THEODORE AND NANCY ANG, REPRESENTED BY ELDRIGE MARVIN B. ACERON, PETITIONERS, VS. SPOUSES ALAN AND EM ANG, RESPONDENTS.

Theodore and Nancy Ang versus Spouses Alan and Em Ang

The Case

This is a petition for review on certiorari brought by Theodore and Nancy Ang against their debtors, the spouses Alan and Em Ang. The petitioners sued to collect a dollar loan, but the real fight is not about the debt at all. It is about venue — where a personal action may be filed when the plaintiff resides abroad. The case matters because it settles, as a rule a reviewee can carry into the examination room, that an attorney-in-fact is not a real party in interest, and that his residence cannot supply the venue that the Rules of Court require of the plaintiff himself.

Procedural History

The petitioners filed a complaint for collection of sum of money before the Regional Trial Court of Quezon City. The respondents moved to dismiss on the grounds of improper venue and prescription. The trial court denied the motion, reasoning that the petitioners' attorney-in-fact, who held a special power of attorney, maintained his address in Quezon City, and that venue may therefore lie where he resides. The trial court likewise denied the respondents' motion for reconsideration.

The respondents then went up to the Court of Appeals on a petition for certiorari. The Court of Appeals annulled and set aside the trial court's orders and directed the dismissal of the complaint, holding that the residence of the plaintiffs' attorney-in-fact is of no moment, and that what counts is the residence of the real parties in interest. The petitioners' motion for reconsideration was denied. Hence, the petitioners elevated the matter to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

On September 2, 1992, the spouses Alan and Em Ang obtained a loan of 300,000 US dollars from Theodore and Nancy Ang. On the same date, the respondents executed a promissory note promising to pay that amount, with interest at ten percent per annum, upon demand. Despite repeated demands, they failed to pay.

On August 28, 2006, the petitioners sent a demand letter asking for payment of the outstanding debt, which by then had grown to 719,671.23 US dollars, inclusive of the accumulated ten percent annual interest. The respondents still did not pay.

The petitioners were then residing in Los Angeles, California, in the United States of America. They executed special powers of attorney in favor of Attorney Eldrige Marvin B. Aceron for the purpose of filing suit. Through him, they filed the complaint for collection before the Regional Trial Court of Quezon City, where the attorney-in-fact held his address. The respondents, who reside in Bacolod City, challenged the venue.

Issues

• Whether or not the Court of Appeals committed reversible error of law in ruling that the complaint must be dismissed on the ground that venue was not properly laid.
• Whether or not an attorney-in-fact appointed by the plaintiff is a real party in interest whose residence may determine the venue of a personal action.

Applicable Provisions

Section 2, Rule 3 of the Rules of Court defines who the real party in interest is:

Section 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest.

This definition is the pivot of the case: it shows that the attorney-in-fact, who neither benefits nor suffers from the judgment, cannot be the party whose residence fixes venue.

Section 3, Rule 3 of the Rules of Court speaks of representatives as parties:

Section 3. Representatives as parties. Where the action is allowed to be prosecuted and defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.

The Court read this provision to confirm that the beneficiary, not the representative, remains the real party in interest, and that nothing in it makes the representative a party in interest for purposes of venue.

Ruling

On the first issue, the Court denied the petition. A complaint for collection of sum of money is a personal action, and the Rules give the plaintiff the option of filing it where he himself resides or where the defendant resides. But when the plaintiff does not reside in the Philippines, there is no election to make. The Court adopted its earlier holding in Cohen and Cohen versus Benguet Commercial Company, Limited, quoting it:

The plaintiff in this action has no residence in the Philippine Islands. Only one of the parties to the action resides here. There can be, therefore, no election by plaintiff as to the place of trial. It must be in the province where the defendant resides.

Since the petitioners reside in Los Angeles and the respondents reside in Bacolod City, the complaint could be filed only in Bacolod City. The Court stressed that venue is regulated by the Rules and is not left to the plaintiff's caprice, and that the choice of venue should not unduly deprive a resident defendant of the rights conferred upon him.

On the second issue, the Court held that Attorney Aceron is not a real party in interest. He does not stand to be benefited or injured by any judgment, and his appointment did not subrogate him into the petitioners' rights. The Court explained that the right sought to be enforced belongs to the petitioners and not to him, and that an attorney-in-fact is not a real party in interest. His reliance on Section 3, Rule 3 was misplaced, because that rule merely requires that the beneficiary be included in the title of the case and be deemed the real party in interest. To hold otherwise, the Court warned, would abrogate the meaning of a real party in interest.

Doctrine

Three rules should be written in the answer. First, in a personal action, the plaintiff may choose between the place of his own residence and that of the defendant, but if the plaintiff does not reside in the Philippines, the complaint may be filed only where the defendant resides. Second, an attorney-in-fact is not a real party in interest under Section 2, Rule 3 of the Rules of Court, because he neither stands to be benefited nor injured by the judgment; the principal remains the true party. Third, the residence of a mere representative cannot be used to lay venue, for venue is fixed for the convenience of litigants and witnesses and is not left to the plaintiff's whim or caprice.

Disposition

The petition was denied, and the decision and resolution of the Court of Appeals were affirmed; the complaint was dismissed for improper venue, the respondents prevailing.

Remember This

Memorize the line: an attorney-in-fact is not a real party in interest, and where the plaintiff resides abroad, venue lies only where the defendant resides. Examiners use this case to test venue in personal actions and the distinction between the real party in interest and a representative under the Rules of Court.