You're currently signed in as:
User
Add TAGS to your cases to easily locate them or to build your SYLLABUS.
Please SIGN IN to use this feature.
https://www.lawyerly.ph/juris/view/c369f?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09
[PHILIPPINE MILLING COMPANY v. COURT OP APPEALS](https://www.lawyerly.ph/juris/view/c369f?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
{case:c369f}
Highlight text as FACTS, ISSUES, RULING, PRINCIPLES to generate case DIGESTS and REVIEWERS.
Please LOGIN use this feature.
Show printable version with highlights

[ GR No. L-9404, Dec 27, 1956 ]

PHILIPPINE MILLING COMPANY v. COURT OP APPEALS +

DECISION

100 Phil. 566

[ G.R. No. L-9404, December 27, 1956 ]

PHILIPPINE MILLING COMPANY, PETITIONER, VS. THE COURT OP APPEALS AND PHILIPPINE INDUSTRIAL EQUIPMENT COMPANY, RESPONDENTS.

D E C I S I O N

MONTEMAYOR, J.:

The following facts are not disputed.  The  Philippine Industrial Equipment Company, later referred to as Equipment Co., is a domestic corporation  whose articles of incorporation  stated that  it  had its residence in the City of Manila, and in fact at the beginning, had its principal office in the city.  The defendant, Philippine Milling Company, later referred to as Milling Co., is another domestic corporation which has its residence and principal office in San Jose, Mindoro.  The Equipment  Co. was dissolved on April 12, 1950,  and the dissolution was approved by  the Securities and Exchange Commission on December 22, 1951. From September 7 to October 23,  1950, while the Equipment Co. was in the process of liquidation,  it sold  to the Milling Co. machinery and office equipment, with a total value of P6,122.46,  which were partly paid for, leaving a balance of P2,122.46  still unpaid.  The  Equipment Co. filed the  present action in the Court of  First Instance of  Rizal to recover this balance, with interest at six per cent per annum from the commencement of the action, plus twenty-five per cent of the amount as  attorney's fees.  The plaintiff  claims that it had its principal office in Makati,  Rizal.

Without questioning the propriety and correctness  of the claim, the Milling Co. raised the question of venue, claiming  that the  action should have been brought in the City of  Manila where the  plaintiff had its  legal residence.   After  hearing, the trial court found that plaintiff had transferred its main  office from Manila to  Makati, Rizal,  a fact  not contracdicted by defendant, and rendered judgment sentencing the Milling Co. to pay the amount  of the claim, namely, P2,122.46 with  interest at  six per cent  per annum from September 4,1953, plus the amount of P400.00 as attorney's fees, with costs.

Appealing the  decision to the  Court of Appeals, the defendant Milling Co. again raised the question of venue and also the propriety of the award of attorney's fees.  On June 25, 1955,  the  Court of Appeals, overruling  the appellant's  contention  about  improper venue, affirmed the decision with the exception  of the amount  of P400  as attorney's fees, which it eliminated.   The Milling Co. again appealed  to this Tribunal reiterating  its contention that venue was improperly laid  in the Court  of First Instance of  Rizal.

Both the trial' court and the Court of Appeals found as  a fact that  the  plaintiff had actually  transferred  its residence and its office from Manila  to Makati, Rizal, and that at the time it filed the complaint, its actual residence was in  the province of Rizal.  The  appellant, however, insists that inasmuch as the legal residence of the plaintiff  was  fixed  in its articles  of incorporation, which is Manila, it can change said  legal residence only by  amending its articles of incorporation to  that effect, and said amendment could be made only by complying with the provisions  of section 18 of  the Corporation Law,  by a majority vote of its board of directors or trustees,  and by the vote or written assent of the stockholders representing at  least two thirds of the subscribed capital stock of the corporation, and that a copy of the  articles of incorporation, as amended, duly certified to be correct by the President and the Secretary of the corporation and a majority of  the board of directors or trustees, shall be filed in the office of the Securities and Exchange Commission.

From  the very beginning, our  impression is that the defense of the appellant in its appeal is based entirely on a technicality.  As already stated, it never questioned the correctness and legality of the claim against it.  Neither did it claim, much less prove, that the filing of the action in Rizal, instead of the City of Manila, caused it any unnecessary trouble, damage, or expense.  It is clear that' inasmuch as the defendant-appellant had its legal residence and principal  office in Mindoro, it made no difference to it whether it  had to appear and  interpose  its defense if it had any which, as already shown, it had noije, in Manila or in Pasig, Rizal, considering the close proximity of the two places.  There is no showing, not  even a hint, that plaintiff-appellee filed the action in Pasig, Rizal, instead of the City of Manila, just to harass the defendant. Under such circumstances, the courts are  disposed to liberally construe the provisions of law about venue and about residence, specially since the provisions of Rule 5,  section 1 of the Rules of Court, about venue are for the convenience of  the plaintiff.   Furthermore, we should  also bear in mind that at the time that the obligation was contracted by the defendant-appellant and at the time that the present action was commenced, the plaintiff had already been dissolved and was in the process of liquidation; consequently, it would have  been difficult, if not impossible, to  comply strictly with the  law as contended by  the  appellant by amending its articles of incorporation just to state the change of residence.  At  that time and under such circumstances, there is no  assurance that, in view of the dissolution of the plaintiff, it  could still have a meeting of its board of directors or  trustees and secure the vote of stockholders representing at least two-thirds of the subscribed  capital stock to amend its articles of incorporation, and then have a copy of the articles of  incorporation, as amended, certified to be correct by the President and  Secretary  of the corporation and the majority of the members of the board of  directors or trustees, filed with the Securities and Exchange Commission.  Frankly, we cannot look with favor upon a defense and appeal based  on a  pure technicality such as we have now before us, which unnecessarily took up the time of two appellate courts, and delayed the  giving of appropriate relief to the plaintiff by more than three years, considering that the  decision of the trial court in favor of the plaintiff and against the defendant was rendered on November 13, 1953.

The Court of Appeals affirmed the decision of the trial court awarding the  amount of P2,122.46 with interest at six per cent per annum from September  4,  1953 to the plaintiff.  To this we agree.  The Court of  Appeals eliminated the amount of P400  awarded by  the trial court as  attorney's fees on the ground that  plaintiff  did not claim the same in his complaint, and that Article 2208 of the New Civil Code does not warrant said award.  To this we are unable to agree.  According to the record on appeal, plaintiff asked for the payment of  twenty-five per cent of  the sum due as  attorney's fees.  Evidently, based  on said prayer the trial  court granted  the amount  of  P400 as  attorney's fees.   In the  second place, Article  2208 of the New Civil Code, paragraph 11, provides that attorney's fees may be awarded in any case where the  court deems it just and equitable that  said fees and expenses of litigation should be recovered.  Under the circumstances of the case as already mentioned, we  believe that the  plaintiff is entitled to attorney's fees.

In  view of the foregoing, the appealed decision of the Court of Appeals is  hereby affirmed, with the modification that the amount of  P400 granted by the trial  court  as attorney's fees will  be restored and will be  paid by the defendant-appellant.   With costs.

Padilla, Bautista Angelo,  Labrador, Concepcion, Reyes, J. B. L., Endencia, and Felix, JJ., concur.

tags