GR 188146; (February, 2017) (Digest)
G.R. No. 188146 , February 1, 2017
PILIPINAS SHELL PETROLEUM CORPORATION, Petitioner, vs. ROYAL FERRY SERVICES, INC., Respondent.
FACTS
Royal Ferry Services, Inc. filed a verified Petition for Voluntary Insolvency with the Regional Trial Court (RTC) of Manila. Its Articles of Incorporation stated its principal office was in Makati City. However, Royal Ferry alleged it had abandoned that office and its actual principal office was located in Intramuros, Manila, a fact supported by evidence that its books and assets were taken from the Manila address by the sheriff. The RTC initially declared Royal Ferry insolvent.
Pilipinas Shell, a creditor, filed a Motion to Dismiss, arguing improper venue. It contended that under the Insolvency Law, the petition must be filed in the court of the province or city where the debtor resides, and a corporation’s residence is fixed by its Articles of Incorporation. The RTC initially denied the motion, finding Royal Ferry had moved to Manila, but later reconsidered and dismissed the petition, ruling that a corporation cannot change its legal residence without amending its Articles. Royal Ferry appealed to the Court of Appeals, which reinstated the insolvency proceedings.
ISSUE
Whether the RTC of Manila had jurisdiction over the voluntary insolvency petition despite the corporation’s Articles of Incorporation stating a Makati address.
RULING
Yes, the RTC of Manila had jurisdiction. The Supreme Court affirmed the Court of Appeals. The general rule under the Insolvency Law ( Act No. 1956 ) is that venue for a voluntary insolvency petition lies in the province or city where the debtor resides. For a corporation, residence is prima facie the place stated as its principal office in its Articles of Incorporation. However, this is not an inflexible rule. Jurisprudence establishes that when it is proven and uncontroverted that a corporation has actually abandoned its old principal office and established a new one in a different location, the corporation is deemed a resident of the place where its actual principal office is found for purposes of venue.
In this case, it was undisputed that Royal Ferry had ceased operations, abandoned its Makati office, and was actually holding office in Manila. The sheriff’s act of taking possession of properties from the Manila address corroborated this fact. The requirement to amend the Articles of Incorporation pertains to the corporation’s relationship with the State and the Securities and Exchange Commission, not to the factual determination of residence for venue purposes in insolvency proceedings. Therefore, the RTC of Manila correctly acquired jurisdiction as it had territorial jurisdiction over Royal Ferry’s actual residence. The Court also noted that Pilipinas Shell’s Motion to Dismiss was procedurally infirm for failing to secure the written consent of all creditors as required by the Insolvency Law.