Golden Arches Development Corp. vs. St. Francis Square Holdings, Inc.

Facts:

Golden Arches Development Corporation (petitioner) entered into a lease contract over a property
owned by Prince City Realty, Inc. The lease contract commenced on June 27, 1991 and was to
terminate on February 27, 2008. On November 2, 2006, however, petitioner informed St. Francis
Square Holdings, Inc. (respondent), successor-in-interest of ASB Holdings, Inc. by which Prince
Realty, Inc. eventually became known, of its intention to discontinue the lease.

Respondent filed an action for breach of contract and damages against petitioner. Petitioner filed a
Motion to Dismiss for lack of cause of action and improper venue. It claimed that respondent
maintained its principal address in Makati as records of the Securities and Exchange Commission
(SEC) in 2007 show, viz: Cover Sheet of Amended Articles of Incorporation (wherein it is stated that
the business address of ASB Holdings Inc. is at Makati), Company Relationship Information Sheet,
and Director’s Certificate dated February 3, 2007 stating that ASB Holdings, Inc., with principal
address at Makati, had amended its Articles of Incorporation by renaming it (ASB Holdings, Inc.) to
St. Francis Square Holdings, Inc., respondent herein, hence, the complaint should have been filed in
Makati. By filing the complaint in Mandaluyong, petitioner concluded that respondent violated
Section 2, Rule 4 of the Rules of Court.

Opposing the Motion to Dismiss, Respondent claimed that it had closed down its office in Makati
effective December 31, 2005 as it now holds office in Mandaluyong City of which petitioner is aware.
RTC denied the motion to dismiss. Petitioner moved to reconsider the denial of the motion, pointing
out that respondent violated SEC Memorandum Circular No. 03 dated February 16, 2006, the
relevant portion of which reads: In line with the "full disclosure" requirement of existing laws, all
corporations and partnerships applying for registration with the Securities and Exchange
Commission should state in their Articles of Incorporation or Articles of Partnership the (i) specific
address of their principal office, which shall include, if feasible, the street name, barangay, city or
municipality; and (ii) specific residence address of each incorporator, stockholder, director, trustee,
or partner. "Metro Manila" shall no longer be allowed as address of the principal office.

Albeit in respondent’s Amended Articles of Incorporation which was filed in 2007, after the above-
stated SEC circular had been issued, it still indicated its principal office address to be "Metro
Manila," the trial court just the same denied petitioner’s motion for reconsideration by Order of
November 12, 2007.

Issue

WON the principal place of business of petition was the one indicated in the amended articles of
incorporation or where it had actually been holding its principal office at the time of the complaint.
(Principal Office; Where it had actually been residing)

Held

Venue, in essence, concerns a rule of procedure. In personal actions, it is fixed for the greatest
possible convenience of the plaintiff and his witnesses, and to promote the ends of justice.

Respondent’s complaint, being one for enforcement of contractual provisions and recovery of
damages, is in the nature of a personal action which, under Section 2, Rule 4 of the Rules of Court,
shall be filed at the plaintiff’s residence. Specifically with respect to a domestic corporation, it is "in a
metaphysical sense a resident of the place where its principal office is located as stated in the
articles of incorporation."
The letters of petitioner itself to respondent indicate the address of respondent to be at St. Francis
Square Mall, Julia Vargas, Ortigas Center, just as the letters of respondent to petitioner before the
filing of the complaint indicate its (respondent’s) address to be at St. Francis Square Mall, Julia
Vargas, Ortigas Center. Petitioner was thus put on notice that at the respondent’s filing of the
complaint, the latter’s business address has been at Mandaluyong

Although respondent’s Amended Articles of Incorporation of 2007 indicates that its principal
business address is at "Metro Manila", venue was properly laid in Mandaluyong since that is where it
had actually been "residing" (or holding its principal office) at the time it filed its complaint. Section 2,
Rule 4 of the Rules of Court, quoted earlier, authorizes the plaintiff (respondent in this case) to make
a choice of venue for personal actions – whether to file the complaint in the place where he resides
or where defendant resides. Respondent’s choice must be respected as "[t]he controlling factor in
determining venue for cases is the primary objective for which said cases are filed." Respondent’s
purpose in filing the complaint in Mandaluyong where it holds its principal office is obviously for its
convenience and for orderly administration of justice.