(IRENE) Marcos-Araneta, (Rubio, Orlando and Jose Reslin) vs.

CA, (daughter Francisca and

wife Julita) Benedicto
(2008)

- Ambassador (Roberto) Benedicto (now deceased) and Benedicto Group organized Far
East Managers Inc. (FEMI) and Universal Equity Corp. (UEC).
o Irene Marcos alleges that both corporation were organized according to a contract
where Benedicto (as trustor) placed in his name and in name of his associates
(as trustees) the shares of stockes of FEMI and UEC with obligation to hold
shares in trust and for the benefit of Irene (65% of shares)
o Irene (through husband Araneta) demanded reconveyance of 65% stockholdings
Benedicto Group refused.
- Irene filed 2 complaints for conveyance of shares of stock, accounting and receivership
against Benedicto Group
o 1 covered UEC shares
o 2 covered FEMI shares
- Francisca (daughter) filed Motion to Dismiss the UEC case
- Benedicto filed Motion to Dismiss the FEMI case
- Both raised the same grounds:
o SEC has jurisdiction over intra-corporate dispute
o Venue was improperly laid
o Complaint failed to state cause of action as there was no allegation that Irene (as
a beneficiary of the purported trust) has accepted the trust created in her favor
- The cases were consolidated upon Benedictos motion.
- During preliminary proceedings:
o Benedictos presented Joint Affidavit of Valdez, Bactat, and Raso all attesting of
being employed as household staff at the Marcos Mansion in Batac, Ilocos
Norte and that Irene did NOT maintain residence in such place as she
visited only twice in 1999; she did NOT vote in Batac (in 1998 elections); and
she was staying at her husbands house in Makati.
- Irenes Evidence:
o PhP 5 Community Tax Certificate (CTC) issued on (11/99) in Curimao, Ilocos
Norte
- Irene filed Motion to Admit Amended Complaint Rubio, (Orlando and Jose) Reslin
were additional plaintiffs
o The added plaintiffs were Irenes new trustees and all from Ilocos Norte
o Amended Complaint stated the same cause of action but sought reconveyance of
FEMI shares only
- RTC denied Irenes MR; but deferred action on Motion to Admit
- RTC admitted Amended Complaint
o Rule 10, Sec. 2 Irene may opt to file amended complaint
o Inclusion of additional plaintiffs (one was a Batac resident) cured the defect
of improper venue
 o Rule 3, Sec. 2 and 3 (Rule 4, Sec. 2) allow filing of amended complaint in the
place of residence of any of Irenes co-plaintiffs
- Motion to Dismiss was DENIED
o As to the fact that there was no complaint to be amended, the RTC said that Irene
had a right as plaintiff to amend complaint absent any responsive pleading
thereto
o The filing of the Amended Complaint (July 17, 2000) superseded the original
complaints the dismissal of which (June 29, 2000) had NOT yet become final
(as of filing)
- Benedictos filed Answer to complaint; also filed Certiorari to CA
- CA required submission of authority of Julita to Francisca for representation (as Julita
had not signed certification on non-forum shopping)
o Affidavit of Authority to Represent was submitted
- CA TRO, prelim injunction.
- CA DISMISSED Amended Complaints
o MR denied
- Irene et al filed 45 Review to SC

W/N there was substantial compliance with Rule on Verification and Certification of
Non-Forum Shopping (on the part of Benedictos) YES

- SC Verification is NOT jurisdictional but merely a formal requirement which the

court may motu propio direct a party to comply with or correct (as the case may be)
o KILUSAN-OLALIA vs. CA Verification is a formal, not a jurisdictional
requisite, as it is mainly intended to secure an assurance that the allegations
therein made are done in good faith or are true and correct and not mere
speculation. The Court may order the correction of the pleading, if not verified, or
act on the unverified pleading if the attending circumstances are such that a strict
compliance with the rule may be dispensed with in order that the ends of justice
may be served
- SC
o General Rule: All plaintiffs/petitioners should sign the Certificate on Non-Forum
Shopping
o Exception (among others) : Signature of any of the principal petitioners/parties
(i.e. Francisca) is substantial compliance with the rule.
Francisca is a principal party in the FEMI case; heir of Benedicto;
substitute for Benedicto (along with her mother Julita)
o Should there exist a commonality of interest among the parties, OR where the
parties filed the case as a "collective," raising only one common cause of action
OR presenting a common defense, then the signature of one of the petitioners
or complainants, acting as representative, is sufficient compliance.
In this case, Francisca and Julita filed petition as a collective sharing
common interest and having common single defense to protect their rights
over the shares
 W/N the merits of the case CANNOT be resolved on Certiorari (65) YES

- SC Irene is correct that the CA (exercising certiorari jurisdiction) is limited to

reviewing errors of jurisdiction only.
o CA (via Certiorari 65)CANNOT delve into the issue of trust as it needs
establishing facts based on evidence
- A question of law exists when the doubt or controversy concerns the correct application
of law or jurisprudence to a certain given set of facts; or when the issue does not call for
an examination of the probative value of the evidence presented, the truth or falsehood of
facts being admitted.
- A question of fact obtains when the doubt or difference arises as to the truth or falsehood
of facts or when the query invites the calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other and to the whole, and
the probability of the situation
- SC The CA overstepped its boundaries when it proceeded to pass on factual issue of
existence/enforceability of the asserted trust
o It resolved the case of reconveyance before presentation of evidence on the matter
o Not even stated whether the trust is implied/express different in manner of
proving existence

W/N the admission of the amended complaint was proper YES

- CA: Filing of the amended complaint was after the RTC ordered the finality of dismissal
of the original complaints (FEMI and UEC)
- SC: Irene et al are correct because the RTC dismissal order had an MR
o Rule 10, Sec.2 Amendments 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 ten (10) days after it is served.
o Responsive Pleading = those which seek affirmative relief and/or set up
defenses, like an Answer.
o SC: A motion to dismiss is not a responsive pleading for purposes of Sec. 2 of
Rule 10
- SC Julita and Francisca did NOT YET filed their Answer before the Amended
Compaint was filed
o RTC was correct that - Irene's Motion to Admit amended complaint was NOT
even necessary
o SC notes, however, that the RTC has NOT offered explanation why it saw fit to
grant the Motion to Admit in the first place
o Apline Lending vs. Corpuz It is the correlative duty of the trial court to accept
the amended complaint; otherwise, mandamus would lie against it. In other
words, the trial court's duty to admit the amended complaint was purely
 ministerial. In fact, respondent should not have filed a motion to admit her
amended complaint

W/N Benedictos waived right to object on improper venue NO

- Irene et al: Benedictos were precluded from raising the matter of improper venue by
their filing of numerous pleadings which signify a waiver of objection to improper
venue
- SC NO.
- Venue essentially concerns a rule of procedure which, in personal actions, is fixed for
the greatest convenience possible of the plaintiff and his witnesses.
- The ground of improperly laid venue must be raised seasonably, else it is 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 his right to object to improper venue.
- SC In the case at bench, Benedicto and Francisca raised at the earliest time
possible, meaning "within the time for but before filing the answer to the complaint,"
the matter of improper venue.
o They would thereafter reiterate and pursue their objection on venue, first, in their
answer to the amended complaints and then in their petition for certiorari
before the CA.

W/N the RTC has NO jurisdiction over the FEMI-UEC cases due to improper venue
YES (on different ground)

- Benedictos Argument: venue is improperly laid since the suit is a real action involving
real properties located outside territorial jurisdiction of RTC-Batac
- SC: NO!
o In a personal action, the plaintiff seeks the recovery of personal property, the
enforcement of a contract, or the recovery of damages. Venue is the court
where the plaintiff or any of the principal plaintiffs resides, or where the
defendant or any of the principal defendants resides, or in the case of a non-
resident defendant where he may be found, at the election of the plaintiff
o Real actions are those affecting title to or possession of real property, or interest
therein. Venue shall be the proper court which has territorial jurisdiction over
the area wherein the real property involved, or a portion thereof, is situated
(Rule 4, Sec. 1)
- SC Here, Irene et al are asking Benedicto to acknowledge holding in trust Irenes
purported 65% stockownership of UEC and FEMI + execute in Irenes favor the
necessary conveying deed personal action
o The fact that FEMIs assets include real properties does NOT materially
change the nature of the action because the ownership interest of a
 stockholder over corporate assets is only inchoate as the corporation, as a juridical
person, solely owns such assets
- SC the Amended Complaint is an action in personam (a suit against Francisca and
Benedicto) on the basis of alleged personal liability to Irene (upon the alleged trust)
o The actions were NOT in rem where the actions are against the real properties
instead of against persons.

- Interpreting Rule 3, Secs. 2 & 3; Rule 4, Sec. 2

- SC As found by the RTC, Irene is NOT a resident of Batac, Ilocos Norte
o SC: Accordingly, Irene CANNOT (in a personal action) opt for Batac as venue
of the reconveyance complaint.
o Rule 4, Sec. 2 adverts to a place "where the plaintiff or any of the principal
plaintiffs resides" Batac is Not such place at the time she filed her Amended
Complaint
o The CTC is of no moment. One can easily secure a basic residence certificate
practically anytime in any Bureau of Internal Revenue or treasurer's office and
dictate whatever relevant data one desires entered. Also, Irene appended such
CTC on her MR after RTC said she is NOT a Batac resident.

- SC VENUE IS IMPROPERLY LAID

- The real party-in-interest is Irene.
o As alleged beneficiary of the disputed trust, she stand to be benefited or entitled to
the avails of the present suit.
o The other co-plaintiffs were Irenes new designated trustees. As trustees,
they can only be mere representatives of Irene.
- Rule 4, Sec. 2 mentions the residence of principal parties as basis for proper venue.
o Justice Feria the word 'principal' has been added [in the uniform procedure
rule] in order to prevent the plaintiff from choosing the residence of a minor
plaintiff or defendant as the venue.
o Justice Regalado Eliminate the qualifying term "principal" and the purpose of
the Rule would "be defeated where a nominal or formal party is impleaded in the
action since the latter would not have the degree of interest in the subject of the
action which would warrant and entail the desirably active participation expected
of litigants in a case.
- SC RTC-Batac was an improper venue for the reconveyance action
o While the 3 co-plaintiffs may be resident of Batac, none of them can be
considered as principal party-plaintiffs in the civil cases as they were mere
trustees of Irene included in the amended complaint
o As trustees, the co-plaintiffs (via Rule 3, Sec.3) have a right to prosecute a suit,
but only on behalf of the beneficiary who must be included in the title of the
case and shall be deemed to be the real party-in-interest.
o More importantly, Irene herself initiated and was actively prosecuting her claim
against Benedicto rendering the impleading of trustees unnecessary
- Irene was a resident of Forbes Park, Makati.
 o Jurisprudence has it that one can have several residence if established as fact.
o SC The Court will not speculate on the reason why Irene, for all the
inconvenience and expenses she and her adversaries would have to endure by a
Batac trial, preferred that her case be heard and decided by the RTC in
Batac.
- Litigants ought to bank on the righteousness of their causes, the superiority of their cases,
and the persuasiveness of arguments to secure a favorable verdict. It is high time that
courts, judges, and those who come to court for redress keep this ideal in mind.
- DISMISSED. Improper Venue!