Case Summary (G.R. No. 186993)
Petitioner
The petitioners advanced a loan of US$300,000 to the respondents on September 2, 1992, evidenced by a promissory note with 10% per annum interest, payable on demand. After unpaid demands and accrued interest, petitioners sought judicial collection and appointed Atty. Eldrige Marvin B. Aceron as attorney-in-fact via Special Powers of Attorney executed on August 6, 2006.
Respondent
The respondents executed the promissory note promising payment but failed to pay despite demands. They contended the complaint was filed in an improper venue (Quezon City) and argued that the venue must be determined by the residence of the real parties in interest (petitioners or respondents), not by the residence of the petitioners’ attorney-in-fact.
Key Dates
- September 2, 1992: Loan made and promissory note executed.
- August 28, 2006: Demand letter sent; outstanding balance claimed as US$719,671.23.
- August 6, 2006: Special Powers of Attorney executed in Los Angeles.
- September 15, 2006: Complaint for collection of sum of money filed in RTC Quezon City by Atty. Aceron.
- November 21, 2006: Respondents’ motion to dismiss (improper venue, prescription).
- April 12, 2007 and August 27, 2007: RTC orders denying dismissal and denying reconsideration.
- August 28, 2008: CA Decision annulling RTC orders and dismissing the complaint.
- February 20, 2009: CA Resolution denying reconsideration.
- Supreme Court final disposition: petition denied (decision rendered under applicable 1987 Constitution).
Applicable Law and Rules Cited
- 1987 Philippine Constitution (applicable given decision date 2012).
- 1997 Rules of Civil Procedure / Rules of Court provisions as cited in the record: Section 2, Rule 4 (venue), Section 2, Rule 3 (real party in interest), and Section 3, Rule 3 (representatives as parties). Relevant jurisprudence referenced in the decision (e.g., Cohen and Cohen v. Benguet Commercial Co.) is relied upon by the Court in applying these rules.
Antecedent Facts
The petitioners extended a demand loan; interest accrued to an asserted balance of US$719,671.23 by August 2006. With petitioners residing abroad, they executed Special Powers of Attorney appointing Atty. Aceron to file and prosecute the collection action in the Philippines. Atty. Aceron filed the complaint in the RTC of Quezon City. Respondents moved to dismiss for improper venue and prescription; the venue objection was centrally contested.
Procedural History
The RTC denied the respondents’ motion to dismiss (April 12, 2007) and denied reconsideration (August 27, 2007), reasoning that venue could lie where the plaintiffs’ attorney-in-fact (Atty. Aceron) resided under Section 2, Rule 4. The respondents petitioned the CA for certiorari; the CA annulled the RTC orders, held venue improper in Quezon City, and dismissed the complaint (August 28, 2008). The CA denied reconsideration (February 20, 2009). Petitioners brought the matter to the Supreme Court by petition for review on certiorari under Rule 45.
Issue Presented
Whether the Court of Appeals committed reversible error in ruling that the complaint must be dismissed on the ground that venue was not properly laid in Quezon City.
Supreme Court Holding
The Supreme Court denied the petition and affirmed the Court of Appeals’ annulment of the RTC orders and dismissal of the complaint for improper venue.
Reasoning — Venue and Residence of Parties
The Court reiterated that venue rules for personal actions (such as collection of sum of money) confer an election to the plaintiff to file where (1) the plaintiff or any of the plaintiffs resides, or (2) where the defendant or any of the defendants resides or may be found. However, when the plaintiff has no residence in the Philippines, the plaintiff has no election as to venue; the action may only be filed in the court of the place where the defendant resides. Applying this principle and the cited precedent (Cohen and Cohen v. Benguet Commercial Co.), the Court observed that because the petitioners were residents of Los Angeles and thus had no residence in the Philippines, they lacked a choice of venue; the complaint therefore could only be filed in the RTC of Bacolod City, where the respondents reside.
Reasoning — Attorney-in-Fact Not a Real Party in Interest
The petitioners argued that Atty. Aceron, as attorney-in-fact, was a real party in interest for venue purposes and that his Quezon City residence made venue proper there. The Court rejected this argument. Under Section 2, Rule 3 of the Rules of Court, a real party in interest is one who stands to be benefited or injured by the judgment and is entitled to the avails of the suit. Atty. Aceron did not stand to benefit o
...continue readingCase Syllabus (G.R. No. 186993)
Case Citation and Procedural Posture
- Reported at 693 Phil. 106, Second Division, G.R. No. 186993, decided August 22, 2012; decision authored by Justice Reyes.
- Petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside:
- Court of Appeals (CA) Decision dated August 28, 2008 (CA-G.R. SP No. 101159), and
- CA Resolution dated February 20, 2009 denying reconsideration.
- Goal of petition: reverse CA annulment of RTC Orders dated April 12, 2007 and August 27, 2007 (RTC of Quezon City, Branch 81, Civil Case No. Q-06-58834) which had denied respondents’ motion to dismiss for improper venue; CA had instead dismissed the complaint for improper venue.
- Final disposition by the Supreme Court: petition denied; CA Decision and Resolution affirmed.
Antecedent Facts (Substance of Claim)
- On September 2, 1992, spouses Alan and Em Ang obtained a loan of US$300,000.00 from Theodore and Nancy Ang.
- On the same date, the respondents executed a promissory note promising to pay the said amount with interest at ten percent (10%) per annum, upon demand.
- Despite repeated demands, respondents failed to pay.
- On August 28, 2006, petitioners sent a demand letter stating the outstanding indebtedness had grown to US$719,671.23, inclusive of ten percent (10%) annual interest accumulated over the years.
- Respondents did not settle the obligation after receipt of the demand letter.
Representation and Filing of Suit
- On August 6, 2006, while residing in Los Angeles, California, petitioners executed Special Powers of Attorney in favor of Attorney Eldrige Marvin B. Aceron authorizing him to file an action in court against the respondents.
- On September 15, 2006, Atty. Aceron, on behalf of petitioners, filed a Complaint for collection of sum of money with the Regional Trial Court (RTC) of Quezon City.
Respondents’ Motion to Dismiss and Grounds
- On November 21, 2006, respondents moved to dismiss the complaint on the grounds of improper venue and prescription.
- Respondents’ venue contention: under Section 2, Rule 4 of the Rules of Court, venue for a personal action may be laid only where either the plaintiff or the defendant resides; respondents averred they reside in Bacolod City while petitioners reside in Los Angeles, California, therefore the Quezon City filing was improper.
- Respondents further argued that the residence of petitioners’ representative (Atty. Aceron) cannot be the basis for venue because he is not the real party in interest.
RTC Proceedings and Orders
- RTC of Quezon City issued Order dated April 12, 2007 denying respondents’ motion to dismiss.
- RTC rationale: attached Special Powers of Attorney show that petitioners appointed Atty. Aceron as attorney-in-fact to prosecute the claim; considering Atty. Aceron’s address is in Quezon City, venue may lie where he resides pursuant to Section 2, Rule 4 of the 1997 Rules of Civil Procedure.
- Respondents filed a motion for reconsideration asserting no law permits filing in court of the representative’s residence; this motion was denied by RTC Order dated August 27, 2007.
Petition for Certiorari to the Court of Appeals
- Respondents (before the CA) filed a petition for certiorari alleging the RTC erred in denying dismissal for improper venue; they argued the proper venue was the court of the place where the petitioners or respondents reside, and that the attorney-in-fact’s residence is immaterial.
Court of Appeals Decision (August 28, 2008)
- CA annulled and set aside the RTC Orders dated April 12, 2007 and August 27, 2007 and directed dismissal of the complaint.
- CA’s key holdings:
- The place of residence of the plaintiff’s attorney-in-fact is immaterial in determining venue for a case filed on behalf of the principal.
- What should be considered is the residence of the real parties in interest (plaintiff and defendant).
- Residence defined as the permanent home to which one intends to return; residence is vital when dealing with venue.
- Because petitioners (plaintiffs below) were residents of Los Angeles, California (beyond territorial jurisdiction of Philippine courts), the complaint should have been filed in Bacolod City where the defendants (respondents below) reside.
- Filing in Quezon City, where the representative resides, was contrary to Section 2, Rule 4 of the 1997 Rules of Court; hence dismissal for improper venue was proper.
- Petitioners’ reconsideration before the CA was denied by Resolution dated February 20, 2009.
Issue Presented to the Supreme Court
- Whether the Court of Appeals committed reversible error in ruling that the complaint must be dismissed on the ground that venue was not properly laid.
Supreme Court Holding (Disposition)
- The petition is DENIED.
- The Court affirmed the CA’s annulment of the RTC Orders and dismissal of the complaint for improper venue.
- The Decision dated August 28, 2008 and Resolution dated February 20, 2009 of the Court of Appeals in CA-G.R. SP No. 101159 are AFFIRMED.
Supreme Court Reasoning — Venue Principles Applied
- General principles:
- Venue rules for personal actions are fixed for convenience of plaintiffs and their witnesses but regulated by the Rules of Court and not subject to plaintiff’s caprice.
- For personal actions enforcing contracts, the plaintiff has options to file where (1) the plaintiff resides or (2) the defendant resides or may be found; residence must exist at the time the action is commenced.
- Critical exception when plaintiff has no residence in the Philippines:
- When plaintiff does not reside in the Philippines, the complaint may only be filed in the c