G.R. No. L-22238; February 18, 1967
CLAVECILLIA RADIO SYSTEM, petitioner-appellant, vs. HON. AGUSTIN ANTILLON, as City Judge of the Municipal Court of Cagayan de Oro City and NEW CAGAYAN GROCERY, respondents-appellees.

FACTS

On June 22, 1963, New Cagayan Grocery filed a complaint for damages against Clavecilla Radio System in the Municipal Court of Cagayan de Oro City (Civil Case No. 1048). The complaint alleged that on March 12, 1963, a telegram message for New Cagayan Grocery was filed at Clavecilla’s Bacolod branch for transmittal through its Cagayan de Oro branch. The Cagayan de Oro branch, in delivering the message, omitted the word “NOT” between “WASHED” and “AVAILABLE,” thereby altering the message’s meaning and causing damages. Clavecilla Radio System moved to dismiss the complaint on the grounds of improper venue and failure to state a cause of action. The City Judge denied the motion. Clavecilla then filed a petition for prohibition with preliminary injunction in the Court of First Instance of Misamis Oriental to enjoin the City Judge from proceeding with the case due to improper venue. The Court of First Instance dismissed the petition, holding that Clavecilla could be sued either in Manila (where its principal office is located) or in Cagayan de Oro City (where it was served summons through its branch office manager). Clavecilla appealed, contending the suit should be filed in Manila.

ISSUE

Whether the venue for the damage suit against Clavecilla Radio System was properly laid in Cagayan de Oro City.

RULING

No. The Supreme Court reversed the order of the Court of First Instance. The suit for damages was based on tort (quasi-delict), not a written contract. Under Section 1(b)(3), Rule 4 of the Rules of Court (governing venue in inferior courts), an action not upon a written contract must be filed in the municipality where the defendant resides or may be served with summons. The residence of a corporation is the place where its principal office is established. It was undisputed that Clavecilla Radio System’s principal office was in Manila; therefore, its residence was Manila. The Court, citing Cohen vs. Benguet Commercial Co., Ltd., held that the phrase “may be served with summons” does not apply when the defendant resides in the Philippines, as in such case, the defendant may be sued only in the municipality of its residence. A corporation can have only one residence at a time. The fact that it maintains branch offices does not mean it can be sued in any of those places; to allow so would create confusion and inconvenience. The venue was improperly laid in Cagayan de Oro City. The action should be filed where venue is proper, in Manila. The order was reversed, without prejudice to filing the action in the proper venue. Costs were awarded against respondents-appellees.