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59.

Marcos-Araneta v CA
[G.R. 154096 August 22, 2008]

FACTS:

- Amb. Roberto S. Benedicto organized Far East Managers and Investors, Inc. (FEMII)
and Universal Equity Corporation (UEC).
- Irene Marcos-Araneta alleged that both corporations were organized pursuant to a
contract or arrangement whereby Benedicto placed in his names and of his
associates the shares of the corporation with the obligation to hold those shares in
trust for the benefit of Irene to the extent of 65%.
- Gregorio Ma. Araneta III(husband) demanded the reconveyance of said 65% but the
Benedicto Group refused.

PROCEDURE:
- Irene instituted two similar complaints before the RTC: conveyance of shares of
stocks, and accounting and receivership with prayer for issuance of TRO against
Benedicto, his daughter and 20 other defendants.
- First case covered UEC shares while the second pertained to the FEMII shares.
- Francisca (daughter) filed a Motion to Dismiss followed later by an Amended
Motion to Dismiss [UEC case]
- Benedicto oved to dismiss [FEMII case] adopting in toto the 5 grounds raised by
Francisca (among these were 1.intra corporate dispute , 2. Venue was improperly
laid and 3. Failure to state Cause of Action)
- Irene filed a Consolidated Oppositionwhich respondents countered with a Joint
Reply to Opposition. Cases were consolidated.
- Respondents presented a Joint Affidavit of the household staff the Marcos Mansion
in Batac, Ilocos Norte attesting that irene did not maintain residence in said place,
as she only visited the mansion twice and that she is staying with her husband in
Makati City.
- Irene countered by present her Community Tax Certificate issued in Curimao, Ilocos
Norte.
- Benedicto died and was substituted by his wife and Francisca.
- RTC dismissed both complaints : Real action, Irene did not reside in Ilocos therefore
venue was improperly laid.
- Irene interposed a MR, pending e resolution of the MR, she filed a Motion to Admit
Amended Complaint.
- The amended complaint included additional plaintiffs who were said to be from
Ilocos Norte and the new trustees of Irene.(same cause of action but concerns FEMII
shares only)
- RTC denied the MR and later on entertained the amended complaint on the ground
that Rules of Court allows Irene to file an amended complaint and that the inclusion
of the additional plaintiffs cured the defect of improper venue.
- Respondents moved to dismiss the amended complaint but it was denied. RTC held
that the First order of dismissal at the time of the filing of the amended complaint
had not yet become final. Consequently the filed an answer. And on the same day
went ot the CA via petition for certiorari.
- CA issued TRO enjoining RTC from further proceedings and set aside RTCs orders
and dismissed the case.
-

ISSUE/S:
- WoN the amended complaints should be dismissed.
- WoN CA erred in holding that respondents did not waive improper venue.
- WoN Batac, Ilocos Norte was a proper venue.

RULING:
- 1st Issue Sec 2, Rule 10 provides that a party may amend his pleading at any time
before a responsive pleading is served or in any case at any time within ten days
after it is served. RTC did not err in admitting petitioners amended complaint, Julita
and Francisca not having yet answered the original complaints (MTD is not a
responsive pleading) when the amended complaint was filed.
- Irene by force of Sec 2, Rule 10 had as a matter of right the option; motion to admit
amended complaint was not even necessary.
- RTC dismissed June 29, 2000 however the finality of such dismissal had not set in
when petitioner filed the amended complaint on July 17,2000 because Irenes
motion for reconsideration was only resolved on Aug 25,2000.
- 2nd Issue Where the defendant failed to file a MTD on the ground of improper venue
or include the same as an affirmative defense, he is deemed to have waived his right
to object on that ground. In this case, respondents raised the ground at the earliest
timehence they did not abandon this objection.
- 3rd Issue Respondents points that the action of Irene is a real action hence the venue
is where the property but the court ruled that this is a Personal action because the
petitioners are basically asking only that the respondents recognize the trust
arrangement hence venue is to be considered based on the plaintiffs residences.
- Court held that the real party interest plaintiff is Irene and that the co plaintiffs
added in the amended complaint were designated as trustees hence they are mere
representatives. Sec 2, Rule 4 clearly provides that when there is more than one
plaintiff, the residence of the principla plaintiff should be the basis in determining
venue.
- It was clearly established in the RTC that Irene is not a resident of Batac, that she
holds a CTC is of no moment as it can be easily obtained. Irene being the principal
plaintiff, the civil cases ought to be commenced and prosecuted at the place where
she resides. (resident of Forbes Park, Makati)

FALLO
WHEREFORE, the instant petition is hereby DISMISSED. The Decision and
Resolution dated October 17, 2001 and June 20, 2002, respectively, of the CA in CA-
G.R. SP No. 64246, insofar as they nullified the assailed orders of the RTC, Branch
17 in Batac, Ilocos Norte in Civil Case Nos. 3341-17 and 3342-17 on the ground of
lack of jurisdiction due to improper venue, are hereby AFFIRMED. The Orders
dated October 9, 2000, December 18, 2000, and March 15, 2001 of the RTC in Civil
Case Nos. 3341-17 and 3342-17 are accordingly ANNULLED and SET ASIDE and said
civil cases are DISMISSED.

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