF APPEALS (THIRTEENTH DIVISION) AND

GEORGE CHIONG ROXAS,respondents.

FACTS: Young Auto Supply Co.(YASCO), petitioners of herein case, sold toRoxas, herein private respondents, Consolidated Marketing & DevelopmentCorporation (CMDC) shares of stocks worth Php 8,000,000.00 payable asfollows; Php4,000,000.00 downpayment and Php4,000,000.00 as its balance tobe paid in 4 installments. A check issued for the payment of the downpaymentwas honored by the drawee bank, however, the 4 subsequent post-dated checkswas dishonored by the drawee bank. In the meantime, roxas sold one of themarkets to a third party with the amount of 600,000.00 and paid it directly toYASCO leaving Roxas balance amounting to 3,400,000.00.

Petitioner then filed a complaint against private respondent in RTC branch 11 ofCebu City, praying that he be ordered to pay petitioners the sum of3,400,000.00ot that the full control of the 3 markets be turned over to YASCOand Garcia, being the assignee of YASCOs president. They also filed acomplaint praying for the forfeiture of the partial payment of Php4, 600,000.00and the payment of attorneys fees and costs. Respondents then in responsefiled a motion for extension of time to submit his answers. But despite of saidmotion, ha failed to do so causing petitioners to file a motion declaring him indefault. Private respondent, Roxas, then filed through a new counsel a thirdmotion for extension of time to submit a responsive pleading.

RTC both denied the respondents motion to dismiss and motion forreconsideration. Roxas filed an unverified Motion to Lift the Order of Defaultwhich was not accompanied with the required affidavit or merit. But withoutwaiting for the resolution of the motion, he filed a petition for certiorari with theCourt of Appeals.

The Court of Appeals sustained the findings of the trial court but ordered thedismissal of the complaint on the ground of improper venue. A subsequentmotion for reconsideration by petitioner was to no avail. Hence this petition.

ISSUE: Whether the Court of Appeals erred in dismissing the case on the groundthat the venue was improperly laid.

RULING: The Court of Appeals erred in holding that the venue was improperlylaid in Cebu City.

In the Regional Trial Courts, all personal actions are commenced and tried in theprovince or city where the defendant or any of the defendants resides or may be

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found, or where the plaintiff or any of the plaintiffs resides, at the election of theplaintiff [Sec. 2(b) Rule 4, Revised Rules of Court]

A corporation has no residence in the same sense in which this term is applied toa 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 thearticles of incorporation The Corporation Code precisely requires eachcorporation to specify in its articles of incorporation the "place where the principaloffice 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 acorporation in a definite place, instead of allowing it to be ambulatory.

In Clavencilla Radio System v. Antillon, 19 SCRA 379 ([1967]), this Courtexplained why actions cannot be filed against a corporation in any place wherethe corporation maintains its branch offices. The Court ruled that to allow anaction to be instituted in any place where the corporation has branch offices,

would create confusion and work untold inconvenience to said entity. By thesame token, a corporation cannot be allowed to file personal actions in a placeother than its principal place of business unless such a place is also theresidence of a co-plaintiff or a defendant.

If it was Roxas who sued YASCO in Pasay City and the latter questioned thevenue on the ground that its principal place of business was in Cebu City, Roxascould argue that YASCO was in estoppel because it misled Roxas to believe thatPasay City was its principal place of business. But this is not the case before us