Case Summary (G.R. No. L-39272)
Petitioner
Young Auto Supply Co., Inc. and Nemesio Garcia
Respondent
George C. Roxas and the Honorable Court of Appeals (Thirteenth Division)
Key Dates
- October 28, 1987: Execution of Deed of Sale transferring CMDC shares to Roxas for ₱8,000,000
- June 10, 1988: Filing of complaint in the Regional Trial Court (RTC), Branch 11, Cebu City
- February 8, 1991: RTC Order denying Roxas’s motion to dismiss
- June 25, 1993: Supreme Court decision
Applicable Law
- 1987 Philippine Constitution
- Rule 4, Section 2(b), Revised Rules of Court (venue for personal actions)
- Corporation Code, Section 14(3) (designation of principal office)
- Jurisprudence: Cohen v. Benquet Commercial Co.; Clavecilla Radio System v. Antillon
Facts
On October 28, 1987, YASCO, represented by Nemesio Garcia, Nelson Garcia, and Vicente Sy, sold all CMDC shares to Roxas for ₱8,000,000—₱4,000,000 as downpayment and ₱4,000,000 by four post-dated checks of ₱1,000,000 each. YASCO retained the stock certificates as security. While the downpayment was honored, the balance checks were dishonored. Roxas then sold one CMDC market; YASCO recovered ₱600,000 from the proceeds, leaving ₱3,400,000 unpaid. Nelson Garcia and Vicente Sy assigned their rights in this recovery to Nemesio Garcia.
Procedural History
- June 10, 1988: YASCO and Garcia filed in RTC Cebu City a complaint for collection of ₱3,400,000 or, alternatively, turnover of markets, forfeiture of ₱4,600,000 partial payment, plus fees and costs.
- Roxas sought several extensions to file an answer; he was twice declared in default and twice relieved.
- August 22, 1988: Roxas filed a motion to dismiss, alleging non-joinder of indispensable parties, waiver or extinguishment of the claim, and improper venue.
- February 8, 1991: RTC denied the motion to dismiss after hearing testimony and evidence. Roxas’s reconsideration motion was denied, and he defaulted again.
- Roxas petitioned the Court of Appeals, which affirmed on the joinder and waiver issues but dismissed the complaint for improper venue (Pasay City rather than Cebu City). Reconsideration was denied.
- Petitioners elevated the case to the Supreme Court.
Issue
Whether the Court of Appeals erred in dismissing the complaint on grounds of improper venue and failing to recognize estoppel.
Ruling
The Supreme Court granted the petition, set aside the Court of Appeals decision, and reinstated the RTC’s February 8, 1991 order.
Legal Analysis
Rule 4, Section 2(b) of the Revised Rules of Court permits personal actions to be filed where any plaintiff resides. YASCO’s articles of incorporation, per Corporation Co
...continue readingCase Syllabus (G.R. No. L-39272)
Facts of the Case
- On October 28, 1987, Young Auto Supply Co., Inc. (“YASCO”) represented by its president Nemesio Garcia, together with Nelson Garcia and Vicente Sy, sold all shares of Consolidated Marketing & Development Corporation (“CMDC”) to George C. Roxas for ₱8,000,000.00.
- The purchase price was structured as a ₱4,000,000.00 downpayment and ₱4,000,000.00 balance payable by four postdated checks of ₱1,000,000.00 each.
- Immediately after signing, Roxas assumed control of CMDC’s four markets, while the vendors retained the CMDC stock certificates as security.
- The downpayment check was honored, but the four postdated checks were dishonored by the drawee bank.
- Roxas sold one market to a third party; from the sale proceeds, YASCO recovered ₱600,000.00, leaving a balance of ₱3,400,000.00.
- Nelson Garcia and Vicente Sy assigned their rights in the sale proceeds to Nemesio Garcia.
Procedural History
- June 10, 1988: Petitioners filed a complaint in RTC Branch 11, Cebu City, seeking either ₱3,400,000.00 or turnover of control over the remaining three markets, forfeiture of ₱4,600,000.00 partial payment, attorney’s fees, and costs.
- Roxas filed three motions for extension of time to plead; failure to answer led to a default declaration on August 19, 1988, which was later lifted.
- August