Documente Academic
Documente Profesional
Documente Cultură
Atty DP
That as security for the payment of the aforesaid credit accommodation, the
Page
THIRD DIVISION
late Leandro A. Soriano, Jr. and defendant Lilian S. Soriano, as president and
treasurer, respectively of plaintiff LEI, but without authority and consent of the
board of said plaintiff and with the use of a falsified board resolution, executed a
real estate mortgage on 28 March 1996, over the above-described property of
plaintiff LEI in favor of defendant PCIB, and had the same registered with the
Office of the Registry of Deeds, Legaspi City, copy of the Real Estate Mortgage is
hereto attached and marked as Annex B, and made part hereof, to the prejudice
of plaintiffs;
7.
That specifically, the Spouses Soriano, with intent to defraud and prejudice
plaintiff LEI and its stockholders, falsified the signatures of plaintiff Lolita A. Soriano
as corporate secretary and director of plaintiff LEI, in a document denominated as
board resolution purportedly issued by the board of plaintiff LEI on 6 November
1995, making it appear that plaintiff LEI's Board met and passed a board resolution
on said date authorizing the Spouses Soriano to mortgage or encumber all or
substantially all of the properties of plaintiff LEI, when in fact and in truth, no
resolution of that nature was ever issued by the board of plaintiff LEI, nor a
meeting was called to that effect, copy of the resolution in question is hereto
attached and marked as Annex C, and made part hereof;
8.
That plaintiff Lolita A. Soriano as Corporate Secretary of plaintiff LEI, had
never signed a board resolution nor issued a Secretary's Certificate to the effect
that on 6 November 1995 a resolution was passed and approved by plaintiff LEI
authorizing the Spouses Soriano as president and treasurer, respectively, to
mortgage the above-described property of plaintiff LEI, neither did she appear
personally before a notary public on 28 March 1996 to acknowledge or attest to the
issuance of a supposed board resolution issued by plaintiff LEI on 6 November
1995;
9.
That defendant PCIB, knowing fully well that the property being mortgaged
by the Spouses Soriano belongs to plaintiff LEI, a corporation, negligently and
miserably failed to exercise due care and prudence required of a banking
institution. Specifically, defendant PCIB failed to investigate and to delve into the
propriety of the issuance of or due execution of subject board resolution, which is
the very foundation of the validity of subject real estate mortgage. Further, it failed
to verify the genuineness of the signatures appearing in said board resolution nor
to confirm the fact of its issuance with plaintiff Lolita A. Soriano, as the corporate
secretary of plaintiff LEI. Furthermore, the height of its negligence was displayed
when it disregarded or failed to notice that the questioned board resolution with a
Secretary's Certificate was notarized only on 28 March 1996 or after the lapse of
more than four (4) months from its purported date of issue on 6 November 1995.
That these circumstances should have put defendant PCIB on notice of the flaws
and infirmities of the questioned board resolution. Unfortunately, it negligently
10. That having been executed without authority of the board of plaintiff LEI said
real estate mortgage dated 28 March 1996 executed by the Spouses Soriano, as
officers of plaintiff LEI in favor of defendant PCIB, is the null and void and has no
legal effect upon said plaintiff. Consequently, said mortgage deed cannot be used
nor resorted to by defendant PCIB against subject property of plaintiff LEI as no
right or rights whatsoever were created nor granted thereunder by reason of its
nullity;
11. Worst, sometime in August 1998, in order to remedy the defects in the
mortgage transaction entered by the Spouses Soriano and defendant PCIB, the
former, with the unlawful instigation of the latter, signed a document denominated
as Deed of Assumption of Loans and Mortgage Obligations and Amendment of
Mortgage; wherein in said document, plaintiff LEI was made to assume the P20
Million personal indebtedness of the Spouses Soriano with defendant PCIB, when
in fact and in truth it never so assumed the same as no board resolution duly
certified to by plaintiff Lolita A. Soriano as corporate secretary was ever issued to
that effect, copy of said Deed is hereto attached and marked as Annex D, and
made part hereof;
12. Moreover, to make it appear that plaintiff LEI had consented to the execution
of said deed of assumption of mortgage, the Spouses Soriano again, through the
unlawful instigation and connivance of defendant PCIB, falsified the signature of
plaintiff Lolita A. Soriano as corporate secretary of plaintiff LEI in a document
denominated as Corporate Resolution to Borrow, to make it appear that plaintiff
LEI so authorized the Spouses Soriano to perform said acts for the corporation,
when in fact and in truth no such authority or resolution was ever issued nor
granted by plaintiff LEI, nor a meeting called and held for said purpose in
accordance with its By-laws; copy of which is hereto attached and marked as
Annex E and made part hereof;
13. That said irregular transactions of defendant Lilian S. Soriano and her
husband Leandro A. Soriano, Jr., on one hand, and defendant PCIB, on the other,
were discovered by plaintiff Lolita A. Soriano sometime in April 1999. That
immediately upon discovery, said plaintiff, for herself and on behalf and for the
benefit of plaintiff LEI, made demands upon defendants Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr., to free subject property of plaintiff LEI from such
mortgage lien, by paying in full their personal indebtedness to defendant PCIB in
the principal sum of P20 Million. However, said defendants, for reason only known
to them, continued and still continue to ignore said demands, to the damage and
prejudice of plaintiffs;
Page
On November 11, 1999, the RTC issued the first assailed Resolution dismissing
petitioners' Complaint. Petitioners then filed a Motion for Reconsideration of said
Resolution. While awaiting resolution of the motion for reconsideration, petitioners
also filed, on January 4, 2000, a Motion to Admit Amended Complaint, amending
paragraph 13 of the original complaint to read as follows:
13. That said irregular transactions of defendant Lilian S. Soriano and her
husband Leandro A. Soriano, Jr., on one hand, and defendant PCIB, on the other,
were discovered by plaintiff Lolita A. Soriano sometime in April 1999. That
immediately upon discovery, said plaintiff, for herself and on behalf and for the
benefit of plaintiff LEI, made demands upon defendant Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr., to free subject property of plaintiff LEI from such
mortgage lien, by paying in full their personal indebtedness to defendant PCIB in
the principal sum of P20 Million. However, said defendants, for reason only known
to them, continued and still continue to ignore said demands, to the damage and
prejudice of plaintiffs; that plaintiff Lolita A. Soriano likewise made demands upon
the Board of Directors of Lisam Enterprises, Inc., to make legal steps to protect the
interest of the corporation from said fraudulent transaction, but unfortunately, until
now, no such legal step was ever taken by the Board, hence, this action for the
benefit and in behalf of the corporation;
On May 15, 2000, the trial court issued the questioned Order denying both the
Motion for Reconsideration and the Motion to Admit Amended Complaint. The trial
court held that no new argument had been raised by petitioners in their motion for
reconsideration to address the fact of plaintiffs' failure to allege in the complaint
that petitioner Lolita A. Soriano made demands upon the Board of Directors of
Lisam Enterprises, Inc. to take steps to protect the interest of the corporation
against the fraudulent acts of the Spouses Soriano and PCIB. The trial court
further ruled that the Amended Complaint can no longer be admitted, because the
same absolutely changed petitioners' cause of action.
Petitioners filed the present petition with this Court, alleging that what are involved
are pure questions of law, to wit:
FIRST, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR
WHEN IT DISMISSED THE ACTION ON THE GROUND THAT PETITIONER
LOLITA A. SORIANO HAS NO LEGAL CAPACITY TO SUE AS SHE IS NOT A
REAL PARTY-IN-INTEREST;
Page
On September 28, 1999, respondent PCIB filed a Motion to Dismiss the Complaint
on grounds of lack of legal capacity to sue, failure to state cause of action, and litis
pendencia. Petitioners filed an Opposition thereto, while PCIB's co-defendants
filed a Motion to Suspend Action.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of
Civil Procedure in Valenzuela v. Court of Appeals, thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the
former rule in such manner that the phrase "or that the cause of action or defense
is substantially altered" was stricken-off and not retained in the new rules. The
clear import of such amendment in Section 3, Rule 10 is that under the new rules,
"the amendment may (now) substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change or alteration in
the cause of action or defense, the amendments sought to be made shall serve the
higher interests of substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding.
The granting of leave to file amended pleading is a matter particularly addressed to
the sound discretion of the trial court; and that discretion is broad, subject only to
the limitations that the amendments should not substantially change the cause of
action or alter the theory of the case, or that it was not made to delay the action.
Nevertheless, as enunciated in Valenzuela, even if the amendment substantially
alters the cause of action or defense, such amendment could still be allowed when
it is sought to serve the higher interest of substantial justice, prevent delay, and
secure a just, speedy and inexpensive disposition of actions and proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a
multiplicity of suits and in order that the real controversies between the
parties are presented, their rights determined, and the case decided on the
merits without unnecessary delay. This liberality is greatest in the early
stages of a lawsuit, especially in this case where the amendment was made
before the trial of the case, thereby giving the petitioners all the time allowed
by law to answer and to prepare for trial.
Furthermore, amendments to pleadings are generally favored and should be
liberally allowed in furtherance of justice in order that every case, may so far as
possible, be determined on its real facts and in order to speed up the trial of the
case or prevent the circuitry of action and unnecessary expense. That is, unless
Page
The next question then is, upon admission of the amended complaint, would it still
be proper for the trial court to dismiss the complaint? The Court answers in the
negative.
Saura v. Saura, Jr.[8] is closely analogous to the present case. In Saura,[9] the
petitioners therein, stockholders of a corporation, sold a disputed real property
owned by the corporation, despite the existence of a case in the Securities and
Exchange Commission (SEC) between stockholders for annulment of subscription,
recovery of corporate assets and funds, etc. The sale was done without the
knowledge of the other stockholders, thus, said stockholders filed a separate case
for annulment of sale, declaration of nullity of deed of exchange, recovery of
possession, etc., against the stockholders who took part in the sale, and the buyer
of the property, filing said case with the regular court (RTC). Petitioners therein
also filed a motion to dismiss the complaint for annulment of sale filed with the
RTC, on the ground of forum shopping, lack of jurisdiction, lack of cause of action,
and litis pendentia among others. The Court held that the complaint for annulment
of sale was properly filed with the regular court, because the buyer of the property
had no intra-corporate relationship with the stockholders, hence, the buyer could
not be joined as party-defendant in the SEC case. To include said buyer as a
party-defendant in the case pending with the SEC would violate the then existing
rule on jurisdiction over intra-corporate disputes. The Court also struck down the
argument that there was forum shopping, ruling that the issue of recovery of
corporate assets and funds pending with the SEC is a totally different issue from
the issue of the validity of the sale, so a decision in the SEC case would not
amount to res judicata in the case before the regular court. Thus, the Court merely
ordered the suspension of the proceedings before the RTC until the final outcome
of the SEC case.
The foregoing pronouncements of the Court are exactly in point with the issues in
the present case. Here, the complaint is for annulment of mortgage with the
mortgagee bank as one of the defendants, thus, as held in Saura,[10] jurisdiction
over said complaint is lodged with the regular courts because the mortgagee bank
has no intra-corporate relationship with the stockholders. There can also be no
forum shopping, because there is no identity of issues. The issue being threshed
out in the SEC case is the due execution, authenticity or validity of board
resolutions and other documents used to facilitate the execution of the mortgage,
while the issue in the case filed by petitioners with the RTC is the validity of the
mortgage itself executed between the bank and the corporation, purportedly
Page
Civil Procedure, amendments may now substantially alter the cause of action or
defense. It should not have been a surprise to them that petitioners would redress
the defect in the original complaint by substantially amending the same, which
course of action is now allowed under the new rules.
THIRD DIVISION
Page
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to
surrender and/or assign in its favor, all the present properties of the former to apply
as dacion en pago for AWRI's existing loan obligation to the bank.7 On January 11,
1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM sent a
letter to petitioners demanding full payment of its obligation to the bank.8
Its demands having remained unheeded, PBCOM instructed its counsel to file a
complaint for collection against petitioners. The case was docketed as Civil Case
No. 99-352.
On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that
they were not personally liable on the promissory notes, because they signed the
Surety Agreement in their capacities as officers of AWRI. They claimed that the
Surety Agreement attached to the complaint as Annexes "A" to "A-2"9 were
falsified, considering that when they signed the same, the words "In his personal
capacity" did not yet appear in the document and were merely intercalated thereon
without their knowledge and consent.10
In support of their allegations, petitioners attached to their Answer a certified
photocopy of the Surety Agreement issued on March 25, 1999 by the Records
Management and Archives Office in Davao City,11 showing that the words "In his
personal capacity" were not found at the foot of page two of the document where
their signatures appeared.12
Because of this development, PBCOM's counsel searched for and retrieved the file
copy of the Surety Agreement. The notarial copy showed that the words "In his
personal capacity" did not appear on page two of the Surety Agreement.13
Petitioners' counsel then asked PBCOM to explain the alteration appearing on the
agreement. PBCOM subsequently discovered that the insertion was ordered by the
bank auditor. It alleged that when the Surety Agreement was inspected by the bank
auditor, he called the attention of the loans clerk, Kenneth Cabahug, as to why the
words "In his personal capacity" were not indicated under the signature of each
surety, in accordance with bank standard operating procedures. The auditor then
ordered Mr. Cabahug to type the words "In his personal capacity" below the
second signatures of petitioners. However, the notary public was never informed of
PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave of
Court to Substitute Annex "A" of the Complaint,16 wherein it attached the duplicate
original copy retrieved from the file of the notary public. PBCOM also admitted its
mistake in making the insertion and explained that it was made without the
knowledge and consent of the notary public. PBCOM maintained that the insertion
was not a falsification, but was made only to speak the truth of the parties'
intentions. PBCOM also contended that petitioners were already primarily liable on
the Surety Agreement whether or not the insertion was made, having admitted in
their pleadings that they voluntarily executed and signed the Surety Agreement in
the original form. PBCOM, invoking a liberal application of the Rules, emphasized
that the motion incorporated in the pleading can be treated as a motion for leave of
court to amend and admit the amended complaint pursuant to Section 3, Rule 10
of the Rules of Court.
On December 14, 1999, the RTC issued an Order17 allowing the substitution of the
altered document with the original Surety Agreement, the pertinent portion of which
reads:
August 16, 1996 attached as Annexes "A" to "A-2" of the reply and answer
Resolving the Motion to Substitute Annexes "A" to "A-2" of the complaint and the
opposition thereto by the defendant, this Court, in the interest of justice, hereby
allows the substitution of said Annexes "A" to "A-2" of the complaint with the
duplicate original of notarial copy of the Agreement dated to counter-claim.
SO ORDERED.
Petitioners filed a motion for reconsideration,18 but it was denied in the
Order19 dated January 11, 2000, to wit:
Resolving the motion for reconsideration and the opposition thereto, the Court
finds the motion substantially a reiteration of the opposition to plaintiff's motion.
Page
III
The court erred in giving credence to the allegation of respondent bank that from
August 15 to December 9, 1997 asian water resources inc. obtained several
availments of new bigger and additional loans totalLing p2,030,000.00 evidenced
by 4 promissory notes marked as annexes "B," "B-1," "B-2" and "B-3."
IV
The court failed to consider the misapplication of the principle of equity committed
by the lower court in ordering the substitution of the falsified document.22
Petitioners argue that the CA committed a reversible error in affirming the Order of
the RTC allowing the substitution of the document by relying on Section 3, Rule 10
of the Rules of Court. Petitioners assert that the Rules do not allow the withdrawal
and substitution of a "falsified document" once discovered by the opposing party.
Petitioners maintain that PBCOM's cause of action was solely and principally
founded on the alleged "falsified document" originally marked as
Annexes "A" to "A-2." Thus, the "withdrawal" of the document results in the
automatic withdrawal of the whole complaint on the ground that there is no more
cause of action to be maintained or enforced by plaintiff against petitioners. Also,
petitioners argue that if the substitution will be allowed, their defenses that were
anchored on Annexes "A" to "A-2" would be gravely affected. Moreover,
considering that the said document was already removed, withdrawn, and
disregarded by the RTC, the withdrawal and substitution of the document would
prevent petitioners from introducing the falsified documents during the trial as part
of their evidence.23
Petitioners submit that the RTC misapplied the principle of equity when it allowed
PBCOM to substitute the document with the original agreement. Petitioners also
Page
Acting as the court on the petition for certiorari, the court committed a reversible
error having no jurisdiction to rule on the obligation of the petitioners based on the
falsified document
Page
As to the substitution of the earlier surety agreement that was annexed to the
complaint with the original thereof, this Court finds that the RTC did not err in
allowing the substitution.
Verily, it is a cardinal rule of evidence, not just one of technicality but of substance,
that the written document is the best evidence of its own contents. It is also a
matter of both principle and policy that when the written contract is established as
the repository of the parties' stipulations, any other evidence is excluded, and the
same cannot be used to substitute for such contract, or even to alter or contradict
the latter.31 The original surety agreement is the best evidence that could establish
the parties' respective rights and obligations. In effect, the RTC merely allowed the
amendment of the complaint, which consequently included the substitution of the
altered surety agreement with a copy of the original.
It is well to remember at this point that rules of procedure are but mere tools
designed to facilitate the attainment of justice. Their strict and rigid application that
would result in technicalities that tend to frustrate rather than promote substantial
justice must always be avoided.32 Applied to the instant case, this not only assures
that it would be resolved based on real facts, but would also aid in the speedy
disposition of the case by utilizing the best evidence possible to determine the
rights and obligations of the party - litigants.
Moreover, contrary to petitioners' contention, they could not be prejudiced by the
substitution since they can still present the substituted documents, Annexes "A" to
A-2," as part of the evidence of their affirmative defenses. The substitution did not
prejudice petitioners or delay the action. On the contrary, it tended to expedite the
determination of the controversy. Besides, the petitioners are not precluded from
filing the appropriate criminal action against PBCOM for attaching the altered copy
of the surety agreement to the complaint. The substitution of the documents would
not, in any way, erase the existence of falsification, if any. The case before the
RTC is civil in nature, while the alleged falsification is criminal, which is separate
and distinct from another. Thus, the RTC committed no reversible error when it
allowed the substitution of the altered surety agreement with that of the original.
A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the
correction of errors of jurisdiction only or grave abuse of discretion amounting to
lack or excess of jurisdiction. Its principal office is only to keep the inferior court
Page
what it submitted was the altered document, thereby necessitating the substitution
of the surety agreement with the original thereof, in order that the case would be
judiciously resolved.
10
Page
present case is still pending determination by the RTC. The CA should have been
more cautious and not have gone beyond the issues submitted before it in the
petition for certiorari; instead, it should have squarely addressed whether or not
there was grave abuse of discretion on the part of the RTC in issuing the Orders
dated December 14, 1999 and January 11, 2000.
11
YNARES-SANTIAGO, J.:
Before us is a petition for review under Rule 45 of the Rules of Court assailing the
decision of the Court of Appeals in CA-G.R. SP No. 44529 dated February 24,
1998, 1 which granted the petition forcertiorari filed by respondent British Steel
Asia Ltd. (British Steel) and ordered the dismissal of petitioner Remington
Industrial Sales Corporations (Remington) complaint for sum of money and
damages. Also assailed in this petition is the resolution 2 of the Court of Appeals
denying petitioners motion for reconsideration.
The facts of the case, as culled from the records, are as follows:chanrob1es virtual
1aw library
On August 21, 1996, petitioner filed a complaint 3 for sum of money and damages
arising from breach of contract, docketed as Civil Case No. 96-79674, before the
sala of Judge Marino M. De la Cruz of the Regional Trial Court of Manila, Branch
22. Impleaded as principal defendant therein was Industrial Steels, Ltd. (ISL), with
Ferro Trading GMBH (Ferro) and respondent British Steel as alternative
defendants.chanrobles virtual lawlibrary
ISL and respondent British Steel separately moved for the dismissal of the
complaint on the ground that it failed to state a cause of action against them. On
April 7, 1997, the RTC denied the motions to dismiss, 4 as well as the ensuing
motion for reconsideration. 5 ISL then filed its answer to the complaint.
On the other hand, respondent British Steel filed a petition for certiorari and
prohibition before the Court of Appeals, 6 docketed as CA-G.R. SP No. 44529.
Respondent claimed therein that the complaint did not contain a single averment
that respondent committed any act or is guilty of any omission in violation of
petitioners legal rights. Apart from the allegation in the complaints "Jurisdictional
Facts" that:chanrob1es virtual 1aw library
no other reference was made to respondent that would constitute a valid cause of
action against it. Since petitioner failed to plead any cause of action against
respondent as alternative defendant under Section 13, Rule 3, 8 the trial court
should have ordered the dismissal of the complaint insofar as respondent was
concerned.
Meanwhile, petitioner sought to amend its complaint by incorporating therein
additional factual allegations constitutive of its cause of action against Respondent.
Pursuant to Section 2, Rule 10 9 of the Rules of Court, petitioner maintained that it
can amend the complaint as a matter of right because respondent has not yet filed
a responsive pleading thereto. 10
Subsequently, petitioner filed a Manifestation and Motion 11 in CA-G.R. SP No.
44529 stating that it had filed a Motion to Admit Amended Complaint together with
said Amended Complaint before the trial court. Hence, petitioner prayed that the
proceedings in the special civil action be suspended.
On January 29, 1998, the trial court ruled on petitioners Motion to Admit Amended
Complaint thus:chanrob1es virtual 1aw library
WHEREFORE, the Amended Complaint is NOTED and further proceedings
thereon and action on the other incidents as aforementioned are hereby held in
abeyance until final resolution by the Honorable Court of Appeals (Special 6th
Division) of the petition for certiorari and prohibition of petitioner (defendant British)
and/or Manifestations and Motions of therein private respondent, herein plaintiff.
SO ORDERED. 12
Thereafter, on February 24, 1998, the Court of Appeals rendered the assailed
decision in CA-G.R. SP No. 44529 as follows:chanrob1es virtua1 1aw 1ibrary
WHEREFORE, this Court grants the writ of certiorari and orders the respondent
judge to dismiss without prejudice the Complaint in Civil Case No. 96-79674
against petitioner British Steel (Asia) Ltd. Costs against private Respondent.
SO ORDERED. 13
In the same decision, the Court of Appeals addressed petitioners prayer for
Page
1.05. Defendants British Steel (Asia) Ltd. and Ferro Trading Gmbh, while
understood by the plaintiff as mere suppliers of goods for defendant ISL, are
impleaded as party defendants pursuant to Section 13, Rule 3 of the Revised
Rules of Court. 7
12
Section 2, Rule 10 16 of the Revised Rules of Court explicitly states that a pleading
may be amended as a matter of right before a responsive pleading is served. This
only means that prior to the filing of an answer, the plaintiff has the absolute right to
amend the complaint whether a new cause of action or change in theory is
introduced. 17 The reason for this rule is implied in the subsequent Section 3 of
Rule 10. 18 Under this provision, substantial amendment of the complaint is not
allowed without leave of court after an answer has been served, because any
material change in the allegations contained in the complaint could prejudice the
rights of the defendant who has already set up his defense in the
answer.chanrob1es virtua1 1aw 1ibrary
Conversely, it cannot be said that the defendants rights have been violated by
changes made in the complaint if he has yet to file an answer thereto. In such an
event, the defendant has not presented any defense that can be altered 19 or
affected by the amendment of the complaint in accordance with Section 2 of Rule
10. The defendant still retains the unqualified opportunity to address the
allegations against him by properly setting up his defense in the answer.
Considerable leeway is thus given to the plaintiff to amend his complaint once, as
a matter of right, prior to the filing of an answer by the defendant.
The right granted to the plaintiff under procedural law to amend the complaint
before an answer has been served is not precluded by the filing of a motion to
dismiss 20 or any other proceeding contesting its sufficiency. Were we to conclude
otherwise, the right to amend a pleading under Section 2, Rule 10 will be rendered
nugatory and ineffectual, since all that a defendant has to do to foreclose this
remedial right is to challenge the adequacy of the complaint before he files an
answer.
Moreover, amendment of pleadings is favored and should be liberally allowed in
the furtherance of justice in order to determine every case as far as possible on its
merits without regard to technicalities. This principle is generally recognized to
speed up trial and save party litigants from incurring unnecessary expense, so that
a full hearing on the merits of every case may be had and multiplicity of suits
avoided. 21
In this case, the remedy espoused by the appellate court in its assailed judgment
will precisely result in multiple suits, involving the same set of facts and to which
the defendants would likely raise the same or, at least, related defenses. Plainly
stated, we find no practical advantage in ordering the dismissal of the complaint
against respondent and for petitioner to re-file the same, when the latter can still
clearly amend the complaint as a matter of right. The amendment of the complaint
Page
13
Page
14
SYLLABUS
Page
17 is not for the purpose of vesting it with jurisdiction but for complying with the
requirements of fair play or due process, so that he will be informed of the
pendency of the action against him and the possibility that property in the
Philippines belonging to him or in which he has an interest may be subjected to a
judgment in favor of the plaintiff and he can thereby take steps to protect his
interest if he is so minded.
15
DECISION
MENDOZA, J.:
July 4, 1991
This is in response to your letter, dated 20 June 1991, which I received on 3 July
1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte,
whose address, telephone and fax numbers appear
below.chanroblesvirtuallawlibrary
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Page
16
Metro Manila
Telephone: 521-1736
Fax: 521-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who at
the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the
summons, insofar as he was concerned, but refused to accept the summons for
his wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept
the process on her behalf. Accordingly the process server left without leaving a
copy of the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim.
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason
private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte
entered a special appearance in behalf of his wife and opposed the private
respondents motion.chanroblesvirtual|awlibrary
In its Order dated July 3, 1992, the trial court, denied private respondents motion
to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration
was similarly denied on September 23, 1992. Whereupon, private respondent filed
a petition for certiorari, prohibition and mandamus with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the
petition and declaring Lourdes A. Valmonte in default. A copy of the appellate
courts decision was received by petitioner Alfredo D. Valmonte on January 15,
1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence,
this petition.
Turning to another point, it would not do for Us to overlook the fact that the
disputed summons was served not upon just an ordinary lawyer of private
respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is not all,
the same lawyer/husband happens to be also her co-defendant in the instant case
which involves real property which, according to her lawyer/husband/co-defendant,
belongs to the conjugal partnership of the defendants the spouses Valmonte). It is
highly inconceivable and certainly it would be contrary to human nature for the
lawyer/husband/co-defendant to keep to himself the fact that they (the spouses
Valmonte) had been sued with regard to a property which he claims to be conjugal.
Parenthetically, there is nothing in the records of the case before Us regarding any
Page
17
In such cases, what gives the court jurisdiction in an action in rem or quasi in rem
is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is
domiciled in the Philippines or the property litigated or attached.
Service of summons in the manner provided in 17 is not for the purpose of vesting
it with jurisdiction but for complying with the requirements of fair play or due
process, so that he will be informed of the pendency of the action against him and
the possibility that property in the Philippines belonging to him or in which he has
an interest may be subjected to a judgment in favor of the plaintiff and he can
thereby take steps to protect his interest if he is so minded. 6chanroblesvirtual|
awlibrary
Applying the foregoing rules to the case at bar, private respondents action, which
is for partition and accounting under Rule 69, is in the nature of an action quasi in
rem. Such an action is essentially for the purpose of affecting the defendants
interest in a specific property and not to render a judgment against him. As
explained in the leading case of Banco Espaol Filipino v. Palanca: 7
[An action quasi in rem is] an action which while not strictly speaking an action in
rem partakes of that nature and is substantially such. . . . The action quasi in rem
differs from the true action in rem in the circumstance that in the former an
individual is named as defendant and the purpose of the proceeding is to subject
Page
his interest therein to the obligation or lien burdening the property. All proceedings
having for their sole object the sale or other disposition of the property of the
defendant, whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these proceedings is
conclusive only between the parties.
18
For the foregoing reasons, we hold that there was no valid service on petitioner
Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the orders dated
July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch
48 are REINSTATED.
SO ORDERED.
Page
who is also her lawyer at the latters address in Manila, no power of attorney to
receive summons for her can be inferred therefrom. In fact the letter was written
seven months before the filing of this case below, and it appears that it was written
in connection with the negotiations between her and her sister, respondent Rosita
Dimalanta, concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was carried on by
counsel for the parties. But the authority given to petitioners husband in these
negotiations certainly cannot be construed as also including an authority to
represent her in any litigation.
19
SECOND DIVISION
[G.R. No. 131724. February 28, 2000.]
MILLENIUM INDUSTRIAL COMMERCIAL CORPORATION, Petitioner, v.
JACKSON TAN,Respondent.
DECISION
MENDOZA, J.:
Petitioner further prayed for "other reliefs just and equitable under the premises." 5
On December 15,1995, the trial court denied petitioners Motion to Dismiss. Its
order stated:chanrob1es virtual 1aw library
This refers to the Motion to Dismiss, dated December 4, 1995, by defendant
anchored on the following grounds:chanrob1es virtual 1aw library
1. That the Court had not acquired jurisdiction over the person of the defendant
corporation because summons was served upon a person who is not known to or
an employee of the defendant corporation.
2. That the obligation sought to be collected was already paid and extinguished.
By interposing the second ground, the defendant has availed of an affirmative
defense on the basis of which the Court has to hear and receive evidence. For the
Court to validly decide the said plea of the defendant. Thus, defendant is
considered to have then abandoned its first ground and is deemed to have
voluntarily submitted itself to the jurisdiction of the Court. It is a legal truism that
voluntary appearance cures the defect of the summons, if any. The defendants
filing of the motion to dismiss by pleading therein the second ground amounts to
voluntary appearance and it indeed cured the defect.chanrobles.com : law library
Wherefore, Motion to Dismiss is hereby denied for lack of merit. 6
Petitioner moved for reconsideration, but its notion was denied by the trial court in
its order, dated January 16, 1996, for failure of petitioner to raise any new ground.
Petitioner then filed a petition forcertiorari in the Court of Appeals, assailing the
aforesaid orders of the trial court.
On September 18, 1997, the Court of Appeals dismissed the petition. 7 The
appellate court ruled that although petitioner denied Lynverd Cinches authority to
receive summons for it, its actual receipt of the summons could be inferred from its
filing of a motion to dismiss, hence, the purpose for issuing summons had been
substantially achieved. Moreover, it was held, by including the affirmative defense
that it had already paid its obligation and praying for other reliefs in its Motion to
Dismiss, petitioner voluntarily submitted to the jurisdiction of the court. 8
Page
That in the remote possibility of failure on the part of the mortgagor to pay the
mortgage obligation and interest in cash, the MORTGAGEE at his option may
demand that payment be made in the form of shares of stock of Millennium
Industrial Commercial Corporation totaling at least 4,000,000 shares. 4
20
In Porac Trucking, Inc. v. Court of Appeals, 15 this Court enumerated the requisites
for the application of the doctrine of substantial compliance, to wit: (a) there must
be actual receipt of the summons by the person served, i.e., transferring
possession of the copy of the summons from the sheriff to the person served;(b)
the person served must sign a receipt or the sheriffs return; and (c) there must be
actual receipt of the summons by the corporation through the person on whom the
summons was actually served. 16 The third requisite is the most important for it is
through such receipt that the purpose of the rule on service of summons is
attained.
In this case, there is no dispute that the first and second requisites were fulfilled.
With respect to the third, the appellate court held that petitioners filing of a motion
to dismiss the foreclosure suit is proof that it received the copy of the summons
and the complaint. There is, however, no direct proof of this or that Lynverd
Cinches actually turned over the summons to any of the officers of the corporation.
In contrast, in our cases applying the substantial compliance rule, 17 there was
direct evidence, such as the admission of the corporations officers, of receipt of
summons by the corporation through the person upon whom it was actually
served. The question is whether it is allowable to merely infer actual receipt of
summons by the corporation through the person on whom summons was served.
We hold that it can not be allowed, For there to be substantial compliance, actual
receipt of summons by the corporation through the person served must be shown.
Where a corporation only learns of the service of summons and the filing of the
complaint against it through some person or means other than the person actually
served, the service of summons becomes meaningless. This is particularly true in
the present case where there is serious doubt if Lynverd Cinches, the person on
whom service of summons was effected, is in fact an employee of the corporation.
Except for the sheriffs return, there is nothing to show that Lynverd Cinches was
really a draftsman employed by the corporation.chanroblesvirtuallawlibrary
Page
although the service of summons was made on a person not enumerated in Rule
14, 13, if it appears that the summons and complaint were in fact received by the
corporation, there is substantial compliance with the rule as its purpose has been
attained.chanrobles.com : virtuallawlibrary
21
Page
22
THIRD DIVISION
[G.R. No. 136426. August 6, 1999.]
E.B. VILLAROSA & PARTNER CO., LTD., Petitioner, v. HON. HERMINIO I.
BENITO, in his capacity as Presiding Judge, RTC, Branch 132, Makati City
and IMPERIAL DEVELOPMENT CORPORATION, Respondent.
DECISION
GONZAGA-REYES, J.:
Before this Court is a petition for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction
seeking to annul and set aside the Orders dated August 5, 1998 and November 20,
1998 of the public respondent Judge Herminio I. Benito of the Regional Trial Court
of Makati City, Branch 132 and praying that the public respondent court be ordered
to desist from further proceeding with Civil Case No. 98-824.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with principal
office address at 102 Juan Luna St., Davao City and with branch offices at 2492
Bay View Drive, Tambo, Paraaque, Metro Manila and Kolambog, Lapasan,
Cagayan de Oro City. Petitioner and private respondent executed a Deed of Sale
with Development Agreement wherein the former agreed to develop certain parcels
of land located at Barrio Carmen, Cagayan de Oro belonging to the latter into a
housing subdivision for the construction of low cost housing units. They further
agreed that in case of litigation regarding any dispute arising therefrom, the venue
shall be in the proper courts of Makati.
On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach of
Contract and Damages against petitioner, as defendant, before the Regional Trial
Court of Makati allegedly for failure of the latter to comply with its contractual
obligation in that, other than a few unfinished low cost houses, there were no
substantial developments therein. 1
Summons, together with the complaint, were served upon the defendant, through
its Branch Manager Engr. Wendell Sabulbero at the stated address at Kolambog,
Lapasan, Cagayan de Oro City 2 but the Sheriffs Return of Service 3 stated that
Page
the summons was duly served "upon defendant E.B. Villarosa & Partner Co., Ltd.
thru its Branch Manager Engr. WENDELL SABULBERO on May 5, 1998 at their
new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the
signature on the face of the original copy of the summons."cralaw virtua1aw library
23
Page
This provision revised the former Section 13, Rule 14 of the Rules of Court which
provided that:jgc:chanrobles.com.ph
24
The designation of persons or officers who are authorized to accept summons for a
domestic corporation or partnership is now limited and more clearly specified in
Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states
"general manager" instead of only "manager" ; "corporate secretary" instead of
"secretary" ; and "treasurer" instead of "cashier." The phrase "agent, or any of its
directors" is conspicuously deleted in the new rule.
The particular revision under Section 11 of Rule 14 was explained by retired
Supreme Court Justice Florenz Regalado, thus: 23
". . . the then Sec. 13 of this Rule allowed service upon a defendant corporation to
be made on the president, manager, secretary, cashier, agent or any of its
directors. The aforesaid terms were obviously ambiguous and susceptible of broad
and sometimes illogical interpretations, especially the word agent of the
corporation. The Filoil case, involving the litigation lawyer of the corporation who
precisely appeared to challenge the validity of service of summons but whose very
appearance for that purpose was seized upon to validate the defective service is
an illustration of the need for this revised section with limited scope and specific
terminology. Thus the absurd result in the Filoil case necessitated the amendment
permitting service only on the in-house counsel of the corporation who is in effect
an employee of the corporation, as distinguished from an independent
practitioner." (Emphasis supplied)
Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court
Revision Committee, stated that" (T)he rule must be strictly observed. Service
must be made to one named in (the) statute . . ." 24
It should be noted that even prior to the effectivity of the 1997 Rules of Civil
Procedure, strict compliance with the rules has been enjoined. In the case of Delta
Motor Sales Corporation v. Mangosing, 25 the Court held:jgc:chanrobles.com.ph
"A strict compliance with the mode of service is necessary to confer jurisdiction of
the court over a corporation. The officer upon whom service is made must be one
who is named in the statute; otherwise the service is insufficient. . .
The purpose is to render it reasonably certain that the corporation will receive
prompt and proper notice in an action against it or to insure that the summons be
served on a representative so integrated with the corporation that such person will
know what to do with the legal papers served on him. In other words, to bring
home to the corporation notice of the filing of the action. . . .
The liberal construction rule cannot be invoked and utilized as a substitute for the
Page
25
Page
26
THIRD DIVISION
[G.R. No. 144294. March 11, 2003.]
SOLEDAD CHANLIONGCO RAMOS, FRANCISCO D. CHANLIONGCO,
ADELBERTO D. CHANLIONGCO, ARMANDO D. CHANLIONGCO and
FLORENCIO D. CHANLIONGCO, Petitioners, v. TERESITA D. RAMOS,
Spouses TERESITA and EDMUNDO S. MUYOT, Spouses VEDASTA and
FLORENCIO M. DATO, LORETO MUYOT, Spouses TERESITA and ELMER
SOLIS, LICERIA TORRES, Spouses CORAZON and VICENTE MACATUNGAL,
Spouses PRECILLA and CRISOSTOMO MUYOT, and Spouses CARIDAD and
SALVADOR PINGOL, Respondents.
DECISION
PANGANIBAN, J.:
Well-settled is the rule that a final judgment is immutable and unalterable. The only
exemptions to this rule are (1) the correction of clerical errors, (2) the so-called
nunc pro tunc entries which cause no prejudice to any party, and (3) void
judgments.
The Case
Before us is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of
Court, seeking to set aside the July 31, 2000 Resolution 2 of the Court of Appeals
(CA) in CA-GR CV No. 29507 which denied petitioners Motion to Set Aside the CA
Decision 3 dated September 28, 1995. The assailed Resolution disposed as
follows:chanrob1es virtua1 1aw 1ibrary
"Finding the opposition of [respondents] to be well-taken, the [Court hereby
DENIES the Motion]" 4
The Facts
Petitioners are children of the late Paulino V. Chanliongco Jr., who was the co-
The RTC upheld the sale insofar as the share of Narcisa was concerned. It ruled
that Adoracion had no authority to sell the shares of the other co-owners, because
the Special Power of Attorney had been executed in favor only of her mother,
Narcisa.
On appeal, the CA modified the ruling of the RTC. It held that while there was no
Special Power of Attorney in favor of Adoracion, the sale was nonetheless valid,
because she had been authorized by her mother to be the latters sub-agent.
There was thus no need to execute another special power of attorney in her favor
as sub-agent. This CA Decision was not appealed, became final and was entered
in favor of respondents on August 8, 1996. 7
On April 10, 1999, petitioner filed with the CA a Motion to Set Aside the Decision.
They contended that they had not been served a copy of either the Complaint or
the summons. Neither had they been impleaded as parties to the case in the RTC.
As it was, they argued, the CA Decision should be set aside because it adversely
affected their respective shares in the property without due process.
In denying the Motion of petitioners, the CA cited the grounds raised in
respondents Opposition: (a) the Motion was not allowed as a remedy under the
1997 Rules of Civil Procedure; (b) the Decision sought to be set aside had long
become final and executory; (c) the movants did not have any legal standing; and
(d) the Motion was purely dilatory and without merit. 8
Hence, this Petition. 9
The Issue
In their Memorandum, petitioners raise this sole issue for the Courts
consideration:jgc:chanrobles.com.ph
". . . [W]hether the Court of Appeals erred in denying petitioners Motion and
allowing its Decision dated September 25, 1995 to take its course, inspite of its
knowledge that the lower court did not acquire jurisdiction over the person of
petitioners and passing petitioners property in favor of respondent, hence without
due process of law." 10
Page
owner of a parcel of land known as Lot No. 2-G of Subdivision Plan SWO No.
7308. Situated in Tondo, Manila, it was co-owned by him, his sister Narcisa, and
his brothers Mario and Antonio. By virtue of a Special Power of Attorney executed
by the co-owners in favor of Narcisa, her daughter Adoracion C. Mendoza had sold
the lot to herein respondents on different days in September 1986. Because of
conflict among the heirs of the co-owners as to the validity of the sale, respondents
filed with the Regional Trial Court (RTC) 5 a Complaint 6 for interpleader to resolve
the various ownership claims.
27
Furthermore, at the time the complaint was filed, the 1964 Rules of Court were still
in effect. Under the old Rules, specifically Section 3 of Rule 3, 20 an executor or
administrator may sue or be sued without joining the party for whose benefit the
action is prosecuted or defended. 21 The present rule, 22 however, requires the
joinder of the beneficiary or the party for whose benefit the action is brought. Under
the former Rules, an executor or administrator is allowed to either sue or be sued
alone in that capacity. In the present case, it was the estate of petitioners father
Paulino Chanliongco, as represented by Sebrio Tan Quiming and Associates, that
was included as defendant 23 and served summons. 24 As it was, there was no
need to include petitioners as defendants. Not being parties, they were not entitled
to be served summons.
Petitioner Florencio D. Chanliongco, on the other hand, was impleaded in the
Complaint, but not served summons. However, the service of summons upon the
estate of his deceased father was sufficient, as the estate appeared for and on
behalf of all the beneficiaries and the heirs of Paulino Chanliongco, including
Florencio.
We also note that the counsel of petitioners, Atty. Felino V. Quiming Jr., is a partner
of the law firm that represented the estate of the deceased father. Hence, it can
reasonably be expected that the service upon the law firm was sufficient notice to
all the beneficiaries of the estate, including Petitioner Florencio D.
Chanliongco.chanrobles.com : law library
WHEREFORE, the Petition is hereby DENIED and the assailed Resolution
AFFIRMED. Costs against petitioners.
SO ORDERED.
THIRD DIVISION
G.R. No. 169116
Page
merely an inchoate interest thereto as heirs of Paulino. They had not standing in
court with respect to actions over a property of the estate, because the latter was
represented by an executor or administrator. 19 Thus, there was not need to
implead them as defendants in the case, inasmuch as the estates of the deceased
co-owners had already been made parties.
28
Page
29
On 27 February 2003, BPI was summoned to file and serve its Answer to the
Complaint filed by Spouses Santiago and Centrogen. On the same day, the Sheriff
served a copy of the summons to the Branch Manager of BPI Sta. Cruz, Laguna
Branch, as evidenced by the Sheriffs Return,7 which reads:
Meanwhile, FEBTC merged with the BPI with the latter as the surviving
corporation. As a result, BPI assumed all the rights, privileges and obligations of
FEBTC.
SHERIFFS RETURN
Respectfully returned the original summons and order dated February 2003 with
the information that on February 27, 2003 the undersigned served the copy of
summons together with the corresponding copy of complaint and its Annexes and
order dated February 27, 2003, to defendants (sic) Bank of the Philippine Islands
(BPI) thru the manager Ms. Glona Ramos at Sta. Cruz Laguna Branch, at Sta.
Cruz, Laguna, to defendant Sheriff Marcial Opinion at the Office of the Provincial
Sheriff of Laguna, R.T.C. (sic) Sta. Cruz, Laguna as shown by their signatures on
the original summons and order.
Instead of filing an Answer, BPI filed a Motion to Dismiss8 the complaint on the
ground of lack of jurisdiction over the person of the defendant and other procedural
infirmities attendant to the filing of the complaint. In its Motion to Dismiss, BPI
claimed that the Branch Manager of its Sta. Cruz, Laguna Branch, was not one of
those authorized by Section 11, Rule 14 of the Revised Rules of Court9 to receive
summons on behalf of the corporation. The summons served upon its Branch
Manager, therefore, did not bind the corporation. In addition, it was alleged that the
complaint filed by the Spouses Santiago and Centrogen lacked a Certificate of
Non-Forum Shopping10 and was therefore dismissible. Finally, BPI underscored
that the person who verified the complaint was not duly authorized by Centrogens
Board of Directors to institute the present action as required by Section 23 of the
Corporation Code.11
In an Order12 dated 28 February 2003, the RTC denied the Motion to Dismiss and
emphasized that the nature of the case merited its removal from the purview of
Page
Section 11, Rule 14 of the Revised Rules of Court. Based on the provisions of
Section 5, Rule 58 of the Revised Rules of Court,13 the RTC declared that the
instant Order is still valid and binding despite non-compliance with the provisions of
Section 11, Rule 14 of the same Rules. The dispositive portion of the Order reads:
30
In compliance with the aforesaid Order, the Branch Clerk of Court caused the
issuance of a new summons on 7 March 2003, a copy of which was served upon
the Office of the Corporate Secretary of the BPI on 11 March 2003, as evidenced
by the Sheriffs Return,16 which reads:
After summary hearing on the Spouses Santiago and Centrogens application for
Temporary Restraining Order, the RTC, on 28 February 2003, issued an
Order14 enjoining the Provincial Sheriff from proceeding with the extra-judicial
foreclosure sale of the subject property until the propriety of granting a preliminary
injunction is ascertained. The decretal portion of the said Order reads:
Sheriffs Return
Wherefore, premises considered, the Court orders that pending the resolution of
the plaintiffs prayer for preliminary injunction:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents
are enjoined from proceeding with the threatened extra-judicial
foreclosure sale (to be conducted today) of the parcel of land owned by
plaintiffs Spouses Ireneo M. Santiago and Liwanag P. Santiago located in
(sic) Brgy. Sto. Angel Norte, Sta. Cruz, Laguna.
2. The application for a preliminary injunction is hereby set for hearing on
March 10, 2003 at 1:30 pm. Further, the plaintiffs are hereby ordered to
immediately file a bond amounting to One Hundred Thousand Pesos
(P100,000.00) to answer for damages that Defendant Bank may sustain if
the court should finally decide that the plaintiffs are not entitled thereto.
On 6 March 2003, the RTC ordered the service of new summons to BPI in
accordance with the provisions of the Revised Rules of Court. The aforesaid Order
reads:
This is to Certify that on March 11, 2003 the undersigned caused the service of
summons together with the copy of complaint and its annexes to defendant Bank
of the Philippine Islands (BPI) and receive (sic) by the Office of the Corporate
Secretary dated March 11, 2003 at the BPI Building Ayala Avenue, Makati City.
On 20 March 2003, the RTC issued an Order granting the application for the
issuance of a Writ of Preliminary Injunction filed by the Spouses Santiago and
Centrogen. It enjoined the extra-judicial foreclosure sale of the subject property
pending resolution of the main action for Annulment of Real Estate Mortgage or
until further orders of the trial court. In issuing the Writ of Preliminary Injunction, it
rationalized that to allow the foreclosure without hearing the main case would work
injustice to the complainant and since Spouses Santiago and Centrogen claimed
that the first loan in the amount of P490,000.00 secured by the property subject of
the extra-judicial sale had long been paid by Centrogen through a Union Bank
Check No. 0363020895 presented as evidence. The dispositive part of the Order
reads:
Wherefore, premises considered, the Court orders that pending the resolution of
the main action for the annulment of the real estate mortgage, etc., and /or order
from this Court:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents
are enjoined from proceeding with the threatened extra-judicial
foreclosure sale of the parcel of land covered by TCT No. T-131382
Page
31
Inarguably, before the Order granting the application for Writ of Preliminary
Injunction was issued, the RTC already acquired jurisdiction over the person of BPI
by virtue of the new summons validly served on the Corporate Secretary. The fact
that the original summons was invalidly served is of no moment since jurisdiction
over BPI was subsequently acquired by the service of a new summons.
In the case of The Philippine American Life and General Insurance Company v.
Brevea,[22] we ruled:
A case should not be dismissed simply because an original summons was
wrongfully served. It should be difficult to conceive, for example, that when a
defendant personally appears before a Court complaining that he had not been
validly summoned, that the case against him should be
dismissed. An alias summons can be actually served on said defendant.
xxxx
x x x It is not pertinent whether the summons is designated as an "original"
or an "alias" summons as long as it has adequately served its purpose. What
is essential is that the summons complies with the requirements under the
Rules of Court and it has been duly served on the defendant together with
the prevailing complaint. x x x Moreover, the second summons was technically
not an alias summons but more of a new summons on the amended complaint. It
was not a continuation of the first summons considering that it particularly referred
to the amended complaint and not to the original complaint. (Emphases supplied.)
BPIs lamentation, at every turn, on the invalidity of the service of summons made
on the Branch Manager and its deliberate neglect to acknowledge the fact that a
new summons was accordingly served on its Corporate Secretary, is an attempt in
futility to mislead this Court into believing that the court a quo never acquired
Page
The subsequent service of summons was neither disputed nor was it mentioned by
BPI except in a fleeting narration of facts and therefore enjoys the presumption that
official duty has been regularly performed.20 The Process Servers Certificate of
Service of Summons is a prima facie evidence of facts set out in that certificate.21
32
Having settled this issue necessitates us to look into the propriety of the issuance
of the Writ of Preliminary Injunction.
BPI asserts that the RTC gravely abused its discretion in granting the Spouses
Santiago and Centrogens application for the Writ of Preliminary Injunction in the
absence of showing that the latter have a clear legal right sought to be protected.
Again, we do not agree.
An injunction is a preservative remedy for the protection of ones substantive right
or interest; it is not a cause of action by itself but merely a provisional remedy, an
adjunct to the main suit.25 The purpose of injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and educated. Its sole aim is to preserve the status quo until the
merits of the case is heard fully.26
The issuance of the writ of preliminary injunction as an ancillary or preventive
remedy to secure the rights of a party in a pending case is entirely within the
discretion of the court taking cognizance of the case, the only limitation being that
the discretion should be exercised based upon the grounds and in a manner
provided by law. Before a writ of preliminary injunction may be issued, the following
requisites must be complied with: (1) a right inesse or a clear or unmistakable right
to be protected; (2) violation of that right; and (3) that there is an urgent and
permanent act and urgent necessity for the writ to prevent serious damage.27
Verily, the aforestated requisites for the issuance of the Writ of Preliminary
Injunction have been fully complied with. The right of Spouses Santiago over the
property clearly exists since they are the registered owners thereof, and the
existence of a Real Estate Mortgage does not undermine the right of the absolute
owner over the property. The violation of such right is manifest in the threatened
foreclosure proceedings commenced by BPI amidst the claim that the principal
obligation has been fully paid. Finally, to allow the foreclosure of the subject
property without first calibrating the evidence of opposing parties pertaining to the
Page
33
Page
In the case at bar, after summary hearing and evaluation of evidence presented by
both contending parties, the RTC ruled that justice would be better served if status
quo is preserved until the final determination of the merits of the case, to wit:
34
Page
35
FIRST DIVISION
[G.R. NO. 170943, September 23, 2008]
PEDRO T. SANTOS, JR., Petitioner, v. PNOC EXPLORATION
CORPORATION, Respondent.
DECISION
CORONA, J.:
This is a petition for review1 of the September 22, 2005 decision2 and December
29, 2005 resolution3of the Court of Appeals in CA-G.R. SP No. 82482.
On December 23, 2002, respondent PNOC Exploration Corporation filed a
complaint for a sum of money against petitioner Pedro T. Santos, Jr. in the
Regional Trial Court of Pasig City, Branch 167. The complaint, docketed as Civil
Case No. 69262, sought to collect the amount of P698,502.10 representing
petitioner's unpaid balance of the car loan4 advanced to him by respondent when
he was still a member of its board of directors.
Respondent naturally opposed the motion. It insisted that it complied with the rules
on service by publication. Moreover, pursuant to the September 11, 2003 order,
petitioner was already deemed in default for failure to file an answer within the
prescribed period.
In an order dated February 6, 2004, the trial court denied petitioner's motion for
reconsideration of the September 11, 2003 order. It held that the rules did not
require the affidavit of complementary service by registered mail to be executed by
the clerk of court. It also ruled that due process was observed as a copy of the
September 11, 2003 order was actually mailed to petitioner at his last known
address. It also denied the motion to admit petitioner's answer because the same
was filed way beyond the reglementary period.
Aggrieved, petitioner assailed the September 11, 2003 and February 6, 2004
orders of the trial court in the Court of Appeals via a petition for certiorari . He
contended that the orders were issued with grave abuse of discretion. He imputed
During the pendency of the petition in the Court of Appeals, the trial court rendered
its decision in Civil Case No. 69262. It ordered petitioner to pay P698,502.10 plus
legal interest and costs of suit.7
Meanwhile, on September 22, 2005, the Court of Appeals rendered its
decision8 sustaining the September 11, 2003 and February 6, 2004 orders of the
trial court and dismissing the petition. It denied reconsideration.9 Thus, this petition.
Petitioner essentially reiterates the grounds he raised in the Court of Appeals,
namely, lack of jurisdiction over his person due to improper service of summons,
failure of the trial court to furnish him with copies of its orders and processes
including the September 11, 2003 order and preference for technicality rather than
justice and equity. In particular, he claims that the rule on service by publication
under Section 14, Rule 14 of the Rules of Court applies only to actions in rem, not
actionsin personam like a complaint for a sum of money. He also contends that the
affidavit of service of a copy of the summons should have been prepared by the
clerk of court, not respondent's messenger.
The petition lacks merit.
Propriety Of
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are unknown. - In
any action where the defendant is designated as an unknown owner, or the like,
orwhenever his whereabouts are unknown and cannot be ascertained by
diligent inquiry, service may, by leave of court, be effected upon him by
publication in a newspaper of general circulation and in such places and for
such times as the court may order. (emphasis supplied)
Since petitioner could not be personally served with summons despite diligent
efforts to locate his whereabouts, respondent sought and was granted leave of
court to effect service of summons upon him by publication in a newspaper of
general circulation. Thus, petitioner was properly served with summons by
publication.
Petitioner invokes the distinction between an action in rem and an action in
personam and claims that substituted service may be availed of only in an
Page
the following errors to the trial court: taking cognizance of the case despite lack of
jurisdiction due to improper service of summons; failing to furnish him with copies
of its orders and processes, particularly the September 11, 2003 order, and
upholding technicality over equity and justice.
36
The trial court allowed respondent to present its evidence ex parte on account of
petitioner's failure to file his answer within the prescribed period. Petitioner assails
this action on the part of the trial court as well as the said court's failure to furnish
him with copies of orders and processes issued in the course of the proceedings.
The effects of a defendant's failure to file an answer within the time allowed
therefor are governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of
the Rules of Court:
SEC. 3. Default; declaration of. - If the defending party fails to answer within
the time allowed therefor, the court shall, upon motion of the claiming party
with notice to the defending party, and proof of such failure, declare the
defending party in default. Thereupon, the court shall proceed to render
judgment granting the claimant such relief as his pleading may warrant, unless the
court in its discretion requires the claimant to submit evidence. Such reception of
evidence may be delegated to the clerk of court.
SEC. 4. Effect of order of default. - A party in default shall be entitled to notice
of subsequent proceedings but not to take part in the trial. (emphasis supplied)
If the defendant fails to file his answer on time, he may be declared in default upon
motion of the plaintiff with notice to the said defendant. In case he is declared in
default, the court shall proceed to render judgment granting the plaintiff such relief
as his pleading may warrant, unless the court in its discretion requires the plaintiff
to submit evidence. The defaulting defendant may not take part in the trial but shall
be entitled to notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed to file his
answer on time. That was in fact why he had to file an "Omnibus Motion for
Reconsideration and to Admit Attached Answer." But respondent moved only for
the ex parte presentation of evidence, not for the declaration of petitioner in
default. In its February 6, 2004 order, the trial court stated:
The disputed Order of September 11, 2003 allowing the presentation of evidence
ex-parte precisely ordered that "despite and notwithstanding service of summons
by publication, no answer has been filed with the Court within the required period
and/or forthcoming.["] Effectively[,] that was a finding that the defendant [that
is, herein petitioner] was in default for failure to file an answer or any
responsive pleading within the period fixed in the publication as precisely the
defendant [could not] be found and for which reason, service of summons by
publication was ordered. It is simply illogical to notify the defendant of the Order of
September 11, 2003 simply on account of the reality that he was no longer residing
and/or found on his last known address and his whereabouts unknown - thus the
publication of the summons. In other words, it was reasonable to expect that the
Page
Notice Of Proceedings
37
38
Page
SO ORDERED
On August 20, 1998, respondent EIM International Sales, Inc. filed in the Regional
Trial Court (RTC) of Pasig City a Complaint for collection of sum of money with
prayer for issuance of preliminary attachment against Wood Based Panels, Inc.,
Sinrimco, Inc., Manfred Luig and petitioner. The case was docketed as Civil Case
No. 66974 and raffled to Branch 167 of the RTC of Pasig City. Petitioner was
impleaded in the case because he was the President of both Wood Based Panels,
Inc. and Sinrimco, Inc.
Subsequently, summons were served upon the two corporations and Luig
(defendants). The sheriff failed to serve the summons intended for the petitioner
because the former could not locate the petitioners address as indicated in the
complaint. Said address was obtained by the respondent from the General
Information Sheets filed with the Securities and Exchange Commission by the two
corporations. 1
The defendants filed a motion to dismiss, but the same was denied by the trial
court. Thereafter, they filed their respective answers to the complaint. The
respondent then filed a motion to set the case for pre-trial, and the court granted
the same and set the pre-trial on October 19, 1999. A notice of pre-trial was sent
by the RTC to the defendants, including the petitioner. The notice to the latter was
again sent to the address indicated in the complaint.
SECOND DIVISION
[G.R. No. 147038. April 24, 2003.]
RICHARD TEH, Petitioner, v. THE HONORABLE COURT OF APPEALS, HON.
ALFREDO C. FLORES, Presiding Judge, Regional Trial Court of Pasig City,
Branch 167, EIM INTERNATIONAL SALES, INC., Respondents.
DECISION
This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure.
Petitioner Richard Teh assails the Resolution of the Court of Appeals dated March
14, 2000 which dismissed his petition forcertiorari for failure to attach the original or
certified true copies of the annexes thereto, as well as the appellate courts
Resolution dated February 9, 2001 dismissing petitioners motion for
reconsideration for lack of merit.chanrob1es virtua1 1aw 1ibrary
The antecedent facts of the case are as follows:chanrob1es virtual 1aw library
On October 19, 1999, the petitioner filed a Motion to Dismiss the complaint on the
ground that the trial court had not acquired jurisdiction over his person because he
had not been served with summons. The trial court ordered the cancellation of the
pre-trial and the resetting thereof on November 19, 1999. It, likewise, ordered the
respondent to submit a reply or opposition to petitioners motion to dismiss within
five days from October 19, 1999.
The next day, October 20, 1999, the respondent filed a Comment explaining that
summons had not been served on the petitioner because, according to the sheriff,
the petitioners address indicated in the complaint, "138 Maria Clara Street, Sta.
Mesa, Manila," could not be located.
The trial court issued an Omnibus Order dated November 17, 1999 denying
petitioners motion to dismiss and directing that an alias summons be issued
against the petitioner to be served upon him at 138 Maria Clara Street, Sta. Mesa,
Manila. The respondent thereafter filed a manifestation and motion, informing the
court that the address of the petitioner as indicated in the complaint was
erroneous, and that summons should instead be served upon him at "138 Maria
Clara Street, Sta. Mesa Heights, Quezon City," which was his correct address.
The trial court issued an Order dated January 25, 2000 denying the petitioners
motion for reconsideration, which order the petitioner received on February 3,
2000.
Page
On December 14, 1999, the petitioner filed a Motion for Reconsideration of the trial
courts omnibus order. He contended therein that the case should be dismissed in
view of the trial courts failure to acquire jurisdiction over his person and the
respondents failure to prosecute the case, considering that more than a year had
passed since the complaint was instituted and yet summons had not yet been
served on him. The respondent opposed the petitioners motion for
reconsideration.
39
The Court of Appeals was not required to look into the merits of the petition
for certiorari before issuing its March 14, 2000 Resolution because it ruled in good
faith that the petition was defective in form. Under Rule 65, Section 6 of the 1997
Rules of Civil Procedure, a petition for certiorari may be dismissed outright if it is
insufficient in form, that is, it fails to comply with the requirements in Section 1 of
the same Rule.
When the appellate court studied the petitioners motion for reconsideration and
found that the contention therein was correct, it proceeded to look into the merits of
the petition. However, it found that the same should be dismissed for lack of merit
because it found that the trial courts order assailed by the petitioner therein was
an order denying a motion to dismiss. Based on the factual circumstances of the
case, the appellate court ruled that the order sought to be reversed was an
interlocutory order which is beyond the scope of a petition for certiorari, and that
the trial court did not commit abuse of discretion when it denied the motion to
dismiss on the ground of lack of jurisdiction over the person of the petitioner and
ordered the issuance of an alias summons to the latter.
The Court agrees with the appellate courts ruling that there was no abuse of
discretion on the part of the trial court when the latter denied the petitioners motion
to dismiss the complaint and ordered the issuance of an alias summons to be
served upon him. Although the respondent should have resorted to other means to
determine the correct address of the petitioner when it was informed by the sheriff
that he failed to serve the summons on the petitioner, the respondent is not entirely
to blame for such failure because the petitioners address as indicated by Wood
Based Panels, Inc., and Sinrimco, Inc. on their respective General Information
Sheets, was incorrect.
Moreover, the trial court was merely exercising its discretion under Rule 16,
Section 3 of the 1997 Rules of Civil Procedure when it denied the petitioners
Page
motion to dismiss. Under said rule, after hearing the motion, a judge may dismiss
the action, deny the motion to dismiss or order the amendment of the pleading.
The trial court denied the motion to dismiss based on its finding that the issues
alleged by the respondent in its complaint could not be resolved fully in the
absence of the petitioner. In its desire to resolve completely the issues brought
before it, the trial court deemed it fitting to properly acquire jurisdiction over the
person of the petitioner by ordering the issuance of alias summons on the
petitioner. Evidently, the trial court acted well within its discretion. The Court of
Appeals did not, therefore, err in dismissing the petition for certiorari filed before
it.cralaw : red
40
The antecedent facts of the case, as found by the Court of Appeals, are as
follows:chanrob1es virtual 1aw library
Petitioners spouses Efren and Digna Mason owned two parcels of land located
along Epifanio delos Santos Avenue in Pasay City. On March 30, 1993, petitioners
and private respondent Columbus Philippines Bus Corporation (hereafter
Columbus) entered into a lease contract, under which Columbus undertook to
construct a building worth ten million pesos (P10,000,000) at the end of the third
year of the lease. Because private respondent failed to comply with this stipulation,
the petitioners on November 13, 1998, filed a complaint for rescission of contract
with damages against private respondent before the Regional Trial Court of Pasay
City, docketed as Civil Case No. 98-1567. Summons was served upon private
respondent through a certain Ayreen Rejalde. While the receiving copy of the
summons described Rejalde as a secretary of Columbus, the sheriffs return
described Rejalde as a secretary to the corporate president, duly authorized to
receive legal processes.
Private respondent failed to file its answer or other responsive pleading, hence
petitioners filed a motion to declare private respondent in default. The motion was
granted and petitioners were allowed to present evidence ex parte. Thereafter, the
case was submitted for decision.
SECOND DIVISION
On April 22, 1999, the trial court rendered its decision whose dispositive portion
reads:chanrob1es virtual 1aw library
DECISION
QUISUMBING, J.:
This petition for review assails the decision, 1 dated May 12, 2000, of the Court of
Appeals and its resolution 2 dated August 25, 2000 in CA-G.R. SP No. 54649
denying petitioners motion for reconsideration. The decision set aside the decision
3 of the Regional Trial Court of Pasay City, Branch 112, in Civil Case No. 98-1567
and directed said court to conduct further proceedings on the complaint for
rescission of lease contract.chanrob1es virtua1 1aw 1ibrary
Page
41
SO ORDERED. 6
The Court of Appeals held that the trial court erred when it denied private
respondents motion to lift order of default. The appellate court pointed out that
private respondent was not properly served with summons, thus it cannot be
faulted if it failed to file an Answer. Section 11, 7 Rule 14 of the 1997 Rules of Civil
Procedure requires that service of summons upon domestic private juridical entity
shall be made through its president, managing partner, general manager, corporate
secretary, treasurer or in-house counsel. Since service upon private respondent
was made through a certain Ayreen Rejalde, a mere filing clerk in private
respondents office, as evidenced by the latters employment record, such service
cannot be considered valid. Consequently, the subsequent proceedings, including
the order of default, judgment by default and its execution, were also invalid
because the trial court did not acquire jurisdiction over private Respondent.
Besides judgments by default are not favored, especially so when there is a prima
facie showing that the defaulting party has a meritorious defense, which in this
case was grounded on the contract of lease sued upon, said the Court of Appeals.
Petitioner filed a motion for reconsideration, but to no avail. Hence, this petition for
review averring that the Court of Appeals erred in:chanrob1es virtual 1aw library
I. . . . HOLDING THAT THERE WAS NO VALID SERVICE OF SUMMONS UPON
PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS CORPORATION
II. . . . NOT HOLDING THAT THERE WAS VALID SERVICE OF SUMMONS
CONFORMABLY WITH THE SUBSTANTIAL COMPLIANCE RULE.
SO ORDERED. 5
Private respondent filed a motion for reconsideration, which was denied.
Undaunted, private respondent filed a manifestation and motion to lift the writ of
execution. It suffered the same fate as the motion for reconsideration for being
dilatory. The branch sheriff was directed to proceed with the enforcement of the
decision.
Private respondent appealed to the Court of Appeals, which ruled in its favor,
thus:chanrob1es virtual 1aw library
WHEREFORE, the petition is GRANTED; the decision in Civil Case No. 98-1567
and all the proceedings therein, including the order of default and writ of execution,
are SET ASIDE. The court a quo is ORDERED to require petitioner to file its
answer and thereafter to conduct further appropriate proceedings with reasonable
dispatch.
Petitioners stress that even though the summons was received by a mere filing
clerk in private respondents corporation, there was substantial compliance with
Section 11, Rule 14 because the summons actually reached private Respondent.
This can be gleaned from private respondents motion to lift order of default where
private respondent did not question the validity of the service of summons but
explained in paragraph three thereof that its failure to answer the complaint was
due to its impression that the case would not be pursued by petitioners because
the corporation already made payments to them. 11
From said averment, according to petitioners, private respondent in effect admitted
that it received the summons. Notwithstanding this, private respondent did not file
its answer to the complaint, said the petitioners. This is tantamount to negligence
which the court cannot tolerate, petitioners conclude. There being valid service of
summons, the Regional Trial Court acquired jurisdiction over private respondent,
according to petitioners.
Page
On the first issue, petitioners contend that while Section 11, Rule 14 of the 1997
Rules of Civil Procedure clearly specifies the persons authorized to receive
summons on behalf of a private juridical entity, said provision did not abandon or
render inapplicable the substantial compliance rule. Petitioners cite Millenium
Industrial Commercial Corporation v. Tan, 9 and maintain that this Court, by
referring to E.B Villarosa & Partner Co., Ltd. v. Judge Benito, 10 effectively ruled
that said provision is the statement of the general rule on service of summons
upon corporation and the substantial compliance rule is the exception. Petitioners
claim that this Court, in an array of cases, upheld the substantial compliance rule
when it allowed the validity of the service of summons on the corporations
employee other than those mentioned in the Rule where said summons and
complaint were in fact seasonably received by the corporation from said employee.
Petitioners insist that technicality must not defeat speedy justice.
42
The question of whether the substantial compliance rule is still applicable under
Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been settled in
Villarosa which applies squarely to the instant case. In the said case, petitioner
E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with principal office address
at 102 Juan Luna St., Davao City and with branches at 2492 Bay View Drive,
Tambo, Paraaque, Metro Manila and Kolambog, Lapasan, Cagayan de Oro City,
entered into a sale with development agreement with private respondent Imperial
Development Corporation. As Villarosa failed to comply with its contractual
obligation, private respondent initiated a suit for breach of contract and damages at
the Regional Trial Court of Makati. Summons, together with the complaint, was
served upon Villarosa through its branch manager at Kolambog, Lapasan,
Neither can herein petitioners invoke our ruling in Millenium to support their
position for said case is not on all fours with the instant case. We must stress that
Millenium was decided when the 1964 Rules of Court were still in force and effect,
unlike the instant case which falls under the new rule. Hence, the cases 15 cited by
petitioners where we upheld the doctrine of substantial compliance must be
deemed overturned by Villarosa, which is the later case.
At this juncture, it is worth emphasizing that notice to enable the other party to be
heard and to present evidence is not a mere technicality or a trivial matter in any
administrative or judicial proceedings. The service of summons is a vital and
indispensable ingredient of due process. 16 We will deprive private respondent of
its right to present its defense in this multi-million peso suit, if we disregard
compliance with the rules on service of summons.
On the second issue, petitioners claim that private respondents motion to lift order
of default was not in order for it was filed late, contrary to the provision in subparagraph (b), Section 3, 17 Rule 9 of the 1997 Rules of Civil Procedure, which
requires filing of the motion after notice but before judgment. Also, the motion was
(a) not under oath; (b) did not show the fraud, accident, mistake or excusable
neglect that caused private respondents failure to answer; and (c) did not show
private respondents meritorious defense.
Private respondent, in turn, argues that since service upon it was invalid, the trial
court did not acquire jurisdiction over it. Hence, all the subsequent proceedings in
Page
Cagayan de Oro City. Villarosa filed a Special Appearance with Motion to Dismiss
on the ground of improper service of summons and lack of jurisdiction. The trial
court denied the motion and ruled that there was substantial compliance with the
rule, thus, it acquired jurisdiction over Villarosa. The latter questioned the denial
before us in its petition for certiorari. We decided in Villarosas favor and declared
the trial court without jurisdiction to take cognizance of the case. We held that there
was no valid service of summons on Villarosa as service was made through a
person not included in the enumeration in Section 11, Rule 14 of the 1997 Rules of
Civil Procedure, which revised the Section 13, Rule 14 of the 1964 Rules of Court.
We discarded the trial courts basis for denying the motion to dismiss, namely,
private respondents substantial compliance with the rule on service of summons,
and fully agreed with petitioners assertions that the enumeration under the new
rule is restricted, limited and exclusive, following the rule in statutory construction
that expressio unios est exclusio alterius. Had the Rules of Court Revision
Committee intended to liberalize the rule on service of summons, we said, it could
have easily done so by clear and concise language. Absent a manifest intent to
liberalize the rule, we stressed strict compliance with Section 11, Rule 14 of the
1997 Rules of Civil Procedure.
43
Page
44
THIRD DIVISION
[G.R. No. 147369. October 23, 2003.]
Spouses PATRICK JOSE and RAFAELA JOSE, Petitioners, v. Spouses
HELEN BOYON and ROMEO BOYON, Respondents.
DECISION
PANGANIBAN, J.:
In general, substituted service can be availed of only after a clear showing that
personal service of summons was not legally possible. Also, service by publication
is applicable in actions in rem and quasi in rem, but not in personal suits such as
the present one which is for specific performance.
"On July 2, 1998, [petitioners] Patrick and Rafaela Jose lodged a complaint for
specific performance against [respondents] Helen and Romeo Boyon to compel
them to facilitate the transfer of ownership of a parcel of land subject of a
controverted sale. The action was lodged before the Regional Trial Court of
Muntinlupa which is presided by herein public respondent Judge N.C. Perello. On
July 21, 1998, respondent judge, through the acting Branch Clerk of Court of
Branch 276 of the RTC of Muntinlupa City, issued summons to the [respondents].
As per return of the summons, substituted service was resorted to by the process
server allegedly because efforts to serve the summons personally to the
[respondents] failed. On December 9, 1998, [petitioners] filed before the trial court
an Ex-parte Motion for Leave of Court to Effect Summons by Publication. On
December 28, 1998, public respondent issued an Order granting the Ex-parte
Motion for Leave of Court to Effect Summons by Publication. On July 30, 1999, the
respondent judge, sans a written motion, issued an Order declaring herein
[respondent] in default for failure to file their respective answers. As a
consequence of the declaration of default, [petitioners] were allowed to submit their
evidence ex-parte. Ultimately, on December 7, 1999, respondent judge issued the
assailed resolution, the dispositive portion of which reads as follows:chanrob1es
virtual 1aw library
. . . Therefore, Spouses Helen and Romeo Boyon are directed to execute the
necessary document with the effect of withdrawing the Affidavit of Loss they filed
and annotated with the Register of Deeds of Makati City so that title to the parcel
of land subject of the Deed of Absolute Sale in favor of the Plaintiffs be transferred
Defendants are also directed to pay Plaintiffs actual expenses in the amount of
P20,000 and attorneys fees of P20,000 including costs of this suit.
x
Page
in their names. Thereafter the Register of Deeds of Makati City or Muntinlupa City
may cancel Transfer of Certificate of Title No. 149635 of the Defendants and issue
another to Plaintiff under the deed of sale, clean and free of any reported
encumbrance.
45
Issues
In their Memorandum, petitioners raise the following issues for our
consideration:chanrob1es virtua1 1aw 1ibrary
x
"A. The Honorable Court of Appeals erred in not holding that the assailed
Resolution dated December 7, 1999 was already final and executory
"On January 5, 2000, [respondent] Helen Boyon, who was then residing in the
United States of America, was surprised to learn from her sister Elizabeth Boyon,
of the resolution issued by the respondent court. On January 18, 2000,
[respondents] filed an Ad Cautelam motion questioning, among others, the validity
of the service of summons effected by the court a quo. On March 17, 2000, the
public respondent issued an Order denying the said motion on the basis of the
defaulted [respondents] supposed loss of standing in court. On March 29, 2000,
the [respondents] once again raised the issue of jurisdiction of the trial court via a
motion for reconsideration. On June 22, 2000, however, an Order was issued by
the public respondent denying the said motion. The [petitioners] moved for the
execution of the controverted judgment which the respondent judge ultimately
granted." 4
"B. The Honorable Court of Appeals erred in giving due course to the Petition
for Certiorari of private respondents despite the pendency of an appeal earlier filed
"C. The Honorable Court erred in not holding that the Petition for Certiorari was
time barred
"D. The Honorable Court of Appeals erred in holding that the proceedings in the
lower court are null and void due to invalid and defective service of summons and
the court did not acquire jurisdiction over the person of the respondents." 6
In sum, the main issue revolves around the validity of the service of summons on
respondents.
Thereafter, respondents filed before the CA a Petition for certiorari under Rule 65
of the Revised Rules of Civil Procedure, questioning the jurisdiction of the regional
trial court (RTC).
Ruling of the Court of Appeals
The CA held that the trial court had no authority to issue the questioned Resolution
and Orders. According to the appellate court, the RTC never acquired jurisdiction
over respondents because of the invalid service of summons upon them. First, the
sheriff failed to comply with the requirements of substituted service of summons,
because he did not specify in the Return of Summons the prior efforts he had
made to locate them and the impossibility of promptly serving the summons upon
them by personal service. Second, the subsequent summons by publication was
equally infirm, because the Complaint was a suit for specific performance and
therefore an action in personam. Consequently, the Resolution and the Orders
were null and void, since the RTC had never acquired jurisdiction over
respondents.
Page
On the other hand, respondents maintain that the proceedings in the trial court
were null and void because of the invalid and defective service of summons.
According to them, the Return of Summons issued by the process server of the
RTC failed to state that he had exerted earnest efforts to effect the service of
summons. He allegedly tried to serve it personally on them on July 22, 1998 at No.
32 Ariza Drive, Camella Homes, Alabang. He, however, resorted to substituted
service on that same day, supposedly because he could not find respondents in
the above address. They further allege that the person to whom he gave the
summons was not even a resident of that address.
46
In the instant case, it appears that the process server hastily and capriciously
resorted to substituted service of summons without actually exerting any genuine
effort to locate respondents. A review of the records 9 reveals that the only effort
he exerted was to go to No. 32 Ariza Drive, Camella Homes, Alabang on July 22,
1998, to try to serve the summons personally on respondents. While the Return of
Summons states that efforts to do so were ineffectual and unavailing because
Helen Boyon was in the United States and Romeo Boyon was in Bicol, it did not
mention exactly what efforts if any were undertaken to find respondents.
Furthermore, it did not specify where or from whom the process server obtained
the information on their whereabouts. The pertinent portion of the Return of
Summons is reproduced as follows:jgc:chanrobles.com.ph
We agree with respondents. In general, trial courts acquire jurisdiction over the
person of the defendant by the service of summons. Where the action is in
personam and the defendant is in the Philippines, such service may be done by
personal or substituted service, following the procedures laid out in Sections 6 and
7 of Rule 14 of the Revised Rules of Court, which read:jgc:chanrobles.com.ph
"That efforts to serve the said Summons personally upon defendants Sps. Helen
and Romeo Boyon were made but the same were ineffectual and unavailing for the
reason that defendant Helen Boyon is somewhere in the United States of America
and defendant Romeo Boyon is in Bicol thus substituted service was made in
accordance with Section 7, Rule 14, of the Revised Rules of Court." 10
The Return of Summons shows that no effort was actually exerted and no positive
step taken by either the process server or petitioners to locate and serve the
summons personally on respondents. At best, the Return merely states the alleged
whereabouts of respondents without indicating that such information was verified
from a person who had knowledge thereof. Certainly, without specifying the details
of the attendant circumstances or of the efforts exerted to serve the summons, a
general statement that such efforts were made will not suffice for purposes of
complying with the rules of substituted service of summons.
"Section 7. Substituted service. If, for justifiable causes, the defendant cannot
be served within a reasonable time as provided in the preceding section, service
may be effected (a) by leaving copies of the summons at the defendants
residence with some person of suitable age and discretion then residing therein, or
(b) by leaving the copies at defendants office or regular place of business with
". . . The pertinent facts and circumstances attendant to the service of summons
must be stated in the proof of service or Officers Return; otherwise, any
substituted service made in lieu of personal service cannot be upheld. This is
necessary because substituted service is in derogation of the usual method of
service. It is a method extraordinary in character and hence may be used only as
prescribed and in the circumstances authorized by statute. Here, no such
explanation was made. Failure to faithfully, strictly, and fully comply with the
requirements of substituted service renders said service ineffective." 12
Moreover, the requirements of substituted service of summons and the effect of
noncompliance with the subsequent proceedings therefor were discussed in
Madrigal v. Court of Appeals 13 as follows:jgc:chanrobles.com.ph
"In a long line of cases, this Court held that the impossibility of personal service
justifying availment of substituted service should be explained in the proof of
service; why efforts exerted towards personal service failed. The pertinent facts
and circumstances attendant to the service of summons must be stated in the
proof of service or Officers Return; otherwise, the substituted service cannot be
upheld. It bears stressing that since service of summons, especially for actions in
personam, is essential for the acquisition of jurisdiction over the person of the
defendant, the resort to a substituted service must be duly justified. Failure to do
so would invalidate all subsequent proceedings on jurisdictional grounds." 14
Summons by Publication Improper
It must be noted that extraterritorial service of summons or summons by
publication applies only when the action is in rem or quasi in rem. The first is an
action against the thing itself instead of against the defendants person; in the
latter, an individual is named as defendant, and the purpose is to subject that
individuals interest in a piece of property to the obligation or loan burdening it. 15
In the instant case, what was filed before the trial court was an action for specific
performance directed against respondents. While the suit incidentally involved a
piece of land, the ownership or possession thereof was not put in issue, since they
did not assert any interest or right over it. Moreover, this Court has consistently
declared that an action for specific performance is an action in personam. 16
Having failed to serve the summons on respondents properly, the RTC did not
Page
The necessity of stating in the process servers Return or Proof of Service the
material facts and circumstances sustaining the validity of substituted service was
explained by this Court in Hamilton v. Levy, 11 from which we
quote:jgc:chanrobles.com.ph
47
Page
48
THIRD DIVISION
[G.R. NO. 130974 : August 16, 2006]
MA. IMELDA M. MANOTOC, Petitioner, v. HONORABLE COURT OF APPEALS
and AGAPITA TRAJANO on behalf of the Estate of ARCHIMEDES
TRAJANO, Respondents.
DECISION
VELASCO, JR., J.:
Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se,
and on behalf of the Estate of Archimedes Trajano v. Imelda 'Imee' R. MarcosManotoc 2 for Filing, Recognition and/or Enforcement of Foreign Judgment.
Respondent Trajano seeks the enforcement of a foreign court's judgment rendered
on May 1, 1991 by the United States District Court of Honolulu, Hawaii, United
States of America, in a case entitled Agapita Trajano, et al. v. Imee MarcosManotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for wrongful death of
deceased Archimedes Trajano committed by military intelligence officials of the
Philippines allegedly under the command, direction, authority, supervision,
tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the
provisions of Rule 39 of the then Revised Rules of Court.
Based on paragraph two of the Complaint, the trial court issued a Summons 3 on
July 6, 1993 addressed to petitioner at Alexandra Condominium Corporation or
Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.
On July 15, 1993, the Summons and a copy of the Complaint were allegedly
served upon (Mr.) Macky de la Cruz, an alleged caretaker of petitioner at the
Page
condominium unit mentioned earlier.4 When petitioner failed to file her Answer, the
trial court declared her in default through an Order 5 dated October 13, 1993.
49
Hence, petitioner has come before the Court for review on certiorari .
Page
On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied
by the CA in its Resolution 16 dated October 8, 1997.
50
The Issues
We GRANT the petition.
Petitioner raises the following assignment of errors for the Court's consideration:
Acquisition of Jurisdiction
I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
RENDERING THE DECISION AND RESOLUTION IN QUESTION (ANNEXES A
AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE IN RULING THAT THE
TRIAL COURT ACQUIRED JURISDICTION OVER THE PERSON OF THE
PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN
ACCORDANCE WITH SECTION 8, RULE 14 OF THE REVISED RULES OF
COURT.
II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR
WHEN IT RULED THAT THERE WAS A VALID SERVICE OF SUMMONS ON AN
ALLEGED CARETAKER OF PETITIONER'S RESIDENCE IN COMPLETE
DEFIANCE OF THE RULING IN CASTILLO v. CFI OF BULACAN, BR. IV, G.R.
NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE
PROPRIETY OF SUCH SERVICE UPON MERE OVERSEERS OF PREMISES
WHERE A PARTY SUPPOSEDLY RESIDES.
III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
CONCLUDING THAT THE RESIDENCE OF THE HUSBAND IS ALSO THE
RESIDENCE OF HIS WIFE CONTRARY TO THE RULING INTHE BANK OF THE
PHILIPPINE ISLANDS v. DE COSTER, G.R. NO. 23181, MARCH 16, 1925, 47
PHIL. 594.
IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
FAILING TO APPLY THE RULE ON EXTRA-TERRITORIAL SERVICE OF
SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES
OF COURT.17
Jurisdiction over the defendant is acquired either upon a valid service of summons
or the defendant's voluntary appearance in court. When the defendant does not
voluntarily submit to the court's jurisdiction or when there is no valid service of
summons, "any judgment of the court which has no jurisdiction over the person of
the defendant is null and void." 18 In an action strictly in personam, personal service
on the defendant is the preferred mode of service, that is, by handing a copy of the
summons to the defendant in person. If defendant, for excusable reasons, cannot
be served with the summons within a reasonable period, then substituted service
can be resorted to. While substituted service of summons is permitted, "it is
extraordinary in character and in derogation of the usual method of
service." 19 Hence, it must faithfully and strictly comply with the prescribed
requirements and circumstances authorized by the rules. Indeed, "compliance with
the rules regarding the service of summons is as much important as the issue of
due process as of jurisdiction." 20
Requirements for Substituted Service
Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case
provides:
SEC. 8.21 Substituted service. - If the defendant cannot be served within a
reasonable time as provided in the preceding section [personal service on
defendant], service may be effected (a) by leaving copies of the summons at the
defendant's residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant's office or regular place
of business with some competent person in charge thereof.
Page
We can break down this section into the following requirements to effect a valid
substituted service:
51
Page
be notified of the receipt of the summons. The sheriff must therefore determine if
the person found in the alleged dwelling or residence of defendant is of legal age,
what the recipient's relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to
immediately deliver it to the defendant or at least notify the defendant of said
receipt of summons. These matters must be clearly and specifically described in
the Return of Summons.
52
Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms
would encourage routine performance of their precise duties relating to substituted
service for it would be quite easy to shroud or conceal carelessness or laxity in
such broad terms. Lastly, considering that monies and properties worth millions
may be lost by a defendant because of an irregular or void substituted service, it is
but only fair that the Sheriff's Return should clearly and convincingly show the
impracticability or hopelessness of personal service.
Granting that such a general description be considered adequate, there is still a
serious nonconformity from the requirement that the summons must be left with a
"person of suitable age and discretion" residing in defendant's house or residence.
Thus, there are two (2) requirements under the Rules: (1) recipient must be a
person of suitable age and discretion; and (2) recipient must reside in the house or
residence of defendant. Both requirements were not met. In this case, the Sheriff's
Return lacks information as to residence, age, and discretion of Mr. Macky de la
Cruz, aside from the sheriff's general assertion that de la Cruz is the "resident
caretaker" of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged
receptionist and telephone operator of Alexandra Homes. It is doubtful if Mr. de la
Cruz is residing with petitioner Manotoc in the condominium unit considering that a
married woman of her stature in society would unlikely hire a male caretaker to
reside in her dwelling. With the petitioner's allegation that Macky de la Cruz is not
her employee, servant, or representative, it is necessary to have additional
information in the Return of Summons. Besides, Mr. Macky de la Cruz's refusal to
Page
53
The Court acknowledges that this ruling is still a valid doctrine. However, for the
presumption to apply, the Sheriff's Return must show that serious efforts or
attempts were exerted to personally serve the summons and that said efforts
failed. These facts must be specifically narrated in the Return. To reiterate, it must
clearly show that the substituted service must be made on a person of suitable age
and discretion living in the dwelling or residence of defendant. Otherwise, the
Return is flawed and the presumption cannot be availed of. As previously
explained, the Return of Sheriff Caelas did not comply with the stringent
requirements of Rule 14, Section 8 on substituted service.
Page
is prima facie evidence of the facts set out herein, and to overcome the
presumption arising from said certificate, the evidence must be clear and
convincing." 40
54
In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the
presumption of regularity in the performance of official functions by the sheriff is
not applicable in this case where it is patent that the sheriff's return is defective
(emphasis supplied)." While the Sheriff's Return in the Venturanza case had no
statement on the effort or attempt to personally serve the summons, the Return of
Sheriff Caelas in the case at bar merely described the efforts or attempts in
general terms lacking in details as required by the ruling in the case of Domagas v.
Jensen and other cases. It is as if Caelas' Return did not mention any effort to
accomplish personal service. Thus, the substituted service is void.
On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E2104, at No. 29 Meralco Avenue, Pasig City, our findings that the substituted
service is void has rendered the matter moot and academic. Even assuming that
Alexandra Homes Room 104 is her actual residence, such fact would not make an
irregular and void substituted service valid and effective.
IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and
the assailed March 17, 1997 Decision and October 8, 1997 Resolution of the Court
of Appeals and the October 11, 1994 and December 21, 1994 Orders of the
Regional Trial Court, National Capital Judicial Region, Pasig City, Branch 163 are
hereby REVERSED and SET ASIDE.No costs.
SO ORDERED.
SECOND DIVISION
Page
55
SO ORDERED.6
The respondent failed to appeal the decision. Consequently, a writ of execution
was issued on September 27, 1999.
On August 16, 2000, the respondent filed a complaint against the petitioner before
the RTC of Dagupan City for the annulment of the decision of the MTC in Civil
Case No. 879, on the ground that due to the Sheriff's failure to serve the complaint
and summons on her because she was in Oslo, Norway, the MTC never acquired
jurisdiction over her person. The respondent alleged therein that the service of the
complaint and summons through substituted service on her brother, Oscar Layno,
was improper because of the following: (a) when the complaint in Civil Case No.
879 was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan,
but of Oslo, Norway, and although she owned the house where Oscar Layno
received the summons and the complaint, she had then leased it to Eduardo
Gonzales; (b) she was in Oslo, Norway, at the time the summons and the
complaint were served; (c) her brother, Oscar Layno, was merely visiting her house
in Barangay Buenlag and was not a resident nor an occupant thereof when he
received the complaint and summons; and (d) Oscar Layno was never authorized
to receive the summons and the complaint for and in her behalf.7
The respondent further alleged that the MTC had no jurisdiction over the subject
matter of the complaint in Civil Case No. 879 because the petitioner, the plaintiff
therein, failed to show prior possession of the property. She further claimed that
the alleged forcible entry was simply based on the result of the survey conducted
by Geodetic Engineer Leonardo de Vera showing that the property of the
respondent encroached on that of the petitioner.
The respondent filed a Manifestation dated August 31, 2000, and appended
thereto the following: (a) a copy8 of her passport showing that she left the country
on February 17, 1999; (b) a copy9 of the Contract of Lease dated November 24,
1997, executed by her and Eduardo D. Gonzales over her house for a period of
three (3) years or until November 24, 2000; (c) her affidavit10 stating, inter alia, that
she owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she
Page
56
After due proceedings, the trial court rendered a decision in favor of the
respondent. The dispositive portion reads:
WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and
against defendant Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case
No. 879, entitled Filomena Domagas v. Vivian Layno Jensen is declared null and
void, for lack of jurisdiction over the person of the plaintiff and the subject matter.
2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:
A.) Actual damages, representing litigation expenses in the amount ofP50,000.00;
b.) Attorney's fees in the amount of P50,000.00;
Page
and (d) the Voter's Registration Record16 of Oscar Layno, approved on June 15,
1997.
57
The respondent, on the other hand, asserts that the action for forcible entry filed
against her was an action quasi in rem, and that the applicable provision of the
Rules of Court is Section 15 of Rule 14, which calls for extraterritorial service of
summons.
The sole issue is whether or not there was a valid service of the summons and
complaint in Civil Case No. 879 on the respondent herein who was the defendant
in the said case. The resolution of the matter is anchored on the issue of whether
or not the action of the petitioner in the MTC against the respondent herein is an
action in personam or quasi in rem.
The ruling of the CA that the petitioner's complaint for forcible entry of the petitioner
against the respondent in Civil Case No. 879 is an action quasi in rem, is
erroneous. The action of the petitioner for forcible entry is a real action and one in
personam.
On the other hand, a proceeding quasi in rem is one brought against persons
seeking to subject the property of such persons to the discharge of the claims
assailed.26 In an action quasi in rem, an individual is named as defendant and the
purpose of the proceeding is to subject his interests therein to the obligation or
loan burdening the property.27 Actions quasi in rem deal with the status, ownership
or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to
ascertain or cut off the rights or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined in the action.28
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when. - Subject to the provisions of
the next succeeding section, a person deprived of the possession of any land or
building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor,
vendee, or other person against whom the possession of any land or building is
Page
The settled rule is that the aim and object of an action determine its
character.18 Whether a proceeding is in rem, or in personam, or quasi in rem for
that matter, is determined by its nature and purpose, and by these only.19 A
proceeding in personam is a proceeding to enforce personal rights and obligations
brought against the person and is based on the jurisdiction of the person, although
it may involve his right to, or the exercise of ownership of, specific property, or seek
to compel him to control or dispose of it in accordance with the mandate of the
court.20 The purpose of a proceeding in personam is to impose, through the
judgment of a court, some responsibility or liability directly upon the person of the
defendant.21 Of this character are suits to compel a defendant to specifically
perform some act or actions to fasten a pecuniary liability on him.22 An action in
personam is said to be one which has for its object a judgment against the person,
as distinguished from a judgment against the propriety to determine its state. It has
been held that an action in personam is a proceeding to enforce personal rights or
obligations; such action is brought against the person. As far as suits for injunctive
relief are concerned, it is well-settled that it is an injunctive act in
personam.23In Combs v. Combs,24 the appellate court held that proceedings to
enforce personal rights and obligations and in which personal judgments are
rendered adjusting the rights and obligations between the affected parties is
in personam. Actions for recovery of real property are in personam.25
58
As gleaned from the averments of the petitioner's complaint in the MTC, she
sought a writ of a preliminary injunction from the MTC and prayed that the said writ
be made permanent. Under its decision, the MTC ordered the defendant therein
(the respondent in this case), to vacate the property and pay a "monthly rental"
of P1,000.00 to the plaintiff therein (the petitioner in this case).
On the issue of whether the respondent was validly served with the summons and
complaint by the Sheriff on April 5, 1999, the petitioner asserts that since her action
of forcible entry against the respondent in Civil Case No. 879 was in personam,
summons may be served on the respondent, by substituted service, through her
brother, Oscar Layno, in accordance with Section 7, Rule 14 of the Rules of Court.
The petitioner avers that Oscar Layno, a person of suitable age and discretion,
was residing in the house of the respondent on April 5, 1999. She avers that the
fact that the house was leased to and occupied by Eduardo Gonzales was of no
moment. Moreover, the Sheriff is presumed to have performed his duty of properly
serving the summons on the respondent by substituted service.
The contention of the petitioner has no merit.
In Asiavest Limited v. Court of Appeals, 31 the Court had the occasion to state:
In an action in personam, jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the case. Jurisdiction over the
person of a resident defendant who does not voluntarily appear in court can be
acquired by personal service of summons as provided under Section 7, Rule 14 of
the Rules of Court. If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance with Section 8 of
said Rule. If he is temporarily out of the country, any of the following modes of
service may be resorted to: (a) substituted service set forth in Section 8; (2)
personal service outside the country, with leave of court; (3) service by publication,
also with leave of court; or (4) any other manner the court may deem sufficient.32
Page
59
Page
In Keister v. Narcereo,38 the Court held that the term "dwelling house" or
"residence" are generally held to refer to the time of service; hence, it is not
sufficient to leave the summons at the former's dwelling house, residence or place
of abode, as the case may be. Dwelling house or residence refers to the place
where the person named in the summons is living at the time when the service is
made, even though he may be temporarily out of the country at the time. It is, thus,
the service of the summons intended for the defendant that must be left with the
person of suitable age and discretion residing in the house of the defendant.
Compliance with the rules regarding the service of summons is as much important
as the issue of due process as of jurisdiction.39
60
In sum, then, the respondent was not validly served with summons and the
complaint in Civil Case No. 879 on April 5, 1999, by substituted service. Hence, the
MTC failed to acquire jurisdiction over the person of the respondent; as such, the
decision of the MTC in Civil Case No. 879 is null and void.
(Sgd.)
EDUARDO J. ABULENCIA
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No
costs.
SO ORDERED.
Page
61
SECOND DIVISION
[G.R. NO. 168723 : July 9, 2008]
DOLE PHILIPPINES, INC. (TROPIFRESH DIVISION), Petitioner, v. HON.
REINATO G. QUILALA in his capacity as pairing judge of Branch 150, RTCMakati City, and ALL SEASON FARM, CORP., Respondents.
DECISION
QUISUMBING, J.:
This Petition for Review assails the Decision1 dated May 20, 2005 of the Court of
Appeals in CA-G.R. SP No. 87723 and its Resolution2 dated June 28, 2005,
denying the motion for reconsideration. The appellate court had affirmed the
Order3 dated February 6, 2004 of the Regional Trial Court (RTC) of Makati City,
Branch 150, in Civil Case No. 03-093 and its Order4 dated September 16, 2004
denying the motion for partial reconsideration.
The factual antecedents of this case are as follows.
In a complaint filed with the RTC of Makati City, presided over by Pairing Judge
Reinato Quilala, private respondent All Season Farm Corporation ("All Season")
On May 20, 2003, Dole filed a motion to dismiss the complaint on the following
grounds: (a) the RTC lacked jurisdiction over the person of Dole due to improper
service of summons; (b) the complaint failed to state a cause of action; (c) All
Season was not the real party in interest; and (d) the officers of Dole cannot be
sued in their personal capacities for alleged acts performed in their official
capacities as corporate officers of Dole.5 In its Order dated February 6, 2004, the
RTC denied said motion. Dole moved for partial reconsideration raising the same
issues but its motion was denied.
Thereafter, Dole filed a petition for certiorari with the Court of Appeals contending
that the alias summons was not properly served. The appellate court, however,
ruled otherwise. It reasoned that Dole's president had known of the service of the
alias summons although he did not personally receive and sign it. It also held that
in today's corporate setup, documents addressed to corporate officers are received
in their behalf by their staff.6 Dole sought reconsideration, but its motion was
likewise denied.
Hence, this petition where petitioner raises the lone issue:
Page
sought the recovery of a sum of money, accounting and damages from petitioner
Dole Philippines, Inc. (Tropifresh Division) ("Dole") and several of its officers.
According to Dole, an alias summons was served upon it through a certain Marifa
Dela Cruz, a legal assistant employed by Dole Pacific General Services, Ltd.,
which is an entity separate from Dole.
62
In this case, it appears that on April 23, 2003, Marifa Dela Cruz, a legal assistant,
received the alias summons.12 Contrary to private respondent's claim that it was
received upon instruction of the president of the corporation as indicated in the
Officer's Return, such fact does not appear in the receiving copy of the alias
summons which Marifa Dela Cruz signed. There was no evidence that she was
authorized to receive court processes in behalf of the president. Considering that
the service of summons was made on a legal assistant, not employed by herein
petitioner and who is not one of the designated persons under Section 11, Rule 14,
the trial court did not validly acquire jurisdiction over petitioner.
Simply stated, the issue in this case is whether there was a valid service of
summons on petitioner for the trial court to acquire jurisdiction over the person of
the corporate defendant below, now the petitioner herein.
Page
Court, the filing of motions seeking affirmative relief, such as, to admit answer, for
additional time to file answer, for reconsideration of a default judgment, and to lift
order of default with motion for reconsideration, are considered voluntary
submission to the jurisdiction of the court.14
63
Note that on May 5, 2003, petitioner filed an Entry of Appearance with Motion for
Time. It was not a conditional appearance entered to question the regularity of the
service of summons, but an appearance submitting to the jurisdiction of the court
by acknowledging the receipt of the alias summons and praying for additional time
to file responsive pleading.15 Consequently, petitioner having acknowledged the
receipt of the summons and also having invoked the jurisdiction of the RTC to
secure affirmative relief in its motion for additional time, petitioner effectively
submitted voluntarily to the jurisdiction of the RTC. It is estopped now from
asserting otherwise, even before this Court.16The RTC therefore properly took
cognizance of the case against Dole Philippines, Inc., and we agree that the trial
and the appellate courts committed no error of law when Dole's contentions were
overruled.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated May
20, 2005 of the Court of Appeals in CA-G.R. SP No. 87723 and its Resolution
dated June 28, 2005 are AFFIRMED. Costs against petitioner.
SO ORDERED.
THIRD DIVISION
G.R. NO. 184333 : April 1, 2013
SIXTO N. CHU, Petitioner, v. MACH ASIA TRADING
CORPORATION, Respondent.
DECISION
This is a petition for review on certiorari assailing the Decision1 dated July 25, 2007
of the Court of Appeals (CA) in CA-G.R. CV No. 70666, and the Resolution2 dated
August 28, 2008 denying petitioner's Motion for Reconsideration.
The factual and procedural antecedents are as follows:chanroblesvirtualawlibrary
Respondent Mach Asia Trading Corporation is a corporation engaged in importing
dump trucks and heavy equipments. On December 8, 1998, petitioner Sixto N. Chu
purchased on installment one (1) Hitachi Excavator worth P900,000.00 from the
respondent. Petitioner initially paid P180,000.00 with the balance of P720,000.00
to be paid in 12 monthly installments through Prime Bank postdated checks. On
March 29, 1999, petitioner again purchased two (2) heavy equipments from the
respondent on installment basis in the sum of P1,000,000.00, namely: one (1)
motorgrader and one (1) payloader. Petitioner made a down payment
of P200,000.00 with the balance of P800,000.00 payable in 12 monthly
installments through Land Bank postdated checks.3chanroblesvirtualawlibrary
However, upon presentment of the checks for encashment, they were dishonored
by the bank either by reason of "closed account," "drawn against insufficient
funds," or "payment stopped." Respondent informed petitioner that the checks
were dishonored and invited him to its office to replace the checks. On September
16, 1999, respondent sent petitioner a formal demand letter urging the latter to
settle his accounts within five days from receipt of the letter. In response, petitioner
sent respondent a letter explaining that his business was badly hit by the Asian
economic crisis and that he shall endeavor to pay his obligation by giving partial
payments. He said that he shall also voluntarily surrender the subject units should
he fail to do so.4chanroblesvirtualawlibrary
On November 11, 1999, respondent filed a complaint before the Regional Trial
Court (RTC) of Cebu City for sum of money, replevin, attorney's fees and damages
against the petitioner. Respondent prayed for the payment of the unpaid balance
of P1,661,947.27 at 21% per annum until full payment, 25% of the total amount to
be recovered as attorney's fees, litigation expenses and
costs.5chanroblesvirtualawlibrary
Page
PERALTA, J.:
64
Page
On July 25, 2007, the CA rendered a Decision9 affirming the Decision of the RTC,
the decretal portion of which reads:chanroblesvirtualawlibrary
65
Page
be effected (a) by leaving copies of the summons at the defendant's residence with
some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant's office or regular place of business with some competent
person in charge thereof.
66
1. That the Summons, together with the complaint, writ of replevin and bond was
received on December 7, 1999, by Rolando Bonayon, a security guard on
defendant Sixto Chu at his given address who received and signed receipt thereof.
Hence, if Chu had actually received the summons through his security guard, the
requirement of due process would have nevertheless been complied with. x x x.
Based on the presumption that a person takes ordinary care of his concerns, the
security guard would not have allowed the sheriff to take possession of the
equipments without the prior permission of Chu; otherwise he would be
accountable to Chu for the said units. Chu, for his part, would not have given his
permission without being informed of the fact of the summons and the writ of
replevin issued by the lower court, which permission includes the authority to
receive the summons and the writ of replevin.
2. That the writ of replevin was duly executed on the same date, December 7,
1999, Tacloban City and San Jorge, Samar of the following properties subject of
the writ.
Thus, where summons was in fact received by defendant, his argument that the
sheriff should have tried first to serve summons on him personally before resorting
to substituted service of summons is not meritorious.
Respectfully returned to the Honorable Regional Trial Court, Branch 17, Cebu City,
the Summons and writ issued in the above-entitled case with the following
information, to wit:chanroblesvirtualawlibrary
x x x.
x x x.
In the interest of fairness, the process server's neglect or inadvertence in the
service of summons should not, thus, unduly prejudice plaintiff-appellee's right to
speedy justice. x x x 19chanroblesvirtualawlibrary
The service of summons is a vital and indispensable ingredient of due process. As
a rule, if defendants have not been validly summoned, the court acquires no
jurisdiction over their person, and a judgment rendered against them is null and
void.20 Since the RTC never acquired jurisdiction over the person of the petitioner,
the judgment rendered by the court could not be considered binding upon him for
being null and void.
WHEREFORE, premises considered, the petition is GRANTED. The Decision of
the Court of Appeals, dated July 25, 2007, as well as its Resolution dated August
28, 2008, in CA-G.R. CV No. 70666 is hereby REVERSED and SET ASIDE. The
Decision of the Regional Trial Court dated December 15, 2000 is declared NULL
and VOID. The Regional Trial Court is hereby ORDERED to validly serve
summons upon Sixto N. Chu and, thereafter, proceed with the trial of the main
action with dispatch.
SO ORDERED.
Page
67
Page
68
In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the
stated address to effect the personal service of the summons on the defendants.
But his efforts to personally serve each defendant in the address were futile
because the defendants were then out of the office and unavailable. He returned in
the afternoon of that day to make a second attempt at serving the summons, but
he was informed that petitioners were still out of the office. He decided to resort to
substituted service of the summons,and explained why in his sheriffs return dated
September 22, 2000,5 to wit:cralavvonlinelawlibrary
SHERIFFS RETURN
This is to certify that on September 18, 2000, I caused the service of summons
together with copies of complaint and its annexes attached thereto, upon the
following:cralavvonlinelawlibrary
1. Defendant Allen A. Macasaet, President/Publisher of defendant Abante Tonite, at
Monica Publishing Corporation, Rooms 301-305 3rd Floor, BF Condominium
Building, Solana corner A. Soriano Streets, Intramuros, Manila, thru his secretary
Lu-Ann Quijano, a person of sufficient age and discretion working therein, who
signed to acknowledge receipt thereof. That effort (sic) to serve the said summons
personally upon said defendant were made, but the same were ineffectual and
unavailing on the ground that per information of Ms. Quijano said defendant is
always out and not available, thus, substituted service was
applied;chanroblesvirtualawlibrary
3. Defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily
Reyes, at the same address, thru Rene Esleta, Editorial Assistant of defendant
Abante Tonite, a person of sufficient age and discretion working therein who signed
to acknowledge receipt thereof. That effort (sic) to serve the said summons
personally upon said defendants were made, but the same were ineffectual and
unavailing on the ground that per information of (sic) Mr. Esleta said defendants is
(sic) always roving outside and gathering news, thus, substituted service was
applied.
Original copy of summons is therefore, respectfully returned duly served.
Manila, September 22, 2000.
On October 3, 2000, petitioners moved for the dismissal of the complaint through
counsels special appearance in their behalf,alleging lack of jurisdiction over their
persons because of the invalid and ineffectual substituted service of summons.
They contended that the sheriff had made no prior attempt to serve the summons
personally on each of them in accordance with Section 6 and Section 7, Rule 14 of
the Rules of Court. They further moved to drop Abante Tonite as a defendant by
virtue of its being neither a natural nor a juridical person that could be impleaded
as a party in a civil action.
At the hearing of petitioners motion to dismiss, Medina testified that he had gone
to the office address of petitioners in the morning of September 18, 2000 to
personally serve the summons on each defendant; that petitioners were out of the
office at the time; that he had returned in the afternoon of the same day to again
attempt to serve on each defendant personally but his attempt had still proved
futile because all of petitioners were still out of the office; that some competent
persons working in petitioners office had informed him that Macasaet and Quijano
were always out and unavailable, and that Albano, Bay, Galang, Hagos and Reyes
were always out roving to gather news; and that he had then resorted to
substituted service upon realizing the impossibility of his finding petitioners in
person within a reasonable time.
On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners
Page
2. Defendant Nicolas V. Quijano, at the same address, thru his wife Lu-Ann
Quijano, who signed to acknowledge receipt thereof. That effort (sic) to serve the
said summons personally upon said defendant were made, but the same were
ineffectual and unavailing on the ground that per information of (sic) his wife said
defendant is always out and not available, thus, substituted service was
applied;chanroblesvirtualawlibrary
69
Ruling of the CA
On March 8, 2002, the CApromulgated its questioned decision,8 dismissing the
petition for certiorari, prohibition, mandamus, to wit:cralavvonlinelawlibrary
We find petitioners argument without merit. The rule is that certiorari will prosper
only if there is a showing of grave abuse of discretion or an act without or in excess
of jurisdiction committed by the respondent Judge. A judicious reading of the
questioned orders of respondent Judge would show that the same were not issued
in a capricious or whimsical exercise of judgment. There are factual bases and
legal justification for the assailed orders. From the Return, the sheriff certified that
effort to serve the summons personally xxx were made, but the same were
ineffectual and unavailing xxx.
and upholding the trial courts finding that there was a substantial compliance with
the rules that allowed the substituted service.
Furthermore, the CA ruled:cralavvonlinelawlibrary
Anent the issue raised by petitioners that Abante Tonite is neither a natural or
juridical person who may be a party in a civil case, and therefore the case against
it must be dismissed and/or dropped, is untenable.
The respondent Judge, in denying petitioners motion for reconsideration, held
Page
and that they were always out because they were roving around to gather news.
Because of that information and because of the nature of the work of the
defendants that they are always on field, so the sheriff resorted to substituted
service of summons. There was substantial compliance with the rules, considering
the difficulty to serve the summons personally to them because of the nature of
their job which compels them to be always out and unavailable. Additional matters
regarding the service of summons upon defendants were sufficiently discussed in
the Order of this Court dated March 12, 2001.
Regarding the impleading of Abante Tonite as defendant, the RTC held,
viz:cralavvonlinelawlibrary
Abante Tonite is a daily tabloid of general circulation. People all over the country
could buy a copy of Abante Tonite and read it, hence, it is for public consumption.
The persons who organized said publication obviously derived profit from it. The
information written on the said newspaper will affect the person, natural as well as
juridical, who was stated or implicated in the news. All of these facts imply that
Abante Tonite falls within the provision of Art. 44 (2 or 3), New Civil Code.
Assuming arguendo that Abante Tonite is not registered with the Securities and
Exchange Commission, it is deemed a corporation by estoppels considering that it
possesses attributes of a juridical person, otherwise it cannot be held liable for
damages and injuries it may inflict to other persons.
Undaunted, petitioners brought a petition for certiorari, prohibition, mandamus in
the CA to nullify the orders of the RTC dated March 12, 2001 and June 29, 2001.
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2.
The petition for review lacks merit. Jurisdiction over the person, or jurisdiction in
personam the power of the court to render a personal judgment or to subject the
parties in a particular action to the judgment and other rulings rendered in the
action is an element of due process that is essential in all actions, civil as well as
criminal, except in actions in rem or quasi in rem. Jurisdiction over the defendant in
an action in rem or quasi in rem is not required, and the court acquires jurisdiction
over an action as long as it acquires jurisdiction over the res that is the subject
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matter of the action. The purpose of summons in such action is not the acquisition
of jurisdiction over the defendant but mainly to satisfy the constitutional
requirement of due process.12
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Under the Rules of Court, the service of the summons should firstly be effected on
the defendant himself whenever practicable. Such personal service consists either
in handing a copy of the summons to the defendant in person, or, if the defendant
refuses to receive and sign for it, in tendering it to him.24 The rule on personal
service is to be rigidly enforced in order to ensure the realization of the two
fundamental objectives earlier mentioned. If, for justifiable reasons, the defendant
cannot be served in person within a reasonable time, the service of the summons
may then be effected either (a) by leaving a copy of the summons at his residence
with some person of suitable age and discretion then residing therein, or (b) by
leaving the copy at his office or regular place of business with some competent
person in charge thereof.25 The latter mode of service is known as substituted
service because the service of the summons on the defendant is made through his
substitute.
It is no longer debatable that the statutory requirements of substituted service must
be followed strictly, faithfully and fully, and any substituted service other than that
authorized by statute is considered ineffective.26 This is because substituted
service, being in derogation of the usual method of service, is extraordinary in
character and may be used only as prescribed and in the circumstances
authorized by statute.27 Only when the defendant cannot be served personally
within a reasonable time may substituted service be resorted to. Hence, the
impossibility of prompt personal service should be shown by stating the efforts
made to find the defendant himself and the fact that such efforts failed, which
statement should be found in the proof of service or sheriffs return.28Nonetheless,
the requisite showing of the impossibility of prompt personal service as basis for
resorting to substituted service may be waived by the defendant either expressly or
impliedly.29
There is no question that Sheriff Medina twice attempted to serve the summons
upon each of petitioners in person at their office address, the first in the morning of
September 18, 2000 and the second in the afternoon of the same date. Each
attempt failed because Macasaet and Quijano were always out and not available
and the other petitioners were always roving outside and gathering news. After
Medina learned from those present in the office address on his second attempt that
there was no likelihood of any of petitioners going to the office during the business
hours of that or any other day, he concluded that further attempts to serve them in
person within a reasonable timewould be futile. The circumstances fully warranted
his conclusion. He was not expected or required as the serving officer to effect
personal service by all means and at all times, considering that he was expressly
authorized to resort to substituted service should he be unable to effect the
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waive the process.22 In other words, compliance with the rules regarding the
service of the summons is as much an issue of due process as it is of jurisdiction.23
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