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Contents

RULE 14- SUMMONS........................................................................................6


Sec. 1. Clerk to issue summons....................................................................6
Optima Realty v. Hertz Phils., G.R. No. 183035, January 9, 2013..............6
Sec. 2. Contents.........................................................................................12
Sec. 3. By whom served.............................................................................12
Sec. 4. Return.............................................................................................12
Sec. 5. Issuance of alias summons.............................................................12
Sec. 6. Service on person of defendant......................................................12
Planters Development Bank v. Chandumal, G.R. No. 195619, September
5, 2012....................................................................................................12
Oaminal v. Castillo, G.R. No. 152776, October 8, 2003...........................18
Macasaet v. Co, G.R. No. 156759, June 5, 2013.......................................26
Sec. 7. Substituted service.........................................................................34
Planters Development Bank v. Chandumal, G.R. No. 195619, September
5, 2012 (Supra.)......................................................................................34
Macasaet v. Co, G.R. No. 156759, June 5, 2013 (Supra.).........................34
Gentle Supreme v. Consulta, G.R. No. 183182, September 1, 2010........34
Leah Palma v. Hon. Galvez, G.R. No. 165273, March 10, 2010................37
Sagana v. Francisco, G.R. No. 161952, October 2, 2009.........................44
Robinson v. Miralles, G.R. No. 163584, December 12, 2006....................50
Chu v. Mach Asia, G.R. No. 184333, April 1, 2013...................................53
Sec. 8. Service upon entity without juridical personality............................58
Sec. 9. Service upon prisoners...................................................................58
Sec. 10. Service upon minors and incompetents........................................58
Sec. 11. Service upon domestic private juridical entity..............................58
B.D. Long-Span Builders v. R.S. Ampeloquio, G.R. No. 169919, September
11, 2009..................................................................................................58
Tung Ho Steel v. Ting Guan, G.R. No. 182153, April 7, 2014...................63
Cathay Metal v. Laguna West, G.R. No. 172204, July 2, 2014.................70
Sec. 12. Service upon foreign private juridical entities..............................87
See: A.M. No. 11-3-6, March 15, 2011.....................................................87
Atiko Trans v. Prudential Guarantee, G.R. No. 167545, August 17, 2011 87

NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011...........95


Sec. 13. Service upon public corporations................................................106
Sec. 14. Service upon defendant whose identity or whereabouts are
unknown...................................................................................................106
Pua v. Deyto, G.R. No. 173336, November 26, 2012 pdf.......................106
Cathay Metal v. Laguna West, G.R. No. 172204, July 2, 2014 (Supra.)..106
Sec. 15. Extraterritorial service................................................................106
NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011 (Supra.)
..............................................................................................................106
Acance v. Court of Appeals, G.R. No. 159699, March 16, 2005.............106
Spouses Jose v. Spouses Boyon, G.R. No. 147369, October 23, 2003. . .112
Sec. 16. Residents temporarily out of the Philippines..............................118
Leah Palma v. Hon. Galvez, G.R. No. 165273, March 10, 2010 (Supra.) 118
Montefalcon v. Vasquez, G.R. No. 165016, June 17, 2008.....................118
Belen v. Belen, G.R. No. 175334, March 26, 2008.................................118
Sec. 17. Leave of court.............................................................................118
Sec. 18. Proof of service...........................................................................118
Sec. 19. Proof of service by publication....................................................118
Acance v. Court of Appeals, G.R. No. 159699, March 16, 2005 supra. . .118
Sec. 20. Voluntary appearance.................................................................118
Herrera-Felix v. Court of Appeals, G.R. No. 143736, August 11, 2004...118
JAPRIL Dev. Corp. v. Security Bank, G.R. No. 190107, June 6, 2011.......122
Rapid City Realty v. Villa, G.R. No. 184197, February 11, 2010.............128
Allan Co v. Cordero, G.R. No. 164703, May 4, 2010...............................131
Lhuillier v. British Airways, G.R. No. 171092, March 15, 2010...............148
Rodriguez vs. Alikpala, G.R. No. L-38314, June 25, 1974.......................156
RULE 15- MOTIONS......................................................................................160
Sec. 1. Motion defined..............................................................................160
Sec. 2. Motions must be in writing............................................................160
Sec. 3.Contents........................................................................................160
Sec. 4. Hearing of motion.........................................................................160
Anama v. Phil. Savings Bank, G.R. No. 187021, January 25, 2012 (Supra.)
..............................................................................................................160
Sec. 5. Notice of hearing..........................................................................171

Anama v. Phil. Savings Bank, G.R. No. 187021, January 25, 2012 (Supra.)
..............................................................................................................172
Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998 (Supra.)
..............................................................................................................172
Sec. 6. Proof of service necessary............................................................178
Sec. 7. Motion day....................................................................................178
Sec. 8. Omnibus motion...........................................................................178
Tung Ho Steel v. Ting Guan, G.R. No. 182153, April 7, 2014 (Supra.)....178
Sec. 9. Motion for leave............................................................................179
Sec. 10. Form............................................................................................179
RULE 16- MOTION TO DISMISS.....................................................................179
Sec. 1. Grounds........................................................................................179
See: Sec. 1, Rule 9....................................................................................179
Obando v. Figueras, G.R. No. 134854, January 18, 2000.......................179
No jurisdiction over defendant.................................................................184
See: Sec. 20, Rule 14.............................................................................184
Planters Development Bank v. Chandumal, G.R. No. 195619, September
5, 2012 (Supra.)....................................................................................184
Carandang v. Heirs of de Guzman, G.R. No. 160347, November 29, 2006
(Supra.).................................................................................................184
No jurisdiction over the subject matter....................................................184
Allied Domecq Phil. v. Hon. Villon, G.R. No. 156264, September 30, 2004
(Supra.).................................................................................................185
Republic v. Bantigue Point Development, G.R. No. 162322, March 14,
2012 (Supra.)........................................................................................185
Tijam v. Sibonghanoy, L-21450, April 15, 1968 (Supra.).......................185
Improper Venue........................................................................................185
See: Rule 4................................................................................................185
Sec. 4, A.M. No. 02-11-10-SC, March 4, 2003...........................................185
Universal Robina v. Lim, G.R. No. 154338, October 5, 2007..................194
No legal capacity to sue...........................................................................199
Evangelista v. Santiago, G.R. No. 157447, April 29, 2005.....................199
B. Van Zuiden v. GTVL Manufacturing, G.R. No. 147905, May 28, 2007 209
Litis Pendentia..........................................................................................215
Spouses Marasigan v. Chevron, G.R. No. 184015, February 8, 2012
(Supra.).................................................................................................215

Quito v. Stop & Save Corp., G.R. No. 186657, June 11, 2014 (Supra.)...215
Benavidez v. Salvador, G.R. No. 173331, December 11, 2013 (Supra.) 215
Res Judicata..............................................................................................215
Heirs of Sotto v. Palicte, G.R. No. 159691, June 13, 2013 (Supra.)........215
Spouses Antonio v. Sayman, G.R. No. 149624, September 29, 2010
(Supra.).................................................................................................215
Prescription/Statute of Limitations............................................................215
Marquez v. Baldoz, G.R. No. 143779, April 4, 2003...............................215
States no cause of action.........................................................................219
Lucas v. Lucas, G.R. No. 190710, June 6, 2011 (Supra.)........................219
Lazaro v. Brewmaster, G.R. No. 182779, August 23, 2010....................230
NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011 (Supra.)
..............................................................................................................237
Evangelista v. Santiago, G.R. No. 157447, April 29, 2005 (Supra.).......237
Paid, Waived, Abandoned, Extinguished...................................................237
Star Two v. Ko, G.R. No. 185454, March 23, 2011.................................237
Urethane v. Ong, G.R. No. 164632, October 29, 2008...........................241
Fernando v. Acuna, G.R. No. 161030, September 14, 2011..................244
Unenforceable..........................................................................................255
See: Art. 1403, Civil Code......................................................................255
Failure to comply with condition precedent..............................................255
Morata v. Go, 125 SCRA 444 (1983)......................................................255
Uy v. Contreras, 237 SCRA 167 (1994)..................................................260
Wingarts v. Mejia, 242 SCRA 436 (1995)...............................................270
Mendova v. Afable, 393 SCRA 390 (2002).............................................276
Aquino v. Aure, 546 SCRA 71 (2008).....................................................280
Pang-et v. Manacnes-dao-as, G.R. No. 167261, March 2, 2007.............288
Agbayani v. Court of Appeals, G.R. No. 183623, June 25, 2012.............296
Sec. 2. Hearing of motion.........................................................................308
Sec. 3. Resolution of the motion...............................................................308
Sec. 4. Time to plead................................................................................308
Sec. 5. Effect of dismissal.........................................................................308
NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011 (Supra.)
..............................................................................................................308
Sec. 6. Pleading grounds as affirmative defenses....................................309

RULE 17- DISMISSAL OF ACTIONS................................................................309


Sec. 1. Dismissal upon notice by plaintiff.................................................309
Dael v. Spouses Beltran, G.R. No. 156470, April 30, 2008.....................309
Go v. Cruz, G.R. No. L-58986, April 17, 1989.........................................313
Sec. 2. Dismissal upon motion of plaintiff.................................................316
Sec. 3. Dismissal due to fault of plaintiff..................................................316
AFPRSBS v. Republic, G.R. No. 188956, March 20, 2013.......................316
Phil. Charter v. Explorer Machine, G.R. No. 175409, September 7, 2011
..............................................................................................................321
Republic v. Enriquez, G.R. No. 181458, March 20, 2013........................326
Shimizu Philippines v. Magasalin, G.R. No. 170026, June 2012.............333
Quintos v. Nicolas, G.R. No. 210252, June 16, 2014..............................342
Sec. 4. Dismissal of counterclaim, cross-claim, or third-party complainant
.................................................................................................................350
RULE 18- PRE-TRIAL.....................................................................................350
Sec. 1. When conducted...........................................................................350
See: A.M. No. 03-1-09-SC......................................................................350
Sarmiento v. Juan, G.R. No. 56605, January 28, 1983............................351
Eloisa Merchandising v. Banco de Oro, G.R. No. 192716, June 13, 2012
..............................................................................................................354
Espiritu v. Lazaro, G.R. No. 181020, November 25, 2009......................363
Paranque Kings v. Santos, G.R. No. 194638, July 2, 2014......................367
Corpus v. Hon. Ochotorena, A.M. No. RTJ-04-1861, July 30, 2004..........373
Sec. 2. Nature and Purpose......................................................................377
Suico Industrial Corp., v. Hon. Yap, G.R. No. 177711, September 5, 2012
..............................................................................................................377
Sec. 3. Notice of pre-trial..........................................................................386
Sec. 4. Appearance of parties...................................................................386
Fiesta World Mall Corp. v. Lindberg, G.R. No. 152471, August 18, 2006
..............................................................................................................386
Sec. 5. Effect of failure to appear.............................................................392
Chingkoe v. Republic, G.R. No. 183608, July 31, 2013...........................392
Durban Apartments v. Pioneer, G.R. No. 179419, January 12, 2011......400
Sec. 6. Pre-trial brief.................................................................................408
BPI v. Dando, G.R. No. 177456, September 4, 2009..............................408

Benavidez v. Salvador, G.R. No. 173331, December 11, 2013..............415


Sec. 7. Record of pre-trial.........................................................................425
See: Rule 10, Sec. 5, Rules of Court......................................................425
Rule 18, Sec. 7, Rules of Court..............................................................425
Lazo v. Republic Surety, G.R. No. L-27365, January 30, 1970 (Supra.). .425
Buce v. Court of Appeals, G.R. No. 136913, May 12, 2000 (Supra.)......432
Mercader v. DBP, G.R. No. 130699, May 12, 2000 (Supra.)...................436
RULE 19- INTERVENTION..............................................................................446
Sec. 1. Who may intervene.......................................................................446
Ongco v. Dalisay, G.R. No. 190810, July 18, 2012.................................446
Sec. 2. Time to intervene..........................................................................452
Quinto v. Comelec, G.R. No. 189698, February 22, 2010......................452
Sec. 3. Pleadings-in-intervention..............................................................481
Sec. 4. Answer to complaint-in-intervention.............................................481
Lim v. Napocor, G.R. No. 178789, November 14, 2012.........................481
RULE 20- CALENDAR OF CASES...................................................................484
RULE 21- SUBPOENA....................................................................................484
Lee v. Court of Appeals, G.R. No. 177861, July 13, 2010.......................484

RULE 14- SUMMONS


Sec. 1. Clerk to issue summons
Optima Realty v. Hertz Phils., G.R. No. 183035, January 9, 2013
G.R. No. 183035

January 9, 2013

OPTIMA REALTY CORPORATION, Petitioner,


vs.
HERTZ PHIL. EXCLUSIVE CARS, INC., Respondent.
DECISION
SERENO, CJ.:

Before us is a Rule 45 Petition assailing the Decision 1 and Resolution2 of the Court of
Appeals (CA) in CA-GR SP No. 99890, which reversed the Decision 3 and
Resolution4 of the Regional Trial Court (RTC), Branch 13 7, Makati City in Civil Case
No. 06-672. The RTC had affirmed in toto the 22 May 2006 Decision 5 of the
Metropolitan Trial Court (MeTC), Branch 64, Makati City in Civil Case No. 90842
evicting respondent Hertz Phil.
Exclusive Cars, Inc. (Hertz) and ordering it to pay back rentals and other arrearages
to petitioner Optima Realty Corporation (Optima).
Optima is engaged in the business of leasing and renting out commercial spaces
and buildings to its tenants. On 12 December 2002, it entered into a Contract of
Lease with respondent over a 131-square-meter office unit and a parking slot in the
Optima Building for a period of three years commencing on 1 March 2003 and
ending on 28 February 2006.6 On 9 March 2004, the parties amended their lease
agreement by shortening the lease period to two years and five months,
commencing on 1 October 2003 and ending on 28 February 2006. 7
Renovations in the Optima Building commenced in January and ended in November
2005.8 As a result, Hertz alleged that it experienced a 50% drop in monthly sales
and a significant decrease in its personnels productivity. It then requested a 50%
discount on its rent for the months of May, June, July and August 2005. 9
On 8 December 2005, Optima granted the request of Hertz. 10 However, the latter
still failed to pay its rentals for the months of August to December of 2005 and
January to February 2006,11 or a total of seven months. In addition, Hertz likewise
failed to pay its utility bills for the months of November and December of 2005 and
January and February of 2006,12 or a total of four months.
On 8 December 2005, Optima wrote another letter to Hertz, 13 reminding the latter
that the Contract of Lease could be renewed only by a new negotiation between the
parties and upon written notice by the lessee to the lessor at least 90 days prior to
the termination of the lease period. 14 As no letter was received from Hertz regarding
its intention to seek negotiation and extension of the lease contract within the 90day period, Optima informed it that the lease would expire on 28 February 2006 and
would not be renewed.15
On 21 December 2005, Hertz wrote a letter belatedly advising Optima of the
formers desire to negotiate and extend the lease. 16 However, as the Contract of
Lease provided that the notice to negotiate its renewal must be given by the lessee
at least 90 days prior to the expiration of the contract, petitioner no longer
entertained respondents notice.
On 30 January 2006, Hertz filed a Complaint for Specific Performance, Injunction and
Damages and/or Sum of Money with prayer for the issuance of a Temporary
Restraining Order (TRO) and Writ of Preliminary Injunction (Complaint for Specific
Performance) against Optima. In that Complaint, Hertz prayed for the issuance of a
TRO to enjoin petitioner from committing acts that would tend to disrupt
respondents peaceful use and possession of the leased premises; for a Writ of

Preliminary Injunction ordering petitioner to reconnect its utilities; for petitioner to


be ordered to renegotiate a renewal of the Contract of Lease; and for actual, moral
and exemplary damages, as well as attorneys fees and costs.
On 1 March 2006, Optima, through counsel, wrote Hertz a letter requiring the latter
to surrender and vacate the leased premises in view of the expiration of the
Contract of Lease on 28 February 2006.17 It likewise demanded payment of the sum
of 420,967.28 in rental arrearages, unpaid utility bills and other charges. 18 Hertz,
however, refused to vacate the leased premises. 19 As a result, Optima was
constrained to file before the MeTC a Complaint for Unlawful Detainer and Damages
with Prayer for the Issuance of a TRO and/or Preliminary Mandatory Injunction
(Unlawful Detainer Complaint) against Hertz. 20
On 14 March 2006, Summons for the Unlawful Detainer Complaint was served on
Henry Bobiles, quality control supervisor of Hertz, who complied with the telephone
instruction of manager Rudy Tirador to receive the Summons. 21
On 28 March 2006, or 14 days after service of the Summons, Hertz filed a Motion for
Leave of Court to file Answer with Counterclaim and to Admit Answer with
Counterclaim (Motion for Leave to File Answer). 22 In that Motion, Hertz stated that,
"in spite of the defective service of summons, it opted to file the instant Answer
with Counterclaim with Leave of Court." 23 In the same Motion, it likewise prayed
that, in the interest of substantial justice, the Answer with Counterclaim attached to
the Motion for Leave to File Answer should be admitted regardless of its belated
filing, since the service of summons was defective. 24
On 22 May 2006, the MeTC rendered a Decision, 25 ruling that petitioner Optima had
established its right to evict Hertz from the subject premises due to nonpayment of
rentals and the expiration of the period of lease. 26 The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the Court hereby renders judgment for the
plaintiff and against the defendant, ordering:
1. the defendant corporation and all persons claiming rights from it to
immediately vacate the leased premises and to surrender possession thereof
to the plaintiff;
2. the defendant corporation to pay the plaintiff the amount of Four Hundred
Twenty Thousand Nine Hundred Sixty Seven Pesos and 28/100 (P420,967.28)
representing its rentals arrearages and utility charges for the period of August
2005 to February 2006, deducting therefrom defendants security deposit;
3. the defendant corporation to pay the amount of Fifty Four Thousand Two
Hundred Pesos (P54,200.00) as a reasonable monthly compensation for the
use and occupancy of the premises starting from March 2006 until possession
thereof is restored to the plaintiff; and

4. the defendant corporation to pay the amount of Thirty Thousand Pesos


(P30,000.00) as and for attorneys fees; and
5. the cost of suit.
SO ORDERED.27
Hertz appealed the MeTCs Decision to the RTC. 28
Finding no compelling reason to warrant the reversal of the MeTCs Decision, the
RTC affirmed it by dismissing the appeal in a Decision 29 dated 16 March 2007.
On 18 June 2007, the RTC denied respondents Motion for Reconsideration of its
assailed Decision.30
Hertz thereafter filed a verified Rule 42 Petition for Review on Certiorari with the
CA.31
On appeal, the CA ruled that, due to the improper service of summons, the MeTC
failed to acquire jurisdiction over the person of respondent Hertz. The appellate
court thereafter reversed the RTC and remanded the case to the MeTC to ensure the
proper service of summons. Accordingly, the CA issued its 17 March 2008 Decision,
the fallo of which reads:
WHEREFORE, premises considered, the May 22, 2006 Decision of the Metropolitan
Trial Court of Makati City, Branch 64, in Civil Case No. 90842, and both the March
16, 2007 Decision, as well as the June 18, 2007 Resolution, of the Regional Trial
Court of Makati City, Branch 137, in Civil Case No. 06-672, are hereby REVERSED,
ANNULLED and SET ASIDE due to lack of jurisdiction over the person of the
defendant corporation HERTZ. This case is hereby REMANDED to the Metropolitan
Trial Court of Makati City, Branch 64, in Civil Case No. 90842, which is DIRECTED to
ensure that its Sheriff properly serve summons to only those persons listed in Sec.
11, Rule 14 of the Rules of Civil Procedure in order that the MTC could acquire
jurisdiction over the person of the defendant corporation HERTZ.
SO ORDERED.32
Petitioners Motion for Reconsideration of the CAs Decision was denied in a
Resolution dated 20 May 2008.33
Aggrieved by the ruling of the appellate court, petitioner then filed the instant Rule
45 Petition for Review on Certiorari with this Court. 34
THE ISSUES
As culled from the records, the following issues are submitted for resolution by this
Court:

1. Whether the MeTC properly acquired jurisdiction over the person of


respondent Hertz;
2. Whether the unlawful detainer case is barred by litis pendentia; and
3. Whether the ejectment of Hertz and the award of damages, attorneys fees
and costs are proper.
THE COURTS RULING
We grant the Petition and reverse the assailed Decision and Resolution of the
appellate court.
I
The MeTC acquired jurisdiction over the person of respondent Hertz.
In civil cases, jurisdiction over the person of the defendant may be acquired either
by service of summons or by the defendants voluntary appearance in court and
submission to its authority.35
In this case, the MeTC acquired jurisdiction over the person of respondent Hertz by
reason of the latters voluntary appearance in court.
In Philippine Commercial International Bank v. Spouses Dy, 36 we had occasion to
state:
Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the
coercive power of legal processes exerted over his person, or his voluntary
appearance in court. As a general proposition, one who seeks an affirmative relief is
deemed to have submitted to the jurisdiction of the court. It is by reason of this rule
that we have had occasion to declare that the filing of motions 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, is considered voluntary submission
to the court's jurisdiction. This, however, is tempered by the concept of conditional
appearance, such that a party who makes a special appearance to challenge,
among others, the court's jurisdiction over his person cannot be considered to have
submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule on
voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of
the defendant must be explicitly made, i.e., set forth in an unequivocal
manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the


court, especially in instances where a pleading or motion seeking affirmative
relief is filed and submitted to the court for resolution. (Emphases supplied)
In this case, the records show that the following statement appeared in
respondents Motion for Leave to File Answer:
In spite of the defective service of summons, the defendant opted to file the instant
Answer with Counterclaim with Leave of Court, upon inquiring from the office of the
clerk of court of this Honorable Court and due to its notice of hearing on March 29,
2005 application for TRO/Preliminary Mandatory Injunction was received on March
26, 2006. (Emphasis supplied)37
Furthermore, the Answer with Counterclaim filed by Hertz never raised the defense
of improper service of summons. The defenses that it pleaded were limited to litis
pendentia, pari delicto, performance of its obligations and lack of cause of
action.38 Finally, it even asserted its own counterclaim against Optima. 39
Measured against the standards in Philippine Commercial International Bank, these
actions lead to no other conclusion than that Hertz voluntarily appeared before the
court a quo. We therefore rule that, by virtue of the voluntary appearance of
respondent Hertz before the MeTC, the trial court acquired jurisdiction over
respondents.
II
The instant ejectment case is not barred by litis pendentia. Hertz contends that the
instant case is barred by litis pendentia because of the pendency of its Complaint
for Specific Performance against Optima before the RTC.
We disagree.
Litis pendentia requires the concurrence of the following elements:
(1) Identity of parties, or at least their representation of the same interests in
both actions;
(2) Identity of rights asserted and reliefs prayed for, the relief being founded
on the same facts; and
(3) Identity with respect to the two preceding particulars in the two cases,
such that any judgment that may be rendered in the pending case, regardless
of which party is successful, would amount to res judicata in the other case. 40
Here, while there is identity of parties in both cases, we find that the rights asserted
and the reliefs prayed for under the Complaint for Specific Performance and those
under the present Unlawful Detainer Complaint are different. As aptly found by the
trial court:

The Complaint for Specific Performance] seeks to compel plaintiff-appellee Optima


to: (1) renegotiate the contract of lease; (2) reconnect the utilities at the leased
premises; and (3) pay damages. On the other hand, the unlawful detainer case
sought the ejectment of defendant-appellant Hertz from the leased premises and to
collect arrears in rentals and utility bills. 41
As the rights asserted and the reliefs sought in the two cases are different, we find
that the pendency of the Complaint for Specific Performance is not a bar to the
institution of the present case for ejectment.
III
The eviction of respondent and the award of damages,
attorneys fees and costs were proper.
We find that the RTCs ruling upholding the ejectment of Hertz from the building
premises was proper. First, respondent failed to pay rental arrearages and utility
bills to Optima; and, second, the Contract of Lease expired without any request from
Hertz for a renegotiation thereof at least 90 days prior to its expiration.
On the first ground, the records show that Hertz failed to pay rental arrearages and
utility bills to Optima. Failure to pay timely rentals and utility charges is an event of
default under the Contract of Lease,42 entitling the lessor to terminate the lease.
Moreover, the failure of Hertz to pay timely rentals and utility charges entitles the
lessor to judicially eject it under the provisions of the Civil Code. 43
On the second ground, the records likewise show that the lease had already expired
on 28 February 2006 because of Hertzs failure to request a renegotiation at least
90 days prior to the termination of the lease period.
The pertinent provision of the Contract of Lease reads:
x x x. The lease can be renewed only by a new negotiation between the parties
upon written notice by the LESSEE to be given to the LESSOR at least 90 days prior
to termination of the above lease period.44
As the lease was set to expire on 28 February 2006, Hertz had until 30 November
2005 within which to express its interest in negotiating an extension of the lease
with Optima. However, Hertz failed to communicate its intention to negotiate for an
extension of the lease within the time agreed upon by the parties. Thus, by its own
provisions, the Contract of Lease expired on 28 February 2006.1wphi1
Under the Civil Code, the expiry of the period agreed upon by the parties is likewise
a ground for judicial ejectment. 45
As to the award of monthly compensation, we find that Hertz should pay adequate
compensation to Optima, since the former continued to occupy the leased premises

even after the expiration of the lease contract. As the lease price during the
effectivity of the lease contract was P54,200 per month, we find it to be a
reasonable award.
Finally, we uphold the award of attorney's fees in the amount of P30,000 and judicial
costs in the light of Hertz's unjustifiable and unlawful retention of the leased
premises, thus forcing Optima to file the instant case in order to protect its rights
and interest.
From the foregoing, we find that the MeTC committed no reversible error in its 22
May 2006 Decision, and that the RTC committed no reversible error either in
affirming the MeTC's Decision.
WHEREFORE, in view of the foregoing, the instant Rule 45 Petition for Review is
GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 99890 are hereby REVERSED and SET ASIDE. The Decision of the Regional
Trial Court, Branch 13 7, Makati City in Civil Case No. 06-672 affirming in toto the
Decision of the Metropolitan Trial Court, Branch 64, Makati City in Civil Case No.
90842 is hereby REINSTATED and AFFIRMED.
SO ORDERED.
MARIA LOURDES P. A. SERENO
Chief Justice
Chairperson

Sec. 2. Contents

Sec. 3. By whom served

Sec. 4. Return

Sec. 5. Issuance of alias summons

Sec. 6. Service on person of defendant

Planters Development Bank v. Chandumal, G.R. No. 195619,


September 5, 2012
G.R. No. 195619

September 5, 2012

PLANTERS DEVELOPMENT BANK, Petitioner,


vs.
JULIE CHANDUMAL, Respondent.
DECISION
REYES, J.:
In this petition for review under Rule 45 of the Rules of Court, Planters Development
Bank (PDB) questions the Decision1 dated July 27, 2010 of the Court of Appeals (CA),
as well as its Resolution2 dated February 16, 2011, denying the petitioner's motion
for reconsideration in CA-G.R. CV No. 82861. The assailed decision nullified the
Decision3 dated May 31, 2004 of the Regional Trial Court (RTC), Las Pias City,
Branch 255 in Civil Case No. LP-99-0137.
Antecedent Facts
The instant case stemmed from a contract to sell a parcel of land, together with
improvements, between BF Homes, Inc. (BF Homes) and herein respondent Julie
Chandumal (Chandumal). The property subject of the contract is located in Talon
Dos, Las Pias City and covered by Transfer Certificate of Title No. T-10779. On
February 12, 1993, BF Homes sold to PDB all its rights, participations and interests
over the contract.
Chandumal paid her monthly amortizations from December 1990 until May 1994
when she began to default in her payments. In a Notice of Delinquency and
Rescission of Contract with Demand to Vacate4 dated July 14, 1998, PDB gave
Chandumal a period of thirty (30) days from receipt within which to settle her
installment arrearages together with all its increments; otherwise, all her rights
under the contract shall be deemed extinguished and terminated and the contract
declared as rescinded. Despite demand, Chandumal still failed to settle her
obligation.
On June 18, 1999, an action for judicial confirmation of notarial rescission and
delivery of possession was filed by PDB against Chandumal, docketed as Civil Case
No. LP-99-0137. PDB alleged that despite demand, Chandumal failed and/or refused
to pay the amortizations as they fell due; hence, it caused the rescission of the
contract by means of notarial act, as provided in Republic Act (R.A.) No.
6552.5 According to PDB, it tried to deliver the cash surrender value of the subject
property, as required under R.A. No. 6552, in the amount of P 10,000.00; however,
the defendant was unavailable for such purpose. 6
Consequently, summons was issued and served by deputy sheriff Roberto T. Galing
(Sheriff Galing). According to his return, Sheriff Galing attempted to personally serve
the summons upon Chandumal on July 15, 19 and 22, 1999 but it was unavailing as

she was always out of the house on said dates. Hence, the sheriff caused
substituted service of summons on August 5, 1999 by serving the same through
Chandumals mother who acknowledged receipt thereof. 7
For her failure to file an answer within the prescribed period, PDB filed on April 24,
2000 an ex parte motion to declare Chandumal in default. On January 12, 2001, the
RTC issued an Order granting the motion of PDB. 8
On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of
Default and to Admit Attached Answer. She maintained that she did not receive the
summons and/or was not notified of the same. She further alleged that her failure to
file an answer within the reglementary period was due to fraud, mistake or
excusable negligence. In her answer, Chandumal alleged the following defenses: (a)
contrary to the position of PDB, the latter did not make any demand for her to pay
the unpaid monthly amortization; and (b) PDB did not tender or offer to give the
cash surrender value of the property in an amount equivalent to fifty percent (50%)
of the actual total payment made, as provided for under Section 3(b) of R.A. No.
6552. Moreover, Chandumal claimed that since the total payment she made
amounts to P 782,000.00, the corresponding cash surrender value due her should
be P 391,000.00.9
Per Order10 dated August 2, 2001, the RTC denied Chandumals motion to set aside
the order of default. Her motion for reconsideration was also denied for lack of
merit.11 Conformably, the RTC allowed PDB to present its evidence ex parte. 12 On
May 31, 2004, the RTC rendered a
Decision13 in favor of PDB, the dispositive portion of which reads:
WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the
plaintiff Planters Development Bank and against defendant Julie Chandumal as
follows, to wit:
1. Declaring the notarial rescission of the Contract to Sell dated 03 January 1990
made by the plaintiff per the Notice of Delinquency and Rescission of Contract with
Demand to Vacate dated 14 July 1998 as judicially confirmed and ratified;
2. Requiring the plaintiff to deposit in the name of the defendant the amount
of P 10,000.00 representing the cash surrender value for the subject property with
the Land Bank of the Philippines, Las Pi[]as City Branch in satisfaction of the
provisions of R.A. No. 6552; and,
3. Ordering the defendant to pay the plaintiff the amount of P 50,000.00 as and by
way of attorneys fees, including the costs of suit.
SO ORDERED.14
From the foregoing judgment, Chandumal appealed to the CA.

On July 27, 2010, the CA, without ruling on the propriety of the judicial confirmation
of the notarial rescission, rendered the assailed decision nullifying the RTC decision
due to invalid and ineffective substituted service of summons. The dispositive
portion of the CA decision provides:
WHEREFORE, premises considered, the decision of Branch 255 of the Regional Trial
Court of Las Pias City, dated May 31, 2004, in Civil Case No. LP-99-0137 is
hereby NULLIFIED and VACATED.
SO ORDERED.15
PDB filed a motion for reconsideration but it was denied by the CA in its Resolution
dated February 16, 2011.
Hence, this petition based on the following assignment of errors:
I
The Honorable Court of Appeals erred in reversing the decision of the trial court on
the ground of improper service of summons;
II
The decision of the trial court is valid as it duly acquired jurisdiction over the person
of respondent Chandumal through voluntary appearance; and
III
The trial court did not err in confirming and ratifying the notarial rescission of the
subject contract to sell.16
PDB contends that the RTC properly acquired jurisdiction over the person of
Chandumal.1wphi1 According to PDB, there was proper service of summons since
the sheriff complied with the proper procedure governing substituted service of
summons as laid down in Section 7, Rule 14 of the Rules of Court. PDB alleges that
it is clear from the sheriffs return that there were several attempts on at least three
(3) different dates to effect personal service within a reasonable period of nearly a
month, before he caused substituted service of summons. The sheriff likewise
stated the reason for his failure to effect personal service and that on his fourth
attempt, he effected the service of summons through Chandumals mother who is
unarguably, a person of legal age and with sufficient discretion. PDB also argues
that Chandumal voluntarily submitted herself to the jurisdiction of the court when
she filed an Urgent Motion to Set Aside Order of Default and to Admit Attached
Answer.
For her part, Chandumal asserts that she never received a copy of the summons or
was ever notified of it and she only came to know of the case sometime in July or
August 2000, but she was already in the United States of America by that time, and

that the CA correctly ruled that there was no valid service of summons; hence, the
RTC never acquired jurisdiction over her person.
Issues
1. Whether there was a valid substituted service of summons;
2. Whether Chandumal voluntarily submitted to the jurisdiction of the trial court;
and
3. Whether there was proper rescission by notarial act of the contract to sell.
Our Ruling
The fundamental rule is that jurisdiction over a defendant in a civil case is acquired
either through service of summons or through voluntary appearance in court and
submission to its authority. If a defendant has not been properly summoned, the
court acquires no jurisdiction over its person, and a judgment rendered against it is
null and void.17
Where the action is in personam18 and the defendant is in the Philippines, service of
summons may be made through personal service, that is, summons shall be served
by handing to the defendant in person a copy thereof, or if he refuses to receive and
sign for it, by tendering it to him. 19 If the defendant cannot be personally served
with summons within a reasonable time, it is then that substituted service may be
made.20 Personal service of summons should and always be the first option, and it is
only when the said summons cannot be served within a reasonable time can the
process server resort to substituted service.21
No
summons

valid

substituted

service

of

In this case, the sheriff resorted to substituted service of summons due to his failure
to serve it personally. In Manotoc v. Court of Appeals, 22 the Court detailed the
requisites for a valid substituted service of summons, summed up as follows: (1)
impossibility of prompt personal service the party relying on substituted service or
the sheriff must show that the defendant cannot be served promptly or there is
impossibility of prompt service; (2) specific details in the return the sheriff must
describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service; (3) a person of suitable age and discretion the sheriff
must determine if the person found in the alleged dwelling or residence of
defendant is of legal age, what the recipients 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, which matters must be clearly and
specifically described in the Return of Summons; and (4) a competent person in
charge, who must have sufficient knowledge to understand the obligation of the
defendant in the summons, its importance, and the prejudicial effects arising from
inaction on the summons.23 These were reiterated and applied in Pascual v.

Pascual,24 where the substituted service of summon made was invalidated due to
the sheriffs failure to specify in the return the necessary details of the failed
attempts to effect personal service which would justify resort to substituted service
of summons.
In applying the foregoing requisites in the instant case, the CA correctly ruled that
the sheriffs return failed to justify a resort to substituted service of summons.
According to the CA, the Return of Summons does not specifically show or indicate
in detail the actual exertion of efforts or any positive step taken by the officer or
process server in attempting to serve the summons personally to the defendant.
The return merely states the alleged whereabouts of the defendant without
indicating that such information was verified from a person who had knowledge
thereof.25 Indeed, the sheriffs return shows a mere perfunctory attempt to cause
personal service of the summons on Chandumal. There was no indication if he even
asked Chandumals mother as to her specific whereabouts except that she was "out
of the house", where she can be reached or whether he even tried to await her
return. The "efforts" exerted by the sheriff clearly do not suffice to justify
substituted service and his failure to comply with the requisites renders such
service ineffective.26
Respondent
voluntarily
to the jurisdiction of the trial court

submitted

Despite that there was no valid substituted service of summons, the Court,
nevertheless, finds that Chandumal voluntarily submitted to the jurisdiction of the
trial court.
Section 20, Rule 14 of the Rules of Court states:
Sec. 20. Voluntary appearance. The defendants voluntary appearance in the
action shall be equivalent to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance.
When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit
Attached Answer, she effectively submitted her person to the jurisdiction of the trial
court as the filing of a pleading where one seeks an affirmative relief is equivalent
to service of summons and vests the trial court with jurisdiction over the
defendants person. Thus, it was ruled that the filing of motions 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 is considered voluntary submission
to the trial courts jurisdiction.27 The Court notes that aside from the allegation that
she did not receive any summons, Chandumals motion to set aside order of default
and to admit attached answer failed to positively assert the trial courts lack of
jurisdiction. In fact, what was set forth therein was the substantial claim that PDB
failed to comply with the requirements of R.A. No. 6552 on payment of cash
surrender value,28 which already delves into the merits of PDBs cause of action. In
addition, Chandumal even appealed the RTC decision to the CA, an act which
demonstrates her recognition of the trial courts jurisdiction to render said
judgment.

Given Chandumals voluntary submission to the jurisdiction of the trial court, the
RTC, Las Pias City, Branch 255, had all authority to render its Decision dated May
31, 2004. The CA, therefore, erred in nullifying said RTC decision and dispensing
with the resolution of the substantial issue raised herein, i.e., validity of the notarial
rescission. Instead, however, of remanding this case to the CA, the Court will resolve
the same considering that the records of the case are already before us and in order
to avoid any further delay.29
There
is
no
valid
contract
to
sell
pursuant to Section 3(b), R.A. No. 6552

rescission
of
by
notarial

the
act

That the RTC had jurisdiction to render the decision does not necessarily mean,
however, that its ruling on the validity of the notarial rescission is in accord with the
established facts of the case, the relevant law and jurisprudence.1wphi1
PDB claims that it has validly rescinded the contract by notarial act as provided
under R.A. No. 6552. Basically, PDB instituted Civil Case No. LP-99-0137 in order to
secure judicial confirmation of the rescission and to recover possession of the
property subject of the contract.
In Leao v. Court of Appeals,30 it was held that:
R. A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial,
commercial, residential) the right of the seller to cancel the contract upon nonpayment of an installment by the buyer, which is simply an event that prevents the
obligation of the vendor to convey title from acquiring binding force. The law also
provides for the rights of the buyer in case of cancellation. Thus, Sec. 3 (b) of the
law provides that:
"If the contract is cancelled, the seller shall refund to the buyer the cash surrender
value of the payments on the property equivalent to fifty percent of the total
payments made and, after five years of installments, an additional five percent
every year but not to exceed ninety percent of the total payments
made: Provided, That the actual cancellation of the contract shall take place after
thirty days from receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act and upon full payment of the cash
surrender value to the buyer."31 (Citation omitted and emphasis ours)
R.A. No. 6552 recognizes the right of the seller to cancel the contract but any such
cancellation must be done in conformity with the requirements therein prescribed.
In addition to the notarial act of rescission, the seller is required to refund to the
buyer the cash surrender value of the payments on the property. The actual
cancellation of the contract can only be deemed to take place upon the expiry of a
thirty (30)-day period following the receipt by the buyer of the notice of cancellation
or demand for rescission by a notarial act and the full payment of the cash
surrender value.32

In this case, it is an admitted fact that PDB failed to give Chandumal the full
payment of the cash surrender value. In its complaint, 33 PDB admitted that it tried to
deliver the cash surrender value of the subject property as required under R.A. No.
6552 but Chandumal was "unavailable" for such purpose. Thus, it prayed in its
complaint that it be ordered to "deposit with a banking institution in the Philippines,
for the account of Defendants (sic), the amount of Ten Thousand Pesos
(P 10,000.00), Philippine Currency, representing the cash surrender value of the
subject property; x x x."34 The allegation that Chandumal made herself unavailable
for payment is not an excuse as the twin requirements for a valid and effective
cancellation under the law, i.e., notice of cancellation or demand for rescission by a
notarial act and the full payment of the cash surrender value, is
mandatory.35 Consequently, there was no valid rescission of the contract to sell by
notarial act undertaken by PDB and the RTC should not have given judicial
confirmation over the same.
WHEREFORE, the petition is DENIED. The Decision dated July 27, 2010 of the
Court of Appeals, as well as its Resolution dated February 16, 2011, denying the
Motion for Reconsideration in CA-G.R. CV No. 82861 areAFFIRMED in so far as there
was no valid service of summons. Further, the Court DECLARES that there was no
valid rescission of contract pursuant to R.A. No. 6552. Accordingly, the Decision
dated May 31, 2004 of the Regional Trial Court, Las Pias City, Branch 255 in Civil
Case
No.
LP-99-0
137
is REVERSED and SET
ASIDE,
and
is
therefore, DISMISSED for lack of merit.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice

Oaminal v. Castillo, G.R. No. 152776, October 8, 2003


THIRD DIVISION

[G.R. No. 152776. October 8, 2003]

HENRY S. OAMINAL, petitioner, vs. PABLITO M. CASTILLO and GUIA S.


CASTILLO, respondents.
DECISION
PANGANIBAN, J.:
In the instant case, the receipt of the summons by the legal secretary of the
defendants -- respondents herein -- is deemed proper, because they admit the

actual receipt thereof, but merely question the manner of service. Moreover, when
they asked for affirmative reliefs in several motions and thereby submitted
themselves to the jurisdiction of the trial court, whatever defects the service of
summons may have had were cured.

The Case
Before us is a Petition for Review [1] under Rule 45 of the Rules of Court, seeking
to nullify the March 26, 2002 Decision[2] of the Court of Appeals (CA) in CA-GR SP No.
66562. The assailed Decision disposed thus:
WHEREFORE, the [D]ecision dated 23 August 2001 is hereby NULLIFIED and SET
ASIDE and Civil Case No. OZC-00-13 ordered DISMISSED, without prejudice. Costs
against [petitioner].[3]

The Antecedents
The antecedents of the case were narrated by the CA as follows:
On 09 March 2000, [Petitioner Henry Oaminal] filed a complaint for collection
against [Respondents Pablito and Guia Castillo] with the Regional Trial Court [RTC] of
Ozamis City (Branch 35) x x x. The complaint prayed that [respondents] be ordered
to pay P1,500,000.00 by way of liquidated damages and P150,000.00 as attorneys
fees.
On 30 May 2000, the summons together with the complaint was served upon Ester
Fraginal, secretary of [Respondent] Mrs. Castillo.
On 06 June 2000, [respondents] filed their Urgent Motion to Declare Service of
Summons Improper and Legally Defective alleging that the Sheriff's Return has
failed to comply with Section (1), Rule 14 of the Rules of Court or substituted service
of summons.
The scheduled hearing of the Motion on 14 July 2000 did not take place because x
x x [RTC] Judge [Felipe Zapatos] took a leave of absence from July 17 to 19, 2000[;]
hence[,] it was re-scheduled to 16 August 2000.
On 19 October 2000, [petitioner] filed an Omnibus Motion to Declare [Respondents]
in Default and to Render Judgment because no answer [was] filed by [the latter].
[Respondents] forthwith filed the following:
a. Omnibus Motion Ad Cautelam to Admit Motion to Dismiss and Answer with
Compulsory Counter-claim dated 9 November 2000 which was set for hearing on 27
November 2000 at 8:30 a.m.;

b. x x x Urgent Motion to Dismiss also dated 9 November 2000 which was also set
for hearing on 27 November 2000 at 8:30 a.m. The said motion was anchored on
the premise that x x x [petitioner's] complaint was barred by improper venue
and litis pendentia; and
c. Answer with Compulsory Counter-Claim dated 9 November 2000.
On 16 November 2000, x x x [the] judge denied [respondents] Motion to Dismiss,
admitted [their] Answer, and set the pre-trial [on] 17 January 2001.
On 24 November 2000, [respondents] filed an Urgent Motion to Inhibit Ad
Cautelam against Judge [Zapatos], in the higher interest of substantial justice and
the [r]ule of [l]aw x x x.
On 27 December 2000, Judge [Zapatos] denied the motion and transferred the
January 17th pre-trial to 19 February 2001.
[Respondents] filed an Urgent Omnibus Motion for Reconsideration with the
Accompanying Plea to Reset dated 22 January 2001. The motion requested that it
be set for consideration and approval by the trial court on 05 February 2001 at 8:30
a.m. Said motion in the main prayed that an order be issued by the Honorable
Court reconsidering its adverse order dated 16 November 2000, by dismissing the
case at bar on the ground of improper venue or in the alternative, that the
Honorable Presiding Judge reconsider and set aside its order dated December 27,
2000 by inhibiting himself from the case at hand.
On 22 May 2001, Judge [Zapatos] ruled that [respondents] Omnibus Motion Ad
Cautelam to Admit Motion to Dismiss and Answer with Counterclaim was filed
outside the period to file answer, hence he (1) denied the Motion to Admit Motion to
Dismiss and Answer; (2) declared [respondents] in default; and (3) ordered
[petitioner] to present evidence ex-parte within ten days from receipt of [the] order,
[failing] which, the case will be dismissed.
On 23 August 2001, Judge [Zapatos] rendered a decision on the merits, with the
following dispositi[on]:
WHEREFORE, finding by preponderance of evidence, judgment is hereby rendered
in favor of [petitioner], ordering [respondents] to pay x x x:
1)

P1,500,000.00 by way of [l]iquidated [d]amages;

2)

P20,000.00 as attorney's fees and litigation expenses; and

3)

x x x cost[s].[4]

On September 11, 2001, respondents filed with the CA a Petition for certiorari,
prohibition and injunction, with a prayer for a writ of preliminary injunction or
temporary restraining order (TRO). In the main, they raised the issue of whether
the trial court had validly acquired jurisdiction over them.

On September 20, 2001, the appellate court issued a TRO to enjoin the lower
court from issuing a writ of execution to enforce the latters decision.

Ruling of the Court of Appeals


The CA ruled that the trial court did not validly acquire jurisdiction over
respondents, because the summons had been improperly served on them. It based
its finding on the Sheriffs Return, which did not contain any averment that effort
had been exerted to personally serve the summons on them before substituted
service was resorted to. Thus, the appellate court set aside the trial courts
Decision and dismissed, without prejudice, Civil Case No. OZC-00-13.
Hence, this Petition.[5]

Issues
Petitioner submits the following issues for our consideration:
I
Whether respondents recourse to a Petition for Certiorari [was] appropriate when
the remedy of appeal was available?
II
Whether the Decision of the trial court attained finality?
III
Whether the
entertaining
establish[ed]
plain, speedy

Honorable Third Division of the Court of Appeals [was] correct in


and in granting the Writ of Certiorari when the facts clearly
that not only was [an] appeal available, but x x x there were other
and adequate remedies in the ordinary course of law?

IV
Whether the Honorable Third Division of the Court of Appeals had jurisdiction to
nullify and set aside the Decision of the trial court and dismiss the case?
V
[Whether] receipt by a legal secretary of a summons [is deemed] receipt by a
lawyer in contemplation of law?[6]

Simply stated, the issues boil down to the following: (1) whether the Petition
for certiorari before the CA was proper; and (2) whether the trial court acquired
jurisdiction over respondents.
Since the Petition for certiorari was granted by the CA based on the trial courts
alleged lack of jurisdiction over respondents, the second issue shall be discussed
ahead of the former.

The Courts Ruling


The present Petition is partly meritorious.

First Issue:
Jurisdiction over Defendants
Petitioner contends that the trial court validly acquired jurisdiction over the
persons of respondents, because the latter never denied that they had actually
received the summons through their secretary. Neither did they dispute her
competence to receive it.
Moreover, he argues that respondents automatically submitted themselves to
the jurisdiction of the trial court when they filed, onNovember 9, 2000, an Omnibus
Motion to Dismiss or Admit Answer, a Motion to Dismiss on the grounds of improper
venue and litis pendentia, and an Answer with Counterclaim.
On the other hand, respondents insist that the substituted service of summons
on them was improper. Thus, they allege that the trial court did not have the
authority to render its August 23, 2001 Decision.
We clarify.

Service of Summons
In civil cases, the trial court acquires jurisdiction over the person of the
defendant either by the service of summons or by the latters voluntary appearance
and submission to the authority of the former. Where the action is in personam and
the defendant is in thePhilippines, the service of summons may be made through
personal or substituted service in the manner provided for by Sections 6 and 7 of
Rule 14 of the Revised Rules of Court, which read:
Section 6. Service in person on defendant. - Whenever practicable, the summons
shall be served by handing a copy thereof to the defendant in person, or, if he
refuses to receive and sign for it, by tendering it to him.
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 defendant's 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 some competent
person in charge thereof.
Personal service of summons is preferred over substituted service. Resort to the
latter is permitted when the summons cannot be promptly served on the defendant
in person and after stringent formal and substantive requirements have been
complied with.[7]
For substituted service of summons to be valid, it is necessary to establish the
following circumstances: (a) personal service of summons within a reasonable time
was impossible; (b) efforts were exerted to locate the party; and (c) the summons
was served upon a person of sufficient age and discretion residing at the partys
residence or upon a competent person in charge of the partys office or regular
place of business.[8] It is likewise required that the pertinent facts proving these
circumstances are stated in the proof of service or officers return.
In the present case, the Sheriffs Return [9] failed to state that efforts had been
made to personally serve the summons on respondents. Neither did the Return
indicate that it was impossible to do so within a reasonable time. It simply stated:
THIS IS TO CERTIFY that on the 30th day of May 2000, copies of the summons
together with the complaint and annexes attached thereto were served upon the
defendants Pablito M. Castillo and Guia B. Castillo at their place of business at No. 7,
21st Avenue, Cubao, Quezon City thru MS. ESTER FREGINAL, secretary, who is
authorized to receive such kind of process. She signed in receipt of the original as
evidenced by her signature appearing on the original summons.
That this return is submitted to inform the Honorable x x x Court that the same was
duly served.[10]
Nonetheless, nothing in the records shows that respondents denied actual
receipt of the summons through their secretary, Ester Fraginal. Their Urgent Motion
to Declare Service of Summons Improper and Legally Defective [11] did not deny
receipt thereof; it merely assailed the manner of its service. In fact, they admitted
in their Motion that the summons, together with the complaint, was served by the
Sheriff on Ester Fraginal, secretary of the defendants at No. 7, 21 st Avenue, Cubao,
Quezon City on 30 May 2000.[12]
That the defendants actual receipt of the summons satisfied the requirements
of procedural due process had previously been upheld by the Court thus:
x x x [T]here is no question that summons was timely issued and received by
private respondent. In fact, he never denied actual receipt of such summons but
confined himself to the argument that the Sheriff should prove that personal service
was first made before resorting to substituted service.
This brings to the fore the question of procedural due process. In Montalban v.
Maximo (22 SCRA 1077 [1968]) the Court ruled that The constitutional requirement
of due process exacts that the service be such as may be reasonably expected to

give the notice desired. Once the service provided by the rules reasonably
accomplishes that end, the requirement of justice is answered; the traditional
notions of fair play are satisfied; due process is served. [13]
There is likewise no showing that respondents had heretofore pursued the issue
of lack of jurisdiction; neither did they reserve their right to invoke it in their
subsequent pleadings. If at all, what they avoided forfeiting and waiving -- both in
their Omnibus Motion ad Cautelam to Admit Motion to Dismiss and Answer with
Compulsory Counter-Claim[14] and in their Motion to Dismiss[15] -- was their right to
invoke the grounds of improper venue and litis pendentia. They argued therein:
3. x x x. To be sure, the [respondents] have already prepared a finalized draft of
their [M]otion to [D]ismiss the case at bar, based on the twin compelling grounds of
improper venue and [the] additional fact that there exists a case between the
parties involving the same transaction/s covered by the plaintiffs cause of action. x
x x;
4. That as things now stand, the [respondents] are confronted with the dilemma of
filing their [M]otion to [D]ismiss based on the legal grounds stated above and thus
avoid forfeiture and waiver of these rights as provided for by the Rules and also file
the corresponding [M]otion to [A]dmit x x x [A]nswer as mandated by the Omnibus
Rule.
xxx

xxx

x x x[16]

Verily, respondents did not raise in their Motion to Dismiss the issue of
jurisdiction over their persons; they raised only improper venue and litis
pendentia. Hence, whatever defect there was in the manner of service should be
deemed waived.[17]

Voluntary Appearance
and Submission
Assuming arguendo that the service of summons was defective, such flaw was
cured and respondents are deemed to have submitted themselves to the
jurisdiction of the trial court when they filed an Omnibus Motion to Admit the Motion
to Dismiss and Answer with Counterclaim, an Answer with Counterclaim, a Motion to
Inhibit, and a Motion for Reconsideration and Plea to Reset Pre-trial. The filing of
Motions seeking affirmative relief -- 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.[18] Having invoked the trial courts jurisdiction to secure affirmative
relief, respondents cannot -- after failing to obtain the relief prayed for -- repudiate
the very same authority they have invoked.[19]

Second Issue:
Propriety of the Petition for Certiorari

Petitioner contends that the certiorari Petition filed by respondents before the
CA was improper, because other remedies in the ordinary course of law were
available to them. Thus, he argues that the CA erred when it took cognizance of
and granted the Petition.
Well-settled is the rule that certiorari will lie only when a court has acted without
or in excess of jurisdiction or with grave abuse of discretion. [20] As a condition for
the filing of a petition for certiorari, Section 1 of Rule 65 of the Rules of Court
additionally requires that no appeal nor any plain, speedy and adequate remedy in
the ordinary course of law must be available. [21] It is axiomatic that the availability
of the right of appeal precludes recourse to the special civil action for certiorari. [22]
Here, the trial courts judgment was a final Decision that disposed of the case. It
was therefore a fit subject of an appeal. [23] However, instead of appealing the
Decision, respondents filed a Petition for certiorari on September 11, 2001.
Be that as it may, a petition for certiorari may be treated as a petition for review
under Rule 45. Such move is in accordance with the liberal spirit pervading the
Rules of Court and in the interest of substantial justice, especially (1) if the petition
was filed within the reglementary period for filing a petition for review; [24] (2) errors
of judgment are averred;[25] and (3) there is sufficient reason to justify the relaxation
of the rules.[26] Besides, it is axiomatic that the nature of an action is determined by
the allegations of the complaint or petition and the character of the relief sought.
[27]
The Court explained:
x x x. It cannot x x x be claimed that this petition is being used as a substitute for
appeal after that remedy has been lost through the fault of petitioner. Moreover,
stripped of allegations of grave abuse of discretion, the petition actually avers
errors of judgment rather than of jurisdiction, which are the subject of a petition for
review.[28]
The present case satisfies all the above requisites. The Petition
for certiorari before the CA was filed within the reglementary period of appeal. A
review of the records shows that respondents filed their Petition on September 11,
2001 -- four days after they had received the RTC Decision. Verily, there were still
11 days to go before the lapse of the period for filing an appeal. Aside from
charging grave abuse of discretion and lack of jurisdiction, they likewise assigned as
errors the order and the judgment of default as well as the RTCs allegedly
unconscionable and iniquitous award of liquidated damages. [29] We find the latter
issue particularly significant, considering that the trial court awarded P1,500,000 as
liquidated damages without the benefit of a hearing and out of an obligation
impugned by respondents because of petitioners failure to pay. [30] Hence, there are
enough reasons to treat the Petition for certiorari as a petition for review.
In view of the foregoing, we rule that the Petition effectively tolled the finality of
the trial court Decision.[31] Consequently, the appellate court had jurisdiction to
pass upon the assigned errors. The question that remains is whether it was correct
in setting aside the Decision and in dismissing the case.

Trial Courts Default

Orders Erroneous
A review of the assailed Decision reveals that the alleged lack of jurisdiction of
the trial court over the defendants therein was the reason why the CA nullified the
formers default judgment and dismissed the case without prejudice. However, we
have ruled earlier that the lower court had acquired jurisdiction over them. Given
this fact, the CA erred in dismissing the case; as a consequence, it failed to rule on
the propriety of the Order and the judgment of default. To avoid circuitousness and
further delay, the Court deems it necessary to now rule on this issue.
As much as possible, suits should be decided on the merits and not on
technicalities.[32] For this reason, courts have repeatedly been admonished against
default orders and judgments that lay more emphasis on procedural niceties at the
expense of substantial justice. [33]Not being based upon the merits of the
controversy, such issuances may indeed amount to a considerable injustice
resulting in serious consequences on the part of the defendant. Thus, it is
necessary to examine carefully the grounds upon which these orders and judgments
are sought to be set aside.[34]
Respondents herein were declared in default by the trial court on May 22, 2001,
purportedly because of their delay in filing an answer. Its unexpected volte
face came six months after it had ruled to admit their Answer on November 16,
2000, as follows:

That with respect to the Motion to Admit Answer, this Court is not in favor of
terminating this case on the basis of technicality for failure to answer on time,
hence, as ruled in the case of Nantz v. Jugo and Cruz, 43 O.G. No. 11, p. 4620, it was
held:
Lapses in the literal observance of a rule of procedure will be overlooked when they
do not involve public policy, when they arose from an honest mistake or unforeseen
accident, when they have not prejudiced the adverse party and have not deprived
the court ot its authority. Conceived in the best traditions of practical and moral
justice and common sense, the Rules of Court frown upon hairsplitting technicalities
that do not square with their liberal tendency and with the ends of justice unless
something in the nature of the factors just stated intervene. x x x
WHEREFORE, x x x in the interest of justice, the Answer of the [respondents] is
hereby admitted.[35]
Indiana Aerospace University v. Commission on Higher Education [36] held that no
practical purpose was served in declaring the defendants in default when their
Answer had already been filed -- albeit after the 15-day period, but before they were
declared as such. Applying that ruling to the present case, we find that respondents
were, therefore, imprudently declared in default.
WHEREFORE, the Petition is hereby GRANTED IN PART, and the Decision of the
Court of Appeals MODIFIED. The trial courts Order of Default dated May 22,

2001 and Judgment of Default dated August 23, 2001 are ANNULLED, and the case
remanded to the trial court for further proceedings on the merits. No costs.
SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez and Carpio Morales, JJ., concur.
Corona, J., on leave.

Macasaet v. Co, G.R. No. 156759, June 5, 2013


G.R. No. 156759

June 5, 2013

ALLEN A. MACASAET, NICOLAS V. QUIJANO, JR., ISAIAS ALBANO, LILY


REYES, JANET BAY, JESUS R. GALANG, AND RANDY HAGOS, Petitioners,
vs.
FRANCISCO R. CO, JR., Respondent.
DECISION
BERSAMIN, J.:
To warrant the substituted service of the summons and copy of the complaint, the
serving officer must first attempt to effect the same upon the defendant in person.
Only after the attempt at personal service has become futile or impossible within a
reasonable time may the officer resort to substituted service.
The Case
Petitioners defendants in a suit for libel brought by respondent appeal the
decision promulgated on March 8, 20021 and the resolution promulgated on January
13, 2003,2 whereby the Court of Appeals (CA) respectively dismissed their petition
for certiorari, prohibition and mandamus and denied their motion for
reconsideration. Thereby, the CA upheld the order the Regional Trial Court (RTC),
Branch 51, in Manila had issued on March 12, 2001 denying their motion to dismiss
because the substituted service of the summons and copies of the complaint on
each of them had been valid and effective. 3
Antecedents
On July 3, 2000, respondent, a retired police officer assigned at the Western Police
District in Manila, sued Abante Tonite, a daily tabloid of general circulation; its
Publisher Allen A. Macasaet; its Managing Director Nicolas V. Quijano; its Circulation
Manager Isaias Albano; its Editors Janet Bay, Jesus R. Galang and Randy Hagos; and
its Columnist/Reporter Lily Reyes (petitioners), claiming damages because of an
allegedly libelous article petitioners published in the June 6, 2000 issue of Abante
Tonite. The suit, docketed as Civil Case No. 00-97907, was raffled to Branch 51 of
the RTC, which in due course issued summons to be served on each defendant,

including Abante Tonite, at their business address at Monica Publishing Corporation,


301-305 3rd Floor, BF Condominium Building, Solana Street corner A. Soriano Street,
Intramuros, Manila.4
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, 2005,5 to wit:
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:
1. Defendant Allen A. Macasaet, President/Publisher of defendant
AbanteTonite, 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;
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;
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
AbanteTonite, 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
to file their answers to the complaint within the remaining period allowed by the
Rules of Court,6 relevantly stating:
Records show that the summonses were served upon Allen A. Macasaet,
President/Publisher of defendant AbanteTonite, through LuAnn Quijano; upon
defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes,
through Rene Esleta, Editorial Assistant of defendant Abante Tonite (p. 12, records).
It is apparent in the Sheriffs Return that on several occasions, efforts to served (sic)
the summons personally upon all the defendants were ineffectual as they were
always out and unavailable, so the Sheriff served the summons by substituted
service.
Considering that summonses cannot be served within a reasonable time to the
persons of all the defendants, hence substituted service of summonses was validly
applied. Secretary of the President who is duly authorized to receive such
document, the wife of the defendant and the Editorial Assistant of the defendant,
were considered competent persons with sufficient discretion to realize the
importance of the legal papers served upon them and to relay the same to the
defendants named therein (Sec. 7, Rule 14, 1997 Rules of Civil Procedure).
WHEREFORE, in view of the foregoing, the Motion to Dismiss is hereby DENIED for
lack of merit..
Accordingly, defendants are directed to file their Answers to the complaint within
the period still open to them, pursuant to the rules.
SO ORDERED.

Petitioners filed a motion for reconsideration, asserting that the sheriff had
immediately resorted to substituted service of the summons upon being informed
that they were not around to personally receive the summons, and that Abante
Tonite, being neither a natural nor a juridical person, could not be made a party in
the action.
On June 29, 2001, the RTC denied petitioners motion for reconsideration. 7 It stated
in respect of the service of summons, as follows:
The allegations of the defendants that the Sheriff immediately resorted to
substituted service of summons upon them when he was informed that they were
not around to personally receive the same is untenable. During the hearing of the
herein motion, Sheriff Raul Medina of this Branch of the Court testified that on
September 18, 2000 in the morning, he went to the office address of the defendants
to personally serve summons upon them but they were out. So he went back to
serve said summons upon the defendants in the afternoon of the same day, but
then again he was informed that the defendants were out and unavailable, 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:
"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, mandamusin
the CA to nullify the orders of the RTC dated March 12, 2001 and June 29, 2001.
Ruling of the CA
On March 8, 2002, the CA promulgated its questioned decision, 8 dismissing the
petition for certiorari, prohibition, mandamus, to wit:
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:
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 that:
xxxx
Abante Tonites newspapers are circulated nationwide, showing ostensibly its being
a corporate entity, thus the doctrine of corporation by estoppel may appropriately
apply.
An unincorporated association, which represents itself to be a corporation, will be
estopped from denying its corporate capacity in a suit against it by a third person
who relies in good faith on such representation.
There being no grave abuse of discretion committed by the respondent Judge in the
exercise of his jurisdiction, the relief of prohibition is also unavailable.
WHEREFORE, the instant petition is DENIED. The assailed Orders of respondent
Judge are AFFIRMED.
SO ORDERED.9
On January 13, 2003, the CA denied petitioners motion for reconsideration. 10
Issues
Petitioners hereby submit that:
1. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT
THE TRIAL COURT ACQUIRED JURISDICTION OVER HEREIN PETITIONERS.
2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING
THE INCLUSION OF ABANTE TONITE AS PARTY IN THE INSTANT CASE. 11
Ruling

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 defendantin an action in rem or quasi in rem is
not required, and the court acquires jurisdiction over an actionas long as it acquires
jurisdiction over the resthat is thesubject 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
The distinctions that need to be perceived between an action in personam, on the
one hand, and an action inrem or quasi in rem, on the other hand, are aptly
delineated in Domagas v. Jensen,13 thusly:
The settled rule is that the aim and object of an action determine its character.
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. 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. 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. Of this character
are suits to compel a defendant to specifically perform some act or actions to fasten
a pecuniary liability on him. 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 property 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. In Combs v. Combs, 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.
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. 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. 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.
As a rule, Philippine courts cannot try any case against a defendant who does not
reside and is not found in the Philippines because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court; but when the
case is an action in rem or quasi in rem enumerated in Section 15, Rule 14 of the

Rules of Court, Philippine courts have jurisdiction to hear and decide the case
because they have jurisdiction over the res, and jurisdiction over the person of the
non-resident defendant is not essential. In the latter instance, extraterritorial service
of summons can be made upon the defendant, and such extraterritorial service of
summons is not for the purpose of vesting the court with jurisdiction, but for the
purpose of complying with the requirements of fair play or due process, so that the
defendant 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. On the other hand, when the
defendant in an action in personam does not reside and is not found in the
Philippines, our courts cannot try the case against him because of the impossibility
of acquiring jurisdiction over his person unless he voluntarily appears in court. 14
As the initiating party, the plaintiff in a civil action voluntarily submits himself to the
jurisdiction of the court by the act of filing the initiatory pleading. As to the
defendant, the court acquires jurisdiction over his person either by the proper
service of the summons, or by a voluntary appearance in the action. 15
Upon the filing of the complaint and the payment of the requisite legal fees, the
clerk of court forthwith issues the corresponding summons to the defendant. 16 The
summons is directed to the defendant and signed by the clerk of court under seal. It
contains the name of the court and the names of the parties to the action; a
direction that the defendant answers within the time fixed by the Rules of Court;
and a notice that unless the defendant so answers, the plaintiff will take judgment
by default and may be granted the relief applied for. 17 To be attached to the original
copy of the summons and all copies thereof is a copy of the complaint (and its
attachments, if any) and the order, if any, for the appointment of a guardian ad
litem.18
The significance of the proper service of the summons on the defendant in an action
in personam cannot be overemphasized. The service of the summons fulfills two
fundamental objectives, namely: (a) to vest in the court jurisdiction over the person
of the defendant; and (b) to afford to the defendant the opportunity to be heard on
the claim brought against him.19 As to the former, when jurisdiction in personam is
not acquired in a civil action through the proper service of the summons or upon a
valid waiver of such proper service, the ensuing trial and judgment are void. 20 If the
defendant knowingly does an act inconsistent with the right to object to the lack of
personal jurisdiction as to him, like voluntarily appearing in the action, he is deemed
to have submitted himself to the jurisdiction of the court. 21 As to the latter, the
essence of due process lies in the reasonable opportunity to be heard and to submit
any evidence the defendant may have in support of his defense. With the proper
service of the summons being intended to afford to him the opportunity to be heard
on the claim against him, he may also waive the process. 21 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
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 time would 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
personal service within a reasonable time. In that regard, what was a reasonable
time was dependent on the circumstances obtaining. While we are strict in insisting
on personal service on the defendant, we do not cling to such strictness should the
circumstances already justify substituted service instead. It is the spirit of the
procedural rules, not their letter, that governs. 30
In reality, petitioners insistence on personal service by the serving officer was
demonstrably superfluous. They had actually received the summonses served
through their substitutes, as borne out by their filing of several pleadings in the RTC,
including an answer with compulsory counterclaim ad cautelam and a pre-trial brief
ad cautelam. They had also availed themselves of the modes of discovery available
under the Rules of Court. Such acts evinced their voluntary appearance in the
action.

Nor can we sustain petitioners contention that Abante Tonite could not be sued as a
defendant due to its not being either a natural or a juridical person. In rejecting their
contention, the CA categorized Abante Tonite as a corporation by estoppel as the
result of its having represented itself to the reading public as a corporation despite
its not being incorporated. Thereby, the CA concluded that the RTC did not gravely
abuse its discretion in holding that the non-incorporation of Abante Tonite with the
Securities and Exchange Commission was of no consequence, for, otherwise,
whoever of the public who would suffer any damage from the publication of articles
in the pages of its tabloids would be left without recourse. We cannot disagree with
the CA, considering that the editorial box of the daily tabloid disclosed that basis,
nothing in the box indicated that Monica Publishing Corporation had owned Abante
Tonite.
WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002; and
ORDERS petitioners to pay the costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice

Sec. 7. Substituted service


Planters Development Bank v. Chandumal, G.R. No. 195619,
September 5, 2012 (Supra.)
Macasaet v. Co, G.R. No. 156759, June 5, 2013 (Supra.)
Gentle Supreme v. Consulta, G.R. No. 183182, September 1, 2010
SECOND DIVISION
GENTLE SUPREME
PHILIPPINES, INC.,
Petitioner,
- versus -

RICARDO F. CONSULTA,
Respondent.

G.R. No. 183182


Present:
CARPIO, J., Chairperson,
NACHURA,
BERSAMIN,*
ABAD, and
MENDOZA, JJ.
Promulgated:

September 1, 2010
x --------------------------------------------------------------------------------------- x
ABAD, J.:
This case is about the service of summons on a corporation and its officers,
allegedly done improperly, resulting in the failure of the trial court to acquire
jurisdiction over the persons of the defendants and in the nullity of its proceedings.
The Facts and the Case
On September 29, 2005 petitioner Gentle Supreme Philippines, Inc. (GSP)
filed a collection case with application for a writ of preliminary attachment [1] against
Consar Trading Corporation (CTC), its president, respondent Ricardo Consulta
(Consulta), and its vice-president, Norberto Sarayba (Sarayba) before the Regional
Trial Court (RTC) of Pasig City, Branch 68, in Civil Case 70544. GSP alleged that CTC,
through Consulta and Sarayba, bought certain merchandise from it but refused to
pay for them.
Before summons could be served, the RTC issued a writ of preliminary
attachment[2] against the defendants after GSP filed the required bond.
[3]
Afterwards, the RTC issued summons against the defendants.
On October 11, 2005 as the sheriff failed to serve the summons and copies of
the complaint on any of CTCs authorized officers as well as on Consulta and
Sarayba, he left copies of such documents with Agnes Canave (Canave) who,
according to the sheriffs return, [4] was Saraybas secretary and an authorized
representative of both Sarayba and Consulta.
None of the defendants filed an answer to the complaint. Thus, upon motion,
on November 18, 2005 the RTC declared them in default [6] and proceeded to hear
GSPs evidence ex parte. Meanwhile, the sheriff attached a registered
land[7] belonging to Consulta.[8] After trial, the RTC ruled that having defrauded GSP,
defendants CTC, Consulta, and Sarayba were solidarily liable for the value of the
supplied goods plus attorneys fees and costs of the suit. [9] And upon motion, on
January 25, 2006 the RTC issued a writ of execution against the defendants. [10]
[5]

On June 9, 2006 respondent Consulta filed a petition for annulment of the RTC
decision before the Court of Appeals (CA) in CA-G.R. SP 94817. [11] He alleged 1) that
he found out about the case against him only on May 19, 2006 when he received a
notice of sale on execution of his house and lot in Marikina City; and 2) that he was
not properly served with summons because, although his address stated in the
complaint was his regular place of business, Canave, who received the summons,
was not in charge of the matter.
Consulta invoked the Courts ruling in Keister v. Judge Navarro,[12] that the
rule (on substituted service) presupposes that such relation of confidence exists
between the person with whom the copy is left and the defendant and, therefore,

assumes that such person will deliver the process to defendant or in some way give
him notice thereof. Consulta claimed that Canave was only Saraybas
secretary. Thus, neither the sheriff nor the RTC had basis for assuming that Canave
would find a way to let Consulta know of the pending case against him. Consulta
concluded that the RTC did not acquire jurisdiction over his person.
In its answer to the petition,[13] GSP insisted on the validity of the service of
summons on Consulta. Also, assuming that summons was not properly served,
Consultas ignorance was contrived. His knowledge of the case against him may be
proved by the following circumstances:
1.
On February 25, 2006 CTC faxed GSP a letter proposing a schedule of
payment for the adjudged amounts in the RTC decision. Admittedly, it was only
Sarayba who signed the letter. By the rules of evidence, however, the act and
declaration of a joint debtor is binding upon a party. [14] This means that Saraybas
knowledge and admission of the case and the defendants corresponding liability to
GSP was binding on Consulta. Besides, Consulta, together with Sarayba, signed the
postdated checks as partial payment of CTCs obligation to GSP;
2.
The RTCs sheriff garnished CTCs bank accounts on the day the
summons was served. As company president, it was incredulous that Consulta was
unaware of the garnishment and the reason for it;
3.
Consulta admitted that CTC was properly served with summons
through Canave. By that statement, it can be deduced that Canave was in charge
of the office, Consultas regular place of business, signifying proper service of the
summons on him.
On March 18, 2008 the CA rendered a decision, holding that the RTC sheriff
did not properly serve summons on all the defendants. It ordered the remand of the
case to the trial court, enjoining it to take steps to insure the valid service of
summons on them.[15]
Respondent Consulta filed a motion for partial reconsideration of the decision
but the CA denied it for being late. Petitioner GSP also filed a motion for
reconsideration[16] which the CA denied on May 29, 2008 for lack of merit, [17] hence,
this petition.
The Issue Presented
The sole issue presented in this case is whether the CA correctly ruled that
summons had not been properly served on respondent Consulta with the result that
the RTC did not acquire jurisdiction over his person and that the judgment against
him was void.
The Ruling of the Court
First of all, only Consulta brought an action for the annulment of the RTC
decision. CTC and Sarayba did not. Consequently, the CA had no business deciding

whether or not the latter two were properly served with summons. The right to due
process must be personally invoked and its circumstances specifically alleged by
the party claiming to have been denied such. [18]
Second, there is valid substituted service of summons on Consulta at his
place of business with some competent person in charge thereof. According to the
sheriffs return, which is prima facie evidence of the facts it states,[19] he served a
copy of the complaint on Canave, an authorized representative of both Consulta and
Sarayba.[20] Besides Consultas bare allegations, he did not present evidence to
rebut the presumption of regularity on the manner that the sheriff performed his
official duty.[21] Nor did Consulta present clear and convincing evidence that Canave
was not competent to receive the summons and the attached documents for him.
In fact, in his petition for annulment of judgment, Consulta said that CTC had
been apprised of the civil action through Canave. [22] In other words, Canave was a
person charged with authority to receive court documents for the company as well
as its officers who held office in that company. Absent contrary evidence, the
veracity of the returns content and its effectiveness stand.
Further, this Court has ruled that it is not necessary that the person in
charge of the defendants regular place of business be specifically authorized to
receive the summons. It is enough that he appears to be in charge. [23] In this case,
Canave, a secretary whose job description necessarily includes receiving documents
and other correspondence, would have the semblance of authority to accept the
court documents.
It is true that this Court emphasized the importance of strict and faithful
compliance in effecting substituted service. [24] It must, however, be reiterated that
when the rigid application of rules becomes a conduit for escaping ones
responsibility, the Court will intervene to set things right according to the rules. [25]
Further, Consulta does not deny a) that summons had been properly served
on Sarayba, his vice-president, through Canave at the companys office; b) that the
summons on him was served on the same occasion also through Canave; c) that the
sheriff had succeeded in garnishing his companys bank deposits; and d) that his
company subsequently made an offer to settle the judgment against it. The Court is
not dumb as to believe that Consulta became aware of the suit only when the
sheriff served a notice of execution sale covering his house and lot.
WHEREFORE, premises considered, the Court REVERSES the Court of
Appeals Decision in CA-G.R. SP 94817 dated March 17, 2008 and REINSTATES the
Regional Trial Courts Decision in Civil Case 70544 dated December 14, 2005.
SO ORDERED.
ROBERTO A. ABAD
Associate Justice

Leah Palma v. Hon. Galvez, G.R. No. 165273, March 10, 2010

LEAH PALMA,

G.R. No. 165273


Petitioner,
Present:

- versus -

HON. DANILO P. GALVEZ, in his


capacity as PRESIDING JUDGE of the
REGIONAL TRIAL COURT OF ILOILO
CITY, BRANCH 24; and PSYCHE
ELENA AGUDO,
Respondents.

CORONA, J., Chairperson,


VELASCO, JR.,
NACHURA,
PERALTA, and
MENDOZA, JJ.
Promulgated:
March 10, 2010

x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Assailed in this petition for certiorari under Rule 65 of the Rules of Court are
the Orders dated May 7, 2004[1] and July 21, 2004[2] of the Regional Trial Court (RTC)
of Iloilo City, Branch 24, granting the motion to dismiss filed by private respondent
Psyche Elena Agudo and denying reconsideration thereof, respectively.
On July 28, 2003, petitioner Leah Palma filed with the RTC an action for
damages against the Philippine Heart Center (PHC), Dr. Danilo Giron and Dr.
Bernadette O. Cruz, alleging that the defendants committed professional fault,
negligence and omission for having removed her right ovary against her will, and
losing the same and the tissues extracted from her during the surgery; and that
although the specimens were subsequently found, petitioner was doubtful and
uncertain that the same was hers as the label therein pertained that of somebody
else. Defendants filed their respective Answers. Petitioner subsequently filed a
Motion for Leave to Admit Amended Complaint, praying for the inclusion of
additional defendants who were all nurses at the PHC, namely, Karla Reyes, Myra

Mangaser and herein private respondent Agudo. Thus, summons were subsequently
issued to them.
On February 17, 2004, the RTC's process server submitted his return of
summons stating that the alias summons, together with a copy of the amended
complaint and its annexes, were served upon private respondent thru her husband
Alfredo Agudo, who received and signed the same as private respondent was out of
the country.[3]
On March 1, 2004, counsel of private respondent filed a Notice of Appearance
and a Motion for Extension of Time to File Answer [4] stating that he was just engaged
by private respondent's husband as she was out of the country and the Answer was
already due.
On March 15, 2004, private respondent's counsel filed a Motion for Another
Extension of Time to File Answer,[5] and stating that while the draft answer was
already finished, the same would be sent to private respondent for her
clarification/verification before the Philippine Consulate in Ireland; thus, the counsel
prayed for another 20 days to file the Answer.
On March 30, 2004, private respondent filed a Motion to Dismiss [6] on the
ground that the RTC had not acquired jurisdiction over her as she was not properly
served with summons, since she was temporarily out of the country; that service of
summons on her should conform to Section 16, Rule 14 of the Rules of
Court. Petitioner filed her Opposition [7] to the motion to dismiss, arguing that a
substituted service of summons on private respondent's husband was valid and
binding on her; that service of summons under Section 16, Rule 14 was not
exclusive and may be effected by other modes of service, i.e., by personal or
substituted service. Private respondent filed a Comment[8] on petitioner's
Opposition, and petitioner filed a Reply[9] thereto.
On May 7, 2004, the RTC issued its assailed Order granting private
respondent's motion to dismiss. It found that while the summons was served at
private respondent's house and received by respondent's husband, such service did
not qualify as a valid service of summons on her as she was out of the country at
the time the summons was served, thus, she was not personally served a summons;
and even granting that she knew that a complaint was filed against her,
nevertheless, the court did not acquire jurisdiction over her person as she was not
validly served with summons; that substituted service could not be resorted to since
it was established that private respondent was out of the country, thus, Section 16,
Rule 14 provides for the service of summons on her by publication.
Petitioner filed a motion for reconsideration, which the RTC denied in its Order
dated July 21, 2004.
Petitioner is now before us alleging that the public respondent committed a
grave abuse of discretion amounting to lack or excess of jurisdiction when he ruled
that:

I. Substituted service of summons upon private respondent, a


defendant residing in the Philippines but temporarily outside the
country is invalid;
II. Section 16, Rule 14, of the 1997 Rules of Civil Procedure limits
the mode of service of summons upon a defendant residing in the
Philippines, but temporarily outside the country, exclusively to
extraterritorial service of summons under section 15 of the same rule;
III. In not ruling that by filing two (2) motions for extension of
time to file Answer, private respondent had voluntarily submitted
herself to the jurisdiction of respondent court, pursuant to Section 20,
Rule 14 of the 1997 Rules of Civil Procedure, hence, equivalent to
having been served with summons;
IV. The cases cited in his challenged Order of May 7, 2004
constitute stare decisis despite his own admission that the factual
landscape in those decided cases are entirely different from those in
this case.[10]
Petitioner claims that the RTC committed a grave abuse of discretion in ruling
that Section 16, Rule 14, limits the service of summons upon the defendantresident who is temporarily out of the country exclusively by means of
extraterritorial service, i.e., by personal service or by publication, pursuant to
Section 15 of the same Rule. Petitioner further argues that in filing two motions for
extension of time to file answer, private respondent voluntarily submitted to the
jurisdiction of the court.
In her Comment, private respondent claims that petitioner's certiorari under
Rule 65 is not the proper remedy but a petition for review under Rule 45, since the
RTC ruling cannot be considered as having been issued with grave abuse of
discretion; that the petition was not properly verified because while the verification
was dated September 15, 2004, the petition was dated September 30, 2004. She
insists that since she was out of the country at the time the service of summons
was made, such service should be governed by Section 16, in relation to Section 15,
Rule 14 of the Rules of Court; that there was no voluntary appearance on her part
when her counsel filed two motions for extension of time to file answer, since she
filed her motion to dismiss on the ground of lack of jurisdiction within the period
provided under Section 1, Rule 16 of the Rules of Court.
In her Reply, petitioner claims that the draft of the petition and the verification
and certification against forum shopping were sent to her for her signature earlier
than the date of the finalized petition, since the petition could not be filed without
her signed verification. Petitioner avers that when private respondent filed her two
motions for extension of time to file answer, no special appearance was made to
challenge the validity of the service of summons on her.
The parties subsequently filed their respective memoranda as required.
We shall first resolve the procedural issues raised by private respondent.

Private respondent's claim that the petition for certiorari under Rule 65 is a
wrong remedy thus the petition should be dismissed, is not persuasive. A petition
for certiorari is proper when any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction and there is no
appeal, or any plain, speedy, and adequate remedy at law. [11] There is grave abuse
of discretion when public respondent acts in a capricious or whimsical manner in
the exercise of its judgment as to be equivalent to lack of jurisdiction.
Section 1, Rule 41 of the 1997 Rules of Civil Procedure states that an
appeal may be taken only from a final order that completely disposes of the
case; that no appeal may be taken from (a) an order denying a motion for new trial
or reconsideration; (b) an order denying a petition for relief or any similar motion
seeking relief from judgment; (c) an interlocutory order; (d) an order disallowing or
dismissing an appeal; (e) an order denying a motion to set aside a judgment by
consent, confession or compromise on the ground of fraud, mistake or duress, or
any other ground vitiating consent; (f) an order of execution; (g) a judgment or
final order for or against one or more of several parties or in separate
claims, counterclaims, cross-claims and third-party complaints, while the
main case is pending, unless the court allows an appeal therefrom; or (h)
an order dismissing an action without prejudice. In all the above instances where
the judgment or final order is not appealable, the aggrieved party may file an
appropriate special civil action for certiorari under Rule 65.
In this case, the RTC Order granting the motion to dismiss filed by private
respondent is a final order because it terminates the proceedings against her, but
it falls within exception (g) of the Rule since the case involves several defendants,
and the complaint for damages against these defendants is still pending. [12] Since
there is no appeal, or any plain, speedy, and adequate remedy in law, the remedy of
a special civil action for certiorari is proper as there is a need to promptly relieve the
aggrieved party from the injurious effects of the acts of an inferior court or tribunal.
[13]

Anent private respondent's allegation that the petition was not properly
verified, we find the same to be devoid of merit. The purpose of requiring a
verification is to secure an assurance that the allegations of the petition have been
made in good faith, or are true and correct, not merely speculative. [14] In this
instance, petitioner attached a verification to her petition although dated earlier
than the filing of her petition. Petitioner explains that since a draft of the petition
and the verification were earlier sent to her in New York for her signature, the
verification was earlier dated than the petition for certiorari filed with us. We accept
such explanation. While Section 1, Rule 65 requires that the petition for certiorari be

verified, this is not an absolute necessity where the material facts alleged are a
matter of record and the questions raised are mainly of law. [15] In this case, the
issue raised is purely of law.

Now on the merits, the issue for resolution is whether there was a valid
service of summons on private respondent.

In civil cases, the trial court acquires jurisdiction over the person of the
defendant either by the service of summons or by the latters voluntary appearance
and submission to the authority of the former. [16] Private respondent was a Filipino
resident who was temporarily out of the Philippines at the time of the service of
summons; thus, service of summons on her is governed by Section 16, Rule 14 of
the Rules of Court, which provides:

Sec. 16. Residents temporarily out of the Philippines.


When an action is commenced against a defendant who ordinarily
resides within the Philippines, but who is temporarily out of it,
service may, by leave of court, be also effected out of the Philippines,
as under the preceding section. (Emphasis supplied)

The preceding section referred to in the above provision is Section 15, which
speaks of extraterritorial service, thus:

SEC. 15. Extraterritorial service. When the defendant does not


reside and is not found in the Philippines, and the action affects the
personal status of the plaintiff or relates to, or the subject of which is,
property within the Philippines, in which the defendant has or claims a

lien or interest, actual or contingent, or in which the relief demanded


consists, wholly or in part, in excluding the defendant from any interest
therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the
Philippines by personal service as under section 6; or by publication in a
newspaper of general circulation in such places and for such time as the
court may order, in which case a copy of the summons and order of the
court shall be sent by registered mail to the last known address of the
defendant, or in any other manner the court may deem sufficient. Any
order granting such leave shall specify a reasonable time, which shall
not be less than sixty (60) days after notice, within which the defendant
must answer.

The RTC found that since private respondent was abroad at the time of the
service of summons, she was a resident who was temporarily out of the country;
thus, service of summons may be made only by publication.

We do not agree.

In Montefalcon v. Vasquez,[17] we said that because Section 16 of


Rule 14
uses the words may and also, it is not mandatory. Other methods of service of
summons allowed under the Rules may also be availed of by the serving officer on a
defendant-resident who is temporarily out of the Philippines. Thus, if a resident
defendant is temporarily out of the country, any of the following modes of service
may be resorted to: (1) substituted service set forth in section 7 ( formerly Section
8), Rule 14; (2) personal service outside the country, with leave of court; (3) service
by publication, also with leave of court; or (4) in any other manner the court may
deem sufficient.[18]

In Montalban v. Maximo,[19] we held that substituted service of summons


under the present Section 7, Rule 14 of the Rules of Court in a suit in
personam against residents of the Philippines temporarily absent therefrom is the
normal method of service of summons that will confer jurisdiction on the court over

such defendant. In the same case, we expounded on the rationale in providing for
substituted service as the normal mode of service for residents temporarily out of
the Philippines.

x x x A man temporarily absent from this country leaves a definite


place of residence, a dwelling where he lives, a local base, so to speak,
to which any inquiry about him may be directed and where he is bound
to return. Where one temporarily absents himself, he leaves his affairs
in the hands of one who may be reasonably expected to act in his place
and stead; to do all that is necessary to protect his interests; and to
communicate with him from time to time any incident of importance
that may affect him or his business or his affairs. It is usual for such a
man to leave at his home or with his business associates information as
to where he may be contacted in the event a question that affects him
crops up. If he does not do what is expected of him, and a case comes
up in court against him, he cannot just raise his voice and say that he is
not subject to the processes of our courts. He cannot stop a suit from
being filed against him upon a claim that he cannot be summoned at
his dwelling house or residence or his office or regular place of
business.

Not that he cannot be reached within a reasonable time to


enable him to contest a suit against him. There are now advanced
facilities of communication. Long distance telephone calls and
cablegrams make it easy for one he left behind to communicate with
him.[20]

Considering that private respondent was temporarily out of the country, the
summons and complaint may be validly served on her through substituted service
under Section 7, Rule 14 of the Rules of Court which reads:

SEC. 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 some
competent person in charge thereof.

We have held that a 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. [21] 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
important as the issue of due process as that of jurisdiction. [22]
Section 7 also designates the persons with whom copies of the process may
be left. The rule presupposes that such a relation of confidence exists between the
person with whom the copy is left and the defendant and, therefore, assumes that
such person will deliver the process to defendant or in some way give him notice
thereof.[23]
In this case, the Sheriff's Return stated that private respondent was out of the
country; thus, the service of summons was made at her residence with her
husband, Alfredo P. Agudo, acknowledging receipt thereof. Alfredo was presumably
of suitable age and discretion, who was residing in that place and, therefore, was
competent to receive the summons on private respondent's behalf.
Notably, private respondent makes no issue as to the fact that the place
where the summons was served was her residence, though she was temporarily out
of the country at that time, and that Alfredo is her husband. In fact, in the notice of
appearance and motion for extension of time to file answer submitted by private
respondent's counsel, he confirmed the Sheriff's Return by stating that private
respondent was out of the country and that his service was engaged by
respondent's husband. In his motion for another extension of time to file answer,
private respondent's counsel stated that a draft of the answer had already been
prepared, which would be submitted to private respondent, who was in Ireland for
her clarification and/or verification before the Philippine Consulate there. These
statements establish the fact that private respondent had knowledge of the case
filed against her, and that her husband had told her about the case as Alfredo even
engaged the services of her counsel.
In addition, we agree with petitioner that the RTC had indeed acquired
jurisdiction over the person of private respondent when the latter's counsel entered
his appearance on private respondent's behalf, without qualification and without
questioning the propriety of the service of summons, and even filed two Motions for

Extension of Time to File Answer. In effect, private respondent, through counsel, had
already invoked the RTCs jurisdiction over her person by praying that the motions
for extension of time to file answer be granted. We have held that 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.[24] When private respondent earlier invoked the jurisdiction
of the RTC to secure affirmative relief in her motions for additional time to file
answer, she voluntarily submitted to the jurisdiction of the RTC and is thereby
estopped from asserting otherwise.[25]
Considering the foregoing, we find that the RTC committed a grave abuse of
discretion amounting to excess of jurisdiction in issuing its assailed Orders.

WHEREFORE, the petition is GRANTED. The Orders dated May 7,


2004 and July 21, 2004 of the Regional Trial Court ofIloilo City, Branch 24, are
hereby SET ASIDE. Private respondent is DIRECTED to file her Answer within the
reglementary period from receipt of this decision.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Sagana v. Francisco, G.R. No. 161952, October 2, 2009


SECOND DIVISION
ARNEL SAGANA,
Petitioner,

G.R. No.161952
Present:

- versus -

RICHARD A. FRANCISCO,
Respondent, **

YNARES-SANTIAGO,* J.
CARPIO MORALES,
Acting Chairperson,
BRION,
DEL CASTILLO, and
ABAD, JJ.
Promulgated:
October 2, 2009

x-----------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
It is, at times, difficult to reconcile the letter of the law with its spirit. Thus, it is
not altogether surprising that two competing values are usually discernable in every
controversy the principle of dura lex sed lex versus the notion that technicalities
should yield to broader interests of justice. In our rules of procedure, for instance,
judges often struggle to find a balance between due process considerations and a
liberal construction to secure a just disposition of every action. In such cases,
where a measure of discretion is permitted, courts must tread carefully, with due
consideration of the factual milieu and legal principles involved. In so doing, we
take steps - sometimes tentative, sometimes bold - to apply prior experience and
precedent towards an eventual just resolution. It is these principles that animate
our decision in the instant case.
Assailed in this Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Court is the 13 August 2003 Decision [2]of the Court of Appeals in CA-G.R. CV No.
66412 which reversed and set aside the 20 September 1999 Decision [3] of the
Regional Trial Court of Quezon City, Branch 99 in Civil Case No. Q-94-22445 and
held that there was no valid service of summons to respondent Richard A. Francisco.
On 13 December 1994, petitioner Arnel Sagana filed a Complaint [4] for
Damages before the Regional Trial Court of Quezon City docketed as Civil Case No.
Q-94-22445 and raffled to Branch 99. Petitioner alleged that on 20 November 1992,
respondent Richard A. Francisco, with intent to kill and without justifiable reason,
shot him with a gun hitting him on the right thigh. As a result, petitioner incurred
medical expenses and suffered wounded feelings, and was compelled to engage the
services of a lawyer, due to respondents refusal to pay said expenses. Petitioner
thus demanded payment of P300,000.00 as actual damages,P150,000.00 as moral
damages, P50,000.00, exemplary damages, and P50,000.00 as attorneys fees.
On 31 January 1995, process server Manuel S. Panlasigui attempted to serve
summons at respondents address at No. 36 Sampaguita St., Baesa, Quezon
City but was unsuccessful. In his Servers Return,[5] Panlasigui stated that he tried
to personally serve the summons to respondent at his given address at No. 36
Sampaguita St., Baesa, Quezon City. However, the occupant of that house, who
refused to give his identity, told him that respondent is unknown at said
address. Panlasigui also declared that diligent efforts were exerted to serve the
summons but these proved to be futile.[6] Subsequently, the trial court attempted to
serve summons to respondents office through registered mail on 9 February
1995. However, despite three notices, respondent failed to pick up the summons.
On 30 June 1995, the trial court dismissed the case on account of petitioners
lack of interest to prosecute.[7] It noted that since the filing of the Servers Return

on 8 February 1995, petitioner did not take any action thus indicating lack of
interest to prosecute the case.
Petitioner filed a Motion for Reconsideration [8] stating that after the Servers
Return was filed, he exerted efforts to locate the respondent, and it was confirmed
that respondent indeed lived at No. 36 Sampaguita St., Baesa, Quezon City. On 4
August 1995, the trial court granted petitioners motion for reconsideration,
conditioned upon the service of summons on the respondent within 10 days from
receipt of the Order.[9]
Thus, on 25 August 1995, Process Server Jarvis Iconar again tried to serve the
summons at the address of the respondent but no avail. According to Iconars
handwritten notation on the summons, [10] he was informed by Michael Francisco,
respondents brother, that respondent no longer lived at said address. However, he
left a copy of the summons to Michael Francisco.[11]
On 10 November 1995, petitioner filed a Motion to Declare Defendant in
Default,[12] alleging that despite service of summons, respondent still failed to file an
Answer. On 16 February 1996, the trial court issued an Order [13] finding that the
summons was validly served to respondent through his brother, Michael. It thus
declared respondent in default and allowed petitioner to present his evidence ex
parte. Nonetheless, copies of all pleadings and court documents were furnished to
respondent at No. 36 Sampaguita St.
In the meantime, on 1 March 1996, Michael Francisco, through his counsel,
Atty. Bernardo Q. Cuaresma, filed a Manifestation and Motion [14] denying that he
received the summons or that he was authorized to receive summons on behalf of
his brother, respondent Richard Francisco. He alleged that the substituted service
did not comply with Section 8, Rule 14 of the Rules of Court, since summons was
not served at defendants residence or left with any person who was authorized to
receive it on behalf of the defendant. Michael Francisco also prayed that his name
be stricken off the records as having received a copy of the summons.
In the Affidavit of Merit[15] submitted together with the Manifestation and
Motion, Michael Francisco asserted that he was 19 years of age; that his brother,
herein respondent Richard Francisco, had left their residence in March 1993; and
that respondent would just write his family without informing them of his address, or
would just call by phone.
Thereafter, petitioner and movant Michael Francisco submitted their
respective Opposition, Reply, and Rejoinder. In his Rejoinder, petitioner attached a
copy of an Affidavit[16] prepared by respondent Richard A. Francisco dated 23
December 1992, where he declared himself a resident of No. 36 Sampaguita
St. Interestingly, the lawyer who notarized the affidavit for the respondent, Atty.
Bernardo Q. Cuaresma, was the same lawyer who represented respondents brother
before the trial court.
On 4 October 1996, the trial court issued an Order[17] denying Michael
Franciscos Manifestation and Motion for lack of merit, holding thus:

It should be considered that earlier, plaintiff had already sent


numerous pleadings to defendant at his last known address. As also
pointed out by [petitioner] in his Opposition, movant has not adduced
evidence, except his affidavit of merit, to impugn the service of
summons thru him. Movant herein also admits that defendant
communicates with him through telephone. Movant, therefore, being a
person of sufficient age and discretion, would be able, more likely than
not, to inform defendant of the fact that summons was sent to him by
the court.[18]
Having failed to file an answer or any responsive pleading, respondent was
declared in default and petitioner was allowed to present evidence ex parte. On 20
September 1999, the trial court rendered its Decision, [19] the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of plaintiff and hereby orders defendant to pay
plaintiff the amount of THIRTY FIVE THOUSAND PESOS (PhP35,000.00)
as and for actual damages, the amount of FIFTEEN THOUSAND PESOS
(PhP15,000.00) as and for moral damages, the amount of TEN
THOUSAND PESOS (PhP10,000.00) for exemplary damages and the
amount of TWENTY THOUSAND PESOS (PhP20,000.00) as attorneys
fees.
No further costs.
SO ORDERED.[20]
On 23 November 1999, respondent Richard A. Francisco filed a Notice of
Appeal, claiming that he received a copy of the trial courts Decision on 9 November
1999; that the same was contrary to the law, facts, and evidence, and praying that
his appeal be given due course.[21]
On 5 June 2000, the Court of Appeals directed the parties to file their
respective briefs, a copy of which was sent to respondent by registered mail at No.
36 Sampaguita St., Baesa, Quezon City.[22] In his Appellants brief, respondent
argued that:
I
THE COURT A QUO ERRED IN ASSUMING JURISDICTION OVER THE
PERSON OF THE DEFENDANT-APPELLANT DESPITE THE IRREGULARITY
OF THE SUBSTITUTED SERVICE OF SUMMONS BY THE COURT PROCESS
SERVER.
II
THE COURT A QUO ERRED IN AWARDING ACTUAL DAMAGES IN THE
AMOUNT OF THIRTY FIVE-THOUSAND PESOS (P35,000.00) TO THE
PLAINTIFF-APPELLEE ALTHOUGH ONLY SEVENTEEN THOUSAND PESOS
(P17,000.00) WAS DULY SUPPORTED BY RECEIPTS.

III
THE COURT A QUO LIKEWISE ERRED IN AWARDING UNREASONABLE
MORAL DAMAGES IN THE AMOUNT OF FIFTEEN THOUSAND PESOS
(P15,000.00); EXEMPLARY DAMAGES IN THE AMOUNT OF TEN
THOUSAND PESOS (P10,000.00); AND ATTORNEYS FEES IN THE
AMOUNT OF TWENTY THOUSAND PESOS (P20,000.00) DESPITE THE
FACT THAT THERE IS NO FACTUAL AND SUBSTANTIVE BASIS FOR ALL
THESE.[23]
On 15 August 2002, the Court of Appeals issued a Resolution [24] ordering the
parties to personally appear for the conduct of preliminary conference to consider
amicably settling the appeal, pursuant to Sec. 1(a), Rule 7 of the Revised Internal
Rules of the Court of Appeals and the Courts Resolution A.M. No. 02-2-17-SC dated
16 April 2002 regarding the Pilot Testing of Mediation in the Court of
Appeals. Respondent was furnished [25] a copy of this Resolution at his address
at No. 36 Sampaguita Street, Baesa,Quezon City. Per Delivery Receipt of the Court
of Appeals, the same was personally received by respondent on 23 August 2002.[26]
On 3 September 2002, respondent attended the preliminary conference;
however the parties failed to reach an amicable settlement. [27] Thus, on 13 August
2003, the Court of Appeals rendered the herein assailed Decision granting the
appeal and setting aside the Decision of the trial court. The appellate court held
that the service of summons was irregular and such irregularity nullified the
proceedings before the trial court. Since it did not acquire jurisdiction over the
person of the respondent, the trial courts decision was void.
In brief, the Court of Appeals found that there was no valid service of
summons for the following reasons:
1.

Except for the notation made by the process server on the summons, no proof
of service by way of a Process Servers Return was prepared;

2.

The process server failed to state the specific facts and circumstances that
would justify valid substituted service of summons, to wit: (a) the
impossibility of service of summons within a reasonable time, (b) the efforts
exerted to locate the respondent, and (c) it was served on a person of
sufficient age and discretion residing therein.

3.

Petitioner failed to prove that, at the time summons


respondent actually lived in No. 36 Sampaguita St.

was

served,

Petitioner filed a Motion for Reconsideration [28] where he alleged that


respondent did, in fact, reside at No. 36 Sampaguita St. To prove this assertion,
petitioner submitted the original copy of the envelope containing respondents
Notice of Appeal, which indicated respondents return address to be No. 36
Sampaguita St.[29] Nonetheless, on 29 January 2004, the Court of Appeals denied
the Motion for Reconsideration.

Hence, petitioner filed this Petition for Review on Certiorari under Rule 45 of
the Rules of Court, raising the sole issue of whether there was valid service of
summons upon the respondent.
The petition is meritorious. Under the circumstances obtaining in this case,
we find there was proper substituted service of summons upon the respondent.
Section 8 of Rule 14 of the old Revised Rules of Court, the rules of procedure
then in force at the time summons was served, provided:
Section 8. 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 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 some
competent person in charge thereof.
Jurisprudence has long established that for substituted service of summons to
be valid, the following must be demonstrated: (a) that personal service of summons
within a reasonable time was impossible; (b) that efforts were exerted to locate the
party; and (c) that the summons was served upon a person of sufficient age and
discretion residing at the party's residence or upon a competent person in charge of
the party's office or regular place of business. [30] It is likewise required that the
pertinent facts proving these circumstances be stated in the proof of service or in
the officer's return.[31]
In this case, personal service of summons was twice attempted by the trial
court, although unsuccessfully. In the first attempt, the resident of the house
refused to receive the summons; worse, he would not even give his name. In the
second attempt, respondents own brother refused to sign for receipt of the
summons, and then later claimed that he never received a copy, despite his
participation in the proceedings. The trial court also thrice attempted to contact the
respondent through his place of work, but to no avail. These diligent efforts to
locate the respondent were noted in the first sheriff's return, the process server's
notation, as well as the records of the case.
Clearly, personal service of summons was made impossible by the acts of the
respondent in refusing to reveal his whereabouts, and by the act of his brother in
claiming that respondent no longer lived at No. 36 Sampaguita St., yet failing to
disclose his brother's location. We also note that it was the trial court which
directed that the second service of summons be made within seven days; thus, the
reasonable time was prescribed by the trial court itself.
Undeniably, no Sheriffs Return was prepared by process server Jarvis Iconar;
the only record of the second service of summons was Mr. Iconars handwritten
notation in the summons itself. However, the information required by law and
prevailing jurisprudence, that is, that personal service was impossible because of
the claim that respondent no longer lived at the stated address, that efforts were
exerted to locate the respondent through the multiple attempts to serve summons,

and that summons was served upon a person of sufficient age and discretion, were
already in the records of the trial court.
Moreover, we find the claim that respondent moved out of their residence in
March 1993 without informing his brother or parents his whereabouts, despite
regular calls and letters, simply incredulous. What makes this version of events
even more implausible is respondents admission that he received a copy of the trial
court's Decision of 20 September 1999 that was sent toNo. 36 Sampaguita
Street. Respondent even filed a Notice of Appeal coincidentally indicating that his
address was No. 36 Sampaguita St., Baesa, Quezon City. He also received a copy of
the appellate courts order for preliminary conference that was sent to said
address. These were never denied by respondent, despite being given every
opportunity to do so.
Respondent also wishes us to believe that it was pure chance that he and his
brother were assisted by the same lawyer, Atty. Bernardo Q. Cuaresma, and yet it
never occurred to respondents own brother or lawyer to inform him about the
receipt of summons. All these militate against respondents self-serving declaration
that he did not reside at No. 36 Sampaguita St. Indeed, there was no proof
presented as to when respondent left and then returned to his original home, if he
actually did leave his home.
In view of the foregoing, we find that substituted service of summons was
validly made upon respondent through his brother.
We do not intend this ruling to overturn jurisprudence to the effect that
statutory requirements of substituted service must be followed strictly, faithfully,
and fully, and that any substituted service other than that authorized by the Rules is
considered ineffective.[32] However, an overly strict application of the Rules is not
warranted in this case, as it would clearly frustrate the spirit of the law as well as do
injustice to the parties, who have been waiting for almost 15 years for a resolution
of this case. We are not heedless of the widespread and flagrant practice whereby
defendants actively attempt to frustrate the proper service of summons by refusing
to give their names, rebuffing requests to sign for or receive documents, or eluding
officers of the court. Of course it is to be expected that defendants try to avoid
service of summons, prompting this Court to declare that, the sheriff must be
resourceful, persevering, canny, and diligent in serving the process on the
defendant.[33] However, sheriffs are not expected to be sleuths, and cannot be
faulted where the defendants themselves engage in deception to thwart the orderly
administration of justice.
The purpose of summons is two-fold: to acquire jurisdiction over the person of
the defendant and to notify the defendant that an action has been commenced so
that he may be given an opportunity to be heard on the claim against him. Under
the circumstances of this case, we find that respondent was duly apprised of the
action against him and had every opportunity to answer the charges made by the
petitioner. However, since respondent refused to disclose his true address, it was
impossible to personally serve summons upon him. Considering that respondent
could not have received summons because of his own pretenses, and has failed to

provide an explanation of his purported new residence, he must now bear the
consequences.[34]
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The 13
August 2003 Decision of the Court of Appeals in CA-G.R. CV No. 66412 and its 29
January 2004 Resolution are REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 99, dated 20 September 1999 in Civil
Case No. Q-94-22445 holding that there was valid service of summons, and ordering
respondent to pay petitioner the amounts of P35,000.00 as actual
damages, P15,000.00 as moral damages, P10,000.00 as exemplary damages,
and P20,000.00 as attorneys fees, is REINSTATED and AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

Robinson v. Miralles, G.R. No. 163584, December 12, 2006

REMELITA M. ROBINSON,
Petitioner,

G.R. No. 163584


Present:

- versus -

PUNO, C.J., Chairperson,


SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.
Promulgated:

CELITA B. MIRALLES,
Respondent.
December 12, 2006
x -------------------------------------------------------------------------------------- x
DECISION
SANDOVAL-GUTIERREZ, J.:

Before us is the instant petition for review on certiorari assailing the


Resolutions dated February 11[1] and May 11, 2004[2]of the Regional Trial Court
(RTC), Branch 274, Paraaque City, in Civil Case No. 00-0372.
On August 25, 2000, Celita Miralles, respondent, filed with the said court a
complaint for sum of money against Remelita Robinson, petitioner, docketed as Civil
Case No. 00-0372. Respondent alleged that petitioner borrowed from her
US$20,054.00 as shown by a Memorandum of Agreement they both executed
on January 12, 2000.
Summons was served on petitioner at her given address. However, per
return of service of Sheriff Maximo Potente datedMarch 5, 2001, petitioner no longer
resides at such address.
On July 20, 2001, the trial court issued an alias summons to be served at No.
19 Baguio St., Alabang Hills, Muntinlupa City, petitioners new address.
Again, the summons could not be served on petitioner. Sheriff Potente
explained that:
The Security Guard assigned at the gate of Alabang Hills refused
to let me go inside the subdivision so that I could effect the service of
the summons to the defendant in this case. The security guard alleged
that the defendant had given them instructions not to let anybody
proceed to her house if she is not around. I explained to the Security
Guard that I am a sheriff serving the summons to the defendant, and
if the defendant is not around, summons can be received by any
person of suitable age and discretion living in the same house.
Despite of all the explanation, the security guard by the name of A.H.
Geroche still refused to let me go inside the subdivision and served
(sic) the summons to the defendant. The same thing happened when I
attempted to serve the summons previously.
Therefore, the summons was served by leaving a copy thereof
together with the copy of the complaint to the security guard by the
name of A.H. Geroche, who refused to affix his signature on the
original copy thereof, so he will be the one to give the same to the
defendant.
Eventually, respondent filed a motion to declare petitioner in default for her
failure to file an answer seasonably despite service of summons.
On February 28, 2003, the trial court granted respondents motion declaring
petitioner in default and allowing respondent to present her evidence ex parte.
On June 20, 2003, the trial court issued an Order, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered in favor of the


plaintiff and against defendant ordering the defendant to pay the
plaintiff as follows:
1.
The sum of US$20,054.00 as the unpaid obligation, plus the
stipulated interest of 3% a month from May 2000 (date of
default) until fully paid;
2.
Php100,000.00 for moral damages;
3.
Php50,000.00 plus Php1,500.00 per appearance as attorneys
fees;
4.
Costs of suit.
SO ORDERED.
A copy of the Order was sent to petitioner by registered mail at her new
address.
Upon respondents motion, the trial court, on September 8, 2003, issued a
writ of execution.
On September 26, 2003, petitioner filed with the trial court a petition for relief
from the judgment by default. She claimed that summons was improperly served
upon her, thus, the trial court never acquired jurisdiction over her and that all its
proceedings are void.
On February 11, 2004, the trial court issued a Resolution denying the petition
for relief. Petitioner filed a motion for reconsideration, but it was denied by the trial
court in a Resolution dated May 11, 2004.
Hence, the instant recourse.
The sole issue for our resolution is whether the trial court correctly ruled that
a substituted service of summons upon petitioner has been validly effected.
Summons is a writ by which the defendant is notified of the action brought
against him or her.[3] In a civil action, service of summons is the means by which
the court acquires jurisdiction over the person of the defendant. [4] Any judgment
without such service, in the absence of a valid waiver, is null and void. [5] Where the
action is in personam and the defendant is in thePhilippines, the service of
summons may be made through personal or substituted service in the manner
provided for in Sections 6 and 7, Rule 14 of the 1997 Rules of Procedure, as
amended,[6] thus:
SEC. 6. Service in person on defendant. Whenever practicable,
the summons shall be served by handing a copy thereof to the
defendant in person, or if he refuses to receive and sign for it, by
tendering it to him.
SEC. 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
the defendants office or regular place of business with some competent
person in charge thereof.
Under our procedural rules, personal service is generally preferred over
substituted service, the latter mode of service being a method extraordinary in
character.[7] For substituted service to be justified, the following circumstances must
be clearly established: (a) personal service of summons within a reasonable time
was impossible; (b) efforts were exerted to locate the party; and (c) the summons
was served upon a person of sufficient age and discretion residing at the partys
residence or upon a competent person in charge of the partys office or place of
business.[8] Failure to do so would invalidate all subsequent proceedings on
jurisdictional grounds.[9]
Petitioner contends that the service of summons upon the subdivision
security guard is not in compliance with Section 7, Rule 14 since he is not related to
her or staying at her residence. Moreover, he is not duly authorized to receive
summons for the residents of the village. Hence, the substituted service of
summons is not valid and that the trial court never acquired jurisdiction over her
person.
We have ruled that the statutory requirements of substituted service must be
followed strictly, faithfully, and fully and any substituted service other than that
authorized by the Rules is considered ineffective. [10] However, we frown upon an
overly strict application of the Rules. It is the spirit, rather than the letter of the
procedural rules, that governs.
In his Return, Sheriff Potente declared that he was refused entry by the
security guard in Alabang Hills twice. The latter informed him that petitioner
prohibits him from allowing anybody to proceed to her residence whenever she is
out. Obviously, it was impossible for the sheriff to effect personal or substituted
service of summons upon petitioner. We note that she failed to controvert the
sheriffs declaration. Nor did she deny having received the summons through the
security guard.
Considering her strict instruction to the security guard, she must bear its
consequences. Thus, we agree with the trial court that summons has been properly
served upon petitioner and that it has acquired jurisdiction over her.
WHEREFORE, we DENY the petition and we AFFIRM the assailed Orders of
the RTC, Branch 274, Paraaque City, in Civil Case No. 00-0372. Costs against
petitioner.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

Chu v. Mach Asia, G.R. No. 184333, April 1, 2013


G.R. No. 184333

April 1, 2013

SIXTO
N.
vs.
MACH ASIA TRADING CORPORATION, Respondent.

CHU, Petitioner,

DECISION
PERALTA, J.:
This is a petition for review on certiorari assailing the Decision 1 dated July 25, 2007
of the Court of Appeals (CA) in CA-G.R. CV No. 70666, and the Resolution 2 dated
August 28, 2008 denying petitioner's Motion for Reconsideration.
The factual and procedural antecedents are as follows:
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.3
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.4
On November 11, 1999, respondent filed a complaint before the Regional Trial Court
(RTC) of Cebu City for sum of money, replevin, attorneys 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 attorneys fees, litigation expenses and costs. 5

On November 29, 1999, the RTC issued an Order 6 allowing the issuance of a writ of
replevin on the subject heavy equipments.
On December 9, 1999, Sheriff Doroteo P. Cortes proceeded at petitioners given
address for the purpose of serving the summons, together with the complaint, writ
of replevin and bond. However, the Sheriff failed to serve the summons personally
upon the petitioner, since the latter was not there. The Sheriff then resorted to
substituted service by having the summons and the complaint received by a certain
Rolando Bonayon, a security guard of the petitioner. 7
Petitioner failed to file any responsive pleading, which prompted respondent to
move for the declaration of defendant in default. On January 12, 2000, the RTC
issued an Order declaring defendant in default and, thereafter, allowed respondent
to present its evidence ex parte.
On December 15, 2000, after respondent presented its evidence, the RTC rendered
a Decision against the petitioner, thus:
1. By adjudicating and adjudging plaintiffs right of ownership and possession
over the subject units mentioned and described in the complaint, and which
were already seized and turned over to the plaintiff by virtue of the writ of
replevin.
2. Ordering defendants to pay to plaintiff the sum of (sic) equivalent to 25%
of the total amount recovered or value of the heavy equipments possessed as
attorneys fees, and to reimburse no less than P15,000.00 as expenses for
litigation, plus the cost of the premium of replevin bond in the amount
of P11,333.50.8
Aggrieved, petitioner sought recourse before the CA, docketed as CA-G.R. CV No.
70666. Petitioner argued that the RTC erred in concluding that the substituted
service of summons was valid, and that, consequently, there was error on the part
of the RTC when it declared him in default, in proceeding with the trial of the case,
and rendering an unfavorable judgment against him.
On July 25, 2007, the CA rendered a Decision 9 affirming the Decision of the RTC, the
decretal portion of which reads:
WHEREFORE, IN LIGHT OF THE FOREGOING, the Decision of the Regional Trial Court
of Cebu, Branch 17, in Civil Case No. CEB-24551, rendered on December 15, 2000,
is hereby AFFIRMED with the sole modification as to award of attorneys fees, which
is hereby reduced to 10% of the value of the heavy equipments recovered.
SO ORDERED.10
Ruling in favor of the respondent, the CA opined, among others, that the
requirement of due process was complied with, considering that petitioner actually
received the summons through his security guard. It held that where the summons
was in fact received by the defendant, his argument that the Sheriff should have

first tried to serve summons on him personally before resorting to substituted


service of summons deserves scant consideration. Thus, in the interest of fairness,
the CA said that the process servers neglect or inadvertence in the service of
summons should not unduly prejudice the respondents right to speedy justice.
The CA also noted that petitioner failed to set up a meritorious defense aside from
his contention that summons was not properly served.1wphi1 It went further and
decided the case on the merits and ruled that petitioner has an unpaid obligation
due to respondent for the heavy machineries he purchased from the latter. It,
however, reduced the amount of attorneys fees awarded to 10% of the value of the
heavy equipments recovered.
Petitioner filed a Motion for Reconsideration,
Resolution11 dated August 28, 2008.

but

it

was

denied

in

the

Hence, the petition assigning the following errors:


I
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN
DEFIANCE OF LAW AND JURISPRUDENCE IN FINDING THAT THE TRIAL COURT
ACQUIRED JURISDICTION OVER THE PERSON OF THE DEFENDANT EVEN WHEN
THE SUBSTITUTED SERVICE OF SUMMONS WAS IMPROPER. 12
II
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN
DEFIANCE OF LAW AND JURISPRUDENCE IN HOLDING THAT HEREIN
PETITIONER SHOULD HAVE SET UP A MERITORIOUS DEFENSE EVEN WHEN
THE SUMMONS WAS IMPROPERLY SERVED.13
Petitioner argues that there was no valid substituted service of summons in the
present case. He maintains that jurisdiction over the person of the defendant is
acquired only through a valid service of summons or the voluntary appearance of
the defendant in court. Hence, when there is no valid service of summons and no
voluntary appearance by the defendant, any judgment of a court, which acquired no
jurisdiction over the defendant, is null and void.
On its part, respondent posits that the RTC acquired jurisdiction over the person of
the petitioner and the judgment by default of the RTC was based on facts, law, and
jurisprudence and, therefore, should be enforced against the petitioner.
The petition is meritorious.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the
other hand, jurisdiction over the defendants in a civil case is acquired either through
the service of summons upon them or through their voluntary appearance in court
and their submission to its authority.14

As a rule, summons should be personally served on the defendant. It is only when


summons cannot be served personally within a reasonable period of time that
substituted service may be resorted to. 15 Section 7, Rule 14 of the Rules of Court
provides:
SEC. 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 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.
It is to be noted that in case of substituted service, there should be a report
indicating that the person who received the summons in the defendant's behalf was
one with whom the defendant had a relation of confidence, ensuring that the latter
would actually receive the summons. 16
Also, impossibility of prompt personal service must be shown by stating that efforts
have been made to find the defendant personally and that such efforts have failed.
This is necessary because substituted service is in derogation of the usual method
of service. It is a method extraordinary in character, hence, may be used only as
prescribed and in the circumstances authorized by statute. 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.17
In the case at bar, the Sheriffs Return provides:
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:
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.
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.
a) Excavator Hitachi with Serial No. WHO44-116-0743
b) Motorgrader with Serial No. N525PS-1014
c) Payloader with Serial No. KLD70-54224
After the issuance of the Sheriffs inventory receipt, the units were turned over to Al
Caballero and companion, representatives of plaintiff, who shipped the same to

Cebu to be deposited with MACH ASIA TRADING CORPORATION, Block 26 MacArthur


Highway, Reclamation Area, Cebu City, for safekeeping, subject to the provision of
Sec. 6, Rule 60 of the Rules of Court. 18
Clearly, it was not shown that the security guard who received the summons in
behalf of the petitioner was authorized and possessed a relation of confidence that
petitioner would definitely receive the summons. This is not the kind of service
contemplated by law. Thus, service on the security guard could not be considered
as substantial compliance with the requirements of substituted service.
Moreover, the reasoning advanced by the CA in ruling against the petitioner was
based merely on conjectures and surmises. The CA even went as far as to conclude
that the process servers neglect should not have unduly prejudiced the respondent,
thus:
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.
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.
x x x x.
Evidently, plaintiff-appellee cannot be penalized, through no fault of its own, for an
irregular or defective return on service of summons. x 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 19
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.

Sec. 8. Service upon entity without juridical personality

Sec. 9. Service upon prisoners


Sec. 10. Service upon minors and incompetents

Sec. 11. Service upon domestic private juridical entity


B.D. Long-Span Builders v. R.S. Ampeloquio, G.R. No. 169919,
September 11, 2009

FIRST DIVISION

B. D. LONG SPAN BUILDERS,


INC.,
Petitioner,

- versus -

G.R. No. 169919


Present:
PUNO, C.J., Chairperson,
CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.

R. S. AMPELOQUIO REALTY
Promulgated:
DEVELOPMENT, INC.,
Respondent.
September 11, 2009
x-----------------------------------------------------------------------------------------x

DECISION
CARPIO, J.:
The Case
This is a petition for review[1] of the Court of Appeals Decision[2] dated 14 July
2005 and Resolution dated 30 September 2005 in CA-G.R. CV No. 78259. The
Court of Appeals reversed the Decision [3] dated 14 January 2003 of the Regional Trial
Court of Muntinlupa City, Branch 206 (RTC).
The Antecedent Facts
Petitioner B. D. Long Span Builders, Inc. and respondent R. S. Ampeloquio
Realty Development, Inc. are corporations duly organized and existing under the
laws of the Republic of the Philippines.
On 31 July 1999, petitioner and respondent entered into an Agreement
wherein petitioner agreed to render rip rapping construction services at
respondents Ampeloquio International Resort in Ternate, Cavite, for the contract
price of P50 million. On the same day, the parties entered into a second Agreement
for the same construction project, stipulating a contract price of P30 million, hence
bringing the total contract price of the project to P80 million. Both Agreements
required petitioner to deposit with respondent a cash bond of one percent (1%) of
the contract price, to be returned to petitioner upon completion of the project. In
compliance, petitioner deposited with respondent a cash bond amounting
to P800,000.
Respondent failed to fulfill its obligations under the Agreements, resulting in
the cancellation of the project. Petitioner demanded the return of the P800,000 cash
bond, but respondent refused to do so. Petitioners legal counsel sent two (2)
demand letters dated 19 April 2002 and 10 May 2002 to respondent, but the latter
still refused to return the P800,000 cash bond.
On 24 September 2002, petitioner (plaintiff) filed with the RTC a complaint for
rescission of contract and damages against respondent (defendant). On 17 October
2002, summons and a copy of the complaint were served on respondent, through its
staff member, Romel Dolahoy.[4]
Respondent failed to file an Answer or any responsive pleading to the
complaint. Upon motion of petitioner, the RTC issued an Order dated 29 November
2002, declaring respondent in default, and allowing petitioner to present
evidence ex parte.

The Trial Courts Ruling


On 14 January 2003, the RTC rendered a Decision, the dispositive portion of
which reads:
WHEREFORE, finding preponderance of evidence in support of
the instant complaint, the same is granted.
Judgment is rendered declaring the aforesaid contracts entered into by
plaintiff with defendant, both dated July 31, 1999 for the rip rapping construction
project at the Ampeloquio International Resort in Ternate, Cavite, as RESCINDED.
Moreover, defendant corporation is ordered to:
1) Return the amount of P800,000.00 posted by the plaintiff as cash bond
with legal interest accruing thereto from the time of its demand until fully paid;
2) Pay the plaintiff the amount of P50,000.00 as nominal damages;
3) Pay the plaintiff the amount of P100,000.00 as exemplary damages;
4) Pay the plaintiff the amount of P50,000.00 as and by way of attorney's
fees; and
5) Pay the cost of suit in the amount of P10,539.00.
SO ORDERED.[5]

The Court of Appeals Ruling


Upon receipt of the RTC decision, respondent filed a Notice of Appeal dated
12 February 2003 with the Court of Appeals. After considering the pleadings filed by
petitioner and respondent, the Court of Appeals rendered judgment [6] which
reversed and set aside the decision of the RTC. The dispositive portion of the Court
of Appeals Decision reads:
WHEREFORE, in view of the foregoing, the decision dated
January 14, 2003 of the Regional Trial Court, Branch 206, Muntinlupa
City in Civil Case No. 02-217 is hereby REVERSED and SET ASIDE.
SO ORDERED.[7]
Petitioner filed a Motion for Reconsideration, but this was denied by the Court
of Appeals in its Resolution of 30 September 2005. [8]

Hence, this appeal.


The Issue
The sole issue for resolution in this case is whether the Court of Appeals erred
in ruling that there was invalid service of summons upon respondent, and hence the
trial court did not acquire jurisdiction over said respondent.

The Courts Ruling


We find the appeal without merit.
Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint. On the other hand, jurisdiction over the defendants in a civil case is
acquired either through the service of summons upon them or through their
voluntary appearance in court and their submission to its authority. [9] The service of
summons is a vital and indispensable ingredient of due process. [10] 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. [11]
Section 11 of Rule 14 of the 1997 Rules of Civil Procedure states:
SEC. 11. Service upon domestic private juridical entity. When
the defendant is a corporation, partnership or association organized
under the laws of the Philippines with a juridical personality, service
may be made on the president, managing partner, general manager,
corporate secretary, treasurer, or in-house counsel.

As a rule, summons should be personally served on the defendant. In case of


a domestic private juridical entity, the service of summons must be made upon an
officer who is named in the statute (i.e., the president, managing partner, general
manager, corporate secretary, treasurer, or in-house counsel), otherwise, the
service is insufficient.[12] 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.
[13]
However, if the summons cannot be served on the defendant personally within a
reasonable period of time, then substituted service may be resorted to. Section 7 of
Rule 14 provides:

SEC. 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 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.

Nonetheless, the impossibility of prompt personal service must be shown by


stating that efforts have been made to find the defendant personally and that such
efforts have failed.[14] 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.
[15]
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.[16]

In Orion Security Corporation v. Kalfam Enterprises, Inc.,[17] this Court held


that in case of substituted service, there should be a report indicating that the
person who received the summons in the defendants behalf was one with whom
the defendant had a relation of confidence ensuring that the latter would actually
receive the summons.

In this case, the Return by Process Server provides:

This is to certify that:


On October 17, 2002 at about 11:00 o'clock in the morning,
undersigned tried to cause the service of the Summons together with
the attached complaint & its annexes in the above-entitled case to the
defendant at his given address on record. Mr Romel Dalahoy, a staff of
said Realty received the said Summons with the attached complaint &
its annexes as evidenced by the former's signature as appearing on the
original copy of the aforesaid Summons.

Henceforth, the said Summons with the attached complaint & its annexes to Atty.
Evangeline V. Tiongson, Clerk of Court V, this Court, is respectfully returned, DULY
SERVED, by substituted service.
October 17, 2002, Muntinlupa City
Angelito C. Reyes
Process Server[18]

Clearly, the summons was not served personally on the defendant (respondent)
through any of the officers enumerated in Section 11 of Rule 14; rather, summons
was served by substituted service on the defendants staff member, Romel
Dolahoy. Substituted service was resorted to on the servers first attempt at service
of summons, and there was no indication that prior efforts were made to render
prompt personal service on the defendant.

Moreover, nothing on record shows that Romel Dolahoy, the staff member who
received the summons in respondents behalf, shared such relation of confidence
ensuring that respondent would surely receive the summons. Thus, following our
ruling inOrion, we are unable to accept petitioners contention that service on Romel
Dolahoy constituted substantial compliance with the requirements of substituted
service.

Petitioners contention that respondents filing of Notice of Appeal effectively


cured any defect in the service of summons is devoid of merit. It is well-settled that
a defendant who has been declared in default has the following remedies, to wit: (1)
he may, at any time after discovery of the default but before judgment, file a
motion, under oath, to set aside the order of default on the ground that his failure to
answer was due to fraud, accident, mistake or excusable neglect, and that he has a
meritorious defense; (2) if judgment has already been rendered when he discovered
the default, but before the same has become final and executory, he may file a
motion for new trial under Section 1(a) of Rule 37; (3) if he discovered the default
after the judgment has become final and executory, he may file a petition for relief
under Section 2 of Rule 38; and (4) he may also appeal from the judgment rendered
against him as contrary to the evidence or to the law, even if no petition to set
aside the order of default has been presented by him. [19] Thus, respondent, which

had been declared in default, may file a notice of appeal and question the validity of
the trial courts judgment without being considered to have submitted to the trial
courts authority.

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals


Decision dated 14 July 2005 and Resolution dated 30 September 2005 in CA-G.R. CV
No. 78259. Let the case be REMANDED to the trial court for further proceedings
upon valid service of summons to respondent.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

Tung Ho Steel v. Ting Guan, G.R. No. 182153, April 7, 2014


G.R. No. 182153

April 7, 2014

TUNG
HO
STEEL
ENTERPRISES
vs.
TING GUAN TRADING CORPORATION, Respondent.

CORPORATION, Petitioner,

DECISION
BRION, J.:
We resolve the petition for review on, certiorari 1 filed by petitioner Tung Ho Steel
Enterprises Corp. (Tung Ho) to challenge the July 5, 2006 decision 2 and the March
12, 2008 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 92828.
The Factual Antecedents
Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of
China.4 On the other hand, respondent Ting Guan Trading Corp. (Ting Guan) is a
domestic corporation organized under the laws of the Philippines. 5
On January 9, 2002, Ting Guan obligated itself under a contract of sale to deliver
heavy metal scrap iron and steel to Tung Ho. Subsequently, Tung Ho filed a request
for arbitration before the ICC International Court of Arbitration (ICC) in Singapore

after Ting Guan failed to deliver the full quantity of the promised heavy metal scrap
iron and steel.6
The ICC ruled in favor of Tung Ho on June 18, 2004 and ordered Ting Guan to pay
Tung Ho the following: (1) actual damages in the amount of US$ 659,646.15 with
interest of 6% per annum from December 4, 2002 until final payment; (2) cost of
arbitration in the amount of US $ 47,000.00; and (3) legal costs and expenses in the
amount of NT $ 761,448.00 and US $ 34,552.83. 7
On October 24, 2004, Tung Ho filed an action against Ting Guan for the recognition
and enforcement of the arbitral award before the Regional Trial Court (RTC) of
Makati, Branch 145. Ting Guan moved to dismiss the case based on Tung Hos lack
of capacity to sue and for prematurity. Ting Guan subsequently filed a supplemental
motion to dismiss based on improper venue. Ting Guan argued that the complaint
should have been filed in Cebu where its principal place of business was located. 8
The Proceedings before the RTC
The RTC denied Ting Guans motion to dismiss in an order dated May 11, 2005. Ting
Guan moved to reconsider the order and raised the RTCs alleged lack of jurisdiction
over its person as additional ground for the dismissal of the complaint. Ting Guan
insisted that Ms. Fe Tejero, on whom personal service was served, was not its
corporate secretary and was not a person allowed under Section 11, Rule 14 of the
Rules of Court to receive a summons. It also asserted that Tung Ho cannot enforce
the award in the Philippines without violating public policy as Taiwan is not a
signatory to the New York Convention.9
The RTC denied the motion in an order dated November 21, 2005 and ruled that
Ting Guan had voluntarily submitted to the courts jurisdiction when it raised other
arguments apart from lack of jurisdiction in its motion to dismiss.
The Proceedings before the CA
Ting Guan responded to the denials by filing a petition for certiorari before the CA
with an application for the issuance of a temporary restraining order and a writ of
preliminary injunction.10
In its Memorandum, Tung Ho argued that a Rule 65 petition is not the proper
remedy to assail the denial of a motion to dismiss. It pointed out that the proper
recourse for Ting Guan was to file an answer and to subsequently appeal the case.
It also posited that beyond the reglementary period for filing an answer, Ting Guan
was barred from raising other grounds for the dismissal of the case. Tung Ho also
claimed that the RTC acquired jurisdiction over the person of Ting Guan since the
return of service of summons expressly stated that Tejero was a corporate
secretary.11
In its decision dated July 5, 2006, the CA dismissed the complaint for lack of
jurisdiction over the person of Ting Guan. The CA held that Tung Ho failed to
establish that Tejero was Ting Guans corporate secretary. The CA also ruled that a

petition for certiorari is the proper remedy to assail the denial of a motion to dismiss
if the ground raised in the motion is lack of jurisdiction. Furthermore, any of the
grounds for the dismissal of the case can be raised in a motion to dismiss provided
that the grounds were raised before the filing of an answer. The CA likewise ruled
that Tung Ho properly filed the complaint before the RTC-Makati. 12
Subsequently, both parties moved to partially reconsider the CA decision. Tung Ho
reiterated that there was proper service of summons. On the other hand, Ting Guan
sought to modify the CA decision with respect to the proper venue of the case. The
CA denied Ting Guans motion for partial reconsideration in an order dated
December 5, 2006.13
Ting Guan immediately proceeded to file a petition for review on certiorari before
this Court to question the CAs rulings as discussed below. In the interim (on
February 11, 2008), Tung Ho (whose motion for reconsideration of the CA decision
was still pending with that court) filed a "Motion to Supplement and Resolve Motion
for Reconsideration" before the CA. In this motion, Tung Ho prayed for the issuance
of an alias summons if the service of summons had indeed been defective, but its
motion proved unsuccessful.14
It was not until March 12, 2008, after the developments described below, that the
CA finally denied Tung Hos partial motion for reconsideration for lack of merit.
Ting Guans Petition before this Court
(G.R. No. 176110)
Ting Guans petition before this Court was docketed as G.R. No. 176110. Ting Guan
argued that the dismissal of the case should be based on the following additional
grounds: first, the complaint was prematurely filed; second, the foreign arbitral
award is null and void; third, the venue was improperly laid in Makati; and lastly, the
enforcement of the arbitral award was against public policy. 15
On April 24, 2007, Tung Ho filed its Comment dated April 24, 2007 in G.R. No.
176110, touching on the issue of jurisdiction, albeit lightly. Tung Ho complained in
its Comment that Ting Guan engaged in dilatory tactics when Ting Guan belatedly
raised the issue of jurisdiction in the motion for reconsideration before the RTC.
However, Tung Ho did not affirmatively seek the reversal of the July 5, 2006
decision. Instead, it merely stated that Ting Guans petition "cannot be dismissed on
the ground that the summons was wrongfully issued as the petitioner can always
move for the issuance of an alias summons to be served". Furthermore, Tung Ho
only prayed that Ting Guans petition be denied in G.R. No. 176110 and for other
just and equitable reliefs. In other words, Tung Ho failed to effectively argue its case
on the merits before the Court in G.R. No. 176110.
On June 18, 2007, we issued our Resolution denying Ting Guans petition for lack of
merit. On November 12, 2007, we also denied Ting Guans motion for
reconsideration. On January 8, 2008, the Court issued an entry of judgment in Ting
Guans petition, G.R. No. 176110.

After the entry of judgment, we referred the matter back to the RTC for further
proceedings. On January 16, 2008, the RTC declared the case closed and
terminated. Its order stated:
Upon examination of the entire records of this case, an answer with caution was
actually filed by the respondent to which a reply was submitted by the petitioner.
Since the answer was with the qualification that respondent is not waiving its claim
of lack of jurisdiction over its person on the ground of improper service of summons
upon it and that its petition to this effect filed before the Court of Appeals was acted
favorably and this case was dismissed on the aforementioned ground and it
appearing that the Decision as well as the Order denying the motion for
reconsideration of the petitioner now final and executory, the Order of November 9,
2007 referring this petition to the Court Annexed Mediation for possible amicable
settlement is recalled it being moot and academic. This case is now considered
closed and terminated.
On February 6, 2008, Tung Ho moved to reconsider the RTC order. Nothing in the
records shows whether the RTC granted or denied this motion for reconsideration.
Tung Hos Petition before this Court
(G.R. No. 182153)
On May 7, 2008, Tung Ho seasonably filed a petition for review on certiorari to seek
the reversal of the July 5, 2006 decision and the March 12, 2008 resolution of the
CA. This is the present G.R. No. 182153 now before us.
Tung Ho reiterates that the RTC acquired jurisdiction over the person of Ting Guan. It
also claims that the return of service of summons is a prima facie evidence of the
recited facts i.e., that Tejero is a corporate secretary as stated therein and that the
sheriff is presumed to have regularly performed his official duties in serving the
summons. In the alternative, Tung Ho argues that Ting Guans successive motions
before the RTC are equivalent to voluntary appearance. Tung Ho also prays for the
issuance of alias summons to cure the alleged defective service of summons. 16
Respondent Ting Guans Position
(G.R. No. 182153)
In its Comment, Ting Guan submits that the appeal is already barred by res judicata.
It also stresses that the Court has already affirmed with finality the dismissal of the
complaint.17 Ting Guan also argues that Tung Ho raises a factual issue that is
beyond the scope of a petition for review on certiorari under Rule 45 of the Rules of
Court.18
The Issues
This case presents to us the following issues:

1) Whether the present petition is barred by res judicata; and


2) Whether the trial court acquired jurisdiction over the person of Ting Guan,
specifically:
a) Whether Tejero was the proper person to receive the summons; and
b) Whether Ting Guan made a voluntary appearance before the trial
court.
The Courts Ruling
We find the petition meritorious.
I. The Court is not precluded from ruling on the jurisdictional issue raised in the
petition
A. The petition is not barred by res judicata
Res judicata refers to the rule that a final judgment or decree on the merits by a
court of competent jurisdiction is conclusive on the rights of the parties or their
privies in all later suits on all points and matters determined in the former suit. 19 For
res judicata to apply, the final judgment must be on the merits of the case which
means that the court has unequivocally determined the parties rights and
obligations with respect to the causes of action and the subject matter of the case. 20
Contrary to Ting Guans position, our ruling in G.R. No. 176110 does not operate as
res judicata on Tung Hos appeal; G.R. No. 176110 did not conclusively rule on all
issues raised by the parties in this case so that this Court would now be barred from
taking cognizance of Tung Hos petition. Our disposition in G.R. No. 176110 only
dwelt on technical or collateral aspects of the case, and not on its merits.
Specifically, we did not rule on whether Tung Ho may enforce the foreign arbitral
award against Ting Guan in that case.
B. The appellate court cannot be ousted of jurisdiction until it finally disposes of the
case
The courts jurisdiction, once attached, cannot be ousted until it finally disposes of
the case. When a court has already obtained and is exercising jurisdiction over a
controversy, its jurisdiction to proceed to the final determination of the case is
retained.21 A judge is competent to act on the case while its incidents remain
pending for his disposition.
The CA was not ousted of its jurisdiction with the promulgation of G.R. No. 176110.
The July 5, 2006 decision has not yet become final and executory for the reason that
there remained a pending incident before the CA the resolution of Tung Hos
motion for reconsideration when this Court promulgated G.R. No. 176110. In this
latter case, on the other hand, we only resolved procedural issues that are divorced
from the present jurisdictional question before us. Thus, what became immutable in

G.R. No. 176110 was the ruling that Tung Hos complaint is not dismissible on
grounds of prematurity, nullity of the foreign arbitral award, improper venue, and
the foreign arbitral awards repugnance to local public policy. This leads us to the
conclusion that in the absence of any ruling on the merits on the issue of
jurisdiction, res judicata on this point could not have set in.
C. Tung Hos timely filing of a motion for reconsideration and of a petition for review
on certiorari prevented the July 5, 2006 decision from attaining finality
Furthermore, under Section 2, Rule 45 of the Rules of Court, Tung Ho may file a
petition for review on certiorari before the Court within (15) days from the denial of
its motion for reconsideration filed in due time after notice of the judgment. Tung
Hos timely filing of a motion for reconsideration before the CA and of a Rule 45
petition before this Court prevented the July 5, 2006 CA decision from attaining
finality. For this Court to deny Tung Hos petition would result in an anomalous
situation where a party litigant is penalized and deprived of his fair opportunity to
appeal the case by faithfully complying with the Rules of Court.
II. The trial court acquired jurisdiction over the person of Ting Guan
A. Tejero was not the proper person to receive the summons
Nonetheless, we see no reason to disturb the lower courts finding that Tejero was
not a corporate secretary and, therefore, was not the proper person to receive the
summons under Section 11, Rule 14 of the Rules of Court. This Court is not a trier of
facts; we cannot re-examine, review or re-evaluate the evidence and the factual
review made by the lower courts. In the absence of compelling reasons, we will not
deviate from the rule that factual findings of the lower courts are final and binding
on this Court.22
B. Ting Guan voluntarily appeared before the trial court
However, we cannot agree with the legal conclusion that the appellate court
reached, given the established facts. 23 To our mind, Ting Guan voluntarily appeared
before the trial court in view of the procedural recourse that it took before that
court. Its voluntary appearance is equivalent to service of summons. 24
As a basic principle, courts look with disfavor on piecemeal arguments in motions
filed by the parties. Under the omnibus motion rule, a motion attacking a pleading,
order, judgment, or proceeding shall include all objections then available. 25 The
purpose of this rule is to obviate multiplicity of motions and to discourage dilatory
motions and pleadings. Party litigants should not be allowed to reiterate identical
motions, speculating on the possible change of opinion of the courts or of the
judges thereof.
In this respect, Section 1, Rule 16 of the Rules of Court requires the defendant to file
a motion to dismiss within the time for, but before filing the answer to the complaint
or pleading asserting a claim. Section 1, Rule 11 of the Rules of Court, on the other
hand, commands the defendant to file his answer within fifteen (15) days after

service of summons, unless a different period is fixed by the trial court. Once the
trial court denies the motion, the defendant should file his answer within the
balance of fifteen (15) days to which he was entitled at the time of serving his
motion, but the remaining period cannot be less than five (5) days computed from
his receipt of the notice of the denial.26
Instead of filing an answer, the defendant may opt to file a motion for
reconsideration. Only after the trial court shall have denied the motion for
reconsideration does the defendant become bound to file his answer. 27 If the
defendant fails to file an answer within the reglementary period, the plaintiff may
file a motion to declare the defendant in default. This motion shall be with notice to
the defendant and shall be supported by proof of the failure. 28
The trial courts denial of the motion to dismiss is not a license for the defendant to
file a Rule 65 petition before the CA. An order denying a motion to dismiss cannot
be the subject of a petition for certiorari as the defendant still has an adequate
remedy before the trial court i.e., to file an answer and to subsequently appeal the
case if he loses the case. 29 As exceptions, the defendant may avail of a petition for
certiorari if the ground raised in the motion to dismiss is lack of jurisdiction over the
person of the defendant30 or over the subject matter.31
We cannot allow and simply passively look at Ting Guans blatant disregard of the
rules of procedure in the present case. The Rules of Court only allows the filing of a
motion to dismiss once.32 Ting Guans filing of successive motions to dismiss, under
the guise of "supplemental motion to dismiss" or "motion for reconsideration", is not
only improper but also dilatory.33 Ting Guans belated reliance on the improper
service of summons was a mere afterthought, if not a bad faith ploy to avoid the
foreign arbitral awards enforcement which is still at its preliminary stage after the
lapse of almost a decade since the filing of the complaint.
Furthermore, Ting Guans failure to raise the alleged lack of jurisdiction over its
person in the first motion to dismiss is fatal to its cause. Ting Guan voluntarily
appeared before the RTC when it filed a motion to dismiss and a "supplemental
motion to dismiss" without raising the RTCs lack of jurisdiction over its person. In
Anunciacion v. Bocanegra,34 we categorically stated that the defendant should raise
the affirmative defense of lack of jurisdiction over his person in the very first motion
to dismiss. Failure to raise the issue of improper service of summons in the first
motion to dismiss is a waiver of this defense and cannot be belatedly raised in
succeeding motions and pleadings.
Even assuming that Ting Guan did not voluntarily appear before the RTC, the CA
should have ordered the RTC to issue an alias summons instead. In Lingner & Fisher
GMBH vs. Intermediate Appellate Court35, we enunciated the policy that the courts
should not dismiss a case simply because there was an improper service of
summons. The lower courts should be cautious in haphazardly dismissing
complaints on this ground alone considering that the trial court can cure this defect
and order the issuance of alias summons on the proper person in the interest of
substantial justice and to expedite the proceedings.
III. A Final Note

As a final note, we are not unaware that the present case has been complicated by
its unique development. The complication arose when the CA, instead of resolving
the parties separate partial motions for reconsideration in one resolution,
proceeded to first resolve and to deny Ting Guans partial motion. Ting Guan,
therefore, went to this Court via a petition for review on certiorari while Tung Hos
partial motion for reconsideration was still unresolved.
Expectedly, Ting Guan did not question the portions of the CA decision favorable to
it when it filed its petition with this Court. Instead, Ting Guan reiterated that the CA
should have included additional grounds to justify the dismissal of Tung Hos
complaint with the RTC. The Court denied Ting Guans petition, leading to the entry
of judgment that improvidently followed. Later, the CA denied Tung Hos partial
motion for reconsideration, prompting Tung Hos own petition with this Court, which
is the present G.R. No. 182153.
Under the Rules of Court, entry of judgment may only be made if no appeal or
motion for reconsideration was timely filed. 36 In the proceedings before the CA, if a
motion for reconsideration (including a partial motion for reconsideration 37) is timely
filed by the proper party, execution of the CAs judgment or final resolution shall be
stayed.38 This rule is applicable even to proceedings before the Supreme Court, as
provided in Section 4, Rule 56 of the Rules of Court. 39
In the present case, Tung Ho timely filed its motion for reconsideration with the CA
and seasonably appealed the CAs rulings with the Court through the present
petition (G.R. No. 182153).
To now recognize the finality of the Resolution of Ting Guan petition (G.R. No.
176110) based on its entry of judgment and to allow it to foreclose the present
meritorious petition of Tung Ho, would of course cause unfair and unjustified injury
to Tung Ho. First, as previously mentioned, the Ting Guan petition did not question
or assail the full merits of the CA decision. It was Tung Ho, the party aggrieved by
the CA decision, who substantially questioned the merits of the CA decision in its
petition; this petition showed that the CA indeed committed error and Tung Hos
complaint before the RTC should properly proceed. Second, the present case is for
the enforcement of an arbitral award involving millions of pesos. Tung Ho already
won in the foreign arbitration and the present case is simply for the enforcement of
this arbitral award in our jurisdiction. Third, and most importantly, Tung Ho properly
and timely availed of the remedies available to it under the Rules of Court, which
provide that filing and pendency of a motion for reconsideration stays the execution
of the CA judgment. Therefore, at the time of the entry of judgment in G.R. No.
176110 in the Supreme Court on January 8, 2008, the CA decision which the Court
affirmed was effectively not yet be final.
Significantly, the rule that a timely motion for reconsideration stays the execution of
the assailed judgment is in accordance with Rule 51, Section 10 (Rules governing
the CA proceedings) which provides that "entry of judgments may only be had if
there is no appeal or motion for reconsideration timely filed. The date when the
judgment or final resolution becomes executory shall be deemed as the date of its
entry." Incidentally, this procedure also governs before Supreme Court
proceedings.40 Following these rules, therefore, the pendency of Tung Hos MR with

the CA made the entry of the judgment of the Court in the Ting Guan petition
premature and inefficacious for not being final and executory.
Based on the above considerations, the Court would not be in error if it applies its
ruling in the case of Realty Sales Enterprises, Inc. and Macondray Farms, Inc. v.
Intermediate Appellate Court, et al.41 where the Court, in a per curiam resolution,
ruled that an entry of judgment may be recalled or lifted motu proprio when it is
clear that the decision assailed of has not yet become final under the rules:
The March 6, 1985 resolution denying reconsideration of the January 30, 1985
resolution was, to repeat, not served on the petitioners until March 20, 1985 - and
therefore the Jan. 30, 1985 resolution could not be deemed final and executory until
one (1) full day (March 21) had elapsed, or on March 22, 1985 (assuming inaction on
petitioners' part.) The entry of judgment relative to the January 30, 1985 resolution,
made on March 18, 1985, was therefore premature and inefficacious. An entry of
judgment does not make the judgment so entered final and execution when it is not
so in truth. An entry of judgment merely records the fact that a judgment, order or
resolution has become final and executory; but it is not the operative act that make
the judgment, order or resolution final and executory. In the case at bar, the entry of
judgment on March 18, 1985 did not make the January 30, 1985 resolution subject
of the entry, final and executory, As of the date of entry, March 18, 1985, notice of
the resolution denying reconsideration of the January 30, 1985 resolution had not
yet been served on the petitioners or any of the parties, since March 18, 1985 was
also the date of the notice (and release) of the March 6, 1985 resolution denying
reconsideration.1wphi1
According to this ruling, the motu proprio recall or setting aside of the entry of final
judgment was proper and "entirely consistent with the inherent power of every
court inter alia to amend and control its process and orders so as to make them
conformable to law and justice [Sec. 5(g), Rule 135, Rules of Court,]. That the recall
has in fact served to achieve a verdict consistent with law and justice is clear from
the judgment subsequently rendered on the merits." This course of action is
effectively what the Court undertook today, adapted of course to the circumstances
of the present case.
In light of these premises, we hereby REVERSE and SET ASIDE the July 5, 2006
decision and the March 12, 2008 resolution of the Court of Appeals in CA-G.R. SP No.
92828. SP. Proc. No. 11.-5954 is hereby ordered reinstated. Let the records of this
case be remanded to the court of origin for further proceedings. No costs.
SO ORDERED.
ARTURO D. BRION
Associate Justice

Cathay Metal v. Laguna West, G.R. No. 172204, July 2, 2014


G.R. No. 172204

July 2, 2014

CATHAY METAL CORPORATION, Petitioner,


vs.
LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., Respondent.
DECISION
LEONEN, J.:
The Rules of Court governs court procedures, including the rules on service of
notices and summons. The Cooperative Code p~ovisions on notices cannot replace
the rules on summons under the Rules of Court. Rule 14, Section 11 of the Rules of
Court provides an-exclusive enumeration of the persons authorized to receive
summons for juridical entities. These persons are the juridical entity's president,
managing partner, general manager, corporate secretary, treasurer, or in-house
counsel.
This petition under Rule45 assails the Court of Appeals decision dated November
25, 2005, and its resolution dated April 5, 2006. The Court of Appeals remanded the
case to the trial court for respondents presentation of evidence.
Respondent Laguna West Multi-Purpose Cooperative is a cooperative recognized
under Republic Act No. 6657 or the Comprehensive Agrarian Reform Law. 1 It
allegedly entered into a joint venture agreement with farmer-beneficiaries through
Certificates of Land Ownership Award (CLOA) in Silang, Cavite. 2 While respondent
was negotiating with the farmer-beneficiaries, petitioner CathayMetal Corporation
entered into Irrevocable Exclusive Right to Buy (IERB) contracts with the same
farmerbeneficiaries.3 Under the IERB, the farmer-beneficiaries committed
themselves to sell to petitioner their agricultural properties upon conversion to
industrial or commercial properties or upon expiration of the period of prohibition
from transferringtitle to the properties.4
In 1996, respondent caused the annotation of its adverse claim on the farmerbeneficiaries certificates of title.5
On November 9, 1998, the Department of Agrarian Reform issued an order
converting the properties from agricultural to mixed use. 6
In 1999, petitioner and the farmer-beneficiaries executed contracts of sale of the
properties.7 Transfer certificates of titlewere also issued in the name of petitioner in
the same year.8 The annotations in the original titles were copied to petitioner's
titles.9
Respondents Vice-President, Orlando dela Pea, sent two letters dated March 20,
2000 and April 12, 2000 to petitioner, informing it of respondents claim to the
properties.10 Petitioner did not respond.11
On September 15, 2000,petitioner filed a consolidated petition for cancellation of
adverse claims on its transfer certificates of title with the Regional Trial Court of
Tagaytay City.12 It served a copy of the petition by registered mail to respondent's

alleged official address at "Barangay Mayapa, Calamba, Laguna." 13 The petition was
returned to sender because respondent could not be found at that address. 14 The
postman issued a certification stating that the reason for the return was that the
"cooperative [was] not existing." 15 Petitioner allegedly attempted to serve the
petition upon respondent personally. 16 However, this service failed for the same
reason.17
Upon petitioner's motion, the Regional Trial Court issued an order on December 15,
2000 declaring petitioners substituted service, apparently by registered mail, 18 to
have been effected,19 thus:
Acting on the "Manifestation And Motion For Substituted Service" filed by petitioner
Cathay Metal Corporation, thru counsel, and finding the reasons therein statedto be
meritorious, the same is hereby GRANTED.
Accordingly, this Court hereby declares that substituted service of the Consolidated
Petition for Cancellation of Adverse Claim on the President of Laguna West MultiPurpose Cooperative, Inc. has been effected. The latter ishereby given a period of
fifteen (15) days from the delivery of said pleadings to the Clerk of Court within
which to file their opposition to the Consolidated petition for cancellation of adverse
claim.20
Petitioner was later allowed to present its evidence ex parte. 21
Upon learning that a case involvingits adverse claim was pending, respondent,
through Mr. Orlando dela Pea, filed a manifestation and motion, alleging that
respondent never received a copy of the summons and the petition. 22 It moved for
the service of the summons and for a copy of the petition to be sent to No. 160,
Narra Avenue, Looc, Calamba, Laguna.23
The Regional Trial Court granted respondent's manifestation and motion on March
16, 2001.24 It ordered that respondent be furnished with a copy of the petition at its
new address.25
Instead of furnishing respondent with a copy of the petition, petitioner filed on April
16, 2001 a motion for reconsideration of the March 16, 2001 Regional Trial Court
order.26 In its motion for reconsideration, petitioner argued that the case was
already submitted for decision after all of petitioners evidence had been admitted,
and a memorandum had been filed. 27 Therefore, it was too late for respondent to
ask the court that it be furnished with a copy of the petition. 28 Moreover, because
respondent was already in default, a manifestation and motion, without allegations
of grounds for a motion to lift order of default, would not give it personality to
participate in the proceedings. 29 Petitioner sent a copy of the motion for
reconsideration to respondent by registered mail and set the motion for hearing on
April 20, 2001.30 Respondent failed to appear atthe hearing on the motion for
reconsideration. On April 20, 2001, the Regional Trial Court submitted the motion for
resolution.31

Respondent received a copy of the motion for reconsideration after the hearing. On
August 13, 2001, respondent filed a motion for leave to admit attached
opposition32 and opposition to petitioners motion for reconsideration of the March
16,2001 Regional Trial Court order. 33 Respondent argued that since petitioners ex
parte presentation of evidence was secured through extrinsic fraud, there should be
a new trial to give respondent a fair day in court. 34 This was opposed by petitioner
on September 6, 2001.35 Petitioner emphasized its alleged compliance with the
Cooperative Code rule on notices and respondents failure to file its comment
despite the courts order that approved petitioners substituted service. 36 Petitioner
further pointed out that it had always questioned the authority of Mr. dela Peato
act for respondent.37
On January 16, 2003, the Regional Trial Court granted petitioner's motion for
reconsideration.38 It found that respondent's alleged representatives failed to prove
their authorities to represent respondent. 39 It ruled that service should be made to
the address indicated in its Cooperative Development Authority Certificate of
Registration.40 The case was declared submitted for decision. 41
Respondent filed a motion for reconsideration of the January 16, 2003 order of the
Regional Trial Court.42
On March 21, 2003, the Regional Trial Court issued a decision granting petitioners
petition for cancellation of annotations. 43 The Register of Deeds of Cavite was
ordered to cancel the annotations onthe certificates of title. 44
On April 3, 2003, the Regional Trial Court issued an order 45 rescinding its March 21,
2003 decision for having been prematurely rendered, thus:
This is regard to the Decision dated March 21, 2003 which the Court has rendered in
this particular case.
A review of the records show that the court for reasons unexplained, has committed
an error in judgment in rendering said decision unmindful of the fact thatthere is
still a pending incident (Oppositor Lagunas Motion for Reconsideration) which has
first to be resolved.
Fully aware that the error if allowed to remain unrectified would cause a grave
injustice and deeply prejudiced [sic] the herein respondent, the Court, faithfully
adhering to the principle enunciated by the Honorable Supreme Court in the case of
Astraquilio vs Javier, 13 CRA 125 which provides that:
"It is one of the inherent powers of the court to amend and control its process and
orders so as to make them conformable to law and justice. This power includes the
right to reverse itself, especially when in its opinion it has committed an error or
mistake in judgment, and that to adhere to its decision will cause injustice to a party
litigant."

do hereby, with deep and sincere apologies to the party-litigants, more particularly
to the herein respondent Laguna West Multi-Purpose Cooperative, Inc., RECALL and
RESCIND its Decision which was prematurely rendered. 46
In an order dated May 26, 2003, the Regional Trial Court denied respondents
motion for reconsideration of the January 16, 2003 order. 47
On June 23, 2003, the Regional Trial Court decided to grant 48 petitioner's petition for
cancellation of annotation on the basis of the following facts: 49
. . . These annotations were subsequently copied to the Transfer Certificates of Titles
over the parcels of land subject of this suit that were issued in the name of Cathay. .
. . Upon verification, Cathay found that Laguna did not file any claim against the
farmer-beneficiaries or Cathay since the time the annotations were made. . . .
Moreover, affidavits of adverse claim and supporting documents that Laguna
supposedly submitted to the Register of Deeds of Cavite were certified bythe
Register of Deeds to be inexistent in the registry's vault. . . . Moreover, the
Cooperative Development Authority likewise certified that Laguna has been
inoperative since 1992 and during the period when the annotations were made in
1996. The Bureau ofPosts has also certified that Laguna's office at Barangay
Mayapa, Calamba, Laguna, its official address as indicated in its Articles of
Incorporation and Confirmation of Registration is "closed". 50
According to the Regional Trial Court, since respondent was inoperative at the time
when its adverse claims were annotated, "there [was] no reason for [it] to believe
that the person who caused the annotations of adverse claim on the titles of the
farmer-beneficiaries . . . was authorized to do so." 51
The Regional Trial Court ordered the Register of Deeds to cancel the annotations on
the transfer certificates of title. 52 It held that Section 70 of Presidential Decree No.
1529 or the Property Registration Decree declares that "an adverse claim is
effective [only]for a period of thirty (30) days and may be cancelled upon filing of a
verified petition after the lapse of this period." 53 Since the 30-day period had already
lapsed, the annotations were already the subject of cancellation. 54
Respondent appealed to the Court of Appeals based on two grounds:
1) Petitioner-appellee secured the favorable orders of the lower court in fraud
of appellant LagunaWest by sending the petition, all other pleadings, and
notices to its former address, thus, denying its day in court; and
2) The trial court erred in applying the rule on substituted service, thus, it did
not validly acquire jurisdiction over the appellant. 55
The Court of Appeals granted respondent's appeal on November 25, 2005. The
dispositive portion of the Court of Appeals' decision reads:

WHEREFORE, premises considered, the appeal is hereby granted. The case is


ordered remanded for appellant's presentation of evidence and thereafter, for the
trial court to render judgment, albeit with dispatch. 56
The Court of Appeals ruled thatthere was no valid service of summons upon
respondent in accordance with Rule 14, Section 11 of the Revised Rules of Civil
Procedure.57 Hence, the "court acquire[d] no jurisdiction to pronounce a judgment in
the case."58
The Court of Appeals denied petitioner's motion for reconsideration on April 5,
2006.59
The issue in this case is whether respondent was properly served with summons or
notices of the hearing on the petition for cancellation of annotations of adverse
claim on the properties.
Petitioner emphasized the following points:
Summons was served upon respondentat its official registered address at Barangay
Mayapa, Calamba, Laguna.60Since no one received the summons, petitioner insisted
that the trial court issue an order to effect substituted service. 61 Respondent still did
not file its answer.62
Later, a certain Orlando dela Pea would filea manifestation and motion dated
February 27, 2001 purportedly on behalf of respondent. 63 Mr. dela Pea claimed that
he was an authorized representative of respondent and that respondent was already
holding office at No. 160, Narra Avenue, Looc, Calamba, Laguna, which was not the
official address of respondent. 64 Mr. dela Pea never submitted proof of his authority
torepresent respondent. He was also never a memberof respondent cooperative. 65
However, Mr. dela Pea was stillallowed to file an answer or opposition. 66 Petitioner
filed a motion for reconsideration opposing the order allowing him to file an answer
or opposition on behalf of respondent. 67Respondent failed to oppose this. He did not
participate further.68 Later, a certain Mr. Geriberto Dragon would claim to be an
officer of respondent. He would file an opposition on its behalf after the period to file
an opposition had lapsed.69 Mr. Dragon alleged that respondents address was at No.
167, Barangay Looc, Calamba, Laguna.70Like Mr. dela Pea, Mr. Dragon had never
been a member or officer of respondent.71
Petitioner argued that Mr. dela Pea and Mr. Dragon never submitted proof of their
authority to represent respondent.72 They were never officers or members of
respondent cooperative.73 Therefore, petitioner cannot be blamed for being
skeptical about Mr. dela Peas and Mr. Dragons claims of authority. 74
Moreover, Mr. dela Pea and Mr. Dragon could not claim to have been authorized to
represent respondent because it was determined to be inoperative since 1992. 75 In
2002, respondent was dissolved by the Cooperative Development Authority. 76

Petitioners motion for reconsideration of the trial court order allowing respondent to
file an answer or opposition to the petition for cancellation of annotation was
granted because of Mr. dela Peas and Mr. Dragons failure to show evidence
ofauthority to act on behalf of respondent.77
Petitioner argued that summons could only be validly served to respondents official
address as indicated in its registration with the Cooperative Development
Authority.78 This is because respondent as a registered cooperative is governed by
Republic Act No. 6938, a substantive law that requires summons to be servedto
respondents official address.79
Substantive law takes precedence over procedural rules. 80
Petitioner cites Article 52 of Republic Act No. 6938:
Article 52. Address. Every cooperative shall have an official postal address to
which all notice and communications shall be sent. Such address and every change
thereof shall be registered with the Cooperative Development Authority.
Further, petitioner argues that there is no law that requires parties to serve
summons to "every unsubstantiated address alleged by [a] party." 81
Petitioner also argued that the Court of Appeals erred when it remanded the case
for trial because respondent already admitted that its adverse claims were based
not on a right over the property but on the "alarm[ing] . . . possibility of losing the
deal"82 with the owners of the property. There was no agreement yet vesting in
respondent any right over the properties. 83 Moreover, the annotations on the title
were made in 1996 when respondent was already inoperative. 84
Meanwhile, respondent emphasized thatit entered into a joint venture agreement
with the farmer-beneficiaries.85While in the process of negotiations, petitioner
suddenly entered into the picture by offering the farmer-beneficiaries an
IrrevocableExclusive Right to Buy (IERB) contracts. 86 It was then that respondent
caused the annotation of an adverse claim on the titles. 87
Respondent, through its Vice President, Mr. dela Pea, wrote two letters between
March and April 2000 relative to its adverse claims in an attempt to amicably settle
what seemed then as a brewing dispute. 88 These letters were written on
respondents letterheads indicating the address, No. 167, Barangay Looc, Calamba,
Laguna.89
Petitioner deliberately served summons upon respondent to its old address. 90 Later,
petitioner would be allowed to present evidence ex parte. 91
Moreover, respondent was unable to appear at the hearing on the motion for
reconsideration of the court order allowing respondent to file its answer or
opposition. Basedon the records, respondents failure to appear was due to
petitioner setting the hearing on April 20, 2001 and mailing respondents a copy of
the motion on April 16, 2001 or just four (4) days before the hearing. 92

Respondent filed a motion for leave to admit attached opposition to petitioners


motion for reconsideration. This was opposed by petitioner. Pending respondents
motion for leave toadmit attached opposition, the trial court already issued its order
dated January 16, 2013, granting petitioners motion for reconsideration of the order
allowing respondent to file its answer or opposition to the petition for cancellation of
adverse claims.93
Respondent filed a motion for reconsideration of the order dated January 16, 2003.
While the said incidents were pending,the trial court rendered its decision dated
March 21, 2003, granting petitioners petition to cancel the annotations of adverse
claims.94 This, according to respondent, was a premature decision. 95
The trial court rescinded the March 21, 2003 decision. On May 26, 2003, the trial
court denied respondents motion for reconsideration. 96
Within the period allowed for respondent to file its petition for certiorari, the trial
court rendered judgment granting petitioners petition to cancel the annotations of
adverse claims on the title.97
Respondent appealed to the Court of Appeals. The appellate court remanded the
case to the lower court so that respondent could be allowed to present evidence. 98
Respondent argued that petitioner was not being fair when it served summons to
respondents old address despite knowledge of its actual address. 99
Moreover, respondent argued that itsrights over the property should be best
determined after trial.100
According to respondent, had there been a trial, it would have:
4.2.1 Presented documentary evidence that its negotiation with the former
landowners had earned for it part-ownership of the properties, or at the very
least, the exclusive authority to deal with potential buyers or developers of
the properties such as petitioner.
4.2.2 Offered in evidence the actual Joint Venture Agreements ("JVA")
between the former landowners and Laguna West whereby Laguna West had
made partial payment of the former landowners 40% share in the joint
venture. Laguna Westhad thus acquired interest over the properties, or had
the same or better right than the registered owner thereof.
4.2.3 Proved by competent evidence that the annotation sought to be
cancelled was not a simple adverse claim but qualifies as a registration of an
interest over the subject properties;
4.2.4 Presented Laguna Wests authorized representatives, Orlando dela
Pea, Geriberto Dragon and Ediza Saliva, and one or two of the original
landowners to testify on their dealings with Laguna West.

4.2.5 Called on the officers of the CD on questions about a cooperatives


address of record vis--vis its actualaddress as known to the party that the
cooperativehad previously been communicating with, in this case,
petitioner.101
We rule that respondent was not validly served with summons or notice of the
hearing. However, its annotations of adverse claims should be cancelled for being
based on a future claim.
I
Respondent was not validly served with summons
Republic Act No. 6938 of 1990 or the Cooperative Code of the Philippines provides
that cooperatives are mandated to have an official postal address to which notices
shall be sent, thus:
Art. 52. Address. Every cooperative shall have an official postal address to which
all notices and communications shall be sent. Such address and every change
thereof shall be registered with the Cooperative Development Authority.
This provision was retained in Article 51 of RepublicAct No. 9520 or the Philippine
Cooperative Codeof 2008. Article 51 provides:
Art. 51. Address. Every cooperativeshall have an official postal address to which all
notices and communications shall be sent. Such address and every change thereof
shall be registered with the Authority.
Relying on the above provision, petitioner argued that respondent was sufficiently
served with summons and a copy of its petition for cancellation of annotations
because it allegedly sent these documents to respondents official address as
registered with the Cooperative Development Authority. Petitioner further argued
that the Rules of Procedure cannot trump the Cooperative Code with respect to
notices. This is because the Cooperative Code is substantive law, as opposed to the
Rules of Procedure, which pertains only to matters of procedure.
Petitioner is mistaken.
The promulgation of the Rules of Procedure is among the powers vested only in this
court. Article VIII, Section 5(5) provides:
Sec. 5. The Supreme Court shall have the following powers:
....
(5) Promulgate rules concerning the protection and enforcement of constitutional
rights, pleading, practice, and procedure in all courts, the admission to the practice
of law,the integrated bar, and legal assistance to the underprivileged.Such rules
shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish,

increase, or modifysubstantive rights. Rules of procedure of special courts and


quasi-judicial bodies shall remain effective unless disapproved by the Supreme
Court.
This means that on matters relating toprocedures in court, it shall be the Rules of
Procedure that will govern. Proper court procedures shall be determined by the
Rules as promulgated by this court.
Service of notices and summons on interested parties in a civil, criminal, or special
proceeding is court procedure. Hence, it shall be governed by the Rules of
Procedure.
The Cooperative Code provisions may govern matters relating to cooperatives
activities as administered by the Cooperative Development Authority. However, they
are not procedural rules that will govern court processes. A Cooperative Code
provision requiring cooperatives to have an official address to which all notices and
communications shall be sent cannot take the place of the rules on summonsunder
the Rules of Court concerning a court proceeding.
This is not to say that the noticescannot be sent to cooperatives in accordance with
the Cooperative Code. Notices may be sent to a cooperatives official address.
However, service of notices sent to the official address in accordance with the
Cooperative Code may not be used as a defense for violations of procedures,
specially when such violation affects another partys rights.
Section 11, Rule 14 of the Rules ofCourt provides the rule on service of summons
upon a juridical entity. It provides that summons may be served upon a juridical
entity only through its officers. Thus:
Sec. 11. Service upon domestic private juridical entity. When the defendant is a
corporation, partnership or association organized under the laws of the Philippines
with a juridical personality, service may be made on the president, managing
partner, general manager, corporate secretary, treasurer, or in-house counsel.
We have already established that the enumeration in Section 11 of Rule 14 is
exclusive.102 Service of summons upon persons other than those officers
enumerated in Section 11 is invalid. 103 Even substantial compliance is not sufficient
service of summons.104
This provision of the rule does not limit service to the officers places of residence or
offices. If summons may not be served upon these persons personally at their
residences or offices, summons may be served upon any of the officers wherever
they may be found.
Hence, petitioner cannot use respondent's failure to amend its Articles of
Incorporation to reflect its new address as an excuse from sending or attempting to
send to respondent copies of the petition and the summons. The Rules of Court
provides that noticesshould be sent to the enumerated officers. Petitioner failed to
do this. Nonotice was ever sent to any of the enumerated officers.

Petitioner insists that it should not be made to inquire further as to the whereabouts
of respondent after the attempt to serve the summons by registered mail to
respondents address as allegedly indicated in its Articles of Incorporation. The
Rules does not provide that it needs to do so. However, it provides for service by
publication. Service by publication is available when the whereabouts of the
defendant is unknown. Section 14, Rule 14 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, or
whenever 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 time as the court
may order. (Emphasis supplied)
This is not a matter of acquiringjurisdiction over the person of respondent since this
is an action in rem. In an action in rem, jurisdiction over the person is not required
as long asthere is jurisdiction over the res. This case involves the issue of fair play
and ensuring that parties are accorded due process.
In this case, petitioner served summons upon respondent by registered mail and,
allegedly, by personal service at the office address indicated in respondents
Certificate of Registration. Summons was not served upon respondents officers. It
was also not published in accordance with the Rules of Court. As a result,
respondent was not given an opportunity to present evidence, and petitioner was
able to obtain from the Regional Trial Court an order cancelling respondents
annotations of adverse claims.
Respondent was, therefore, not validly served with summons.
II
Respondents
operation
authorizing
its
proceedings

alleged
does
a
behalf

not
person

bar
to
in

it
act

nonfrom
on
court

Petitioner argues that failure to serve the summons upon respondent was due to
respondent's non-operation and failure to amend its Articles of Incorporation to
reflectits new address. Petitioner's conclusion that respondent was no longer
operating was based only on the postmaster's certification. According to the
postmasters certification, it failed to serve the petition for cancellation of
annotation to respondents official address becauseof respondents nonexistence or
closure. Petitioner failed to consider that the postmaster was not in the position to
make a reliable statement as to the existence or closure of an entity.
Moreover, the Cooperative Development Authority's certification stating that
respondent was not submitting any financial report since 1992, which was proof of
its non-operation, was a mere statement of what was indicative of non-operation. It
was not yet a conclusive statement that respondent was not in operation.

In any case, even assuming that respondent was not operating, it might still
exercise its powers as a cooperative until it would get dissolved. Section 9 of
Republic Act No. 6938 provides the powers and capacities of registered
cooperatives.
Section 9. Cooperative Powers and Capacities.- A cooperative registered under this
Code shall have the following powers and capacities:
(1) To sue and be sued in its cooperative name;
(2) Of succession;
(3) To amend its articles of cooperation in accordance with the provisions of
this code;
(4) To adopt by-laws not contrary to law, morals or public policy, and to
amend and repeal the same in accordance with this Code;
(5) To purchase, receive, take orgrant, hold, convey, sell, lease, pledge,
mortgage, and otherwise deal with such real and personal property as the
transaction of the lawful affairs of the cooperative may reasonably and
necessarily require, subject to the limitations prescribed by law and the
Constitution;
(6) To enter into division, mergeror consolidation, as provided in this Code;
(7) To join federations or unions, as provided in this Code;
(8) To accept and receive grants, donations and assistance from foreign and
domestic sources; and
(9) To exercise such other powers granted in this Code or necessary to carry
out its purpose or purposes as stated in its articles of cooperation.
Prior to dissolution, a cooperative isentitled to the exercise of these powers. It may
engage indeals involving its properties or rights. It may cause the annotation of
claims it deems to have in order to protect such claim. Contrary to petitioners
claim, respondent is not prevented from authorizing persons to act on its behalf.
In any case, even if petitioner alleged that respondent was already dissolved by
virtue of a November7, 2002 resolution of Cooperative Development Authority, the
relevant acts of respondent had occurred before such resolution.
The resolution of the issue of representation could have facilitated the resolution of
the case on the merits.
III
The
resolved

trial

court
the

could
issue

have
of

representation;
decisions elicit suspicion

premature

The court must not trifle with jurisdictional issues. It is inexcusable that a case
involving issues that the trial court had full control of had to be elevated to this
court for determination.
The trial court had every opportunityto resolve the validity of Mr. dela Peas and
Mr. Dragons alleged authority to act on behalf of respondent. The trial court had, in
fact, already allowed respondent to file its answer and oppose petitioners
petitionfor cancellation of annotation. It could have easily ordered Mr. dela Pea or
Mr. Dragon to produce evidence of their authority to represent respondent.
Moreover, there had been at least two motions for reconsideration filed before the
trial court finallydecided the petitioners petition for cancellation of annotation.
The first was filed by petitioner when the trial court granted respondents
manifestation and motion on March 16, 2001. The trial court could have heard the
parties on the issue of representation at this instance had it noted petitioners noncompliance with the rule that the notice of hearing must "be served in such a
manner as to ensure its receipt by the other party at least three (3) days before the
date of the hearing."105 Section 4, Rule 15 provides:
Sec. 4. Hearing of motion. Except for motions which the court may act upon
without prejudicing the rights of the adverse party, every written motion shall be set
for hearing by the applicant. Every written motion required to be heard and the
notice of the hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of hearing, unless
the court for good cause sets the hearing on shorter notice.
In this case, petitioner set the case for hearing on April 20, 2001. It served a copy
upon respondent by registered mail only on April 16, 2001 or four (4) days before
the set date for hearing. To be covered by the three-day rule under Rule 15, Section
4, petitioner should ensure respondents receipt of the notice by April 17, 2001. We
take judicial notice that service by registered mail in our jurisdiction does not take
place in one day. Service of notice by registered mail only four (4) days before the
date of hearing, therefore, does not amount to ensuring the other partys receipt at
least three (3) days before the hearing.
The second motion for reconsideration was filed by respondent when the Regional
Trial Court granted petitioners motion for reconsideration of its order of March 16,
2001.Hence, for the second time, the trial court had an opportunity to hear whether
Mr. dela Pea or Mr. Dragon was properly authorized to act on behalf of respondent.
On one hand, nobodys rights would have been prejudiced had respondent been
allowed to prove the alleged representatives authorities. On the other hand, there
is a likelihood ofprejudice, in this case, if the court relied purely on technicalities.
Thus, we reiterate this courts ruling in Alonso v. Villamor: 106

. . . In other words, [processes] are a means to an end. When they lose the
character of the one and become the other, the administration of justice is at fault
and courts are correspondingly remiss in the performance of their obvious duty.
. . . To take advantage of [a purely technical error] for other purposes than to cure it,
does not appeal to a fair sense of justice. Its presentation as fatal to [a party]s case
smacks of skill rather than right. A litigation is not a game of technicalities in which
one, more deeply schooled and skilled in the subtle art of movement and position,
entraps and destroys the other. It is, rather, a contest in which each contending
party fully and fairly lays before the court the facts in issue and then, brushing aside
as wholly trivial and indecisive all imperfections of form and technicalities of
procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not
to be won by a rapiers thrust. Technicality, when it deserts its proper office as anaid
to justice and becomes its great hindrance and chief enemy, deservesscant
consideration from courts. There should be no vested rights in technicalities. No
litigant should be permitted to challenge a record of a court of these Islands for
defect of form when his substantial rights have not been prejudiced thereby.
Both motions for reconsideration filed in the trial court were opportunities to hear
the parties on the issue of representation and to ensure that all parties were given
their fair opportunity to be heard. The trial court ignored both opportunities and
chose to rule based on technicalities to the prejudice of respondent.
The rules cannot be interpreted asa means to violate due process rights. Courts
should, as much as possible, give parties the opportunity to present evidence as to
their claims so that decisions will be made based on the merits of the case.
The trial court issued a decision pending incidents yet to be resolved. We take this
opportunity to remind courtsthat the issuance of fair decisions is the heart of our
functions. The judiciary is expected to take seriously its task of crafting decisions
with utmostjudiciousness. Premature decisions only elicit suspicion of the courts and
diminish our role as administrator of justice.
IV
Rights
are not adverse claims

still

under

negotiations

Ordinarily, this case would be remanded to the trial court for the presentation of
respondents evidence. However, this case has been pending in this court for about
eight (8) years.In the interest of judicial economy and efficiency, and given that the
court records are sufficient to make a determination on the validity of respondents
adverse claim, we shall rule on the issue. Respondent had been assailing the lack of
service of summons upon it and the resulting cancellation of its alleged adverse
claim on the titles. Its claim is anchored on its disrupted negotiations with the
farmer-beneficiaries involving the properties. In its memorandum filed on March 1,
2007, respondent stated:
1.2 Some ten (10) years ago, Laguna West entered into [sic] Joint Venture
Agreement ("JVA") with various farmer-CLOA beneficiaries in the Kaong-Kalayugan

area of Silang, Cavite for a total lot area of Eight Hundred Fifty Five Thousand and
Nine Hundred Fourteen (855,914) square meters.
1.3 To hold the CLOA beneficiaries to their commitment to submit their respective
lots to the JVA, Laguna West promised them a guaranteed share of 40% in the
proceeds of the project.
1.4 But, while Laguna West was still in the process of finalizing the negotiations with
these farmer-beneficiaries, petitioner entered the picture by offering an alleged
"Irrevocable Exclusive Right to Buy (IERB)" contracts with the same farmerlandowners for the purpose of converting the subject vast track [sic] of land into an
industrial, commercial and residential area.
1.5 Alarmed with the possibility that it could lose the deal to a big and moneyed
corporation, Laguna Westcaused the annotation of adverse claims on the thirty-nine
(39) TCTs in 1996.107 Respondents annotations on petitioners certificates of title are
similarly worded, thus:
Entry No. . . . -AFFIDAVIT OF ADVERSE CLAIM- Covering the parcel of land described
in this title as per Affidavit of Adverse Claim executed by Calisto M. Dela Pena [sic]
of Laguna West Multi-Purpose Cooperative Inc., wherein the registered owner
entered into a Joint Venture Agreement, as per Affidavit ofAdverse Claim, subs. and
sworn to before the Not. Public for . . ., a copy is on file in this registry.
Date of inst.- . . . .
Date of inscription- . . . .
NOTE: The foregoing annotations were copied from TCT. . . . 108
Another version of the annotation is worded as follows:
Entry No. . . . -ADVERSE CLAIM- Signed and executed by Calixto M. dela Pena [sic],
president and Chairman of Cooperative, [alleging] therein the existence of Joint
Venture Agreement with the registered owner and that there are aboutto dispose
said lot, exec. before the Not. Public . . . Copy is on file in this registry. Date of inst.- .
. . . Date of inscription- . . . .109
NOTE: The foregoing annotations were copied from TCT. . . .
The purpose of annotations of adverse claims on title is to apprise the whole world
of the controversy involving a property. These annotations protect the adverse
claimant's rights before or during the pendency of a case involving a property. It
notifies third persons that rights that may be acquired with respect to a property are
subject to the results of the case involving it.
Section 70 of Presidential Decree No. 1529 or the Property Registration Decree
governs adverse claims. It describes an adverse claim as a statement in writing

setting forth a subsequent right or interest claimed involving the property, adverse
tothe registered owner. Thus:
Section 70. Adverse claim. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this Decree for registering the
same, make a statement in writing setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the number of the certificate of
title of the registered owner, the name of the registered owner, and a description of
the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants
residence, and a place at which all notices may be served upon him. This statement
shall be entitled to registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from the date of
registration. After the lapse ofsaid period, the annotation of adverse claim may be
cancelled upon filing of a verified petition therefor by the party in interest: Provided,
however, that after cancellation, no second adverse claim based on the same
ground shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in
the court of First Instance where the land is situated for the cancellation of the
adverse claim, and the court shall grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render judgment as may be just and
equitable. If the adverse claim is adjudged to be invalid, the registration thereof
shall be ordered cancelled. If, in any case, the court, after notice and hearing, shall
find that the adverse claim thus registered was frivolous, it may fine the claimant in
an amount not less than one thousand pesos nor more than five thousand pesos, in
its discretion. Before the lapse of thirty days, the claimant may withdraw his
adverse claim by filing with the Register of Deeds a sworn petition to that effect.
A claim based on a future right does notripen into an adverse claim as defined in
Section 70 of Presidential Decree No. 1529. A right still subject to negotiations
cannot be enforced against a title holder or against one that has a legitimate title to
the property based on possession, ownership, lien, or any valid deed of transfer.
Respondents claim was not based on any of those.1awp++i1 Its claim was based
on a deal with the CLOA farmer-beneficiaries, which did not materialize.
Respondent alleged that had there been a trial, it could have "[p]resented
documentary evidence that its negotiation with the former landowners had earned
for it part-ownership of the properties, or . . . the exclusive authority to deal with
potential buyers or developers."110 Respondent contradicts itself. For there to be a
contract, there must be a meeting of the minds between the parties. There could
not have been any contract earning for respondent part-ownership or any right
since it was still undergoing negotiations with the farmer-beneficiaries. At that
stage, meeting of the minds was absent. The terms were not yet final. Hence, no
right or obligation could attach to the parties. In essence, parties cannot claim,
much less make an adverse claim of any right, from terms that are still under
negotiations.

Respondent also alleged that had it been allowed to offer as evidence the joint
venture agreement it entered with the farmer-beneficiaries, it would have shown
that it "had made partial payment of the former landowners 40% share in the joint
venture,"111 acquiring for itself an "interest over the properties, or . . . better right
than the registered owner[s]."112 Respondent was mistaken.
Republic Act No. 6657 or the Comprehensive Agrarian Reform Law prohibits its own
circumvention. The prohibition on disposition includes all rights relating to
disposition such as sale, and promise of sale of property upon the happening of
conditions that remove the restrictions on disposition.
Republic Act No. 6657 prohibits the sale, transfer, or conveyance of awarded lands
within ten (10) years, subject only to a few exceptions. Section 27 of the Act
provides:
SECTION 27. Transferability of Awarded Lands. Lands acquired by beneficiaries
underthis Act may not be sold, transferred or conveyed except through hereditary
succession, or to the government, or the LBP, or to other qualified beneficiaries for a
period of ten (10) years: provided, however, that the children or the spouse of the
transferorshall have a right to repurchase the land from the government or LBP
withina period of two (2) years. Due notice of the availability of the land shall be
given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the
barangay where the land is situated. The Provincial Agrarian Reform Coordinating
Committee (PARCCOM) as herein provided, shall, in turn, be given due notice
thereof by the BARC.
If the land has not yet been fully paid by the beneficiary, the rights to the land may
be transferred orconveyed, with prior approval of the DAR, to any heir of the
beneficiary or to any other beneficiary who, as a condition for such transferor
conveyance, shall cultivate the land himself. Failing compliance herewith, the land
shall be transferred to the LBP which shall give due notice of the availability of the
land in the manner specified in the immediately preceding paragraph.
In the event of such transfer to the LBP, the latter shall compensate the beneficiary
in one lump sum for the amounts the latter has already paid, together with the
value of improvements he has made on the land Republic Act No. 6657 also
provides that the awarded lands may be converted to residential, commercial,or
industrial use if these are not economically feasible anymore or because of
urbanization, greater economic value will be derived with their conversion. Section
65 of the Act provides:
SECTION 65. Conversion of Lands. After the lapse of five (5) years from its award,
when the land ceases to be economically feasible and sound for agricultural
purposes, or the locality has become urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes, the DAR, upon
application of the beneficiary or the landowner, with due notice to the affected
parties, and subject to existing laws, may authorize the reclassification or
conversion of the land and its disposition: provided, that the beneficiary shall have
fully paid his obligation.

These provisions imply the following on rules on sale of awarded lands:


1) Subject to a few exceptions, landsacquired by beneficiaries may be
conveyed to non-beneficiaries after ten (10) years.
2) Before the lapse of ten (10) years but after the lapse of five (5) years, a
beneficiary may dispose of the acquired land if it "ceases to be economically
feasible and sound for agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value" 113 with its
residential, commercial, or industrial use.
These implications are easily abused. Hence, Republic Act No. 6657 included among
the prohibitions any act that will circumvent its provisions. Thus:
SECTION 73. Prohibited Acts and Omissions. The following are prohibited: (a) The
ownership or possession, for the purpose of circumventing the provisions of this Act,
of agricultural lands in excess of the total retention limits or award ceilings by any
person, natural or juridical, except those under collective ownership by farmerbeneficiaries. (b) The forcible entry or illegal detainer by persons who are not
qualified beneficiaries under thisAct to avail themselves of the rights and benefits of
the Agrarian Reform Program. (c) The conversion by any landowner of his
agricultural land into any nonagricultural use with intent to avoid the application of
this Act to his landholdings and to dispossess his tenant farmers of the land tilled by
them. (d) The willful prevention or obstruction by any person, association or entity
of the implementation of the CARP. (e) The sale, transfer, conveyance or change of
the nature of lands outside of urban centers and city limits either in whole or in part
after the effectivity of this Act. The date ofthe registration of the deed of
conveyance in the Register of Deeds with respect to titled lands and the date of the
issuance ofthe tax declaration to the transferee of the property with respect to
unregistered lands, as the case may be, shall be conclusive for the purpose of this
Act. (f) The sale, transfer or conveyance by a beneficiary of the right to use or any
other usufructuary right over the land he acquired by virtue of being a beneficiary,
in order to circumvent the provisions of this Act. (Emphasis supplied)
The prohibition from disposition of the properties encompasses all rights relating to
disposition, including the right to convey ownership or to promise the sale and
transfer of property from the farmer-beneficiaries to anyone upon the happening of
certain conditions that will remove the conveyance restrictions.
The conveyance of the property withinthe prohibited period or before its conversion
to non-agricultural use isan outright violation of Republic Act No. 6657. Meanwhile,
the promise of sale of properties upon the happening of conditions that will remove
restrictions carry with it an intent to circumvent the provisions of Republic Act No.
6657. This law prohibits its circumvention.
In this case, the CLOAs were awarded to the farmer-beneficiaries between 1990 and
1992.114 Since the affidavit of adverse claim annotated on petitioners certificates of
title was annotated in 1996 and the properties were converted only in 1998,

respondentsjoint venture agreement with the farmer-beneficiaries could not have


validly transferred rights to respondent.
The 10-year period of prohibition against conveyance had not yet lapsed at that
time.1wphi1 Neither were the properties already converted to non-agricultural use
at that time. Respondent's adverse claim, therefore, based on its alleged payment
of the farmer-beneficiaries' 40% could not be valid.
In sum, whether or not there were provisions on transfer of rights or promise to
transfer rights in the joint venture agreement, there could be no basis for
respondents adverse claim. Lack of that provision means that respondent does not
have any valid claim or right over the properties at all. Meanwhile, inclusion of such
provision is illegal and, therefore, void.
This ruling is also applicable to petitioner, which entered into irrevocable exclusive
right to buy contracts from the farmer-beneficiaries. These contracts provided that
the farmer-beneficiaries committed themselves to selling their properties to
petitioner upon expiration of the period of prohibition to transfer or upon conversion
of the properties from agricultural to industrial or commercial use, whichever comes
first. These contracts were execl!ted between farmer-beneficiaries and petitioner
during the period of prohibition and before the properties' conversion from
agricultural to mixed use. Upon conversion of the properties, these were
immediately sold to petitioner. Intent to circumvent the provisions of Republic Act
No. 6657 is, therefore, apparent. Petitioner's contracts are, therefore, also illegal
and void. Hence, this decision is without prejudice to the right of interested parties.
to seek the cancellation of petitioner's certificates of title obtained in violation of the
law.
WHEREFORE, the petition is GRANTED. The Register of Deeds of Cavite is ORDERED
to cancel the annotations of adverse claims on the transfer certificates of title.
SO ORDERED.
MARVIC MARIO VICTOR F. LEONEN
Associate Justice

Sec. 12. Service upon foreign private juridical entities


See: A.M. No. 11-3-6, March 15, 2011
AM. No. 11-3-6-SC
AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON SERVICE
UPONFOREIGN PRIVATE JURIDICAL ENTITY

Section 12, Rule 14 of the Rules of Court is hereby amended to read as


follows:
"SEC. 12. Service upon foreign private juridical entity. When the defendant
is a foreign private juridical entity which has transacted business in the
Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or, i f there be no such agent, on the
government official designated by law to that effect, or on any of its officers
or agents within the Philippines.
If the foreign private juridical entity is not registered in the Philippines or has
no resident agent, service may, with leave of court, be effected out of the
Philippines through any of the following means:
a) By personal service coursed through the appropriate court in the foreign
country with the assistance of the Department of Foreign Affairs;
b) By publication once in a newspaper of general circulation in the country
where the defendant may be found and by serving a copy of the summons
and the court order by-registered mail at the last known address of the
defendant;
c) By facsimile or any recognized electronic means that could generate proof
of service; or
d) By such other means as the court may in its discretion direct."
This rule shall take effect fifteen (15) days after publication in a newspaper of
general circulation in the Philippines.
March 15, 2011
Atiko Trans v. Prudential Guarantee, G.R. No. 167545, August 17,
2011
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
ATIKO TRANS, INC. and
CHENG LIE NAVIGATION
CO., LTD.,
Petitioners,

G.R. No. 167545


Present:

CORONA, C.J., Chairperson,


LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

- versus -

PRUDENTIAL GUARANTEE
AND ASSURANCE, INC.,
Promulgated:
Respondent.
August 17, 2011
x---------------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
Where service of summons upon the defendant principal is coursed thru its codefendant agent, and the latter happens to be a domestic corporation, the rules on service
of summons upon a domestic private juridical entity[1] must be strictly complied
with. Otherwise, the court cannot be said to have acquired jurisdiction over the person of
both defendants. And insofar as the principal is concerned, such jurisdictional flaw cannot
be cured by the agents subsequent voluntary appearance.
This Petition for Review on Certiorari assails the December 10, 2004 Decision[2] of
the Court of Appeals (CA) in CA-G.R. SP No. 82547 which affirmed the April 8, 2003
Decision[3] of the Regional Trial Court (RTC), Branch 150, Makati City. Said Decision of the
RTC affirmed the August 6, 2002 Decision [4] of the Metropolitan Trial Court (MeTC), Branch
63, Makati City, which disposed as follows:
WHEREFORE, judgment is rendered declaring defendants Cheng
Lie Navigation Co., Ltd. and Atiko Trans, Inc. solidarily liable to pay plaintiff
Prudential Guarantee & Assurance, Inc. the following amounts:
1.
P205,220.97 as actual damages with interest of 1% per
month from 14 December 1999 until full payment;
2.

P10,000.00 as Attorneys fees; and

3.

Costs of suit.

SO ORDERED.[5]

Likewise assailed is the CAs Resolution[6] dated March 16, 2005 which denied the
Motion for Reconsideration of the said December 10, 2004 Decision.

Factual Antecedents
On December 11, 1998, 40 coils of electrolytic tinplates were loaded on board M/S
Katjana in Kaohsiung, Taiwan for shipment toManila. The shipment was covered by Bill of
Lading No. KNMNI-15126[7] issued by petitioner Cheng Lie Navigation Co., Ltd. (Cheng Lie)
with Oriental Tin Can & Metal Sheet Manufacturing Co., Inc. (Oriental) as the notify
party. The cargoes were insured against all risks per Marine Insurance Policy No. 20RN18749/99 issued by respondent Prudential Guarantee and Assurance, Inc. (Prudential).
On December 14, 1998, M/S Katjana arrived in the port of Manila. Upon discharge
of the cargoes, it was found that one of the tinplates was damaged, crumpled and dented
on the edges. The sea van in which it was kept during the voyage was also damaged,
presumably while still on board the vessel and during the course of the voyage.
Oriental then filed its claim against the policy. Satisfied that Orientals claim was
compensable, Prudential paid Oriental P205,220.97 representing the amount of losses it
suffered due to the damaged cargo.
Proceedings before the Metropolitan Trial Court
On December 14, 1999, Prudential filed with the MeTC of Makati City a
Complaint[8] for sum of money against Cheng Lie and Atiko Trans, Inc. (Atiko). In addition to
the above undisputed facts, Prudential alleged that:
1.
Plaintiff (Prudential) is a domestic insurance corporation
duly organized and existing under the laws of the Philippines with office
address
at
Coyiuto
House,
119
Carlos
Palanca[,] Jr.
St., Legaspi Village, Makati City;
2.
Defendant Cheng Lie Navigation Co. Ltd., is [a] foreign
shipping company doing business in the Philippines [thru] its duly authorized
shipagent defendant Atiko Trans Inc. which is a domestic corporation duly
established and created under the laws of the Philippines with office address
at 7th Floor, Victoria Bldg., United Nation[s] Ave., Ermita, Manila, where both
defendants may be served with summons and other court processes;
3.
At all times material to the cause of action of this
complaint, plaintiff was and still is engaged in, among others, marine
insurance business; Whereas Defendant Cheng Lie Navigation Co. Ltd. was
and still is engaged in, among others, shipping, transportation and
freight/cargo forwarding business, and as such, owned, operated and/or
chartered the ocean going vessel M/S Katjana as common carrier to and

from any Philippine [port] in international trade [thru] its duly authorized
shipagent defendant Atiko Trans Inc. (Both defendants are hereinafter referred
to as the CARRIER);
xxxx
9.
Plaintiff, as cargo-insurer and upon finding that the consignees
insurance claim was in order and compensable, paid the latters claim in the
amount of P205,220.97 under and by virtue of the aforesaid insurance policy,
thereby subrogating herein plaintiff to all the rights and causes of action
appertaining to the consignee against the defendants;[9]
On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default,
[10]
alleging among others that on March 1, 2000 a copy of the summons was served upon
petitioners thru cashier Cristina Figueroa and that despite receipt thereof petitioners failed to
file any responsive pleading. Acting on the motion, the MeTC issued an Order [11] declaring
Cheng Lie and Atiko in default and allowing Prudential to present its evidence ex-parte.
On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a
Notice of Appeal[12] dated November 4, 2002.
Proceedings before the Regional Trial Court and the Court of Appeals
In its Memorandum of Appeal,[13] Atiko argued that Prudential failed to prove the
material allegations of the complaint. Atiko asserted that Prudential failed to prove by
preponderance of evidence that it is a domestic corporation with legal personality to file an
action; that Cheng Lie is a private foreign juridical entity operating its shipping business in
the Philippines thru Atiko as its shipagent; that Cheng Lie is a common carrier, which owns
and operates M/S Katjana; that Prudential was subrogated to the rights of Oriental; and, that
Atiko can be held solidarily liable with Cheng Lie.
Although assisted by the same counsel, Cheng Lie filed its own Memorandum of
Appeal maintaining that the MeTC never acquired jurisdiction over its person.
[14]

On April 8, 2003, the RTC rendered its Decision dismissing the appeal and affirming
the Decision of the MeTC. Atiko and Cheng Lie challenged the RTC Decision before the
CA via a Petition for Review[15] under Rule 42 of the Rules of Court but the appellate court
affirmed the RTCs Decision.
Hence, this petition.
Issues

In their Memorandum,[16] petitioners raised the following issues:


1.

WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS


AFFIRMED BY MAKATI RTC AND THE COURT OF APPEALS IS NULL AND
VOID FOR FAILURE TO ACQUIRE JURISDICTION OVER THE PERSONS OF
THE PETITIONERS-DEFENDANTS CONSIDERING THAT THE SUMMONS
WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE 14 OF
THE RULES OF COURT.

2.

WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO


PROVE THE MATERIAL ALLEGATIONS IN THE COMPLAINT EVEN IN DEFAULT
JUDGMENT OR WHETHER OR NOT IN DEFAULT JUDGMENT, ALL
ALLEGATIONS IN THE COMPLAINT ARE DEEMED CONTROVERTED, HENCE,
MUST BE PROVED BY COMPETENT EVIDENCE.
2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE
ITS LEGAL PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.
2.2. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE
THAT PETITIONER-DEFENDANT ATIKO IS THE SHIPAGENT OF
PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.
2.3. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND THE
DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR PURPOSES
OTHER THAN THE PURPOSE FOR WHICH THEY WERE OFFERED.
2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN DEFAULT
ADDRESSED AND SENT TO ONLY ONE OF THE DEFENDANTS
WOULD BIND THE OTHER DEFENDANT TO WHOM THE MOTION
WAS NOT ADDRESSED AND NOT SENT.[17]

Our Ruling
The petition is partly meritorious. We shall first tackle the factual matters involved in
this case, then proceed with the jurisdictional issues raised.
Petitioners raised factual matters which are not
the proper subject of this appeal.

Petitioners contend that the lower courts grievously erred in granting the complaint
because, even if they were declared in default, the respondent still has the burden of
proving the material allegations in the complaint by preponderance of evidence. Petitioners
further argue that respondent miserably failed to discharge this burden because it failed to

present sufficient proof that it is a domestic corporation. Hence, respondent could not
possibly maintain the present action because only natural or juridical persons or entities
authorized by law can be parties to a civil action. Petitioners also claim that respondent
failed to present competent proof that Cheng Lie is a foreign shipping company doing
business in the Philippines thru its duly authorized shipagent Atiko. Lastly, petitioners
assert that respondent failed to prove that Cheng Lie is a common carrier which owned,
operated and/or chartered M/S Katjana thru its duly authorized shipagent Atiko. Petitioners
emphasize that there is no proof, testimonial or otherwise, which would support the material
allegations of the complaint. They also insist that respondents witnesses do not have
personal knowledge of the facts on which they were examined.
Respondent, for its part, assails the propriety of the remedy taken by the
petitioners. It posits that petitioners advanced factual matters which are not the proper
subject of a petition for review on certiorari. Besides, the lower courts consistently held that
the allegations in respondents complaint are supported by sufficient evidence.
We agree with respondent.
A cursory reading of the issues raised readily reveals that they involve factual
matters which are not within the province of this Court to look into. Well-settled is the rule
that in petitions for review on certiorari under Rule 45, only questions of law can be
raised. While there are recognized exceptions to this rule,[18] none is present in this
case. [A]s a matter of x x x procedure, [this] Court defers and accords finality to the factual
findings of trial courts, [especially] when such findings were [affirmed by the RTC and the
CA. These] factual determination[s], as a matter of long and sound appellate practice,
deserve great weight and shall not be disturbed on appeal x x x. [I]t is not the function of
the Court to analyze and weigh all over again the evidence or premises supportive of the
factual holding of the lower courts.[19]
MeTC properly acquired jurisdiction over the
person of Atiko.

Petitioners also argue that the MeTC did not acquire jurisdiction over the person of
Atiko as the summons was received by its cashier, Cristina Figueroa. They maintain that
under Section 11, Rule 14 of the Rules of Court, when the defendant is a domestic
corporation like Atiko, summons may be served only upon its president, general manager,
corporate secretary, treasurer or in-house counsel.
We are not persuaded. True, when the defendant is a domestic corporation, service
of summons may be made only upon the persons enumerated in Section 11, Rule 14 of the

Rules of Court.[20] However, jurisdiction over the person of the defendant can be acquired
not only by proper service of summons but also by defendants voluntary appearance
without expressly objecting to the courts jurisdiction, as embodied in Section 20, Rule 14 of
the Rules of Court, viz:
SEC. 20. Voluntary appearance. The defendants voluntary
appearance in the action shall be equivalent to service of summons. The
inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction
over the person of the defendant shall not be deemed a voluntary
appearance.

In the case at bench, when Atiko filed its Notice of Appeal, [21] Memorandum of
Appeal,[22] Motion for Reconsideration[23] of the April 8, 2003 Decision of the RTC, and Petition
for Review,[24] it never questioned the jurisdiction of the MeTC over its person. The filing of
these pleadings seeking affirmative relief amounted to voluntary appearance and, hence,
rendered the alleged lack of jurisdiction moot. In Palma v. Galvez,[25] this Court reiterated
the oft-repeated rule that 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.
Moreover, petitioners contention is a mere afterthought. It was only in their
Memorandum[26] filed with this Court where they claimed, for the first time, that Atiko was
not properly served with summons. In La Naval Drug Corporation v. Court of Appeals,[27] it
was held that the issue of jurisdiction over the person of the defendant must be seasonably
raised. Failing to do so, a party who invoked the jurisdiction of a court to secure an
affirmative relief cannot be allowed to disavow such jurisdiction after unsuccessfully trying to
obtain such relief.[28]
It may not be amiss to state too that in our February 13, 2006 Resolution, [29] we
reminded the parties that they are not allowed to interject new issues in their
memorandum.
MeTC did not acquire jurisdiction over the person
of Cheng Lie.

Petitioners likewise challenge the validity of the service of summons upon Cheng Lie,
thru Atiko. They claim that when the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service of summons may be made, among others,

upon its resident agent. In this case, however, there is no proof that Atiko is the local agent
of Cheng Lie.

SC,

[30]

On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6Section 12 of Rule 14 of the Rules of Court reads:
SEC. 12. Service upon foreign private juridical entity. When the
defendant is a foreign private juridical entity which has transacted business in
the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or, if there be no such agent, on the
government official designated by law to that effect, or on any of its officers or
agents within the Philippines.

Elucidating on the above provision of the Rules of Court, this Court declared
in Pioneer International, Ltd. v. Guadiz, Jr.[31] that when the defendant is a foreign juridical
entity, service of summons may be made upon:
1.

Its resident agent designated in accordance with law for that


purpose;

2.

The government official designated by law to receive summons if


the corporation does not have a resident agent; or,

3.

Any of the corporations officers or agents within the Philippines.

In the case at bench, no summons was served upon Cheng Lie in any manner
prescribed above. It should be recalled that Atiko was not properly served with summons as
the person who received it on behalf of Atiko, cashier Cristina Figueroa, is not one of the
corporate officers enumerated in Section 11 of Rule 14 of the Rules of Court. The MeTC
acquired jurisdiction over the person of Atiko not thru valid service of summons but by the
latters voluntary appearance. Thus, there being no proper service of summons upon Atiko
to speak of, it follows that the MeTC never acquired jurisdiction over the person of Cheng
Lie. To rule otherwise would create an absurd situation where service of summons is valid
upon the purported principal but not on the latters co-defendant cum putative agent
despite the fact that service was coursed thru said agent. Indeed, in order for the court to
acquire jurisdiction over the person of a defendant foreign private juridical entity under
Section 12, Rule 14 of the Rules of Court, there must be prior valid service of summons upon
the agent of such defendant.
Also, the records of this case is bereft of any showing that cashier Cristina Figueroa is
a government official designated by law to receive summons on behalf of Cheng Lie or that

she is an officer or agent of Cheng Lie within the Philippines. Hence, her receipt of
summons bears no significance insofar as Cheng Lie is concerned. At this point, we
emphasize that the requirements of the rule on summons must be strictly followed, [32] lest
we ride roughshod on defendants right to due process.[33]
With regard to Cheng Lies filing of numerous pleadings, the same cannot be
considered as voluntary appearance. Unlike Atiko, Cheng Lie never sought affirmative relief
other than the dismissal of the complaint on the ground of lack of jurisdiction over its
person. From the very beginning, it has consistently questioned the validity of the service of
summons and the jurisdiction of the MeTC over its person.
It does not escape our attention though that Cheng Lies pleadings do not indicate
that the same were filed by way of special appearance. But these, to our mind, are mere
inaccuracies in the title of the pleadings. What is important are the allegations contained
therein which consistently resisted the jurisdiction of the trial court. Thus, Cheng Lie cannot
be considered to have submitted itself to the jurisdiction of the courts.[34]
In fine, since the MeTC never acquired jurisdiction over the person of Cheng Lie, its
decision insofar as Cheng Lie is concerned is void.[35]
Cheng Lie was improperly declared in default.

Applying the above disquisition, the MeTC likewise erred in declaring Cheng Lie in
default. Settled is the rule that a defendant cannot be declared in default unless such
declaration is preceded by a valid service of summons.[36]
WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed
December 10, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 82547 is AFFIRMED
with the MODIFICATION that the judgment insofar as Cheng Lie Navigation Co., Ltd. is
concerned is declared VOID for failure to acquire jurisdiction over its person as there was
improper service of summons.
SO ORDERED.

MARIANO C. DEL CASTILLO


Associate Justice

NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011

Republic of the Philippines


Supreme Court
Manila

FIRST DIVISION

NM
ROTHSCHILD
&
(AUSTRALIA) LIMITED,
Petitioner,

SONS
G.R. No. 175799

Present:
- versus -

LEPANTO CONSOLIDATED MINING


COMPANY,
Respondent.

CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.
Promulgated:

November 28, 2011


x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari assailing the Decision[1] of the Court
of Appeals dated September 8, 2006 in CA-G.R. SP No. 94382 and its
Resolution[2] dated December 12, 2006, denying the Motion for Reconsideration.
On August 30, 2005, respondent Lepanto Consolidated Mining Company filed
with the Regional Trial Court (RTC) of Makati City a Complaint [3] against petitioner NM
Rothschild & Sons (Australia) Limited praying for a judgment declaring the loan and
hedging contracts between the parties void for being contrary to Article 2018 [4] of
the Civil Code of the Philippines and for damages. The Complaint was docketed as
Civil Case No. 05-782, and was raffled to Branch 150. Upon respondents (plaintiffs)
motion, the trial court authorized respondents counsel to personally bring the
summons and Complaint to the Philippine Consulate General in Sydney, Australia for
the latter office to effect service of summons on petitioner (defendant).
On October 20, 2005, petitioner filed a Special Appearance With Motion to
Dismiss[5] praying for the dismissal of the Complaint on the following grounds: (a)
the court has not acquired jurisdiction over the person of petitioner due to the
defective and improper service of summons; (b) the Complaint failed to state a
cause of action and respondent does not have any against petitioner; (c) the action
is barred by estoppel; and (d) respondent did not come to court with clean hands.
On November 29, 2005, petitioner filed two Motions: (1) a Motion for Leave to
take the deposition of Mr. Paul Murray (Director, Risk Management of petitioner)
before the Philippine Consul General; and (2) a Motion for Leave to Serve
Interrogatories on respondent.
On December 9, 2005, the trial court issued an Order [6] denying the Motion to
Dismiss. According to the trial court, there was a proper service of summons
through the Department of Foreign Affairs (DFA) on account of the fact that the
defendant has neither applied for a license to do business in the Philippines, nor
filed with the Securities and Exchange Commission (SEC) a Written Power of
Attorney designating some person on whom summons and other legal processes
maybe served. The trial court also held that the Complaint sufficiently stated a
cause of action. The other allegations in the Motion to Dismiss were brushed aside
as matters of defense which can best be ventilated during the trial.
On December 27, 2005, petitioner filed a Motion for Reconsideration. [7] On
March 6, 2006, the trial court issued an Order denying the December 27, 2005
Motion for Reconsideration and disallowed the twin Motions for Leave to take
deposition and serve written interrogatories.[8]
On April 3, 2006, petitioner sought redress via a Petition for Certiorari[9] with
the Court of Appeals, alleging that the trial court committed grave abuse of

discretion in denying its Motion to Dismiss. The Petition was docketed as CA-G.R. SP
No. 94382.
On September 8, 2006, the Court of Appeals rendered the assailed Decision
dismissing the Petition for Certiorari. The Court of Appeals ruled that since the
denial of a Motion to Dismiss is an interlocutory order, it cannot be the subject of a
Petition forCertiorari, and may only be reviewed in the ordinary course of law by an
appeal from the judgment after trial. On December 12, 2006, the Court of Appeals
rendered the assailed Resolution denying the petitioners Motion for
Reconsideration.
Meanwhile, on December 28, 2006, the trial court issued an Order directing
respondent to answer some of the questions in petitioners Interrogatories to
Plaintiff dated September 7, 2006.
Notwithstanding the foregoing, petitioner filed the present petition assailing
the September 8, 2006 Decision and the December 12, 2006 Resolution of the Court
of Appeals. Arguing against the ruling of the appellate court, petitioner insists that
(a) an order denying a motion to dismiss may be the proper subject of a petition
for certiorari; and (b) the trial court committed grave abuse of discretion in not
finding that it had not validly acquired jurisdiction over petitioner and that the
plaintiff had no cause of action.
Respondent, on the other hand, posits that: (a) the present Petition should be
dismissed for not being filed by a real party in interest and for lack of a proper
verification and certificate of non-forum shopping; (b) the Court of Appeals correctly
ruled thatcertiorari was not the proper remedy; and (c) the trial court correctly
denied petitioners motion to dismiss.
Our discussion of the issues raised by the parties follows:
Whether petitioner is a real party in
interest
Respondent argues that the present Petition should be dismissed on the
ground that petitioner no longer existed as a corporation at the time said Petition
was filed on February 1, 2007. Respondent points out that as of the date of the
filing of the Petition, there is no such corporation that goes by the name NM
Rothschild and Sons (Australia) Limited. Thus, according to respondent, the present
Petition was not filed by a real party in interest, citing our ruling in Philips Export
B.V. v. Court of Appeals,[10] wherein we held:
A name is peculiarly important as necessary to the very
existence of a corporation (American Steel Foundries vs. Robertson,
269 US 372, 70 L ed 317, 46 S Ct 160; Lauman vs. Lebanon Valley R.
Co., 30 Pa 42; First National Bank vs. Huntington Distilling Co., 40 W Va
530, 23 SE 792). Its name is one of its attributes, an element of its
existence, and essential to its identity (6 Fletcher [Perm Ed], pp. 3-4).
The general rule as to corporations is that each corporation must have

a name by which it is to sue and be sued and do all legal acts. The
name of a corporation in this respect designates the corporation in the
same manner as the name of an individual designates the person
(Cincinnati Cooperage Co. vs. Bate, 96 Ky 356, 26 SW 538; Newport
Mechanics Mfg. Co. vs. Starbird, 10 NH 123); and the right to use its
corporate name is as much a part of the corporate franchise as any
other privilege granted (Federal Secur. Co. vs. Federal Secur. Corp., 129
Or 375, 276 P 1100, 66 ALR 934; Paulino vs. Portuguese Beneficial
Association, 18 RI 165, 26 A 36).[11]
In its Memorandum[12] before this Court, petitioner started to refer to itself
as Investec Australia Limited (formerly NM Rothschild & Sons [Australia]
Limited) and captioned said Memorandum accordingly. Petitioner claims that NM
Rothschild and Sons (Australia) Limited still exists as a corporation under the laws of
Australia under said new name. It presented before us documents evidencing the
process in the Australian Securities & Investment Commission on the change of
petitioners company name from NM Rothschild and Sons (Australia) Limited to
Investec Australia Limited.[13]
We find the submissions of petitioner on the change of its corporate name
satisfactory and resolve not to dismiss the present Petition for Review on the ground
of not being prosecuted under the name of the real party in interest. While we
stand by our pronouncement in Philips Export on the importance of the corporate
name to the very existence of corporations and the significance thereof in the
corporations right to sue, we shall not go so far as to dismiss a case filed by the
proper party using its former name when adequate identification is presented. A
real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. [14] There is no
doubt in our minds that the party who filed the present Petition, having presented
sufficient evidence of its identity and being represented by the same counsel as that
of the defendant in the case sought to be dismissed, is the entity that will be
benefited if this Court grants the dismissal prayed for.
Since the main objection of respondent to the verification and certification
against forum shopping likewise depends on the supposed inexistence of the
corporation named therein, we give no credit to said objection in light of the
foregoing discussion.
Propriety of the Resort to a Petition
for Certiorari with the Court of Appeals
We have held time and again that an order denying a Motion to Dismiss is an
interlocutory order which neither terminates nor finally disposes of a case as it
leaves something to be done by the court before the case is finally decided on the
merits. The general rule, therefore, is that the denial of a Motion to Dismiss cannot
be questioned in a special civil action for Certiorari which is a remedy designed to
correct errors of jurisdiction and not errors of judgment. [15] However, we have
likewise held that when the denial of the Motion to Dismiss is tainted with grave

abuse of discretion, the grant of the extraordinary remedy of Certiorari may be


justified. By grave abuse of discretion is meant:
[S]uch capricious and whimsical exercise of judgment that is
equivalent to lack of jurisdiction. The abuse of discretion must be
grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and must be so
patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined by or to act all in
contemplation of law.[16]
The resolution of the present Petition therefore entails an inquiry into whether
the Court of Appeals correctly ruled that the trial court did not commit grave abuse
of discretion in its denial of petitioners Motion to Dismiss. A mere error in judgment
on the part of the trial court would undeniably be inadequate for us to reverse the
disposition by the Court of Appeals.
Issues more properly ventilated during
the trial of the case
As previously stated, petitioner seeks the dismissal of Civil Case No. 05-782
on the following grounds: (a) lack of jurisdiction over the person of petitioner due to
the defective and improper service of summons; (b) failure of the Complaint to state
a cause of action and absence of a cause of action; (c) the action is barred by
estoppel; and (d) respondent did not come to court with clean hands.
As correctly ruled by both the trial court and the Court of Appeals, the alleged
absence of a cause of action (as opposed to the failure to state a cause of action),
the alleged estoppel on the part of petitioner, and the argument that respondent is
in pari delicto in the execution of the challenged contracts, are not grounds in a
Motion to Dismiss as enumerated in Section 1, Rule 16 [17] of the Rules of Court.
Rather, such defenses raise evidentiary issues closely related to the validity and/or
existence of respondents alleged cause of action and should therefore be threshed
out during the trial.
As regards the allegation of failure to state a cause of action, while the same
is usually available as a ground in a Motion to Dismiss, said ground cannot be ruled
upon in the present Petition without going into the very merits of the main case.
It is basic that [a] cause of action is the act or omission by which a party
violates a right of another. [18] Its elements are the following: (1) a right existing in
favor of the plaintiff, (2) a duty on the part of the defendant to respect the plaintiff's
right, and (3) an act or omission of the defendant in violation of such right. [19] We
have held that to sustain a Motion to Dismiss for lack of cause of action, the
complaint must show that the claim for relief does not exist and not only that the
claim was defectively stated or is ambiguous, indefinite or uncertain. [20]

The trial court held that the Complaint in the case at bar contains all the three
elements of a cause of action, i.e., it alleges that: (1) plaintiff has the right to ask for
the declaration of nullity of the Hedging Contracts for being null and void and
contrary to Article 2018 of the Civil Code of the Philippines; (2) defendant has the
corresponding obligation not to enforce the Hedging Contracts because they are in
the nature of wagering or gambling agreements and therefore the transactions
implementing those contracts are null and void under Philippine laws; and (3)
defendant ignored the advice and intends to enforce the Hedging Contracts by
demanding financial payments due therefrom. [21]
The rule is that in a Motion to Dismiss, a defendant hypothetically admits the
truth of the material allegations of the ultimate facts contained in the plaintiff's
complaint.[22] However, this principle of hypothetical admission admits of
exceptions. Thus, inTan v. Court of Appeals, [23] we held:
The flaw in this conclusion is that, while conveniently echoing
the general rule that averments in the complaint are deemed
hypothetically admitted upon the filing of a motion to dismiss
grounded on the failure to state a cause of action, it did not take into
account the equally established limitations to such rule, i.e., that a
motion to dismiss does not admit the truth of mere epithets of
fraud; norallegations of legal conclusions; nor an erroneous
statement of law; nor mere inferences or conclusions from facts not
stated; nor mere conclusions of law; nor allegations of fact the
falsity of which is subject to judicial notice; nor matters of evidence;
nor surplusage and irrelevant matter; nor scandalous matter inserted
merely to insult the opposing party; nor to legally impossible facts; nor
to facts which appear unfounded by a record incorporated in the
pleading, or by a document referred to; and, nor to general averments
contradicted by more specific averments. A more judicious resolution
of a motion to dismiss, therefore, necessitates that the court be not
restricted to the consideration of the facts alleged in the complaint and
inferences fairly deducible therefrom. Courts may consider other facts
within the range of judicial notice as well as relevant laws and
jurisprudence which the courts are bound to take into account,
and they are also fairly entitled to examine records/documents
duly incorporated into the complaint by the pleader himself in
ruling on the demurrer to the complaint.[24] (Emphases supplied.)
In the case at bar, respondent asserts in the Complaint that the Hedging
Contracts are void for being contrary to Article 2018 [25] of the Civil
Code. Respondent claims that under the Hedging Contracts, despite the express
stipulation for deliveries of gold, the intention of the parties was allegedly merely to
compel each other to pay the difference between the value of the gold at the
forward price stated in the contract and its market price at the supposed time of
delivery.
Whether such an agreement is void is a mere allegation of a conclusion of
law, which therefore cannot be hypothetically admitted. Quite properly, the relevant

portions of the contracts sought to be nullified, as well as a copy of the contract


itself, are incorporated in the Complaint. The determination of whether or not the
Complaint stated a cause of action would therefore involve an inquiry into whether
or not the assailed contracts are void under Philippine laws. This is, precisely, the
very issue to be determined in Civil Case No. 05-782. Indeed, petitioners defense
against the charge of nullity of the Hedging Contracts is the purported intent of the
parties that actual deliveries of gold be made pursuant thereto. Such a defense
requires the presentation of evidence on the merits of the case. An issue that
requires the contravention of the allegations of the complaint, as well as the full
ventilation, in effect, of the main merits of the case, should not be within the
province of a mere Motion to Dismiss.[26] The trial court, therefore, correctly denied
the Motion to Dismiss on this ground.
It is also settled in jurisprudence that allegations of estoppel and bad faith
require proof. Thus, in Paraaque Kings Enterprises, Inc. v. Court of Appeals,[27] we
ruled:
Having come to the conclusion that the complaint states a valid
cause of action for breach of the right of first refusal and that the trial
court should thus not have dismissed the complaint, we find no more
need to pass upon the question of whether the complaint states a
cause of action for damages or whether the complaint is barred by
estoppel or laches. As these matters require presentation and/or
determination of facts, they can be best resolved after trial on
the merits.[28] (Emphases supplied.)
On the proposition in the Motion to Dismiss that respondent has come to
court with unclean hands, suffice it to state that the determination of whether one
acted in bad faith and whether damages may be awarded is evidentiary in
nature. Thus, we have previously held that [a]s a matter of defense, it can be best
passed upon after a full-blown trial on the merits. [29]
Jurisdiction
petitioner

over

the

person

of

Petitioner alleges that the RTC has not acquired jurisdiction over its person on
account of the improper service of summons. Summons was served on petitioner
through the DFA, with respondents counsel personally bringing the summons and
Complaint to the Philippine Consulate General in Sydney, Australia.
In the pleadings filed by the parties before this Court, the parties entered into
a lengthy debate as to whether or not petitioner is doing business in the
Philippines. However, such discussion is completely irrelevant in the case at bar, for
two reasons. Firstly,since the Complaint was filed on August 30, 2005, the
provisions of the 1997 Rules of Civil Procedure govern the service of
summons. Section 12, Rule 14 of said rules provides:
Sec. 12. Service upon foreign private juridical entity. When the
defendant is a foreign private juridical entity which has transacted

business in the Philippines, service may be made on its resident


agent designated in accordance with law for that purpose, or, if there
be no such agent, on the government official designated by law to that
effect, or on any of its officers or agents within the Philippines.
(Emphasis supplied.)
This is a significant amendment of the former Section 14 of said rule which
previously provided:
Sec. 14. Service upon private foreign corporations. If the
defendant is a foreign corporation, or a nonresident joint stock
company or association, doing business in the Philippines, service
may be made on its resident agent designated in accordance with law
for that purpose, or if there be no such agent, on the government
official designated by law to that effect, or on any of its officers or
agents within the Philippines. (Emphasis supplied.)
The coverage of the present rule is thus broader. [30] Secondly, the service of
summons to petitioner through the DFA by the conveyance of the summons to the
Philippine Consulate General in Sydney, Australia was clearly made not through the
above-quoted Section 12, but pursuant to Section 15 of the same rule which
provides:
Sec. 15. Extraterritorial service. When the defendant does not
reside and is not found in the Philippines, and the action affects the
personal status of the plaintiff or relates to, or the subject of which is
property within the Philippines, in which the defendant has or claims a
lien or interest, actual or contingent, or in which the relief demanded
consists, wholly or in part, in excluding the defendant from any interest
therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the
Philippines by personal service as under section 6; or by publication in
a newspaper of general circulation in such places and for such time as
the court may order, in which case a copy of the summons and order of
the court shall be sent by registered mail to the last known address of
the defendant, or in any other manner the court may deem
sufficient. Any order granting such leave shall specify a reasonable
time, which shall not be less than sixty (60) days after notice, within
which the defendant must answer.
Respondent argues[31] that extraterritorial service of summons upon foreign
private juridical entities is not proscribed under the Rules of Court, and is in fact
within the authority of the trial court to adopt, in accordance with Section 6, Rule
135:
Sec. 6. Means to carry jurisdiction into effect. When by law
jurisdiction is conferred on a court or judicial officer, all auxiliary writs,

processes and other means necessary to carry it into effect may be


employed by such court or officer; and if the procedure to be followed
in the exercise of such jurisdiction is not specifically pointed out by law
or by these rules, any suitable process or mode of proceeding may be
adopted which appears comformable to the spirit of said law or rules.
Section 15, Rule 14, however, is the specific provision dealing precisely with
the service of summons on a defendant which does not reside and is not found in
the Philippines, while Rule 135 (which is in Part V of the Rules of Court entitled Legal
Ethics) concerns the general powers and duties of courts and judicial officers.
Breaking down Section 15, Rule 14, it is apparent that there are only four
instances wherein a defendant who is a non-resident and is not found in the country
may be served with summons by extraterritorial service, to wit: (1) when the action
affects the personal status of the plaintiffs; (2) when the action relates to, or the
subject of which is property, within the Philippines, in which the defendant claims a
lien or an interest, actual or contingent; (3) when the relief demanded in such action
consists, wholly or in part, in excluding the defendant from any interest in property
located in the Philippines; and (4) when the defendant non-resident's property has
been attached within the Philippines. In these instances, service of summons may
be effected by (a) personal service out of the country, with leave of court; (b)
publication, also with leave of court; or (c) any other manner the court may deem
sufficient.[32]
Proceeding from this enumeration, we held in Perkin Elmer Singapore Pte Ltd.
v. Dakila Trading Corporation[33] that:
Undoubtedly, extraterritorial service of summons applies
only where the action is in rem or quasi in rem, but not if an
action is in personam.
When the case instituted is an action in rem or quasi in rem,
Philippine courts already have jurisdiction to hear and decide the case
because, in actions in rem and quasi in rem, jurisdiction over the
person of the defendant is not a prerequisite to confer jurisdiction on
the court, provided that the court acquires jurisdiction over
the res. Thus, in such instance, extraterritorial service of summons
can be made upon the defendant. The said extraterritorial service of
summons is not for the purpose of vesting the court with jurisdiction,
but for complying with the requirements of fair play or due process, so
that the defendant 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. On the other hand, when the
defendant or respondent does not reside and is not found in
the Philippines, and the action involved is in personam,
Philippine courts cannot try any case against him because of

the impossibility of acquiring jurisdiction over his person


unless he voluntarily appears in court.[34] (Emphases supplied.)
In Domagas v. Jensen,[35] we held that:
[T]he aim and object of an action determine its character. 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. 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. 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. Of this character are suits to compel a defendant to
specifically perform some act or actions to fasten a pecuniary liability
on him.[36]
It is likewise settled that [a]n action in personam is lodged against a person based
on personal liability; an action in rem is directed against the thing itself instead of
the person; while an action quasi in rem names a person as defendant, but its object
is to subject that persons interest in a property to a corresponding lien or
obligation.[37]
The Complaint in the case at bar is an action to declare the loan and
Hedging Contracts between the parties void with a prayer for damages. It
is a suit in which the plaintiff seeks to be freed from its obligations to the defendant
under a contract and to hold said defendant pecuniarily liable to the plaintiff for
entering into such contract. It is therefore an action in personam, unless and until
the plaintiff attaches a property within the Philippines belonging to the defendant, in
which case the action will be converted to one quasi in rem.
Since the action involved in the case at bar is in personam and since the
defendant, petitioner Rothschild/Investec, does not reside and is not found in the
Philippines, the Philippine courts cannot try any case against it because of the
impossibility of acquiring jurisdiction over its person unless it voluntarily appears in
court.[38]
In this regard, respondent vigorously argues that petitioner should be held to
have voluntarily appeared before the trial court when it prayed for, and was actually
afforded, specific reliefs from the trial court. [39] Respondent points out that while
petitioners Motion to Dismiss was still pending, petitioner prayed for and was able
to avail of modes of discovery against respondent, such as written interrogatories,
requests for admission, deposition, and motions for production of documents. [40]
Petitioner counters that under this Courts ruling in the leading case of La
Naval Drug Corporation v. Court of Appeals,[41] a party may file a Motion to Dismiss

on the ground of lack of jurisdiction over its person, and at the same time raise
affirmative defenses and pray for affirmative relief, without waiving its objection to
the acquisition of jurisdiction over its person. [42]
It appears, however, that petitioner misunderstood our ruling in La Naval. A
close reading of La Naval reveals that the Court intended a distinction between the
raising of affirmative defenses in an Answer (which would not amount to
acceptance of the jurisdiction of the court) and the prayer for affirmative
reliefs (which would be considered acquiescence to the jurisdiction of the court):
In the same manner that a plaintiff may assert two or
more causes of action in a court suit, a defendant is likewise
expressly allowed, under Section 2, Rule 8, of the Rules of
Court, to put up his own defenses alternatively or even
hypothetically. Indeed, under Section 2, Rule 9, of the Rules of Court,
defenses and objections not pleaded either in a motion to dismiss or in
an answer, except for the failure to state a cause of action, are
deemed waived. We take this to mean that a defendant may, in fact,
feel enjoined to set up, along with his objection to the court's
jurisdiction over his person, all other possible defenses. It thus appears
that it is not the invocation of any of such defenses, but the failure to
so raise them, that can result in waiver or estoppel. By defenses, of
course, we refer to the grounds provided for in Rule 16 of the
Rules of Court that must be asserted in a motion to dismiss or
by way of affirmative defenses in an answer.
Mindful of the foregoing, in Signetics Corporation vs.
Court of Appeals and Freuhauf Electronics Phils., Inc. (225
SCRA 737, 738), we lately ruled:
This is not to say, however, that the
petitioner's right to question the jurisdiction of the
court over its person is now to be deemed a
foreclosed matter. If it is true, as Signetics claims, that
its only involvement in the Philippines was through a
passive investment in Sigfil, which it even later disposed
of, and that TEAM Pacific is not its agent, then it cannot
really be said to be doing business in the Philippines. It is
a defense, however, that requires the contravention of the
allegations of the complaint, as well as a full ventilation,
in effect, of the main merits of the case, which should not
thus be within the province of a mere motion to dismiss.
So, also, the issue posed by the petitioner as to whether a
foreign corporation which has done business in the
country, but which has ceased to do business at the time
of the filing of a complaint, can still be made to answer for
a cause of action which accrued while it was doing
business, is another matter that would yet have to await
the reception and admission of evidence. Since these
points have seasonably been raised by the

petitioner, there should be no real cause for what


may understandably be its apprehension, i.e., that
by its participation during the trial on the merits, it
may, absent
an
invocation
of
separate
or
independent reliefs of its own, be considered to
have voluntarily submitted itself to the court's
jurisdiction.[43] (Emphases supplied.)
In order to conform to the ruling in La Naval, which was decided by this Court
in 1994, the former Section 23, Rule 14 [44]concerning voluntary appearance was
amended to include a second sentence in its equivalent provision in the 1997 Rules
of Civil Procedure:
SEC. 20. Voluntary appearance. The defendant's voluntary
appearance in the action shall be equivalent to service of
summons.The inclusion in a motion to dismiss of other grounds
aside from lack of jurisdiction over the person of the defendant
shall not be deemed a voluntary appearance. (Emphasis
supplied.)
The new second sentence, it can be observed, merely mentions other
grounds in a Motion to Dismiss aside from lack of jurisdiction over the person of the
defendant. This clearly refers to affirmative defenses, rather than affirmative
reliefs.
Thus, while mindful of our ruling in La Naval and the new Section 20, Rule 20,
this Court, in several cases, ruled that seeking affirmative relief in a court is
tantamount to voluntary appearance therein. [45] Thus, in Philippine Commercial
International Bank v. Dy Hong Pi,[46] wherein defendants filed a Motion for Inhibition
without submitting themselves to the jurisdiction of this Honorable Court
subsequent to their filing of a Motion to Dismiss (for Lack of Jurisdiction), we held:
Besides, any lingering doubts on the issue of voluntary
appearance dissipate when the respondents' motion for inhibition is
considered. This motion seeks a sole relief: inhibition of Judge
Napoleon Inoturan from further hearing the case. Evidently, by
seeking affirmative relief other than dismissal of the case,
respondents manifested their voluntary submission to the
court's jurisdiction. It is well-settled that the active participation of a
party in the proceedings is tantamount to an invocation of the court's
jurisdiction and a willingness to abide by the resolution of the case,
and will bar said party from later on impugning the court's jurisdiction.
[47]
(Emphasis supplied.)
In view of the above, we therefore rule that petitioner, by seeking affirmative
reliefs from the trial court, is deemed to have voluntarily submitted to the
jurisdiction of said court. A party cannot invoke the jurisdiction of a court to secure

affirmative relief against his opponent and after obtaining or failing to obtain such
relief, repudiate or question that same jurisdiction. [48] Consequently, the trial court
cannot be considered to have committed grave abuse of discretion amounting to
lack or excess of jurisdiction in the denial of the Motion to Dismiss on account of
failure to acquire jurisdiction over the person of the defendant.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision
of the Court of Appeals dated September 8, 2006 and its Resolution dated
December 12, 2006 in CA-G.R. SP No. 94382 are hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO


Associate Justice

Sec. 13. Service upon public corporations

Sec. 14. Service upon defendant whose identity or whereabouts


are unknown
Pua v. Deyto, G.R. No. 173336, November 26, 2012 pdf
Cathay Metal v. Laguna West, G.R. No. 172204, July 2, 2014 (Supra.)

Sec. 15. Extraterritorial service


NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011
(Supra.)
Acance v. Court of Appeals, G.R. No. 159699, March 16, 2005
SECOND DIVISION

[G.R. No. 159699. March 16, 2005]


ROSALINO P. ACANCE, in his capacity as Attorney-in-Fact, Administrator of
property and as counsel of SPOUSES JESULITO P. ACANCE and VILMA
ACANCE, SPOUSES MANUEL P. ACANCE and GUIA ACANCE, and
SPOUSES NESTOR P. ACANCE and LYNNE ACANCE, petitioners,
vs. COURT OF APPEALS, SPOUSES YOLANDA QUIJANO TRIA and
AMBROCIO TRIA, SPOUSES EPIFANIA QUIJANO and RAPHAEL
VILLANUEVA, and SPOUSES NAPOLEON PAGLICAWAN QUIJANO and
PILAR Z. QUIJANO, represented by their attorney-in-fact, ENGR.
JULIUS VILLANUEVA, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is a petition for review on certiorari seeking to reverse and set
aside the Resolution[1] dated November 29, 2002 of the Court of Appeals (CA) in CAG.R. SP No. 71658. In the said resolution, the appellate court dismissed the petition
for certiorari filed therewith for failure to file a motion for reconsideration with the
court a quo. Likewise sought to be reversed is the appellate courts Resolution
dated August 27, 2003 denying the reconsideration of its earlier resolution.
The case stemmed from the following facts:
On May 23, 2001, Spouses Yolanda Quijano and Ambrocio Tria, Spouses Epifania
Quijano and Raphael Villanueva, Spouses Napoleon and Pilar Quijano (respondents
herein), represented by their attorney-in-fact Engr. Julius F. Villanueva, filed with the
Regional Trial Court (RTC) of Muntinlupa an amended complaint against Spouses
Jesulito and Vilma Acance, Spouses Nestor and Lynne Acance, and Spouses Manuel
and Guia Acance (petitioners herein). The case was docketed as Civil Case No. 01122 and raffled to Branch 276 of the RTC of Muntinlupa City.
The amended complaint sought to annul the Extra-Judicial Settlement of the
Estate of Deceased Jesus P. Acance and Waiver of Rights dated February 10, 1997,
executed by Jesulito, Manuel and Nestor, all surnamed Acance, and their mother
Angela. The estate covered by the said extra-judicial settlement included two
parcels of land with a total area of 1,044 square meters under Transfer Certificates
of Titles (TCT) Nos. 239998 and 242993 and the improvements thereon consisting of
a 9-door apartment units, situated in Muntinlupa City. Following the execution of
the extra-judicial settlement, TCT Nos. 239998 and 242993, which were in the
names of Jesus and Angela Acance, were cancelled and, in their stead, TCT Nos.
4365 and 4366 were issued in the names of the Acance siblings.
The amended complaint alleged that the siblings Yolanda, Epifania and
Napoleon were the legitimate children of Angela Paglicawan and Vernier Quijano.
The couple, however, became estranged after the birth of their youngest child.
Upon their separation, Vernier continued to reside in Looc, Occidental Mindoro while
Angela went to Manila to work as a nurse at the National Mental Hospital in
Muntinlupa City. While working thereat, Angela met Jesus Acance. They lived
together as common law husband and wife and bore the siblings Jesulito, Manuel
and Nestor.

Some time in 1966, Angela went to the United States to work as a nurse. With
the savings she earned therefrom, she acquired the subject parcels of land in
Muntinlupa and had the subject 9-door apartment units constructed thereon. Jesus
Acance lived with Angela in the United States. After Vernier passed away in 1989,
Jesus and Angela got married in 1990. Jesus died in 1996 in the United States.
In seeking to nullify the extra-judicial settlement of estate executed by the
Acance siblings and their TCT Nos. 4365 and 4366, the Quijano siblings alleged that
the subject real properties are conjugal properties of Angela and Vernier because
these were acquired by Angela during the subsistence of her first marriage with
Vernier. As such, they (the Quijano siblings) have a valid right to succeed over the
said properties as the lawful and compulsory heirs of Angela and Vernier.
The Quijano siblings impugned the validity of the extra-judicial settlement
claiming that the signature of Angela thereon was a forgery or that she affixed the
same without her free volition because at the time of its execution, she was already
senile. In any case, Angelas purported waiver of her rights over the subject
properties in favor of her children with Jesus (Acance siblings) and excluding her
children with Vernier (Quijano siblings) is against the law. Consequently, TCT Nos.
4365 and 4366 of the Acance siblings are allegedly also void as they emanated from
the forged deed of extra-judicial settlement.
On April 26, 2002, upon motion of the respondents (the Quijano siblings and
their spouses), as plaintiffs therein, the court a quo issued an order declaring the
petitioners (the Acance siblings and their spouses), as defendants therein, in default
for their failure to file an answer to the amended complaint.
On May 13, 2002, petitioner Rosalino Acance, as attorney-in-fact and
administrator of the subject properties, filed with the court a quo a Motion to Lift/Set
Aside Order of Default. In his affidavit of merit attached to the said motion,
petitioner Rosalino alleged that the Acance siblings had appointed him as their
private prosecutor in a criminal case involving the subject real properties. On
January 25, 2002, upon learning about Civil Case No. 01-122, he filed therein a
Motion to Represent Defendants and set the same for hearing on February 5, 2002.
On the said date, however, petitioner Rosalino found out that his motion was not
included in the court calendar for that day. Since there was no action on his motion,
he had the impression that the court a quo needed time to determine other
jurisdictional requirements considering that the petitioners are American citizens
and non-residents of the Philippines.
Petitioner Rosalino further alleged that he had not received a copy of the
complaint filed in Civil Case No. 01-122. The only pleading he received pertaining
to the case was that of the motion to declare the petitioners in default and setting
the hearing thereon on April 26, 2002. At the said hearing, the respondents motion
was granted and the petitioners were declared in default.
The affidavit of merit likewise alleged that the petitioners have a valid and
meritorious defense including that the subject real properties were acquired by their
parents, Jesus and Angela, with both their earnings during the period that they lived
together. They denied that these were paraphernal properties of Angela or conjugal
properties of Angela and Vernier. The petitioners further claimed that the extrajudicial settlement was duly executed by them and Angelas waiver of her rights
over the subject properties in their favor was validly made. To prove that Angela

really intended to transfer the properties to them, the petitioners presented her Last
Will and Testament executed in the United States on December 6, 1996 in which she
bequeathed to them all her properties, real and personal, wherever situated.
In its Order dated June 27, 2002, the court a quo denied the motion to lift the
order of default. It explained that the petitioners are all residing abroad but the real
properties subject of the complaint are situated in Muntinlupa City. Accordingly,
upon motion, they were deemed served with the summons and the amended
complaint through publication thereof in a newspaper of general circulation in
Muntinlupa City, where the properties are located, and nationwide on October 20,
2001. The petitioners had sixty (60) days from the last publication or until
December 2, 2001 within which to file their answer. However, they failed to do so.
More than a month later, or on January 25, 2002, petitioner Rosalino filed the
motion to represent the petitioners and asked for sixty (60) days to file an answer.
According to the court a quo, since the motion was not an adversarial pleading it
was no longer included in the court calendar. It stressed that at the time said
counsel entered his appearance, the period to file an answer had long expired.
Further, the 60 days extension prayed for was not denied. However, the petitioners
still failed to file their answer within the extension period prayed for.
The court a quo faulted petitioner Rosalino, as counsel, for erroneously
assuming that since it failed to rule on his entry of appearance, the period to file an
answer was suspended. It pointed out that the fact that the counsel may be
allowed to represent a party-litigant or not does not toll the running of the period to
file the responsive pleading to the complaint.
Forthwith, the petitioners filed with the Court of Appeals a petition
for certiorari alleging grave abuse of discretion on the part of the court a quo in
denying their motion to lift the default order. Preliminarily, they averred that they
dispensed with the filing of a motion for reconsideration with the court a
quo because of the urgency of the matter as well as the fact that they raised
jurisdictional issues in their motion to lift the default order.
They contended that, in denying their motion to lift the order of default, the
court a quo adopted a rigid, strict and technical stance. Further, petitioner Rosalino,
as their counsel, was of the honest belief that when the court a quo did not act on
his motion to represent the petitioners, it was still determining whether all the
requirements for a valid extraterritorial service was made on them. They, likewise,
harped on the fact that the court a quos order denying their motion to lift order of
default had been promulgated before they even filed their reply to the respondents
opposition. They maintained that the court a quo did not acquire jurisdiction over
the petitioners because no valid extraterritorial service of summons was made on
them.
On November 29, 2002, the appellate court rendered the assailed Resolution
dismissing outright the petition for certiorari for failure of the petitioners to file a
motion for reconsideration with the court a quo. In so doing, it applied the general
rule that the filing of a motion for reconsideration of the disputed order is a
condition sine qua non in order that certiorari will lie. The petitioners moved for the
reconsideration of the said resolution but it was denied in the assailed Resolution
dated August 27, 2003. Hence, the recourse to this Court by the petitioners.

It is contended by the petitioners that the appellate court committed reversible


error in dismissing their petition for certiorari for failure to file a motion for
reconsideration with the court a quo. They posit that such omission is not fatal.
They maintain that they have a meritorious defense in Civil Case No. 01-122 and
that grave injuries and injustice would be inflicted on them unless they are afforded
the full opportunity to protect their interests. On the other hand, no undue
prejudice would be caused the respondents in the event that the order of default is
lifted and the action in the court a quo is heard on the merits.
According to the petitioners, the non-filing of a motion for reconsideration was
justified because the need for relief was extremely urgent and a motion for
reconsideration was not a plain and adequate remedy under the circumstances of
the case. Moreover, the questions raised before the appellate court were the same
as those which have been raised in the motion to lift order of default and already
passed upon by the court a quo. Finally, the failure to file a responsive pleading to
the respondents amended complaint was due to the excusable negligence of the
petitioners counsel.
For their part, the respondents urge the Court to deny the petition for review.
They are of the view that the appellate court correctly applied the general rule that
the filing of a motion for reconsideration is a condition sine qua non in order
that certiorari will lie.
The threshold issue that needs to be resolved is whether the CA committed
reversible error in dismissing the petition for certiorari for failure of the petitioners
to file a motion for reconsideration with the court a quo.
The Court rules in the affirmative.
The rule is well settled that the filing of a motion for reconsideration is an
indispensable condition to the filing of a special civil action forcertiorari.[2] However,
this rule admits of exceptions including:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) where the questions raised in the certiorari proceedings have been duly raised
and passed upon by the lower court, or are the same as those raised and passed
upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question and any
further delay would prejudice the interests of the Government or of the petitioner or
the subject matter of the action is perishable;
(d) where, under the circumstances, a motion for reconsideration would be useless;
(e) where petitioner was deprived of due process and there is extreme urgency for
relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and the granting
of such relief by the trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due process;

(h) where the proceedings was ex parte or in which the petitioner had no
opportunity to object; and
(i) where the issue raised is one purely of law or public interest is involved. [3]
A perusal of the petition for certiorari filed with the CA shows that the
petitioners expressly stated therein that they dispensed with the filing of a motion
for reconsideration with the court a quo because they raised questions of
jurisdiction in the motion to set aside the default order filed therewith. It was
further averred that there was an urgent necessity for relief as the court a
quo seemed to act with precipitate haste. It was, likewise, pointed out that the
court a quo allowed the respondents to present their evidence ex parte on April 30,
2002 (a Tuesday), just two office days after the default order was issued on April 26,
2002 (a Friday).
It appears that the CA committed reversible error in dismissing outright the
petition for certiorari for failure of the petitioners to move for a reconsideration of
the default order when it had been sufficiently shown that the need for relief was
extremely urgent. The procedural requirement that a motion for reconsideration
must first be filed before resorting to the special civil action of certiorari may be
glossed over to prevent a miscarriage of justice and, among other recognized
instances, when the need for relief is extremely urgent and certiorari is the only
adequate and speedy remedy available. [4] Among other remedies, a petition
for certiorari to declare the nullity of a judgment by default is available if the trial
court improperly declared a party in default, or even if the trial court properly
declared a party in default, if grave abuse of discretion attended such declaration. [5]
In this case, the court a quo acted with grave abuse of discretion in declaring
the petitioners in default without showing that there was full compliance with the
requirements for extraterritorial service of summons under Section 15, Rule 14 of
the Rules of Court. The said provision reads:
Sec. 15. Extraterritorial service. When the defendant does not reside and is not
found in the Philippines, and the action affects the personal status of the plaintiff or
relates to, or the subject of which is, property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant from any interest
therein, or the property of the defendant has been attached within the Philippines,
service may, by leave of court, be effected out of the Philippines by personal service
as under Section 6; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a copy of the
summons and order of the court shall be sent by registered mail to the last known
address of the defendant, or in any other manner the court may deem sufficient.
Any order granting such leave shall specify a reasonable time, which shall not be
less than sixty (60) days after notice, within which the defendant must answer.
The petitioners are citizens of the United States and residents thereof. Further,
the suit against them involves real property wherein the petitioners, as defendants
therein, have an interest. These facts clearly warranted extraterritorial service of
summons in accordance with Section 15, Rule 14 of the Rules of Court. The
rationale for service of summons on a nonresident defendant is explained, thus:

We repeat, service of summons on a nonresident defendant who is not found in the


country is required, not for purposes of physically acquiring jurisdiction over his
person but simply in pursuance of the requirements of fair play, so that he may be
informed of the pendency of the action against him and the possibility that the
property in the Philippines belonging to him or in which he has an interest may be
subjected to a judgment in favor of a resident, and that he may thereby be
accorded an opportunity to defend in the action, if he be so minded. The only relief
that may be granted in such an action against such a nonresident defendant, who
does not choose to submit himself to the jurisdiction of the Philippine court, is
limited to the res.[6]
In its Order dated April 26, 2002, the court a quo declared the petitioners in
default in this wise:
Since the last publication of this case more than 60 days ago, no answer has been
filed by any of the Defendants, the MOTION TO DECLARE THE DEFENDANTS IN
DEFAULT is, therefore, granted; hence Defendants, SPS. JESULITO P. ACANCE &
VILMA ACANCE, SPS. MANUEL P. ACANCE & GUIA ACANCE, and SPS. NESTOR P.
ACANCE & LYNNE ACANCE are defaulted.
Evidence for Plaintiffs may be received ex-parte before the Clerk of Court.[7]
However, as will be shown shortly, the service of summons in this case is
defective. There was no showing that copies of the summons and the amended
complaint were duly served at the petitioners last known correct address by
registered mail, as a complement to the publication pursuant to Section 15, Rule 14
of the Rules of Court[8] and in compliance with the court a quos Order dated July 1,
2001 granting the respondents motion for leave to serve summons by publication.
The respondents alleged that they had caused copies of the Amended
Complaint and Summons and the 1 July 2001 Order to be sent on November 13,
2001 by registered mail to the Acances known addresses in the United States. In
their Compliance dated January 31, 2002 filed with the court a quo, the respondents
averred that a copy of the summons and order of the court together with a copy of
the amended complaint had been sent to each of the three (3) defendants in their
respective addresses by registered mail, as evidenced by Registry Receipt No.
26832 for Nestor P. Acance dated November 13, 2001; Registry receipt No. 26833
for Jesulito P. Acance dated November 13, 2001 and Registry Receipt No. 26834 for
Manuel P. Acance dated November 13, 2001, all sent from the Makati City Branch
Post Office.[9] However, except for this bare allegation, the corresponding registry
receipts or copies thereof were not presented to show compliance with the rules.
Further, there was likewise non-compliance with Section 19, Rule 15 of the Rules
of Court relating to the proof of service by publication. The said provision reads:
Sec. 19. Proof of service by publication. If the service has been made by
publication, service may be proved by the affidavit of the printer, his foreman, or
principal clerk, or of the editor, business or advertising manager, to which affidavit a
copy of the publication shall be attached, and by an affidavit showing the deposit of
a copy of the summons and order for publication in the post office, postage prepaid,
directed to the defendant by registered mail to his last known address.

While the respondents claimed that they had complied with the service of
summons by publication in a newspaper of general circulation, [10] it does not appear
that they had presented to the court a quo the affidavit of the printer, his foreman,
or principal clerk, or of the editor, business or advertising manager of the
Remate, where the publication was allegedly made, to prove such service by
publication. Neither did they present an affidavit showing the deposit of a copy of
the summons and order of publication in the post office, postage prepaid, directed
to the petitioners by registered mail to their last known addresses.
The failure to strictly comply correctly with the requirements of the rules
regarding the mailing of copies of the summons and the order for its publication is a
fatal defect in the service of summons.[11] As held by this Court:
It is the duty of the court to require the fullest compliance with all the requirements
of the statute permitting service by publication. Where service is obtained by
publication, the entire proceeding should be closely scrutinized by the courts and a
strict compliance with every condition of law should be exacted. Otherwise great
abuses may occur, and the rights of persons and property may be made to depend
upon the elastic conscience of interested parties rather than the enlightened
judgment of the court or judge.[12]
Even granting arguendo that the respondents had fully complied with the
requirements for extraterritorial service of summons and the court a quo correctly
declared them in default; still, it should not have been too rash in dismissing the
petitioners motion to lift the default order. Well-settled is the rule that courts
should be liberal in setting aside orders of default for default judgments are frowned
upon, unless in cases where it clearly appears that the reopening of the case is
intended for delay. The issuance of the orders of default should be the exception
rather than the rule, to be allowed only in clear cases of obstinate refusal by the
defendant to comply with the orders of the trial court. [13] In this case, there is no
showing that the petitioners failure to file an answer was due to an apparent
scheme to delay the proceedings or to flagrantly transgress the rules.
Under the circumstances, the setting aside of the order of default is in order.
The petitioners should be afforded the opportunity to present evidence on their
behalf in order that substantial justice is achieved. After all, court litigations are
primarily for the search of truth, and a liberal interpretation of the rules by which
both parties are given the fullest opportunity to adduce proofs is the best way to
ferret out such truth.[14] By conducting a full-blown trial, both parties will be able to
present their evidence, thus, affording them the opportunity to enforce and protect
their respective rights.
WHEREFORE, the petition is GRANTED. The assailed Resolutions dated
November 29, 2002 and August 27, 2003 of the Court of Appeals in CA-G.R. SP No.
71658 are REVERSED AND SET ASIDE. The case is REMANDED to the court a quo,
which is DIRECTED to allow the petitioners to file their answer to the amended
complaint, and thereafter to conduct the proper proceedings in Civil Case No. 01122.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Spouses Jose v. Spouses Boyon, G.R. No. 147369, October 23, 2003
THIRD DIVISION

[G.R. No. 147369. October 23, 2003]


Spouses PATRICK JOSE and RAFAELA JOSE, petitioners, vs. 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.

The Case
Before the Court is a Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Court, assailing the February 26, 2001 Decision [2]of the Court of Appeals
(CA) in CA-GR SP No. 60888. The dispositive portion of the CA Decision is worded as
follows:
WHEREFORE, on the basis of what prescinds, the assailed resolution and orders
issued by the public respondent are perforce ANNULLED and SET ASIDE. This
pronouncement is nonetheless rendered without prejudice to the refiling of the
same case by the private respondents with the court a quo.[3]

The Facts
The factual antecedents of the case are narrated by the CA in this wise:
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 [respondents] 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:
x x x 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 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.
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.
xxx

xxx
xxx

On January 5, 2000, [respondent] Helen Boyon, who was then residing in


the United States of America, was surprised to learn from her sister ElizabethBoyon,
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]
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 inpersonam. Consequently, the Resolution and the Orders were
null and void, since the RTC had never acquired jurisdiction over respondents.
Hence, this Petition.[5]

Issues
In their Memorandum,
consideration:

petitioners

raise

the

following

issues

for

our

A. The Honorable Court of Appeals erred in not holding that the assailed Resolution
dated December 7, 1999 was already final and executory
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.

The Courts Ruling


The Petition has no merit.

Main Issue:
Validity of the Service of Summons
Petitioners aver that the CA erred in ruling that the service of summons on
respondents was invalid. They submit that although the case filed before the trial
court was denominated as an action for specific performance, it was actually an
action quasi in rem, because it involved a piece of real property located in the
Philippines. They further argue that in actions quasi in rem involving ownership of a
parcel of land, it is sufficient that the trial court acquire jurisdiction over
the res. Thus, the summons by publication, which they effected subsequent to the
substituted service of summons, was allegedly sufficient.
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 ArizaDrive, 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.
Respondents contend that when summons is served by substituted service, the
return must show that it was impossible to serve the summons personally, and that
efforts had been exerted toward that end. They add that noncompliance with the
rule on substituted service renders invalid all proceedings relative thereto.
As to the summons by publication subsequently effected by petitioners,
respondents argue that the case filed before the trial court was an action for
specific performance and, therefore, an action in personam. As such, the summons
by publication was insufficient to enable the trial court to acquire jurisdiction over
the persons of respondents.
Respondents conclude that even granting that the service of summons by
publication was permissible under the circumstances, it would still be defective and
invalid because of the failure of petitioners to observe the requirements of law, like
an Affidavit attesting that the latter deposited in the post office a copy of the
summons and of the order of publication, paid the postage, and sent the documents
by registered mail to the formers last known address.
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:
Section 6. Service in person on defendant. - Whenever practicable, the summons
shall be served by handing a copy thereof to the defendant in person, or, if he
refuses to receive and sign for it, by tendering it to him.
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 defendant's 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 some competent
person in charge thereof.
As can be gleaned from the above-quoted Sections, personal service of
summons is preferred to substituted service. Only if the former cannot be made
promptly can the process server resort to the latter. Moreover, the proof of service
of summons must (a) indicate the impossibility of service of summons within a
reasonable time; (b) specify the efforts exerted to locate the defendant; and (c)
state that the summons was served upon a person of sufficient age and discretion
who is residing in the address, or who is in charge of the office or regular place of
business, of the defendant.[7] It is likewise required that the pertinent facts proving
these circumstances be stated in the proof of service or in the officers return. The

failure to comply faithfully, strictly and fully with all the foregoing requirements of
substituted service renders the service of summons ineffective. [8]

Defective Personal
Service of Summons
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 Boyonwas 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:
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.
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:
x x x 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
proceedingstherefor were
discussed
[13]
in Madrigal v. Court of Appeals
as follows:

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 inrem. 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
validly acquire jurisdiction over their persons. Consequently, due process demands
that all the proceedings conducted subsequent thereto should be deemed null and
void.[17]
WHEREFORE, the Petition is DENIED and
Resolution AFFIRMED. Costs against petitioners.

the

assailed

Decision

and

SO ORDERED.
Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Sec. 16. Residents temporarily out of the Philippines

Leah Palma v. Hon. Galvez, G.R. No. 165273, March 10, 2010
(Supra.)
Montefalcon v. Vasquez, G.R. No. 165016, June 17, 2008
Belen v. Belen, G.R. No. 175334, March 26, 2008

Sec. 17. Leave of court

Sec. 18. Proof of service

Sec. 19. Proof of service by publication


Acance v. Court of Appeals, G.R. No. 159699, March 16, 2005 supra

Sec. 20. Voluntary appearance


Note: The following cases were already assigned on page 5 of the syllabus.
Herrera-Felix v. Court of Appeals, G.R. No. 143736, August 11, 2004
SECOND DIVISION

[G.R. No. 143736. August 11, 2004]


OFELIA
HERRERA-FELIX,
Represented
by
JOVITA
HERRERASEA, petitioner, vs. COURT OF APPEALS, andST. JOSEPH RESOURCES
DEVELOPMENT, INC., respondents.
RESOLUTION
CALLEJO, SR., J.:
This is a petition for review on certiorari assailing the Decision[1]of the Court of
Appeals which dismissed the petition to annul the Decision [2] of the Regional Trial
Court of Malabon, Metro Manila, Branch 73, in Civil Case No. 1967, on the ground of
lack of jurisdiction over the person of herein petitioner Ofelia Herrera-Felix.

The Antecedents
On March 11, 1993, respondent St. Joseph Resource Development, Inc. filed a
complaint for sum of money against the Spouses Restituto and Ofelia Felix with a

prayer for a writ of preliminary attachment. It was alleged therein that, during the
period from November 16, 1992 to December 14, 1992, the Felix Spouses
purchased from the respondent tubs of assorted fish, as follows:
Date of Purchase
Amount of Fish Purchased
November
November
November
November
December
December
December
December
December
December
December
December
December

16, 1992
17, 1992
19, 1992
20, 1992
2, 1992
3, 1992
5, 1992
8, 1992
9, 1992
11, 1992
12, 1992
13, 1992
14, 1992

Total

.....

P 183,360.00
114,380.00
56,014.00
183,400.00
70,000.00
159,100.00
73,500.00
79,025.50
275,190.00
102,840.00
78,300.00
108,692.00
32,379.50
----------------P 1,516,181.00

It was also alleged that the Felix Spouses still had an outstanding obligation
amounting to P1,132,065.50, after deducting their total payment of P438,615.50
from their aggregate purchases. The respondent prayed that, after due
proceedings, judgment be rendered in its favor, thus:
WHEREFORE, it is respectfully prayed that judgment be rendered in favor of plaintiff
and against defendants, ordering the latter to pay the former the following:
1. P1,132,065.50, representing their unpaid obligation, including unpaid tubs, plus
legal interest from the date of filing of the complaint;
2. Attorneys fees equivalent to 25% of the foregoing amount; and
3. Costs of suit.
Plaintiff likewise prays that a writ of preliminary attachment be issued ex
parte against the properties of defendants as security for the satisfaction of any
judgment that may be recovered.
Other just and equitable relief is also prayed for. [3]
The case was docketed as Civil Case No. 1967.
The trial court granted the respondents prayer for a writ of preliminary
attachment on a bond of P1,132,065.50 which was posted onMarch 26, 1993. The
Sheriff levied and took custody of some of the personal properties of the Felix
Spouses. On March 26, 1993, a copy of the writ of preliminary attachment,
summons and complaint were served on them at their residence, through the sister
of Ofelia Herrera-Felix, Ma. Luisa Herrera. [4] According to the Sheriffs Return, Ofelia
Herrera-Felix was out of the country, as per the information relayed to him by Ma.

Luisa Herrera. On April 5, 1993, the Felix Spouses, through Atty. Celestino C. Juan,
filed a motion praying for an extension of time to file their answer to the complaint.
[5]
On April 6, 1993, the trial court issued an Order granting the motion. However,
the Felix Spouses failed to file their answer to the complaint. The respondent then
filed a Motion dated April 23, 1993 to declare the said spouses in default, [6] which
motion was granted by the court in its Resolution [7] dated May 13, 1993. A copy of
the said resolution was sent to and received by the counsel of the Felix Spouses
through registered mail.
On August 11, 1993, the court a quo rendered a decision in favor of the
respondent, the decretal portion of which reads:
WHEREFORE, judgment is hereby rendered ordering:
1.
The defendants to pay, jointly and severally, the plaintiffs the amount of ONE
MILLION SEVENTY-SEVEN THOUSAND FIVE HUNDRED SIXTY-FIVE PESOS
AND FIFTY CENTAVOS (P1,077,565.50) plus legal rate of interest from the date of
the filing of the complaint;
2.
The defendants to pay, jointly and severally, the amount of TWENTY-FIVE
THOUSAND PESOS (P25,000.00) as/for reasonable Attorneys fees;
3.

The defendants to pay the costs of this suit.

SO ORDERED.[8]
Copies of the said decision were mailed to the Felix Spouses and their counsel,
Atty. Celestino C. Juan, by registered mail. The copy of the decision addressed to
the spouses was returned to the court after two notices for having been
Unclaimed. However, then counsel for the Felix Spouses received his copy of the
decision.
The decision of the trial court became final and executory after the Felix
Spouses failed to appeal the same. The respondent filed a motion for a writ of
execution. A copy thereof was served on the said spouses by registered mail, but
they failed to oppose the motion. The court thereafter issued an order granting the
motion and directing the issuance of a writ of execution. The counsel for the Felix
Spouses received a copy of the said order. Thereafter, the following personal
properties of the latter were levied upon and sold by the sheriff at public auction
for P83,200.00 to the respondent as the winning bidder:
(1) unit Jeep-semi stainless
(1) unit Jeep-stainless
(1) Victor-Radio/TV/Cassette Recorder
(1) Sony 17 TV w/ remote control
(1) Kawai Electric Organ
(3) Hitachi Stand Fan
(1) Standard Desk Fan
(1) 6 pieces Sala Set.[9]
On August 14, 1995, the Sheriff executed a Certificate of Sale of personal
properties.[10]

On September 13, 1996, petitioner Ofelia Herrera-Felix, represented by another


sister, Jovita Herrera-Sea, filed a petition with the Court of Appeals under Rule 47
of the Rules of Court for the nullification of the trial courts judgment by default, the
writ of execution issued by the said court, and the sale of her properties at public
auction. The petitioner alleged, inter alia, that the complaint and summons were
handed over to her sister, Ma. Luisa Herrera, who was merely a visitor in her house
and, as such, was not a valid substituted service under Rule 14, Section 7 of the
Rules of Court. She also alleged that her husband Restituto Felix had died as early
as April 23, 1988, as evidenced by his Certificate of Death. [11]
In its comment on the petition, the respondent alleged that the substituted
service of the complaint and summons on the petitioner, who was then temporarily
outside the Philippines, through her sister Ma. Luisa Herrera, was valid and
effective. The respondent, likewise, averred that even if such substituted service on
the petitioner was defective, the defect was cured when the latter, through her
counsel, Atty. Celestino C. Juan, appeared in court and moved for an extension of
time to file her responsive pleading. The respondent also maintained that the
petitioner and her counsel were served with copies of the decision of the court a
quo, but that the petitioner failed to appeal the decision.
In her reply to the comment of the respondent, the petitioner alleged that since
she failed to file a responsive pleading to the complaint, the appearance of Atty.
Celestino C. Juan, as her counsel, did not constitute as a voluntary submission to the
jurisdiction of the court.
On June 7, 2000, the CA rendered a decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, finding that the court a quo validly acquired
jurisdiction over the action and absent any ground warranting the annulment of its
judgment, this petition is hereby DISMISSED for lack of merit
SO ORDERED.[12]
The petitioner, through her sister, Jovita Herrera-Sea, now comes to this
Court via a petition for review on certiorari praying for the reversal of the decision of
the Court of Appeals. She alleges that the trial court did not acquire jurisdiction
over her person through the service of the complaint and summons on her sister,
Ma. Luisa Herrera. She maintains that the latter was a mere visitor in her house,
not a resident therein; hence, the decision of the trial court is null and void. She
further alleges that even assuming the validity of the trial courts decision, such
decision never became final and executory since she was not served a copy of the
same. As such, the writ of execution issued by the trial court, the sale of her
personal properties at public auction, as well as the issuance of the Certificate of
Sale, are null and void. She asserts that the actuations of both the trial court and
the Sheriff deprived her of her right to due process.
The contentions of the petitioner have no merit.
The court acquires jurisdiction over the person of the defendant by service of
the complaint and summons on him, either by personal service or by substituted
service or by extra-territorial service thereof or by his voluntary personal
appearance before the court or through counsel. In this case, the petitioner

appeared before the court, through counsel, and filed a motion for extension of
time to file her answer to the complaint which the trial court granted. She even
admitted in the said motion that she was served with a copy of the complaint as
well as the summons. The admissions made in a motion are judicial admissions
which are binding on the party who made them. Such party is precluded from
denying the same unless there is proof of palpable mistake or that no such
admission was made.[13]
By filing the said motion, through counsel, the petitioner thereby submitted
herself to the jurisdiction of the trial court. Indeed, inBusuego vs. Court of Appeals,
[14]
we ruled that:
A voluntary appearance is a waiver of the necessity of a formal notice. An
appearance in whatever form, without explicitly objecting to the jurisdiction of the
court over the person, is a submission to the jurisdiction of the court over the
person. While the formal method of entering an appearance in a cause pending in
the courts is to deliver to the clerk a written direction ordering him to enter the
appearance of the person who subscribes it, an appearance may be made by simply
filing a formal motion, or plea or answer. This formal method of appearance is not
necessary. He may appear without such formal appearance and thus submit himself
to the jurisdiction of the court. He may appear by presenting a motion, for example,
and unless by such appearance he specifically objects to the jurisdiction of the
court, he thereby gives his assent to the jurisdiction of the court over his
person. When the appearance is by motion objecting to the jurisdiction of the court
over his person, it must be for the sole and separate purpose of objecting to the
jurisdiction of the court. If his motion is for any other purpose than to object to the
jurisdiction of the court over his person, he thereby submits himself to the
jurisdiction of the court.[15]
Equally barren of factual basis is the claim of the petitioner that she was not
served with a copy of the decision of the trial court. The records show that aside
from the copy of the decision sent to her by the Branch Clerk of Court by registered
mail, another copy of the decision was served on her through her counsel, Atty.
Celestino C. Juan, who received the same. The service of the decision on the
petitioner, through counsel, is binding on her, conformably to Rule 13, Section 2 of
the Rules of Court.[16]
We reject the petitioners plaint of having been deprived of her right to due
process.
The essence of due process is a reasonable opportunity to be heard and submit
evidence in support of ones defense. What the law proscribes, therefore, is the
lack of opportunity to be heard. [17] A party who opts not to avail of the opportunity
to answer cannot complain of procedural due process. There can be no denial of due
process where a party had the opportunity to participate in the proceedings but
failed to do so through his own fault.
WHEREFORE, the petition is DENIED DUE COURSE. The assailed decision of
the Court of Appeals dated June 7, 2000 is hereby AFFIRMED. Costs against the
petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

JAPRIL Dev. Corp. v. Security Bank, G.R. No. 190107, June 6, 2011
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
JAPRL DEVELOPMENT CORP.,
PETER RAFAEL C. LIMSON and
JOSE UY AROLLADO,
Petitioners,

- versus -

G.R. No. 190107


Present:
CARPIO MORALES, J.,
Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.

SECURITY BANK CORPORATION,


Respondent.
Promulgated:
June 6, 2011
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.,
JAPRL Development Corporation (JAPRL), a domestic corporation engaged in
fabrication, manufacture and distribution of steel products, applied for a credit
facility (Letter of Credit/Trust Receipt) in the amount of Fifty Million (P50,000,000)
Pesos with Security Bank Corporation (SBC). The application was approved and the
Credit Agreement took effect on July 15, 1996.[1]
On November 5, 2001, petitioners Peter Rafael C. Limson (Limson) and Jose
Uy Arollado (Arollado), JAPRL Chairman and President, respectively, executed a
Continuing Suretyship Agreement (CSA)[2] in favor of SBC wherein they guaranteed
the due and full payment and performance of JAPRLs guaranteed obligations under
the credit facility.[3]
In 2002, on JAPRLs proposal, SBC extended the period of settlement of his
obligations.
In 2003, JAPRLs financial adviser, MRM Management Incorporated (MRM),
convened JAPRLs creditors, SBC included, for the purpose of restructuring JAPRLs

existing loan obligations. Copies of JAPRLs financial statements from 1998 to 2001
were given for the creditors to study.
SBC soon discovered material inconsistencies in the financial statements
given by MRM vis--vis those submitted by JAPRL when it applied for a credit facility,
drawing SBC to conclude that JAPRL committed misrepresentation.
As paragraph 10 (c) of the Credit Agreement [4] provided, if any
representation or warranty, covenant or undertaking embodied [therein] and [in]
the Credit Instrument or in any certificate, statement or document submitted to SBC
turns out to be untrue or ceases to be true in any material respect, or is violated or
not complied with, such will constitute an event of default committed by JAPRL and
its sureties.

On the basis of Item 2 of the CSA,[5] SBC sent a formal letter of


demand[6] dated August 20, 2003 to petitioners JAPRL, Limson and Arollado for the
immediate payment of Forty Three Million Nine Hundred Twenty Six Thousand and
Twenty One Pesos and 41/100 (P43,926,021.41) representing JAPRLs outstanding
obligations.
Petitioners failed to comply with SBCs demand, hence, SBC filed on
September 1, 2003 a complaint for sum of money with application for issuance of
writ of preliminary attachment[7] before the Regional Trial Court (RTC)
of Makati City against JAPRL, Limson and Arollado.
During the hearing on the prayer for the issuance of writ of preliminary
attachment on September 16, 2003, SBCs counsel manifested that it received a
copy of a Stay Order dated September 8, 2003 issued by the RTC of Quezon City,
Branch 90 wherein JAPRLs petition for rehabilitation was lodged. The Makati RTC at
once ordered in open court the archiving of SBCs complaint for sum of money until
disposition by the Quezon City RTC of JAPRLs petition for rehabilitation. [8]
When the Makati RTC reduced to writing its open court Order of September
16, 2003, however, it instead declared the dismissal of SBCs complaint without
prejudice:
When this case was called for hearing, plaintiffs counsel
manifested that they received a Stay Order from Regional Trial Court,
Br. 190, Quezon City, relative to the approval of the Rehabilitation Plan
filed by defendant JAPRL Dev. Corp. and in view thereof heprayed that
the present case be archived instead. However, the Court is of the view
to have the case dismissed without prejudice so that a disposition be
made on the case.
WHEREFORE, let the present case be ordered DISMISSED without
prejudice to a refiling or having a claim filed with the appropriate
forum.

SO ORDERED.[9] (underscoring supplied)


On SBCs motion for reconsideration, however, the Makati RTC, by Order of
January 9, 2004,[10] reverted to its oral order of archiving SBCs complaint.
SBC moved to clarify the Makati RTC January 9, 2004 Order, positing that the
suspension of the proceedings should only be with respect to JAPRL but not with
respect to Limson and Arollado.[11] The Makati RTC, by Order of February 25, 2004,
mantained its order archiving the complaint against all petitioners herein, however.
SBC filed a motion for reconsideration [12] of the February 25, 2004 Order, to
which
Limson
and
Arollado
separately
filed
an
Opposition
(Ad
[13]
Cautelam)
wherein they claimed that summons were not served on them, hence,
the Makati RTC failed to acquire jurisdiction over their person. At any rate, they
raised defenses against SBCs claim that they acted as sureties of JAPRL.

Meanwhile, the proposed rehabilitation plan before the Quezon City RTC was
disapproved by Order of May 9, 2005.[14] On SBCs motion, theMakati RTC thus
reinstated SBCs complaint to its docket, by Order of February 27, 2006. [15]
Petitioners later filed before the Makati RTC a Manifestation (Ad Cautelam)
informing that a Stay Order dated March 13, 2006 [17] was issued, this time by the
Calamba RTC, Branch 34, in a new petition for rehabilitation filed by JAPRL and its
subsidiary, RAPID Forming Corporation, and praying for the archiving of SBCs
complaint.
[16]

By Order of June 30, 2006,[18] the Makati RTC again archived SBCs complaint
against petitioners. SBC, by Consolidated Motion, moved for the reconsideration of
the June 30, 2006 Order, averring that its complaint should not have been archived
with respect to sureties Limson and Arollado; and that since the two failed to file
their respective Answers within the reglementary period, they should be declared in
default.
The Makati RTC denied, by Order of October 2, 2006, [19] the Consolidated
Motion of SBC, prompting SBC to file a petition for certiorari before the Court of
Appeals.
By Decision of September 25, 2008,[20] the appellate court held that Limson
and Arollado voluntarily submitted themselves to the jurisdiction of the Makati RTC,
despite the qualification that the filing of their respective Opposition[s] Ad
Cautelam and Manifestation[s] Ad Cautelam, was by way of special
appearance they having sought affirmative relief by praying for the archiving of
SBCs complaint.
The Manifestations and Oppositions filed by the individual
private respondents to the court a quo have the purpose of asking the
court to archive the case until the final resolution of either the Petition
for Rehabilitation filed by private respondent corporation JAPRL
inQuezon City or the subsisting Petition for Rehabilitation filed
in Calamba City, Laguna. Clearly, the purpose of those pleadings is to
seek for affirmative relief, (i.e. Suspending the proceedings in Civil
Case No. 03-1036) from the said court. By those pleadings asking for
affirmative relief, the individual private respondents had voluntarily
appeared in court. As expressly stated in Rule 14, Section 20, of the
Rules of Court, the defendants voluntary appearance in the action
shall be equivalent to service of summons. It is well settled that any
form of appearance in court, by the defendant, by his agent authorized
to do so, or by attorney, is equivalent to service except where such
appearance is precisely to object to the jurisdiction of the court over
the person of the defendant. x x x [21] (italics in the original;
underscoring supplied)

To the appellate court, SBCs claim against Limson and Arollado in their
capacity as sureties could proceed independently of JAPRLs petition for
rehabilitation:
x x x [T]he property of the surety cannot be taken into custody
by the rehabilitation receiver (SEC) and said surety can be sued
separately to enforce his liability as surety for the debts or obligations
of the debtor. The debts or obligations for which a surety may be liable
include future debts, an amount which may not be known at the time
the surety is given.
Aside from that, it is specifically stated under Rule 4, Section 6
(b) of the Interim Rules of Procedure on Corporate Rehabilitation, that
the issuance of a Stay order will have an effect of:
(b) staying enforcement of all claims whether for money or
otherwise and whether such enforcement is by court action otherwise,
against the debtor, its guarantors and sureties not solidarily
liable with the debtor.[22] (emphasis and italics in the original;
underscoring supplied)
The appellate court denied petitioners motion for reconsideration by
Resolution of October 29, 2009,[23] hence, the present petition for review on
certiorari.[24]
The petition fails.
A reading of the separate Oppositions Ad Cautelam by Limson and Arollado to
SBCs Motion for Reconsideration [25] shows that they did not challenge the trial
courts jurisdiction. Albeit both pleadings contained prefatory statements that the
two did not receive summons, they pleaded defenses in their favor, viz:
Limsons Opposition Ad Cautelam
6. First of all, there is no gainsaying that herein defendant
LIMSON as well as defendant AROLLADO are being sued in their
alleged capacities as SURETIES, with defendant JAPRL being the
DEBTOR. As SURETIES, they are covered by the Stay Order issued by
the court hearing the petition for corporate rehabilitation filed by Rapid
Forming Corp. and defendant JAPRL. The Stay Order directed, among
others, the stay of enforcement of ALL CLAIMS, WHETHER FOR
MONEY OR OTHERWISE, AND WHETHER SUCH ENFORCEMENT IS BY
COURT ACTION OR OTHERWISE, against the petitioner/s, and its/their
guarantors and SURETIES not solidarily liable with petitioner/s, [26] x x x
(all caps in the original)
Arollados Opposition (Ad Cautelam)
11. Certainly, the plaintiff cannot unjustly enrich itself and be
allowed to recover from both the DEBTOR JAPRL in accordance with the

rehabilitation plan, and at the same time from the alleged


SURETIES LIMSON and AROLLADO through the present complaint.

12. Moreover, defendant AROLLADO, as surety, can set up


against the plaintiff all the defenses which pertain to the principal
DEBTOR JAPRL and even those defenses that are inherent in the debt.
Likewise, defendant AROLLADO would, in any case, have a right of
action for reimbursement against JAPRL, the principal DEBTOR.
Additionally, defendant AROLLADO is given the right, under Article
1222 of the New Civil Code, to avail himself of all the
defenses which are derived from the nature of the obligation. Since the
plaintiff, and even defendants LIMSON and AROLLADO, are temporarily
barred from enforcing a claim against JAPRL, there is, therefore, every
reason tosuspend the proceedings against defendants LIMSON and
AROLLADO while the complaint is archived and cannot be prosecuted
against the DEBTOR JAPRL.[27] (capitalization and emphasis in the
original; underscoring supplied)
When a defendants appearance is made precisely to object to the jurisdiction
of the court over his person, it cannot be considered as appearance in court.
[28]
Limson and Arollado glossed over the alleged lack of service of summons,
however, and proceeded to exhaustively discuss why SBCs complaint could not
prosper against them as sureties. They thereby voluntarily submitted themselves to
the jurisdiction of the Makati RTC .
On a trial courts suspension of proceedings against a surety of a corporation
in the process of rehabilitation, Banco de Oro-EPCI, Inc. v. JAPRL Development
Corporation[29] holds that a creditor can demand payment from the surety solidarily
liablewith the corporation seeking rehabilitation, it being not included in the list of
stayed claims:
Indeed, Section 6(b) of the Interim Rules of Procedure of Corporate
Rehabilitation which the appellate court cited in the earlier-quoted portion of its
decision, provides that a stay order does not apply to sureties who are solidarily
liable with the debtor. In Limson and Arollados case, their solidary liability with
JAPRL is documented.
3. Liability of the Surety The liability of the Surety
is solidary and not contingent upon the pursuit by the Bank of
whatever remedies it may have against the Debtor or the
collaterals/liens it may possess. If any of the Guaranteed
Obligation is not paid or performed on due date (at stated maturity or
by acceleration), the Surety shall, without need for any notice, demand
or any other act or deed, immediately become liable therefor and the
Surety shall pay and perform the same. [30] (emphasis and underscoring
supplied)
Limson and Arollado, as sureties, whose liability is solidary cannot, therefore,
claim protection from the rehabilitation court, they not being the financiallydistressed corporation that may be restored, not to mention that the rehabilitation
court has no jurisdiction over them. Article 1216 of the Civil Code clearly is not on
their side:

ART. 1216. The creditor may proceed against any one of the
solidary debtors or some or all of them simultaneously. The demand
made against any one of them shall not be an obstacle to those which
may subsequently be directed against the others, so long as the debt
has not been fully collected. (underscoring supplied)
IN FINE, SBC can pursue its claim against Limson and Arollado despite the
pendency of JAPRLs petition for rehabilitation. For, by the CSA in favor of SBC, it is
the obligation of the sureties, who are therein stated to be solidary with JAPRL, to
see to it that JAPRLs debt is fully paid.[31]
Finally, contrary to petitioners position, the appellate courts decision only
nullified the suspension of proceedings against Limson and Arollado. [32] The
suspension with respect to JAPRL remains, in line with Philippine Blooming Mills v.
Court of Appeals.[33]
WHEREFORE, the petition is DENIED.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice

Rapid City Realty v. Villa, G.R. No. 184197, February 11, 2010
RAPID
CITY
REALTY
DEVELOPMENT CORPORATION,
Petitioner,

AND

G.R. No. 184197


Present:
PUNO, C.J., Chairperson,
CARPIO MORALES,
NACHURA,*
CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

- versus -

ORLANDO VILLA and LOURDES PAEZVILLA,[1]


Respondents.

Promulgated:
February 11, 2010
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

CARPIO MORALES, J.:


Sometime in 2004, Rapid City Realty and Development Corporation
(petitioner) filed a complaint for declaration of nullity of subdivision
plans . . . mandamus and damages against several defendants including Spouses
Orlando and Lourdes Villa (respondents). The complaint, which was docketed at the
Regional Trial Court of Antipolo City as Civil Case No. 04-7350, was lodged at Branch
71 thereof.
After one failed attempt at personal service of summons, Gregorio Zapanta
(Zapanta), court process server, resorted to substituted service by serving
summons upon respondents househelp who did not acknowledge receipt thereof
and refused to divulge their names. Thus Zapanta stated in the Return of
Summons:
THIS IS TO CERTIFY that on September 24, 2004, the
undersigned caused the service of summons together with a copy of
the complaint with its annexes to defendant Spouses Lourdes Estudillo
Paez-Cline and Orlando Villa at their given address at 905 Padre Faura
Street, Ermita Manila, as per information given by two lady househelps
who are also residing at the said address, the defendant spouses
are not around at that time. On the 27th of September, 2004, I
returned to the same place to serve the summons. I served the
summons and the copy of the complaint with its annexes to the two
ladies (The same lady househelp I met on Sept. 24, 2004) but
they refused to sign to acknowledge receipt and they refused
to tell their name as per instruction of the defendants. With me
who can attest to the said incident is Mr. Jun Llanes, who was with me
at that time.[2] x x x (emphasis and underscoring supplied)
Despite substituted service, respondents failed to file their Answer, prompting
petitioner to file a Motion to Declare Defendants[-herein respondents] in Default
which the trial court granted by Order of May 3, 2005.
More than eight months thereafter or on January 30, 2006, respondents filed
a Motion to Lift Order of Default,[3] claiming that on January 27, 2006 they
officially received all pertinent papers such as Complaint and Annexes. Motion to
Dismiss of the Solicitor General and the ORDER dated May 3, 2005 granting the
Motion to Declare [them] in Default.
And they denied the existence of two
women helpers who allegedly refused to sign and acknowledge receipt of the
summons. In any event, they contended that assuming that the allegation were
true, the helpers had no authority to receive the documents. [4]
By Order of July 17, 2006, the trial court set aside the Order of Default and
gave herein respondents five days to file their Answer. Respondents just the same
did not file an Answer, drawing petitioner to again file a Motion to declare them in
default, which the trial court again granted by Order of February 21, 2007.
On April 18, 2007, respondents filed an Omnibus Motion for reconsideration of
the second order declaring them in default and to vacate proceedings, this time

claiming that the trial court did not acquire jurisdiction over their persons due to
invalid service of summons.
The trial court denied respondents Omnibus Motion by Order of May 22,
2007 and proceeded to receive ex-parte evidence for petitioner.
Respondents, via certiorari, challenged the trial courts February 21, 2007 and
April 18, 2007 Orders before the Court of Appeals.
In the meantime, the trial court, by Decision of September 4, 2007,
rendered judgment in favor of petitioner.
By Decision of April 29, 2008,[5] the appellate court annulled the trial courts
Orders declaring respondents in default for the second time in this wise:
In assailing the orders of the trial court through their Motion to Lift
and later their Omnibus Motion the petitioners [herein-respondents]
never raised any other defense in avoidance of the respondents
[herein petitioners] claim, and instead focused all their energies on
questioning the said courts jurisdiction. The latter motion clearly
stated prefatorily their counsels reservation or special appearance to
question jurisdiction over the persons of the petitioners. A party who
makes a special appearance in court challenging the jurisdiction of said
court based on the ground of invalid service of summons is not
deemed to have submitted himself to the jurisdiction of the
court.[6] (citation omitted; italics, emphasis and underscoring
supplied)
Petitioners motion for reconsideration having been denied by the appellate
court by Resolution of August 12, 2008, it comes to the Court via petition for review
on certiorari, arguing in the main that respondents, in filing the first Motion to Lift
the Order of Default, voluntarily submitted themselves to the jurisdiction of the
court.
The petition is impressed with merit.
It is settled that if there is no valid service of summons, the court can still
acquire jurisdiction over the person of the defendant by virtue of the latters
voluntary appearance. Thus Section 20 of Rule 14 of the Rules of Court provides:
Sec. 20. Voluntary appearance. The defendants voluntary
appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack of
jurisdiction over the person shall not be deemed a voluntary
appearance.
And Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi and
Lolita Dy, et al. enlightens:

Preliminarily, jurisdiction over the defendant in a civil case is acquired


either by the coercive power of legal processes exerted over his
person, or his voluntary appearance in court. As a general proposition,
one who seeks an affirmative relief is deemed to have submitted to the
jurisdiction of the court. It is by reason of this rule that we have had
occasion to declare that the filing of motions 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,
isconsidered
voluntary
submission
to
the
courts
jurisdiction. This, however, is tempered by the concept of conditional
appearance, such that a party who makes a special appearance to
challenge, among others, the courts jurisdiction over his person
cannot be considered to have submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule
on voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the
person of the defendant must be explicitly made, i.e., set forth in
an unequivocal manner; and
(3) Failure to do so constitutes voluntary submission to the
jurisdiction of the court, especially in instances where a pleading or
motion seeking affirmative relief is filed and submitted to the court for
resolution.[7] (italics and underscoring supplied)
In their first Motion to Lift the Order of Default [8] dated January 30, 2006,
respondents alleged:
4.

xxxx
In the case of respondents, there is no reason why they should
not receive the Orders of this Honorable Court since the subject of
the case is their multi-million real estate property and naturally
they would not want to be declared in default or lose the same
outright without the benefit of a trial on the merits;

5.

It would be the height of injustice if the respondents is [sic]


denied the equal protection of the laws[;]

6.

Respondents must be afforded Due process of Law as


enshrined in the New Constitution, which is a basic right of every
Filipino, since they were not furnished copies of pleadings by the
plaintiff and the Order dated May 3, 2005;
x x x x[9]

and accordingly prayed as follows:


WHEREFORE, . . . it is most respectfully prayed . . . that the
Order dated May 5, 2005 declaring [them] in default be LIFTED. [10]
Respondents did not, in said motion, allege that their filing thereof was a special
appearance for the purpose only to question the jurisdiction over their
persons. Clearly, they had acquiesced to the jurisdiction of the court.
WHEREFORE, the petition is GRANTED. The assailed Court of Appeals
Decision of April 29, 2008 is REVERSED andSET ASIDE.
Let the original records of Civil Case No. 04-7350 be remanded to the court of
origin, Regional Trial Court of Antipolo City, Branch 71.
SO ORDERED.

CONCHITA CARPIO MORALES


Associate Justice

Allan Co v. Cordero, G.R. No. 164703, May 4, 2010

FIRST DIVISION
ALLAN C. GO, doing business
under the name and style ACG
Express Liner,
Petitioner,

G.R. No. 164703

- versus MORTIMER F. CORDERO,


Respondent.
x-----------------------------------------x
MORTIMER F. CORDERO,
Petitioner,

G.R. No. 164747

Present:
- versus -

ALLAN C. GO, doing business


under the name and style
ACG Express Liner, FELIPE M.
LANDICHO and VINCENT D. TECSON,
Respondents.

PUNO, C.J., Chairperson,


CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.
Promulgated:
May 4, 2010

x-----------------------------------------------------------------------------------------x
DECISION
VILLARAMA, JR., J.:
For review is the Decision[1] dated March 16, 2004 as modified by the
Resolution[2] dated July 22, 2004 of the Court of Appeals (CA) in CA-G.R. CV No.
69113, which affirmed with modifications the Decision [3] dated May 31, 2000 of the
Regional Trial Court (RTC) of Quezon City, Branch 85 in Civil Case No. 98-35332.
The factual antecedents:
Sometime in 1996, Mortimer F. Cordero, Vice-President of Pamana Marketing
Corporation (Pamana), ventured into the business of marketing inter-island
passenger vessels. After contacting various overseas fast ferry manufacturers from
all over the world, he came to meet Tony Robinson, an Australian national based
in Brisbane, Australia, who is the Managing Director of Aluminium Fast Ferries
Australia (AFFA).
Between June and August 1997, Robinson signed documents appointing
Cordero as the exclusive distributor of AFFA catamaran and other fast ferry vessels
in the Philippines. As such exclusive distributor, Cordero offered for sale to
prospective buyers the 25-meter Aluminium Passenger catamaran known as the
SEACAT 25.[4]
After negotiations with Felipe Landicho and Vincent Tecson, lawyers of Allan C.
Go who is the owner/operator of ACG Express Liner of Cebu City, a single
proprietorship, Cordero was able to close a deal for the purchase of two (2) SEACAT
25 as evidenced by the Memorandum of Agreement dated August 7, 1997.
[5]
Accordingly, the parties executed Shipbuilding Contract No. 7825 for one (1) highspeed catamaran (SEACAT 25) for the price of US$1,465,512.00. [6] Per agreement
between Robinson and Cordero, the latter shall receive commissions totalling
US$328,742.00, or 22.43% of the purchase price, from the sale of each vessel. [7]

Cordero made two (2) trips to the AFFA Shipyard in Brisbane, Australia, and
on one (1) occasion even accompanied Go and his family and Landicho, to monitor
the progress of the building of the vessel. He shouldered all the expenses for
airfare, food, hotel accommodations, transportation and entertainment during these
trips. He also spent for long distance telephone calls to communicate regularly with
Robinson, Go, Tecson and Landicho.
However, Cordero later discovered that Go was dealing directly with Robinson
when he was informed by Dennis Padua of Wartsila Philippines that Go was
canvassing for a second catamaran engine from their company which provided the
ship engine for the first SEACAT 25. Padua told Cordero that Go instructed him to
fax the requested quotation of the second engine to the Park Royal Hotel
in Brisbane where Go was then staying. Cordero tried to contact Go and Landicho
to confirm the matter but they were nowhere to be found, while Robinson refused to
answer his calls. Cordero immediately flew to Brisbane to clarify matters with
Robinson, only to find out that Go and Landicho were already there
in Brisbane negotiating for the sale of the second SEACAT 25. Despite repeated
follow-up calls, no explanation was given by Robinson, Go, Landicho and Tecson who
even made Cordero believe there would be no further sale between AFFA and ACG
Express Liner.
In a handwritten letter dated June 24, 1998, Cordero informed Go that such
act of dealing directly with Robinson violated his exclusive distributorship and
demanded that they respect the same, without prejudice to legal action against him
and Robinson should they fail to heed the same. [8] Corderos lawyer, Atty. Ernesto A.
Tabujara, Jr. of ACCRA law firm, also wrote ACG Express Liner assailing the
fraudulent actuations and misrepresentations committed by Go in connivance with
his lawyers (Landicho and Tecson) in breach of Corderos exclusive distributorship
appointment.[9]
Having been apprised of Corderos demand letter, Thyne & Macartney, the
lawyer of AFFA and Robinson, faxed a letter toACCRA law firm asserting that the
appointment of Cordero as AFFAs distributor was for the purpose of one (1)
transaction only, that is, the purchase of a high-speed catamaran vessel by ACG
Express Liner in August 1997. The letter further stated that Cordero was offered the
exclusive distributorship, the terms of which were contained in a draft agreement
which Cordero allegedly failed to return to AFFA within a reasonable time, and which
offer is already being revoked by AFFA. [10]
As to the response of Go, Landicho and Tecson to his demand letter, Cordero
testified before the trial court that on the same day, Landicho, acting on behalf of
Go, talked to him over the telephone and offered to amicably settle their
dispute. Tecson and Landicho offered to convince Go to honor his exclusive
distributorship with AFFA and to purchase all vessels for ACG Express Liner through
him for the next three (3) years. In an effort to amicably settle the matter,
Landicho, acting in behalf of Go, set up a meeting with Cordero on June 29, 1998
between 9:30 p.m. to 10:30 p.m. at the Mactan Island Resort Hotel lobby. On said
date, however, only Landicho and Tecson came and no reason was given for Gos
absence. Tecson and Landicho proposed that they will convince Go to pay him

US$1,500,000.00 on the condition that they will get a cut of 20%. And so it was
agreed between him, Landicho and Tecson that the latter would give him a weekly
status report and that the matter will be settled in three (3) to four (4) weeks and
neither party will file an action against each other until a final report on the
proposed settlement. No such report was made by either Tecson or Landicho who, it
turned out, had no intention to do so and were just buying time as the catamaran
vessel was due to arrive from Australia. Cordero then filed a complaint with the
Bureau of Customs (BOC) to prohibit the entry of SEACAT 25 from Australia based on
misdeclaration and undervaluation. Consequently, an Alert Order was issued by
Acting BOC Commissioner Nelson Tan for the vessel which in fact arrived on July 17,
1998. Cordero claimed that Go and Robinson had conspired to undervalue the
vessel by around US$500,000.00.[11]
On August 21, 1998, Cordero instituted Civil Case No. 98-35332 seeking to
hold Robinson, Go, Tecson and Landicho liable jointly and solidarily for conniving
and conspiring together in violating his exclusive distributorship in bad faith and
wanton disregard of his rights, thus depriving him of his due commissions (balance
of unpaid commission from the sale of the first vessel in the amount of
US$31,522.01 and unpaid commission for the sale of the second vessel in the
amount of US$328,742.00) and causing him actual, moral and exemplary damages,
including P800,000.00 representing expenses for airplane travel to Australia,
telecommunications bills and entertainment, on account of AFFAs untimely
cancellation of the exclusive distributorship agreement. Cordero also prayed for the
award of moral and exemplary damages, as well as attorneys fees and litigation
expenses.[12]
Robinson filed a motion to dismiss grounded on lack of jurisdiction over his
person and failure to state a cause of action, asserting that there was no act
committed in violation of the distributorship agreement. Said motion was denied by
the trial court on December 20, 1999. Robinson was likewise declared in default for
failure to file his answer within the period granted by the trial court. [13] As for Go
and Tecson, their motion to dismiss based on failure to state a cause of action was
likewise denied by the trial court on February 26, 1999.[14] Subsequently, they filed
their Answer denying that they have anything to do with the termination by AFFA of
Corderos authority as exclusive distributor in the Philippines. On the contrary, they
averred it was Cordero who stopped communicating with Go in connection with the
purchase of the first vessel from AFFA and was not doing his part in making progress
status reports and airing the clients grievances to his principal, AFFA, such that Go
engaged the services of Landicho to fly to Australia and attend to the documents
needed for shipment of the vessel to the Philippines. As to the inquiry for the
Philippine price for a Wartsila ship engine for AFFAs other on-going vessel
construction, this was merely requested by Robinson but which Cordero
misinterpreted as indication that Go was buying a second vessel. Moreover,
Landicho and Tecson had no transaction whatsoever with Cordero who had no
document to show any such shipbuilding contract. As to the supposed meeting to
settle their dispute, this was due to the malicious demand of Cordero to be given
US$3,000,000 as otherwise he will expose in the media the alleged undervaluation
of the vessel with the BOC. In any case, Cordero no longer had cause of action for
his commission for the sale of the second vessel under the memorandum of

agreement dated August 7, 1997 considering the termination of his authority by


AFFAs lawyers on June 26, 1998.[15]
Pre-trial was reset twice to afford the parties opportunity to reach a
settlement. However, on motion filed by Cordero through counsel, the trial court
reconsidered the resetting of the pre-trial to another date for the third time as
requested by Go, Tecson and Landicho, in view of the latters failure to appear at the
pre-trial conference on January 7, 2000 despite due notice. The trial court further
confirmed that said defendants misled the trial court in moving for continuance
during the pre-trial conference held onDecember 10, 1999, purportedly to go
abroad for the holiday season when in truth a Hold-Departure Order had been
issued against them.[16] Accordingly, plaintiff Cordero was allowed to present his
evidence ex parte.
Corderos testimony regarding his transaction with defendants Go, Landicho
and Tecson, and the latters offer of settlement, was corroborated by his counsel
who also took the witness stand. Further, documentary evidence including
photographs taken of the June 29, 1998 meeting with Landicho, Tecson and Atty.
Tabujara at Shangri-las Mactan Island Resort, photographs taken in Brisbane
showing Cordero, Go with his family, Robinson and Landicho, and also various
documents, communications, vouchers and bank transmittals were presented to
prove that: (1) Cordero was properly authorized and actually transacted in behalf of
AFFA as exclusive distributor in the Philippines; (2) Cordero spent considerable sums
of money in pursuance of the contract with Go and ACG Express Liner; and (3) AFFA
through Robinson paid Cordero his commissions from each scheduled payment
made by Go for the first SEACAT 25 purchased from AFFA pursuant to Shipbuilding
Contract No. 7825.[17]
On May 31, 2000, the trial court rendered its decision, the dispositive portion
of which reads as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered in favor of Plaintiff and against defendants Allan C. Go, Tony
Robinson, Felipe Landicho, and Vincent Tecson. As prayed for,
defendants are hereby ordered to pay Plaintiff jointly and solidarily, the
following:
1. On the First Cause of Action, the sum total of SIXTEEN MILLION
TWO HUNDRED NINETY ONE THOUSAND THREE HUNDRED
FIFTY TWO AND FORTY THREE CENTAVOS (P16,291,352.43) as
actual damages with legal interest from 25 June 1998 until
fully paid;
2. On the Second Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as moral damages;
3. On the Third Cause of Action, the sum of ONE MILLION PESOS
(P1,000,000.00) as exemplary damages; and

4. On the Fourth Cause of Action, the sum of ONE MILLION PESOS


(P1,000,000.00) as attorneys fees;
Costs against the defendants.
SO ORDERED.[18]
Go, Robinson, Landicho and Tecson filed a motion for new trial, claiming that
they have been unduly prejudiced by the negligence of their counsel who was
allegedly unaware that the pre-trial conference on January 28, 2000 did not push
through for the reason that Cordero was then allowed to present his evidence exparte, as he had assumed that the said ex-parte hearing was being conducted only
against Robinson who was earlier declared in default. [19] In its Order dated July 28,
2000, the trial court denied the motion for new trial. [20] In the same order, Corderos
motion for execution pending appeal was granted. Defendants moved to reconsider
the said order insofar as it granted the motion for execution pending appeal.
[21]
On August 8, 2000, they filed a notice of appeal. [22]
On August 18, 2000, the trial court denied the motion for reconsideration and
on August 21, 2000, the writ of execution pending appeal was issued.
[23]
Meanwhile, the notice of appeal was denied for failure to pay the appellate
court docket fee within the prescribed period. [24] Defendants filed a motion for
reconsideration and to transmit the case records to the CA. [25]
On September 29, 2000, the CA issued a temporary restraining order at the
instance of defendants in the certiorari case they filed with said court docketed as
CA-G.R. SP No. 60354 questioning the execution orders issued by the trial
court. Consequently, as requested by the defendants, the trial court recalled and
set aside its November 6, 2000 Order granting the ex-parte motion for release of
garnished funds, cancelled the scheduled public auction sale of levied real
properties, and denied the ex-parte Motion for Break-Open Order and ExParte Motion for Encashment of Check filed by Cordero. [26] On November 29, 2000,
the trial court reconsidered its Order dated August 21, 2000 denying due course to
the notice of appeal and forthwith directed the transmittal of the records to the CA.
[27]

On January 29, 2001, the CA rendered judgment granting the petition for
certiorari in CA-G.R. SP No. 60354 and setting aside the trial courts orders of
execution pending appeal. Cordero appealed the said judgment in a petition for
review filed with this Court which was eventually denied under our Decision
dated September 17, 2002.[28]
On March 16, 2004, the CA in CA-G.R. CV No. 69113 affirmed the trial court
(1) in allowing Cordero to present his evidence ex-parte after the unjustified failure
of appellants (Go, Tecson and Landicho) to appear at the pre-trial conference
despite due notice; (2) in finding that it was Cordero and not Pamana who was
appointed by AFFA as the exclusive distributor in the Philippines of its SEACAT 25
and other fast ferry vessels, which is not limited to the sale of one (1) such

catamaran to Go on August 7, 1997; and (3) in finding that Cordero is entitled to a


commission per vessel sold for AFFA through his efforts in the amount equivalent to
22.43% of the price of each vessel or US$328,742.00, and with payments of
US$297,219.91 having been made to Cordero, there remained a balance of
US$31,522.09 still due to him. The CA sustained the trial court in ruling that Cordero
is entitled to damages for the breach of his exclusive distributorship agreement with
AFFA. However, it held that Cordero is entitled only to commission for the sale of
the first catamaran obtained through his efforts with the remaining unpaid sum of
US$31,522.09 or P1,355,449.90 (on the basis of US$1.00=P43.00 rate) with interest
at 6% per annum from the time of the filing of the complaint until the same is fully
paid. As to the P800,000.00 representing expenses incurred by Cordero for
transportation, phone bills, entertainment, food and lodging, the CA declared there
was no basis for such award, the same being the logical and necessary
consequences of the exclusive distributorship agreement which are normal in the
field of sales and distribution, and the expenditures having redounded to the benefit
of the distributor (Cordero).
On the amounts awarded by the trial court as moral and exemplary damages,
as well as attorneys fees, the CA reduced the same to P500,000.00, P300,000.00
and P50,000.00, respectively. Appellants were held solidarily liable pursuant to the
provisions of Article 1207 in relation to Articles 19, 20, 21 and 22 of the New Civil
Code. The CA further ruled that no error was committed by the trial court in
denying their motion for new trial, which said court found to be pro forma and did
not raise any substantial matter as to warrant the conduct of another trial.
By Resolution dated July 22, 2004, the CA denied the motions for
reconsideration respectively filed by the appellants and appellee, and affirmed the
Decision dated March 16, 2004 with the sole modification that the legal interest of
6% per annum shall start to run from June 24, 1998 until the finality of the decision,
and the rate of 12% interest per annum shall apply once the decision becomes final
and executory until the judgment has been satisfied.
The case before us is a consolidation of the petitions for review under Rule
45 separately filed by Go (G.R. No. 164703) and Cordero (G.R. No. 164747) in which
petitioners raised the following arguments:
G.R. No. 164703
(Petitioner Go)
I.

THE HONORABLE COURT OF APPEALS DISREGARDED THE RULES


OF COURT AND PERTINENT JURISPRUDENCE AND ACTED WITH
GRAVE ABUSE OF DISCRETION IN NOT RULING THAT THE
RESPONDENT IS NOT THE REAL PARTY-IN-INTEREST AND IN NOT
DISMISSING THE INSTANT CASE ON THE GROUND OF LACK OF
CAUSE OF ACTION;

II.

THE HONORABLE COURT OF APPEALS IGNORED THE LAW AND


JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF DISCRETION
IN HOLDING HEREIN PETITIONER RESPONSIBLE FOR THE BREACH

IN THE ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT WITH


ALUMINIUM FAST FERRIES AUSTRALIA;
III.

THE HONORABLE APPELLATE COURT MISAPPLIED THE LAW AND


ACTED WITH GRAVE ABUSE OF DISCRETION IN FINDING
PETITIONER LIABLE IN SOLIDUM WITH THE CO-DEFENDANTS WITH
RESPECT TO THE CLAIMS OF RESPONDENT;

IV.

THE HONORABLE COURT OF APPEALS MISAPPLIED LAW AND


JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION WHEN IT
FOUND PETITIONER LIABLE FOR UNPAID COMMISSIONS, DAMAGES,
ATTORNEYS FEES, AND LITIGATION EXPENSES; and

V.

THE HONORABLE APPELLATE COURT ACTED CONTRARY TO LAW


AND JURISPRUDENCE AND GRAVELY ABUSED ITS DISCRETION
WHEN IT EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS
RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER COURTS
DENIAL OF PETITIONERS MOTION FOR NEW TRIAL.[29]

G.R. No. 164747


(Petitioner Cordero)
I.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE JUDGMENT OF
THE TRIAL COURT AWARDING PETITIONER ACTUAL DAMAGES FOR HIS
COMMISSION FOR THE SALE OF THE SECOND VESSEL, SINCE THERE IS
SUFFICIENT EVIDENCE ON RECORD WHICH PROVES THAT THERE WAS A
SECOND SALE OF A VESSEL.
A. THE MEMORANDUM OF AGREEMENT DATED 7 AUGUST
1997 PROVIDES
THAT
RESPONDENT
GO
WAS
CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS FROM
AFFA.
B. RESPONDENT GOS POSITION PAPER AND COUNTERAFFIDAVIT/POSITION PAPER THAT WERE FILED BEFORE THE
BUREAU OF CUSTOMS, ADMITS UNDER OATH THAT HE HAD
INDEED PURCHASED A SECOND VESSEL FROM AFFA.
C. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL BRIEF THAT
THEY HAD PURCHASED A SECOND VESSEL.
II.
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER IS NOT
ENTITLED TO HIS COMMISSIONS FOR THE PURCHASE OF A SECOND
VESSEL, SINCE IT WAS PETITIONERS EFFORTS WHICH ACTUALLY
FACILITATED AND SET-UP THE TRANSACTION FOR RESPONDENTS.

III.
THE COURT OF APPEALS ERRED IN NOT IMPOSING THE PROPER LEGAL
INTEREST RATE ON RESPONDENTS UNPAID OBLIGATION WHICH
SHOULD BE TWELVE PERCENT (12%) FROM THE TIME OF THE BREACH
OF THE OBLIGATION.

IV.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE ORIGINAL
AMOUNT OF CONSEQUENTIAL DAMAGES AWARDED TO PETITIONER BY
THE TRIAL COURT CONSIDERING THE BAD FAITH AND FRAUDULENT
CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE MONEY OF
PETITIONER.[30]
The controversy boils down to two (2) main issues: (1) whether petitioner
Cordero has the legal personality to sue the respondents for breach of contract; and
(2) whether the respondents may be held liable for damages to Cordero for his
unpaid commissions and termination of his exclusive distributorship appointment by
the principal, AFFA.
I. Real Party-in-Interest
First, on the issue of whether the case had been filed by the real party-ininterest as required by Section 2, Rule 3 of the Rules of Court, which defines such
party as the one (1) to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. The purposes of this provision are: 1) to
prevent the prosecution of actions by persons without any right, title or interest in
the case; 2) to require that the actual party entitled to legal relief be the one to
prosecute the action; 3) to avoid a multiplicity of suits; and 4) to discourage
litigation and keep it within certain bounds, pursuant to sound public policy. [31] A
case is dismissible for lack of personality to sue upon proof that the plaintiff is not
the real party-in-interest, hence grounded on failure to state a cause of action. [32]
On this issue, we agree with the CA in ruling that it was Cordero and not
Pamana who is the exclusive distributor of AFFA in the Philippines as shown by the
Certification dated June 1, 1997 issued by Tony Robinson. [33] Petitioner Go mentions
the following documents also signed by respondent Robinson which state that
Pamana Marketing Corporation represented by Mr. Mortimer F. Cordero was
actually the exclusive distributor: (1) letter dated 1 June 1997 [34]; (2) certification
dated 5 August 1997[35]; and (3) letter dated 5 August 1997 addressed to petitioner
Cordero
concerning commissions
to
be
paid
to
Pamana
Marketing
Corporation.[36] Such apparent inconsistency in naming AFFAs exclusive distributor
in the Philippines is of no moment. For all intents and purposes, Robinson and AFFA
dealt only with Cordero who alone made decisions in the performance of the
exclusive distributorship, as with other clients to whom he had similarly offered
AFFAs fast ferry vessels. Moreover, the stipulated commissions from each progress
payments made by Go were directly paid by Robinson to Cordero. [37] Respondents
Landicho and Tecson were only too aware of Corderos authority as the person who
was appointed and acted as exclusive distributor of AFFA, which can be gleaned
from their act of immediately furnishing him with copies of bank transmittals
everytime Go remits payment to Robinson, who in turn transfers a portion of funds
received to the bank account of Cordero in the Philippines as his commission. Out of
these partial payments of his commission, Cordero would still give Landicho and

Tecson
their
respective
commission,
or
cuts
from
his
own
commission. Respondents Landicho and Tecson failed to refute the evidence
submitted by Cordero consisting of receipts signed by them. Said amounts were
apart from the earlier expenses shouldered by Cordero for Landichos airline tickets,
transportation, food and hotel accommodations for the trip to Australia.[38]
Moreover, petitioner Go, Landicho and Tecson never raised petitioner
Corderos lack of personality to sue on behalf of Pamana, [39] and did so only before
the CA when they contended that it is Pamana and not Cordero, who was appointed
and acted as exclusive distributor for AFFA. [40] It was Robinson who argued in
support of his motion to dismiss that as far as said defendant is concerned, the real
party plaintiff appears to be Pamana, against the real party defendant which is
AFFA.[41] As already mentioned, the trial court denied the motion to dismiss filed by
Robinson.
We find no error committed by the trial court in overruling Robinsons
objection over the improper resort to summons by publication upon a foreign
national like him and in an action in personam, notwithstanding that he raised it in a
special appearance specifically raising the issue of lack of jurisdiction over his
person. Courts acquire jurisdiction over the plaintiffs upon the filing of the
complaint, while jurisdiction over the defendants in a civil case is acquired either
through the service of summons upon them in the manner required by
law or through their voluntary appearance in court and their submission to its
authority.[42] A party who makes a special appearance in court challenging the
jurisdiction of said court based on the ground of invalid service of summons is not
deemed to have submitted himself to the jurisdiction of the court. [43]
In this case, however, although the Motion to Dismiss filed by Robinson
specifically stated as one (1) of the grounds the lack of personal jurisdiction, it
must be noted that he had earlier filed a Motion for Time to file an appropriate
responsive pleading even beyond the time provided in the summons by publication.
[44]
Such motion did not state that it was 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 summons by publication issued
by the court and praying for additional time to file a responsive
pleading. Consequently, Robinson having acknowledged the summons by
publication and also having invoked the jurisdiction of the trial court to secure
affirmative relief in his motion for additional time, he effectively submitted
voluntarily to the trial courts jurisdiction. He is now estopped from asserting
otherwise, even before this Court.[45]
II. Breach of Exclusive Distributorship,
Contractual Interference and
Respondents Liability for Damages
In Yu v. Court of Appeals,[46] this Court ruled that the right to perform an
exclusive distributorship agreement and to reap the profits resulting from such
performance are proprietary rights which a party may protect. Thus, injunction is

the appropriate remedy to prevent a wrongful interference with contracts


by strangers to such contracts where the legal remedy is insufficient and the
resulting injury is irreparable. In that case, the former dealer of the same goods
purchased the merchandise from the manufacturer in England through a trading
firm in West Germany and sold these in the Philippines. We held that the rights
granted to the petitioner under the exclusive distributorship agreement may not be
diminished nor rendered illusory by the expedient act of utilizing or interposing a
person or firm to obtain goods for which the exclusive distributorship was
conceptualized, at the expense of the sole authorized distributor. [47]
In the case at bar, it was established that petitioner Cordero was not paid the
balance of his commission by respondent Robinson. From the time petitioner Go
and respondent Landicho directly dealt with respondent Robinson in Brisbane, and
ceased communicating through petitioner Cordero as the exclusive distributor of
AFFA in the Philippines, Cordero was no longer informed of payments remitted to
AFFA in Brisbane. In other words, Cordero had clearly been cut off from the
transaction until the arrival of the first SEACAT 25 which was sold through his
efforts. When Cordero complained to Go, Robinson, Landicho and Tecson about
their acts prejudicial to his rights and demanded that they respect his exclusive
distributorship, Go simply let his lawyers led by Landicho and Tecson handle the
matter and tried to settle it by promising to pay a certain amount and to purchase
high-speed catamarans through Cordero. However, Cordero was not paid anything
and worse, AFFA through its lawyer in Australia even terminated his exclusive
dealership insisting that his services were engaged for only one (1) transaction, that
is, the purchase of the first SEACAT 25 in August 1997.
Petitioner Go argues that unlike in Yu v. Court of Appeals[48] there is no
conclusive proof adduced by petitioner Cordero that they actually purchased a
second SEACAT 25 directly from AFFA and hence there was no violation of the
exclusive distributorship agreement. Further, he contends that the CA gravely
abused its discretion in holding them solidarily liable to Cordero, relying on Articles
1207, 19 and 21 of the Civil Code despite absence of evidence, documentary or
testimonial, showing that they conspired to defeat the very purpose of the exclusive
distributorship agreement.[49]
We find that contrary to the claims of petitioner Cordero, there was indeed no
sufficient evidence that respondents actually purchased a second SEACAT 25
directly from AFFA. But this circumstance will not absolve respondents from liability
for invading Corderos rights under the exclusive distributorship. Respondents
clearly acted in bad faith in bypassing Cordero as they completed the remaining
payments to AFFA without advising him and furnishing him with copies of the bank
transmittals as they previously did, and directly dealt with AFFA through Robinson
regarding arrangements for the arrival of the first SEACAT 25 in Manila and
negotiations for the purchase of the second vessel pursuant to the Memorandum of
Agreement which Cordero signed in behalf of AFFA. As a result of respondents
actuations, Cordero incurred losses as he was not paid the balance of his
commission from the sale of the first vessel and his exclusive distributorship
revoked by AFFA.

Petitioner Go contends that the trial and appellate courts erred in holding
them solidarily liable for Corderos unpaid commission, which is the sole obligation
of the principal AFFA. It was Robinson on behalf of AFFA who, in the letter
datedAugust 5, 1997 addressed to Cordero, undertook to pay commission payments
to Pamana on a staggered progress payment plan in the form of percentage of the
commission per payment. AFFA explicitly committed that it will, upon receipt of
progress payments, pay to Pamana their full commission by telegraphic transfer to
an account nominated by Pamana within one to two days of [AFFA] receiving such
payments.[50] Petitioner Go further maintains that he had not in any way violated
or caused the termination of the exclusive distributorship agreement between
Cordero and AFFA; he had also paid in full the first and only vessel he purchased
from AFFA.[51]
While it is true that a third person cannot possibly be sued for breach of
contract because only parties can breach contractual provisions, a contracting party
may sue a third person not for breach but for inducing another to commit such
breach.
Article 1314 of the Civil Code provides:
Art. 1314. Any third person who induces another to violate his
contract shall be liable for damages to the other contracting party.
The elements of tort interference are: (1) existence of a valid contract; (2)
knowledge on the part of the third person of the existence of a contract; and (3)
interference of the third person is without legal justification. [52]
The presence of the first and second elements is not disputed. Through the
letters issued by Robinson attesting that Cordero is the exclusive distributor of AFFA
in the Philippines, respondents were clearly aware of the contract between Cordero
and AFFA represented by Robinson. In fact, evidence on record showed that
respondents initially dealt with and recognized Cordero as such exclusive dealer of
AFFA high-speed catamaran vessels in the Philippines. In that capacity as exclusive
distributor, petitioner Go entered into the Memorandum of Agreement and
Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA.
As to the third element, our ruling in the case of So Ping Bun v. Court of
Appeals[53] is instructive, to wit:
A duty which the law of torts is concerned with is respect for the
property of others, and a cause of action ex delicto may be predicated
upon an unlawful interference by one person of the enjoyment by the
other of his private property. This may pertain to a situation where a
third person induces a party to renege on or violate his undertaking
under a contract. In the case before us, petitioners Trendsetter
Marketing asked DCCSI to execute lease contracts in its favor, and as a
result petitioner deprived respondent corporation of the latters
property right. Clearly, and as correctly viewed by the appellate court,

the three elements of tort interference above-mentioned are present in


the instant case.
Authorities debate on whether interference may be justified where
the defendant acts for the sole purpose of furthering his own financial
or economic interest. One view is that, as a general rule, justification
for interfering with the business relations of another exists where the
actors motive is to benefit himself. Such justification does not exist
where his sole motive is to cause harm to the other. Added to this,
some authorities believe that it is not necessary that the interferers
interest outweigh that of the party whose rights are invaded, and that
an individual acts under an economic interest that is substantial, not
merely de minimis, such that wrongful and malicious motives are
negatived, for he acts in self-protection. Moreover, justification for
protecting ones financial position should not be made to depend on a
comparison of his economic interest in the subject matter with that of
others. It is sufficient if the impetus of his conduct lies in a proper
business interest rather than in wrongful motives.
As early as Gilchrist vs. Cuddy, we held that where there
was no malice in the interference of a contract, and the
impulse behind ones conduct lies in a proper business interest
rather than in wrongful motives, a party cannot be a malicious
interferer. Where the alleged interferer is financially interested, and
such interest motivates his conduct, it cannot be said that he is an
officious or malicious intermeddler.
In the instant case, it is clear that petitioner So Ping Bun prevailed
upon DCCSI to lease the warehouse to his enterprise at the expense of
respondent corporation. Though petitioner took interest in the
property of respondent corporation and benefited from it,
nothing on record imputes deliberate wrongful motives or
malice in him.
x

While we do not encourage tort interferers seeking their economic


interest to intrude into existing contracts at the expense of others,
however, we find that the conduct herein complained of did not
transcend the limits forbidding an obligatory award for damages in the
absence of any malice. The business desire is there to make some gain
to the detriment of the contracting parties. Lack of malice,
however, precludes damages. But it does not relieve petitioner
of the legal liability for entering into contracts and causing
breach of existing ones. The respondent appellate court correctly
confirmed the permanent injunction and nullification of the lease
contracts between DCCSI and Trendsetter Marketing, without awarding
damages. The injunction saved the respondents from further damage
or injury caused by petitioners interference. [54] [EMPHASIS SUPPLIED.]

Malice connotes ill will or spite, and speaks not in response to duty. It implies
an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.
[55]
In the case of Lagon v. Court of Appeals,[56] we held that to sustain a case for
tortuous interference, the defendant must have acted with malice or must have
been driven by purely impure reasons to injure the plaintiff; in other words, his act
of interference cannot be justified. We further explained that the word induce
refers to situations where a person causes another to choose one course of conduct
by persuasion or intimidation. As to the allegation of private respondent in said
case that petitioner induced the heirs of the late Bai Tonina Sepi to sell the property
to petitioner despite an alleged renewal of the original lease contract with the
deceased landowner, we ruled as follows:
Assuming ex gratia argumenti that petitioner knew of the
contract, such knowledge alone was not sufficient to make him liable
for tortuous interference. x x x
Furthermore, the records do not support the allegation of private
respondent that petitioner induced the heirs of Bai Tonina Sepi to sell
the property to him. The word induce refers to situations where a
person causes another to choose one course of conduct by persuasion
or intimidation. The records show that the decision of the heirs of the
late Bai Tonina Sepi to sell the property was completely of their own
volition and that petitioner did absolutely nothing to influence their
judgment. Private respondent himself did not proffer any evidence to
support his claim. In short, even assuming that private respondent
was able to prove the renewal of his lease contract with Bai Tonina
Sepi, the fact was that he was unable to prove malice or bad faith on
the part of petitioner in purchasing the property. Therefore, the claim
of tortuous interference was never established. [57]
In their Answer, respondents denied having anything to do with the unpaid
balance of the commission due to Cordero and the eventual termination of his
exclusive distributorship by AFFA. They gave a different version of the events that
transpired following the signing of Shipbuilding Contract No. 7825. According to
them, several builder-competitors still entered the picture after the said contract
for the purchase of one (1) SEACAT 25 was sent to Brisbane in July 1997 for
authentication, adding that the contract was to be effective on August 7, 1997, the
time when their funds was to become available. Go admitted he called the
attention of AFFA if it can compete with the prices of other builders, and upon mutual
agreement, AFFA agreed to give them a discounted price under the following terms
and conditions: (1) that the contract price be lowered; (2) that Go will obtain
another vessel; (3) that to secure compliance of such conditions, Go must make an
advance payment for the building of the second vessel; and (4) that the payment
scheme formerly agreed upon as stipulated in the first contract shall still be the
basis and used as the guiding factor in remitting money for the building of the first
vessel. This led to the signing of another contract superseding the first one (1),
still to be dated 07 August 1997. Attached to the answer were photocopies of the
second contract stating a lower purchase price (US$1,150,000.00) and facsimile
transmission of AFFA to Go confirming the transaction.[58]

As to the cessation of communication with Cordero, Go averred it was


Cordero who was nowhere to be contacted at the time the shipbuilding progress
did not turn good as promised, and it was always Landicho and Tecson who, after
several attempts, were able to locate him only to obtain unsatisfactory reports
such that it was Go who would still call up Robinson regarding any progress status
report, lacking documents for MARINA, etc., and go to Australia for ocular
inspection. Hence, in May 1998 on the scheduled launching of the ship in
Australia, Go engaged the services of Landicho who went to Australia to see to it
that all documents needed for the shipment of the vessel to the Philippines would
be in order. It was also during this time that Robinsons request for inquiry on the
Philippine price of a Wartsila engine for AFFAs then on-going vessel construction,
was misinterpreted by Cordero as indicating that Go was buying a second vessel. [59]
We find these allegations unconvincing and a mere afterthought as these
were the very same averments contained in the Position Paper for the Importer
dated October 9, 1998, which was submitted by Go on behalf of ACG Express Liner
in connection with the complaint-affidavit filed by Cordero before the BOC-SGS
Appeals Committee relative to the shipment valuation of the first SEACAT 25
purchased from AFFA.[60] It appears that the purported second contract
superseding the original Shipbuilding Contract No. 7825 and stating a lower price
of US$1,150,000.00 (not US$1,465,512.00) was only presented before the BOC to
show that the vessel imported into the Philippines was not undervalued by almost
US$500,000.00. Cordero vehemently denied there was such modification of the
contract and accused respondents of resorting to falsified documents, including the
facsimile transmission of AFFA supposedly confirming the said sale for only
US$1,150,000.00. Incidentally, another document filed in said BOC case, the
Counter-Affidavit/Position Paper for the Importer dated November 16, 1998,
[61]
states in paragraph 8 under the Antecedent facts thereof, that -8.

As elsewhere stated, the total remittances made by


herein Importer to AFFA does not alone represent the
purchase price for Seacat 25. It includes advance
payment for the acquisition of another vessel as
part of the deal due to the discounted price.[62]

which even gives credence to the claim of Cordero that respondents negotiated
the sale of the second vessel and that the nonpayment of the remaining two
instalments of his commission for the sale of the first SEACAT 25 was a result of
and Landichos directly dealing with Robinson, obviously to obtain a lower price
the second vessel at the expense of Cordero.

for
(2)
Go
for

The act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter
into another contract directly with ACG Express Liner to obtain a lower price for the
second vessel resulted in AFFAs breach of its contractual obligation to pay in full
the commission due to Cordero and unceremonious termination of Corderos
appointment as exclusive distributor. Following our pronouncement in Gilchrist v.
Cuddy (supra), such act may not be deemed malicious if impelled by a proper
business interest rather than in wrongful motives. The attendant circumstances,
however, demonstrated that respondents transgressed the bounds of permissible

financial interest to benefit themselves at the expense of Cordero. Respondents


furtively went directly to Robinsonafter Cordero had worked hard to close the deal
for them to purchase from AFFA two (2) SEACAT 25, closely monitored the progress
of building the first vessel sold, attended to their concerns and spent no measly
sum for the trip to Australia with Go, Landicho and Gos family members. But what
is appalling is the fact that even as Go, Landicho and Tecson secretly negotiated
with Robinson for the purchase of a second vessel, Landicho and Tecson continued
to demand and receive from Cordero their commission or cut
from Corderos earned commission from the sale of the first SEACAT 25.
Cordero was practically excluded from the transaction when Go, Robinson,
Tecson and Landicho suddenly ceased communicating with him, without giving him
any explanation. While there was nothing objectionable in negotiating for a lower
price in the second purchase of SEACAT 25, which is not prohibited by the
Memorandum of Agreement, Go, Robinson, Tecson and Landicho clearly connived
not only in ensuring that Cordero would have no participation in the contract for
sale of the second SEACAT 25, but also that Cordero would not be paid the balance
of his commission from the sale of the first SEACAT 25. This, despite their
knowledge that it was commission already earned by and due to Cordero. Thus,
the trial and appellate courts correctly ruled that the actuations of Go, Robinson,
Tecson and Landicho were without legal justification and intended solely to
prejudice Cordero.
The existence of malice, ill will or bad faith is a factual matter. As a rule,
findings of fact of the trial court, when affirmed by the appellate court, are
conclusive on this Court.[63] We see no compelling reason to reverse the findings of
the RTC and the CA that respondents acted in bad faith and in utter disregard of
the rights of Cordero under the exclusive distributorship agreement.
The failure of Robinson, Go, Tecson and Landico to act with fairness, honesty
and good faith in securing better terms for the purchase of high-speed catamarans
from AFFA, to the prejudice of Cordero as the duly appointed exclusive distributor,
is further proscribed by Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith.
As we have expounded in another case:
Elsewhere, we explained that when a right is exercised in a manner
which does not conform with the norms enshrined in Article 19 and
results in damage to another, a legal wrong is thereby committed for
which the wrongdoer must be responsible. The object of this article,
therefore, is to set certain standards which must be observed not only
in the exercise of ones rights but also in the performance of ones
duties. These standards are the following: act with justice, give
everyone his due and observe honesty and good faith. Its antithesis,

necessarily, is any act evincing bad faith or intent to injure. Its


elements are the following: (1) There is a legal right or duty; (2) which
is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is proper
under Articles 20 or 21 of the Civil Code. Article 20 pertains to
damages arising from a violation of law x x x. Article 21, on the other
hand, states:
Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage.
Article 21 refers to acts contra bonus mores and has the following
elements: (1) There is an act which is legal; (2) but which is contrary to
morals, good custom, public order, or public policy; and (3) it is done
with intent to injure.
A common theme runs through Articles 19 and 21, and that is, the
act complained of must be intentional.[64]
Petitioner Gos argument that he, Landicho and Tecson cannot be held liable
solidarily with Robinson for actual, moral and exemplary damages, as well as
attorneys fees awarded to Cordero since no law or contract provided for solidary
obligation in these cases, is equally bereft of merit. Conformably with Article 2194
of the Civil Code, the responsibility of two or more persons who are liable for the
quasi-delict is solidary.[65] In Lafarge Cement Philippines, Inc. v. Continental Cement
Corporation,[66] we held:
[O]bligations arising from tort are, by their nature,
always solidary. We have assiduously maintained this legal
principle as early as 1912 in Worcester v. Ocampo, in which we
held:
x x x The difficulty in the contention of the appellants
is that they fail to recognize that the basis of the present
action is tort. They fail to recognize the universal doctrine
that each joint tort feasor is not only individually liable for
the tort in which he participates, but is also jointly liable
with his tort feasors. x x x
It may be stated as a general rule that joint tort
feasors are all the persons who command, instigate,
promote, encourage, advise, countenance, cooperate in,
aid or abet the commission of a tort, or who approve of it
after it is done, if done for their benefit. They are each
liable as principals, to the same extent and in the
same manner as if they had performed the wrongful
act themselves. x x x
Joint tort feasors are jointly and severally liable for the
tort which they commit. The persons injured may sue all of

them or any number less than all. Each is liable for the
whole damages caused by all, and all together are jointly
liable for the whole damage. It is no defense for one sued
alone, that the others who participated in the wrongful act
are not joined with him as defendants; nor is it any excuse
for him that his participation in the tort was insignificant as
compared to that of the others. x x x
Joint tort feasors are not liable pro rata. The damages
can not be apportioned among them, except among
themselves. They cannot insist upon an apportionment, for
the purpose of each paying an aliquot part. They are jointly
and severally liable for the whole amount. x x x
A payment in full for the damage done, by one of the
joint tort feasors, of course satisfies any claim which might
exist against the others. There can be but satisfaction. The
release of one of the joint tort feasors by agreement
generally operates to discharge all. x x x
Of course, the court during trial may find that some of
the alleged tort feasors are liable and that others are not
liable. The courts may release some for lack of evidence
while condemning others of the alleged tort feasors. And
this is true even though they are charged jointly and
severally.[67] [EMPHASIS SUPPLIED.]
The rule is that the defendant found guilty of interference with contractual
relations cannot be held liable for more than the amount for which the party who
was inducted to break the contract can be held liable. [68] Respondents Go,
Landicho and Tecson were therefore correctly held liable for the balance of
petitioner Corderos commission from the sale of the first SEACAT 25, in the
amount of US$31,522.09 or its peso equivalent, which AFFA/Robinson did not pay in
violation of the exclusive distributorship agreement, with interest at the rate of 6%
per annum from June 24, 1998 until the same is fully paid.
Respondents having acted in bad faith, moral damages may be recovered
under Article 2219 of the Civil Code.[69] On the other hand, the requirements of an
award of exemplary damages are: (1) they may be imposed by way of example in
addition to compensatory damages, and only after the claimants right to them has
been established; (2) that they cannot be recovered as a matter of right, their
determination depending upon the amount of compensatory damages that may be
awarded to the claimant; and (3) the act must be accompanied by bad faith or
done in a wanton, fraudulent, oppressive or malevolent manner. [70] The award of
exemplary damages is thus in order. However, we find the sums awarded by the
trial court as moral and exemplary damages as reduced by the CA, still excessive
under the circumstances.

Moral damages are meant to compensate and alleviate the physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injuries unjustly
caused. Although incapable of pecuniary estimation, the amount must somehow be
proportional to and in approximation of the suffering inflicted. Moral damages are
not punitive in nature and were never intended to enrich the claimant at the
expense of the defendant. There is no hard-and-fast rule in determining what would
be a fair and reasonable amount of moral damages, since each case must be
governed by its own peculiar facts. Trial courts are given discretion in determining
the amount, with the limitation that it should not be palpably and scandalously
excessive. Indeed, it must be commensurate to the loss or injury suffered. [71]
We believe that the amounts of P300,000.00 and P200,000.00 as moral and
exemplary damages, respectively, would be sufficient and reasonable. Because
exemplary damages are awarded, attorneys fees may also be awarded in
consonance with Article 2208 (1).[72] We affirm the appellate courts award of
attorneys fees in the amount of P50,000.00.
WHEREFORE, the petitions are DENIED. The Decision dated March 16,
2004 as modified by the Resolution dated July 22, 2004 of the Court of Appeals in
CA-G.R. CV No. 69113 are hereby AFFIRMED with MODIFICATION in that the
awards of moral and exemplary damages are hereby reduced to P300,000.00
and P200,000.00, respectively.
With costs against the petitioner in G.R. No. 164703.
SO ORDERED.

MARTIN S. VILLARAMA, JR.


Associate Justice

Lhuillier v. British Airways, G.R. No. 171092, March 15, 2010


G.R. No. 171092

March 15, 2010

EDNA DIAGO LHUILLIER, Petitioner,


vs.
BRITISH AIRWAYS, Respondent.
DECISION
DEL CASTILLO, J.:

Jurisdictio est potestas de publico introducta cum necessitate juris dicendi.


Jurisdiction is a power introduced for the public good, on account of the necessity of
dispensing justice.1
Factual Antecedents
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint 2 for damages
against respondent British Airways before the Regional Trial Court (RTC) of Makati
City. She alleged that on February 28, 2005, she took respondents flight 548 from
London, United Kingdom to Rome, Italy. Once on board, she allegedly requested
Julian Halliday (Halliday), one of the respondents flight attendants, to assist her in
placing her hand-carried luggage in the overhead bin. However, Halliday allegedly
refused to help and assist her, and even sarcastically remarked that "If I were to
help all 300 passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy,
another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among
all the passengers in the business class section to lecture on plane safety. Allegedly,
Kerrigan made her appear to the other passengers to be ignorant, uneducated,
stupid, and in need of lecturing on the safety rules and regulations of the plane.
Affronted, petitioner assured Kerrigan that she knew the planes safety regulations
being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and menacingly told her that "We dont
like your attitude."
Upon arrival in Rome, petitioner complained to respondents ground manager and
demanded an apology. However, the latter declared that the flight stewards were
"only doing their job."
Thus, petitioner filed the complaint for damages, praying that respondent be
ordered to pay P5 million as moral damages, P2 million as nominal damages, P1
million as exemplary damages, P300,000.00 as attorneys fees,P200,000.00 as
litigation expenses, and cost of the suit.
On May 16, 2005, summons, together with a copy of the complaint, was served on
the respondent through Violeta Echevarria, General Manager of Euro-Philippine
Airline Services, Inc.3
On May 30, 2005, respondent, by way of special appearance through counsel, filed
a Motion to Dismiss4 on grounds of lack of jurisdiction over the case and over the
person of the respondent. Respondent alleged that only the courts of London,
United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention,5 Article 28(1) of which provides:
An action for damages must be brought at the option of the plaintiff, either before
the court of domicile of the carrier or his principal place of business, or where he
has a place of business through which the contract has been made, or before the
court of the place of destination.

Thus, since a) respondent is domiciled in London; b) respondents principal place of


business is in London; c) petitioner bought her ticket in Italy (through Jeepney Travel
S.A.S, in Rome);6 and d) Rome, Italy is petitioners place of destination, then it
follows that the complaint should only be filed in the proper courts of London,
United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over
the person of the respondent because the summons was erroneously served on
Euro-Philippine Airline Services, Inc. which is not its resident agent in the
Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner to file her
Comment/Opposition on the Motion to Dismiss within 10 days from notice thereof,
and for respondent to file a Reply thereon. 7 Instead of filing a Comment/Opposition,
petitioner filed on June 27, 2005, an Urgent Ex-Parte Motion to Admit Formal
Amendment to the Complaint and Issuance of Alias Summons. 8 Petitioner alleged
that upon verification with the Securities and Exchange Commission, she found out
that the resident agent of respondent in the Philippines is Alonzo Q. Ancheta.
Subsequently, on September 9, 2005, petitioner filed a Motion to Resolve Pending
Incident and Opposition to Motion to Dismiss.9
Ruling of the Regional Trial Court
On October 14, 2005, the RTC of Makati City, Branch 132, issued an Order 10 granting
respondents Motion to Dismiss. It ruled that:
The Court sympathizes with the alleged ill-treatment suffered by the plaintiff.
However, our Courts have to apply the principles of international law, and are bound
by treaty stipulations entered into by the Philippines which form part of the law of
the land. One of this is the Warsaw Convention. Being a signatory thereto, the
Philippines adheres to its stipulations and is bound by its provisions including the
place where actions involving damages to plaintiff is to be instituted, as provided for
under Article 28(1) thereof. The Court finds no justifiable reason to deviate from the
indicated limitations as it will only run counter to the provisions of the Warsaw
Convention. Said adherence is in consonance with the comity of nations and
deviation from it can only be effected through proper denunciation as enunciated in
the Santos case (ibid). Since the Philippines is not the place of domicile of the
defendant nor is it the principal place of business, our courts are thus divested of
jurisdiction over cases for damages. Neither was plaintiffs ticket issued in this
country nor was her destination Manila but Rome in Italy. It bears stressing however,
that referral to the court of proper jurisdiction does not constitute constructive
denial of plaintiffs right to have access to our courts since the Warsaw Convention
itself provided for jurisdiction over cases arising from international transportation.
Said treaty stipulations must be complied with in good faith following the time
honored principle of pacta sunt servanda.
The resolution of the propriety of service of summons is rendered moot by the
Courts want of jurisdiction over the instant case.

WHEREFORE, premises considered, the present Motion to Dismiss is hereby


GRANTED and this case is hereby ordered DISMISSED.
Petitioner filed a Motion for Reconsideration but the motion was denied in an
Order11 dated January 4, 2006.
Petitioner now comes directly before us on a Petition for Review on Certiorari on
pure questions of law, raising the following issues:
Issues
I. WHETHER X X X PHILIPPINE COURTs HAVE JURISDICTION OVER A TORTIOUS
CONDUCT COMMITTED AGAINST A FILIPINO CITIZEN AND RESIDENT BY AIRLINE
PERSONNEL OF A FOREIGN CARRIER TRAVELLING BEYOND THE TERRITORIAL LIMIT
OF ANY FOREIGN COUNTRY; AND THUS IS OUTSIDE THE AMBIT OF THE WARSAW
CONVENTION.
II. WHETHER x x x RESPONDENT AIR CARRIER OF PASSENGERS, IN FILING ITS
MOTION TO DISMISS BASED ON LACK OF JURISDICTION OVER THE SUBJECT MATTER
OF THE CASE AND OVER ITS PERSON MAY BE DEEMED AS HAVING IN FACT AND IN
LAW SUBMITTED ITSELF TO THE JURISDICTION OF THE LOWER COURT, ESPECIALLY
SO, WHEN THE VERY LAWYER ARGUING FOR IT IS HIMSELF THE RESIDENT AGENT OF
THE CARRIER.
Petitioners Arguments
Petitioner argues that her cause of action arose not from the contract of carriage,
but from the tortious conduct committed by airline personnel of respondent in
violation of the provisions of the Civil Code on Human Relations. Since her cause of
action was not predicated on the contract of carriage, petitioner asserts that she
has the option to pursue this case in this jurisdiction pursuant to Philippine laws.
Respondents Arguments
In contrast, respondent maintains that petitioners claim for damages fell within the
ambit of Article 28(1) of the Warsaw Convention. As such, the same can only be
filed before the courts of London, United Kingdom or Rome, Italy.
Our Ruling
The petition is without merit.
The Warsaw Convention has the force and effect of law in this country.
It is settled that the Warsaw Convention has the force and effect of law in this
country. In Santos III v. Northwest Orient Airlines,12 we held that:
The Republic of the Philippines is a party to the Convention for the Unification of
Certain Rules Relating to International Transportation by Air, otherwise known as the

Warsaw Convention. It took effect on February 13, 1933. The Convention was
concurred in by the Senate, through its Resolution No. 19, on May 16, 1950. The
Philippine instrument of accession was signed by President Elpidio Quirino on
October 13, 1950, and was deposited with the Polish government on November 9,
1950. The Convention became applicable to the Philippines on February 9, 1951. On
September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201,
declaring our formal adherence thereto, "to the end that the same and every article
and clause thereof may be observed and fulfilled in good faith by the Republic of
the Philippines and the citizens thereof."
The Convention is thus a treaty commitment voluntarily assumed by the Philippine
government and, as such, has the force and effect of law in this country. 13
The Warsaw Convention applies because the air travel, where the alleged tortious
conduct occurred, was between the United Kingdom and Italy, which are both
signatories to the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage or
goods performed by aircraft for reward. It applies equally to gratuitous
carriage by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international carriage"
means any carriage in which, according to the contract made by the
parties, the place of departure and the place of destination, whether or not
there be a break in the carriage or a transhipment, are situated either within
the territories of two High Contracting Parties, or within the territory of a
single High Contracting Party, if there is an agreed stopping place within a
territory subject to the sovereignty, suzerainty, mandate or authority of
another Power, even though that Power is not a party to this Convention. A
carriage without such an agreed stopping place between territories subject to
the sovereignty, suzerainty, mandate or authority of the same High
Contracting Party is not deemed to be international for the purposes of this
Convention. (Emphasis supplied)
Thus, when the place of departure and the place of destination in a contract of
carriage are situated within the territories of two High Contracting Parties, said
carriage is deemed an "international carriage". The High Contracting Parties referred
to herein were the signatories to the Warsaw Convention and those which
subsequently adhered to it.14
In the case at bench, petitioners place of departure was London, United Kingdom
while her place of destination was Rome, Italy.15 Both the United Kingdom16 and
Italy17 signed and ratified the Warsaw Convention. As such, the transport of the
petitioner is deemed to be an "international carriage" within the contemplation of
the Warsaw Convention.

Since the Warsaw Convention applies in the instant case, then the jurisdiction over
the subject matter of the action is governed by the provisions of the Warsaw
Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for
damages before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has
been made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in
London, United Kingdom with London as its principal place of business. Hence,
under the first and second jurisdictional rules, the petitioner may bring her case
before the courts of London in the United Kingdom. In the passenger ticket and
baggage check presented by both the petitioner and respondent, it appears that the
ticket was issued in Rome, Italy. Consequently, under the third jurisdictional rule,
the petitioner has the option to bring her case before the courts of Rome in Italy.
Finally, both the petitioner and respondent aver that the place of destination is
Rome, Italy, which is properly designated given the routing presented in the said
passenger ticket and baggage check. Accordingly, petitioner may bring her action
before the courts of Rome, Italy. We thus find that the RTC of Makati correctly ruled
that it does not have jurisdiction over the case filed by the petitioner.
Santos III v. Northwest Orient Airlines 18 applies in this case.
Petitioner contends that Santos III v. Northwest Orient Airlines 19 cited by the trial
court is inapplicable to the present controversy since the facts thereof are not
similar with the instant case.
We are not persuaded.
In Santos III v. Northwest Orient Airlines, 20 Augusto Santos III, a resident of the
Philippines, purchased a ticket from Northwest Orient Airlines in San Francisco, for
transport between San Francisco and Manila via Tokyo and back to San Francisco.
He was wait-listed in the Tokyo to Manila segment of his ticket, despite his prior
reservation. Contending that Northwest Orient Airlines acted in bad faith and
discriminated against him when it canceled his confirmed reservation and gave his
seat to someone who had no better right to it, Augusto Santos III sued the carrier for
damages before the RTC. Northwest Orient Airlines moved to dismiss the complaint
on ground of lack of jurisdiction citing Article 28(1) of the Warsaw Convention. The
trial court granted the motion which ruling was affirmed by the Court of Appeals.
When the case was brought before us, we denied the petition holding that under
Article 28(1) of the Warsaw Convention, Augusto Santos III must prosecute his claim

in the United States, that place being the (1) domicile of the Northwest Orient
Airlines; (2) principal office of the carrier; (3) place where contract had been made
(San Francisco); and (4) place of destination (San Francisco). 21
We further held that Article 28(1) of the Warsaw Convention is jurisdictional in
character. Thus:
A number of reasons tends to support the characterization of Article 28(1) as a
jurisdiction and not a venue provision. First, the wording of Article 32, which
indicates the places where the action for damages "must" be brought, underscores
the mandatory nature of Article 28(1). Second, this characterization is consistent
with one of the objectives of the Convention, which is to "regulate in a uniform
manner the conditions of international transportation by air." Third, the Convention
does not contain any provision prescribing rules of jurisdiction other than Article
28(1), which means that the phrase "rules as to jurisdiction" used in Article 32 must
refer only to Article 28(1). In fact, the last sentence of Article 32 specifically deals
with the exclusive enumeration in Article 28(1) as "jurisdictions," which, as such,
cannot be left to the will of the parties regardless of the time when the damage
occurred.
xxxx
In other words, where the matter is governed by the Warsaw Convention,
jurisdiction takes on a dual concept. Jurisdiction in the international sense must be
established in accordance with Article 28(1) of the Warsaw Convention, following
which the jurisdiction of a particular court must be established pursuant to the
applicable domestic law. Only after the question of which court has jurisdiction is
determined will the issue of venue be taken up. This second question shall be
governed by the law of the court to which the case is submitted. 22
Contrary to the contention of petitioner, Santos III v. Northwest Orient Airlines 23 is
analogous to the instant case because (1) the domicile of respondent is London,
United Kingdom;24 (2) the principal office of respondent airline is likewise in London,
United Kingdom;25 (3) the ticket was purchased in Rome, Italy; 26 and (4) the place of
destination is Rome, Italy.27 In addition, petitioner based her complaint on Article
217628 of the Civil Code onquasi-delict and Articles 1929 and 2130 of the Civil Code on
Human Relations. In Santos III v. Northwest Orient Airlines, 31 Augusto Santos III
similarly posited that Article 28 (1) of the Warsaw Convention did not apply if the
action is based on tort. Hence, contrary to the contention of the petitioner, the
factual setting of Santos III v. Northwest Orient Airlines 32 and the instant case are
parallel on the material points.
Tortious conduct as ground for the petitioners complaint is within the purview of the
Warsaw Convention.
Petitioner contends that in Santos III v. Northwest Orient Airlines, 33 the cause of
action was based on a breach of contract while her cause of action arose from the
tortious conduct of the airline personnel and violation of the Civil Code provisions on
Human Relations.34 In addition, she claims that our pronouncement in Santos III v.

Northwest Orient Airlines35 that "the allegation of willful misconduct resulting in a


tort is insufficient to exclude the case from the comprehension of the Warsaw
Convention," is more of an obiter dictum rather than the ratio decidendi. 36 She
maintains that the fact that said acts occurred aboard a plane is merely incidental, if
not irrelevant.37
We disagree with the position taken by the petitioner. Black defines obiter dictum as
"an opinion entirely unnecessary for the decision of the case" and thus "are not
binding as precedent."38 In Santos III v. Northwest Orient Airlines, 39 Augusto Santos
III categorically put in issue the applicability of Article 28(1) of the Warsaw
Convention if the action is based on tort.
In the said case, we held that the allegation of willful misconduct resulting in a tort
is insufficient to exclude the case from the realm of the Warsaw Convention. In fact,
our ruling that a cause of action based on tort did not bring the case outside the
sphere of the Warsaw Convention was our ratio decidendi in disposing of the
specific issue presented by Augusto Santos III. Clearly, the contention of the herein
petitioner that the said ruling is an obiter dictum is without basis.
Relevant to this particular issue is the case of Carey v. United Airlines, 40 where the
passenger filed an action against the airline arising from an incident involving the
former and the airlines flight attendant during an international flight resulting to a
heated exchange which included insults and profanity. The United States Court of
Appeals (9th Circuit) held that the "passenger's action against the airline carrier
arising from alleged confrontational incident between passenger and flight
attendant on international flight was governed exclusively by the Warsaw
Convention, even though the incident allegedly involved intentional misconduct by
the flight attendant."41
In Bloom v. Alaska Airlines,42 the passenger brought nine causes of action against
the airline in the state court, arising from a confrontation with the flight attendant
during an international flight to Mexico. The United States Court of Appeals (9th
Circuit) held that the "Warsaw Convention governs actions arising from international
air travel and provides the exclusive remedy for conduct which falls within its
provisions." It further held that the said Convention "created no exception for an
injury suffered as a result of intentional conduct" 43 which in that case involved a
claim for intentional infliction of emotional distress.
It is thus settled that allegations of tortious conduct committed against an airline
passenger during the course of the international carriage do not bring the case
outside the ambit of the Warsaw Convention.
Respondent, in seeking remedies from the trial court through special appearance of
counsel, is not deemed to have voluntarily submitted itself to the jurisdiction of the
trial court.
Petitioner argues that respondent has effectively submitted itself to the jurisdiction
of the trial court when the latter stated in its Comment/Opposition to the Motion for
Reconsideration that "Defendant [is at a loss] x x x how the plaintiff arrived at her

erroneous impression that it is/was Euro-Philippines Airlines Services, Inc. that has
been making a special appearance since x x x British Airways x x x has been clearly
specifying in all the pleadings that it has filed with this Honorable Court that it is the
one making a special appearance."44
In refuting the contention of petitioner, respondent cited La Naval Drug Corporation
v. Court of Appeals45 where we held that even if a party "challenges the jurisdiction
of the court over his person, as by reason of absence or defective service of
summons, and he also invokes other grounds for the dismissal of the action under
Rule 16, he is not deemed to be in estoppel or to have waived his objection to the
jurisdiction over his person."46
This issue has been squarely passed upon in the recent case of Garcia v.
Sandiganbayan,47 where we reiterated our ruling in La Naval Drug Corporation v.
Court of Appeals48 and elucidated thus:
Special Appearance to Question a Courts Jurisdiction Is Not
Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil Procedure
clearly provides:
Sec. 20. Voluntary appearance. The defendants voluntary appearance in the
action shall be equivalent to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction of the
court over his person, together with other grounds raised therein, is not deemed to
have appeared voluntarily before the court. What the rule on voluntary appearance
the first sentence of the above-quoted rule means is that the voluntary
appearance of the defendant in court is without qualification, in which case he is
deemed to have waived his defense of lack of jurisdiction over his person due to
improper service of summons.
The pleadings filed by petitioner in the subject forfeiture cases, however, do not
show that she voluntarily appeared without qualification. Petitioner filed the
following pleadings in Forfeiture I: (a) motion to dismiss; (b) motion for
reconsideration and/or to admit answer; (c) second motion for reconsideration; (d)
motion to consolidate forfeiture case with plunder case; and (e) motion to dismiss
and/or to quash Forfeiture I. And in Forfeiture II: (a) motion to dismiss and/or to
quash Forfeiture II; and (b) motion for partial reconsideration.
The foregoing pleadings, particularly the motions to dismiss, were filed by petitioner
solely for special appearance with the purpose of challenging the jurisdiction of the
SB over her person and that of her three children. Petitioner asserts therein that SB
did not acquire jurisdiction over her person and of her three children for lack of valid
service of summons through improvident substituted service of summons in both

Forfeiture I and Forfeiture II. This stance the petitioner never abandoned when she
filed her motions for reconsideration, even with a prayer to admit their attached
Answer Ex Abundante Ad Cautelam dated January 22, 2005 setting forth affirmative
defenses with a claim for damages. And the other subsequent pleadings, likewise,
did not abandon her stance and defense of lack of jurisdiction due to improper
substituted services of summons in the forfeiture cases. Evidently, from the
foregoing Sec. 20, Rule 14 of the 1997 Revised Rules on Civil Procedure, petitioner
and her sons did not voluntarily appear before the SB constitutive of or equivalent
to service of summons.
Moreover, the leading La Naval Drug Corp. v. Court of Appeals applies to the instant
case. Said case elucidates the current view in our jurisdiction that a special
appearance before the courtchallenging its jurisdiction over the person through a
motion to dismiss even if the movant invokes other groundsis not tantamount to
estoppel or a waiver by the movant of his objection to jurisdiction over his person;
and such is not constitutive of a voluntary submission to the jurisdiction of the
court.1avvphi1
Thus, it cannot be said that petitioner and her three children voluntarily appeared
before the SB to cure the defective substituted services of summons. They are,
therefore, not estopped from questioning the jurisdiction of the SB over their
persons nor are they deemed to have waived such defense of lack of jurisdiction.
Consequently, there being no valid substituted services of summons made, the SB
did not acquire jurisdiction over the persons of petitioner and her children. And
perforce, the proceedings in the subject forfeiture cases, insofar as petitioner and
her three children are concerned, are null and void for lack of jurisdiction. (Emphasis
supplied)
In this case, the special appearance of the counsel of respondent in filing the Motion
to Dismiss and other pleadings before the trial court cannot be deemed to be
voluntary submission to the jurisdiction of the said trial court. We hence disagree
with the contention of the petitioner and rule that there was no voluntary
appearance before the trial court that could constitute estoppel or a waiver of
respondents objection to jurisdiction over its person.
WHEREFORE, the petition is DENIED. The October 14, 2005 Order of the Regional
Trial Court of Makati City, Branch 132, dismissing the complaint for lack of
jurisdiction, is AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

Rodriguez vs. Alikpala, G.R. No. L-38314, June 25, 1974


G.R. No. L-38314 June 25, 1974

BELEN S. RODRIGUEZ and JOSE S. SANTOS, JR., petitioners,


vs.
HON. FEDERICO ALIKPALA (Presiding Judge, Branch XXII, Court of First
Instance of Manila), FEDERICO TOLENTINO and FELISA
TOLENTINO, respondents.
Santos, Santos & Cunanan Law Office for petitioners.
Prospero A. Crescini & Associates for respondents.

CASTRO, J.:p
Failing to levy on the properties of the respondents Federico and Felisa Tolentino
because of a prohibitory judgment rendered by the respondent Court of First
Instance of Manila in civil case 85998, the petitioners Belen S. Rodriguez and Jose S.
Santos, Jr., have come to this Court on appeal by certiorari.
On August 19, 1971 the petitioner Rodriguez, assisted by her counsel, the petitioner
Santos, filed an action, docketed as civil case 204601, with the city court of Manila
against the spouses Manuel and Fe Rebollado for recovery of the sum of P5,320 plus
interest, attorney's fees and costs. A writ of preliminary attachment was issued and
served on the Rebollados at their store in Divisoria market. Fe Rebollado
immediately communicated with the petitioner Santos, and later with the latter's
client, the petitioner Rodriguez, to plead for time before the attachment was to be
effectively enforced. Rodriguez agreed to cause the suspension of the attachment
writ on condition that Fe Rebollado's parents, the now respondents Federico and
Felisa Tolentino, would bind themselves, jointly and severally with the Rebollado's,
to pay the entire obligation subject of the suit. Felisa Tolentino who was then
present agreed to this proposal, and so the petitioner Santos, at the request of the
petitioner Rodriguez, drew up a motion for judgment on a compromise embodying
the terms of the agreement of the parties. On the basis of the said motion, the city
court, on August 14, 1971, rendered judgment, as follows:
Parties herein submitted the following compromise agreement and prayed that
judgment be rendered in accordance there with:
COMPROMISE AGREEMENT
xxx xxx xxx
1. That the defendants admit all the material allegations in the
plaintiff's complaint and acknowledged their indebtedness to the
plaintiff in the total amount of P5,980.00, which amount includes
expenses of litigation;
2. That in consideration of defendants acknowledging their said
indebtedness and confessing judgment therefor, plaintiff has allowed

defendants some consideration by allowing them to pay their abovestated account in the following manner, to wit:
a) the sum of P200.00 shall be paid upon the signing of
this compromise agreement;
b) the remaining balance shall be paid in installment basis
at the rate of P100.00 a week, payable every Saturday
beginning August 28, 1971 and every Saturday of the
week thereafter until fully paid.
3. That in order to secure the prompt payment of the said obligations
of the defendants, Federico Tolentino and Felisa Tolentino hereby bind
themselves to pay jointly and severally with the defendants the said
obligations, and in the event of default on the part of the defendants to
pay any of the said installments when the same is already due, the
judgment which may be rendered by virtue hereof as to full amount
remaining unpaid, may likewise be executed as against the properties
of Federico Tolentino and Felisa Tolentino;
4. That failure on the part of the defendants to pay any one of the
installments as above-scheduled shall render the remaining balance
unpaid immediately due and demandable and the plaintiff shall then
be entitled to the execution of the judgment which may be rendered by
virtue hereof;
WHEREFORE, judgment by COMPROMISE is hereby rendered pursuant
to the foregoing agreement, enjoining strict compliance thereto by the
parties.
The Rebollado's subsequently failed to comply with the terms of the compromise,
thus prompting the petitioner Rodriguez to ask the city court for a writ of execution
not only against the Rebollados but as well against the Tolentino's. When this was
granted; and later affirmed over the opposition of the Tolentino's, the latter brought
an action for certiorari in the respondent Court of First Instance of Manila, docketed
as civil case 85998, to enjoin the city court from enforcing any writ of execution
against them. On December 20, 1973, after hearing duly had, the respondent court
rendered judgment excluding the Tolentinos from the effects of the writ of execution
granted by the city court in civil case 204601. It is this judgment that is the subject
of the present appeal.
In excluding the Tolentino's from the effects of the judgment on a compromise
rendered by the city court, the respondent court invokes two reasons: first, the
dispositive portion of the judgment quoted above cannot be executed because it
does not explicitly enjoin the Tolentino's to pay, jointly and severally with the
Rebollado's, the amount due to the plaintiff; and second, the city court never
acquired jurisdiction over the persons of the Tolentino's and, therefore, the latter
cannot be bound by the judgment rendered in civil cue 204601.

The respondent court is in error on both counts.


1. The dispositive portion of the judgment in civil case 204601 of the city court
approving the compromise and"enjoining strict compliance thereto by the parties" is
adequate for purposes of execution. It is not unusual for the body of a judgment on
a compromise to merely quote the words of the agreement that spell out the
respective rights and obligations of the parties, since it is both unnecessary and
improper for the court to still make preliminary adjudication of the facts and the law
involved in the case. 1 These rights and obligations, although not reproduced in the
dispositive portion of the judgment in obvious avoidance of repetition, are
understood to constitute the terms under which execution may issue. Decisions of
similar tenor, import and form have in the past been given effect by this Court. 2
2. There is no question in the mind of the respondent court that the Rebollado's and
the Tolentinos freely and voluntarily entered into the compromise agreement which
became the basis of the judgment of the city court. Be it remembered that neither
the Rebollado's nor the Tolentino's question the existence of the indebtedness of the
Rebollados or the amount thereof. The respondent court heard the testimonies of
the witnesses first hand and accorded no credence to the version of the Rebollado's
and the Tolentino's that Manuel and Fe Rebollado and Felisa Tolentino were made to
sign the motion for a judgment on a compromise without being permitted to read its
contents and, further, that Felisa Tolentino was induced to sign, too, the name of her
husband without any authority from the latter. The respondent court analyzed the
evidence at length and found that the involvement of the Tolentino's in the
compromise agreement arose out of their natural filial concern for their daughter Fe
whose inventories at Divisoria market were under imminent threat of levy and
seizure. The respondent court, moreover, brooks no doubt, and we concur with it,
that both the Rebollado's and the Tolentino's understood the plain unequivocal
terms of the compromise agreement. And by assuming the roles of co-movants in
the motion for a judgment on a compromise, the Tolentino's actively instigated the
city court into giving its judicial imprimatur to the said agreement as well as their
participation therein. Under the circumstances, the Tolentino's are estopped from
denying the very authority they have invoked. 3
Moreover, because they signed and executed the compromise agreement willingly
and voluntarily, and, in a manner of speaking, with their eyes wide open, they
should be bound by its terms. A person cannot, to paraphrase Justice Alejo
Labrador, repudiate the effects of his voluntary acts simply because they do not suit
him. In the very words of Justice Labrador, "in a regime of law and order, repudiation
of an agreement validly entered into can not be made without any ground or reason
in law or in fact for such repudiation." 4
And even if we assume that estoppel does not apply in this case, we nonetheless
cannot shunt aside the principle of equity that jurisdiction over a person not
formally or originally a party to a litigation may nevertheless be acquired, under
proper conditions, thru the voluntary appearance of that person before the court.
Thus, judgment may be directed against one who, although not a formal party in the
case, has assumed or participated in the defense. 5 By coming forward with the
original litigants in moving for a judgment on a compromise and, furthermore, by
assuming such interest in the final adjudication of the case as would place them in

unequivocal liability, together with the Rebollado's, to the plaintiff therein, the
Tolentino's effectively submitted themselves to the jurisdiction of the city court.
They were and are thus subject to its judgment.
ACCORDINGLY, the judgment a quo of December 20, 1973 is reversed, and the order
of the city court of November 26, 1971 in civil case 264601, directing the release of
the writ of execution against the Rebollado spouses and the Tolentino spouses, is
hereby affirmed, with costs against the respondents Federico and Felisa Tolentino.
Makalintal, C.J., Teehankee, Makasiar, Esguerra and Muoz Palma, JJ., concur.

RULE 15- MOTIONS


Sec. 1. Motion defined

Sec. 2. Motions must be in writing

Sec. 3.Contents

Sec. 4. Hearing of motion


Anama v. Phil. Savings Bank, G.R. No. 187021, January 25, 2012
(Supra.)

Republic of the Philippines


Supreme Court
Manila
THIRD DIVISION

G.R. No. 187021


DOUGLAS F. ANAMA,
Petitioner,

Present:

VELASCO, JR., J.,Chairperson,

- versus -

PERALTA,
ABAD,
COURT OF APPEALS,
PHILIPPINE SAVINGS BANK,
SPOUSES SATURNINA BARIA
&TOMAS CO and THE REGISTER OF
DEEDS, METRO MANILA,
DISTRICT II,
Respondents.

MENDOZA, and
PERLAS-BERNABE, JJ.

Promulgated:

January 25, 2012


X ----------------------------------------------------------------------------------------------------- X
DECISION
MENDOZA, J.:
This is a petition for review under Rule 45 assailing the March 31, 2008
Decision[1] of the Court of Appeals (CA) and itsFebruary 27, 2009 Resolution,[2] in CA
G.R. No. SP-94771, which affirmed the November 25, 2005 Order of the Regional
Trial Court, Branch 167, Pasig City (RTC), granting the motion for issuance of a writ
of execution of respondents.

The Facts
The factual and procedural backgrounds of this case were succinctly recited
by the CA in its decision as follows:

Sometime in 1973, the Petitioner, Douglas F. Anama (Anama),


and the Respondent, Philippine Savings Bank (PSB), entered into a
Contract to Buy, on installment basis, the real property owned and
covered by Transfer Certificate of Title (TCT) No. 301276 in the latters
name. However, Anama defaulted in paying his obligations thereunder,
thus, PSB rescinded the said contract and title to the property
remained with the latter. Subsequently, the property was sold by PSB
to the Spouses Saturnina Baria and Tomas Co (Co Spouses) who, after
paying the purchase price in full, caused the registration of the same in
their names and were, thus, issued TCT No. 14239.

Resultantly, Anama filed before the Respondent Court a


complaint for declaration of nullity of the deed of sale, cancellation of
transfer certificate of title, and specific performance with damages
against PSB, the Co Spouses, and the Register of Deeds of Metro
Manila, District II.

On August 21, 1991 and after trial on the merits,


the Respondent Court dismissed Anamas complaint and upheld the
validity of the sale between PSB and the Co Spouses. Undaunted,
Anama appealed, at first, to this Court, and after failing to obtain a
favorable decision, to the Supreme Court.

On January 29, 2004, the Supreme Court rendered judgment


denying Anamas petition and sustaining the validity of the sale
between PSB and the Co Spouses. Its decision became final and
executory on July 12, 2004. Pursuant thereto, the Co Spouses moved

for execution, which was granted by the Respondent Court per its
Order, dated November 25, 2005.

Aggrieved, Anama twice moved for the reconsideration of


the Respondent Courts November 25, 2005 Order arguing that the Co
Spouses motion for execution is fatally defective. He averred that the
Spouses motion was pro forma because it lacked the required affidavit
of service and has a defective notice of hearing, hence, a mere scrap
of paper. The Respondent Court, however, denied Anamas motion(s)
for reconsideration.

Dissatisfied, the petitioner questioned the RTC Order before the CA for taking
judicial cognizance of the motion for execution filed by spouses Tomas Co and
Saturnina Baria (Spouses Co) which was (1) not in accord with Section 4 and Section
15 of the Rules of Court because it was without a notice of hearing addressed to the
parties; and (2) not in accord with Section 6, Rule 15 in conjunction with Section 13,
Rule 13 of the Rules of Court because it lacks the mandatory affidavit of service.

On March 31, 2008, the CA rendered a decision dismissing the petition. It


reasoned out, among others, that the issue on the validity of the deed of sale
between respondents, Philippine Savings Bank (PSB) and the Spouses Co, had long
been laid to rest considering that the January 29, 2004 Decision of this Court
became final and executory on July 12, 2004. Hence, execution was already a
matter of right on the part of the respondents and the RTC had the ministerial duty
to issue a writ of execution enforcing a final and executory decision.

The CA also stated that although a notice of hearing and affidavit of service in
a motion are mandatory requirements, the Spouses Cos motion for execution of a
final and executory judgment could be acted upon by the RTC ex parte, and
therefore, excused from the mandatory requirements of Sections 4, 5 and 6 of Rule
15 of the Rules of Court.

The CA was of the view that petitioner was not denied due process because
he was properly notified of the motion for execution of the Spouses Co. It stated
that the act of the Spouses Co in resorting to personal delivery in serving their
motion for execution did not render the motion pro forma. It refused to apply a rigid
application of the rules because it would result in a manifest failure of justice
considering that petitioners position was nothing but an obvious dilatory tactic
designed to prevent the final disposition of Civil Case No. 44940.

Not satisfied with the CAs unfavorable disposition, petitioner filed this
petition praying for the reversal thereof presenting the following

ARGUMENTS:

THE RESPONDENT APPELLATE COURT DID NOT TAKE INTO


CONSIDERATION THE CLEAR TEACHING OF THE HONORABLE
COURT WITH REGARD TO THE REQUISITE NOTICE OF HEARING
IT SHOULD BE ADDRESSED TO THE PARTIES NOT TO THE CLERK
OF
COURT,
THE
LATEST
(THEN)
BEING
GARCIA
V.
SANDIGANBAYAN, G.R. NO. 167103, AUGUST 31, 2006, 500
SCRA 361; DE JESUS V. JUDGE DILAG, A.M. NO. RTJ-051921, SEPTEMBER 30, 2005, 471 SCRA 176; LAND BANK OF
THE PHILIPPINES V. NATIVIDAD, G.R. NO. 127198, MAY 16,
2005, 458 SCRA 441; ATTY.JULIUS NERI V. JUDGE JESUS S. DE LA
PEA, A.M NO. RTJ-05-1896, APRIL 29, 2005, 457 SCRA 538;
AND ALVAREZ V. DIAZ, A.M. NO. MTJ-00-1283, MARCH 3, 2004,
424 SCRA 213;

THE RESPONDENT APPELLATE COURT DID NOT TAKE INTO


CONSIDERATION THE CLEAR TEACHING OF THE HONORABLE
COURT WITH REGARD TO THE REQUISITE AFFIDAVIT OF
SERVICE IT SHOULD BE IN THE PROPER FORM AS PRESCRIBED
IN THE RULES AND IT SHOULD BE ATTACHED TO THE MOTION,
THE LATEST (THEN) BEING ELLO V. COURT OF APPEALS, G.R.
NO. 141255, JUNE 21, 2005, 460 SCRA 406; LOPEZ DELA ROSA
DEVELOPMENT CORPORATION V. COURT OF APPEALS, G.R. NO.
148470, APRIL 29, 2005, 457 SCRA 614; ALVAREZ V. DIAZ, A.M.
NO. MTJ-00-1283, MARCH 3, 2004, 424 SCRA 213; EL REYNO
HOMES, INC. V. ERNESTO ONG, 397 SCRA 563; CRUZ V. COURT
OF APPEALS, 388 SCRA 72, 80-81; AND MERIS V. OFILADA, 293
SCRA 606;

THE RESPONDENT APPELLATE COURT DID NOT TAKE


APPROPRIATE ACTION ON THE FRAUD PERPETRATED UPON
THE COURT BY RESPONDENT-SPOUSES AND THEIR LEAD
COUNSEL.

SINCE THE RESPONDENT APPELLATE COURT REFUSED


TO TAKE INTO CONSIDERATION THE RESPONDENT
BANKS ACTION THAT OF:

ENGAGING
IN
A
DAGDAG-BAWAS
(LEGALLY
INTERCALATION) OPERATION OF A PORTION OF
THE TRANSCRIPT OF STENOGRAPHIC NOTES (TSN),
OCTOBER 12, 1984, OF THE REGIONAL TRIAL COURT,
BRANCH 167, PASIG CITY, IN CIVIL CASE NO. 44940,
PAGES 54-55, AND

PRESENTING IT IN ITS APPELLEES BRIEF (IN THE


OWNERSHIP CASE, CA-G.R. NO. CV-42663, LIKEWISE,
BEFORE THE RESPONDENT APPELLATE COURT) BY
CITING IT ON PAGE 14 OF SAID BRIEF, AS IMPLIEDLY
COMING FROM THE TSN OF THE TRIAL COURT.

THINKING THAT THEIR FALSIFIED APPELLEES BRIEF


WAS MATERIAL IN SAID CA-G.R. NO. CV-42663.

IT COULD NOT RULE THAT THE SAME HAS BROUGHT


ABOUT A CRUCIAL MATERIAL CHANGE IN THE SITUATION OF
THE PARTIES WHICH MAKES EXECUTION INEQUITABLE (PUNCIA
V. GERONA, 252 SCRA 424, 430-431), OR, IN THE WORDS OF
DEVELOPMENT
BANK
OF
RIZAL
V.
CA,
G.R.
NO.
75964, DECEMBER 1, 1987, 156 SCRA 84, 90, THERE EXISTS A
COMPELLING REASON FOR STAYING THE EXECUTION OF
JUDGMENT.

Basically, petitioner argues that the respondents failed to substantially


comply with the rule on notice and hearing when they filed their motion for the

issuance of a writ of execution with the RTC. He claims that the notice of hearing in
the motion for execution filed by the Spouses Co was a mere scrap of paper
because it was addressed to the Clerk of Court and not to the parties. Thus, the
motion for execution did not contain the required proof of service to the adverse
party. He adds that the Spouses Co and their counsel deliberately misserved the
copy of their motion for execution, thus, committing fraud upon the trial court.

Additionally, he claims that PSB falsified its appellees brief by engaging in a


dagdag-bawas (intercalation) operation in pages 54 to 55 of the TSN,
dated October 12, 1984.

Position of the Spouses Co

The Spouses Co counter that the petition should be dismissed outright for
raising both questions of facts and law in violation of Section 1, Rule 45 of the Rules
of Court. The Spouses Co aver that petitioner attempts to resurrect the issue that
PSB cheated him in their transaction and that the RTC committed a dagdagbawas. According to the Spouses Co, these issues had long been threshed out by
this Court.

At any rate, they assert that they have substantially complied with the
requirements of notice and hearing provided under Sections 4 and 5 of Rule 15 and
Section 13, Rule 13 of the Rules of Court. Contrary to petitioners allegations, a copy
of the motion for the issuance of a writ of execution was given to petitioner through
his principal counsel, the Quasha Law Offices. At that time, the said law office had
not formally withdrawn its appearance as counsel for petitioner. Spouses Co argue
that what they sought to be executed was the final judgment of the RTC duly
affirmed by the CA and this Court, thus, putting the issues on the merits to
rest. The issuance of a writ of execution then becomes a matter of right and the
courts duty to issue the writ becomes ministerial.

Position of respondent PSB

PSB argues that the decision rendered by the RTC in Civil Case No. 44940
entitled Douglas F. Anama v. Philippine Savings Bank, et. al. [3] had long become
final and executory as shown by the Entry of Judgment made by the Court on July
12, 2004. The finality of the said decision entitles the respondents, by law, to the
issuance of a writ of execution. PSB laments that petitioner relies more on
technicalities to frustrate the ends of justice and to delay the enforcement of a final
and executory decision.

As to the principal issue, PSB points out that the notice of hearing appended
to the motion for execution filed by the Spouses Co substantially complied with the
requirements of the Rules since petitioners then counsel of record was duly notified
and furnished a copy of the questioned motion for execution. Also, the motion for
execution filed by the Spouses Co was served upon and personally received by said
counsel.

The Courts Ruling


The Court agrees with the Spouses Co that petitioners allegations on the
dagdag-bawas operation of the Transcript of Stenographic Notes, the fraud
perpetuated upon the Court by said spouses and their lead counsel, the
ownership, and falsification had long been laid to rest in the case of Douglas F.
Anama v. Philippine Savings Bank, et. al. [4] For said reason, the Court cannot review
those final pronouncements. To do so would violate the rules as it would open a final
judgment to another reconsideration which is a prohibited procedure.
On the subject procedural question, the Court finds no compelling reason to
stay the execution of the judgment because the Spouses Co complied with the
notice and hearing requirements under Sections 4, 5 and 6 of Rule 15. Said sections,
as amended, provide:
SECTION 4. Hearing of motion. Except for motions which the
court may act upon without prejudicing the rights of the adverse party,
every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the
hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of
hearing, unless the court for good cause sets the hearing on shorter
notice.

SECTION 5. Notice of hearing. The notice of hearing shall be


addressed to all parties concerned, and shall specify the time and date
of the hearing which must not be later than ten (10) days after the
filing of the motion.
SECTION 6. Proof of service necessary. No written motion set
for hearing shall be acted upon by the court without proof of service
thereof.
Pertinently, Section 13 of Rule 13 of the 1997 Rules of Civil Procedure, as
amended, provides:
SEC. 13. Proof of service. Proof of personal service shall
consist of a written admission of the party served, or the official return
of the server, or the affidavit of the party serving, containing a full
statement of the date, place, and manner of service. If the service is
by ordinary mail, proof thereof shall consist of an affidavit of the
person mailing of facts showing compliance with section 7 of this Rule.
If service is made by registered mail, proof shall be made by such
affidavit and the registry receipt issued by the mailing office. The
registry return card shall be filed immediately upon its receipt by the
sender, or in lieu thereof the unclaimed letter together with the
certified or sworn copy of the notice given by the postmaster to the
addressee.
Elementary is the rule that every motion must contain the mandatory
requirements of notice and hearing and that there must be proof of service thereof.
The Court has consistently held that a motion that fails to comply with the above
requirements is considered a worthless piece of paper which should not be acted
upon. The rule, however, is not absolute. There are motions that can be acted upon
by the court ex parte if these would not cause prejudice to the other party. They are
not strictly covered by the rigid requirement of the rules on notice and hearing of
motions.
The motion for execution of the Spouses Co is such kind of motion. It cannot
be denied that the judgment sought to be executed in this case had already become
final and executory. As such, the Spouses Co have every right to the issuance of a
writ of execution and the RTC has the ministerial duty to enforce the same. This
right on the part of the Spouses Co and duty on the part of the RTC are based on
Section 1 and Section 2 of Rule 39 of the 1997 Revised Rules of Civil Procedure
provides, as follows:
Section 1. Execution upon judgments or final orders.
Execution shall issue as a matter of right, on motion, upon a judgment
or order that disposes of the action or proceeding upon the expiration
of the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, the
execution may forthwith be applied for in the court of origin, on motion
of the judgment obligee, submitting therewith certified true copies of
the judgment or judgments or final order or orders sought to be
enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the
interest of justice so requires, direct the court of origin to issue the writ
of execution.
SEC. 2. Discretionary execution.
(a) Execution of a judgment or final order pending appeal. On
motion of the prevailing party with notice to the adverse party filed
in the trial court while it has jurisdiction over the case and is in
possession of either the original record or the record on appeal, as the
case may be, at the time of the filing of such motion, said court may, in
its discretion, order execution of a judgment or final order even before
the expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for execution
pending appeal may be filed in the appellate court.
Discretionary execution may only issue upon good reasons to be
stated in a special order after due hearing.
(b) Execution of several, separate or partial judgments.A
several, separate or partial judgment may be executed under the same
terms and conditions as execution of a judgment or final order pending
appeal. (2a) [Emphases and underscoring supplied]

As can be gleaned therefrom, under Paragraph 1 of Section 1 of Rule 39 of


the 1997 Revised Rules of Civil Procedure, the Spouses Co can have their motion for
execution executed as a matter of right without the needed notice and hearing
requirement to petitioner. This is in contrast to the provision of Paragraph 2 of
Section 1 and Section 2 where there must be notice to the adverse party. In the
case of Far Eastern Surety and Insurance Company, Inc. v. Virginia D. Vda. De
Hernandez,[5] it was written:
It is evident that Section 1 of Rule 39 of the Revised
Rules of Court does not prescribe that a copy of the motion for
the execution of a final and executory judgment be served on
the defeated party, like litigated motions such as a motion to dismiss
(Section 3, Rule 16), or motion for new trial (Section 2, Rule 37), or a
motion for execution of judgment pending appeal (Section 2, Rule 39),
in all of which instances a written notice thereof is required to be
served by the movant on the adverse party in order to afford the latter
an opportunity to resist the application.

It is not disputed that the judgment sought to be executed in the


case at bar had already become final and executory. It is fundamental
that the prevailing party in a litigation may, at any time within five (5)
years after the entry thereof, have a writ of execution issued for its
enforcement and the court not only has the power and authority to
order its execution but it is its ministerial duty to do so. It has also
been held that the court cannot refuse to issue a writ of execution
upon a final and executory judgment, or quash it, or order its stay, for,
as a general rule, the parties will not be allowed, after final judgment,
to object to the execution by raising new issues of fact or of law,
except when there had been a change in the situation of the parties
which makes such execution inequitable or when it appears that the
controversy has ever been submitted to the judgment of the court; or
when it appears that the writ of execution has been improvidently
issued, or that it is defective in substance, or is issued against the
wrong party, or that judgment debt has been paid or otherwise
satisfied;
or
when
the
writ
has
been
issued
without
authority. Defendant-appellant has not shown that she falls in any of
the situations afore-mentioned.Ordinarily, an order of execution of a
final judgment is not appealable. Otherwise, as was said by this Court
in Molina v. de la Riva,a case could never end. Once a court renders a
final judgment, all the issues between or among the parties before it
are deemed resolved and its judicial function as regards any matter
related to the controversy litigated comes to an end. The execution
of its judgment is purely a ministerial phase of adjudication.
The nature of its duty to see to it that the claim of the prevailing party
is fully satisfied from the properties of the loser is generally
ministerial.
In Pamintuan v. Muoz, We ruled that once a judgment becomes
final and executory, the prevailing party can have it executed as
a matter of right, and the judgment debtor need not be given
advance notice of the application for execution.
Also of the same stature is the rule that once a judgment
becomes final and executory, the prevailing party can have it executed
as a matter of right and the granting of execution becomes
a ministerial duty of the court. Otherwise stated, once sought by the
prevailing party, execution of a final judgment will just follow as a
matter of course. Hence, the judgment debtor need not be given
advance notice of the application for execution nor he afforded
prior hearing.
Absence of such advance notice to the judgment debtor does
not constitute an infringement of the constitutional guarantee of due
process.
However, the established rules of our system of jurisprudence
do not require that a defendant who has been granted an opportunity
to be heard and has had his day in court should, after a judgment has

been rendered against him, have a further notice and hearing before
supplemental proceedings are taken to reach his property in
satisfaction of the judgment. Thus, in the absence of a statutory
requirement, it is not essential that he be given notice before the
issuance of an execution against his tangible property; after the
rendition of the judgment he must take "notice of what will follow," no
further notice being "necessary to advance justice." [Emphases and
underscoring supplied]
Likewise, in the case of Leonardo Lim De Mesa v. Hon. Court of Appeals, [6] it
was stated:
In the present case, the decision ordering partition and the
rendition of accounting had already become final and executory. The
execution thereof thus became a matter of right on the part of the
plaintiffs, herein private respondents, and is a mandatory and
ministerial duty on the part of the court. Once a judgment becomes
final and executory, the prevailing party can have it executed
as a matter of right, and the judgment debtor need not be
given advance notice of the application for execution nor be
afforded prior hearings thereon.
On the bases of the foregoing considerations, therefore, the
Court of Appeals acted correctly in holding that the failure to serve a
copy of the motion for execution on petitioner is not a fatal defect. In
fact, there was no necessity for such service. [Emphases and
underscoring supplied]
At any rate, it is not true that the petitioner was not notified of the motion for
execution of the Spouses Co. The records clearly show that the motion for
execution was duly served upon, and received by, petitioners counsel-of-record, the
Quasha Ancheta Pena Nolasco Law Offices, as evidenced by a signed stamped
received mark appearing on said pleading. [7] The records are bereft of proof
showing any written denial from petitioners counsel of its valid receipt on behalf of
its client. Neither is there proof that the Quasha Ancheta Pena Nolasco Law Offices
has formally withdrawn its appearance as petitioners counsel-of-record.
Considering that there is enough proof shown on record of personal delivery in
serving the subject motion for execution, there was a valid compliance with the
Rules, thus, no persuasive reason to stay the execution of the subject final and
executory judgment.
Moreover, this Court takes note that petitioner was particularly silent on the
ruling of the CA that he was notified, through his counsel, of the motion for
execution of the Spouses Co when he filed a motion for reconsideration of the RTCs
order dated June 28, 2005, holding in abeyance said motion pending the resolution
of petitioners pleading filed before this Court. He did not dispute the ruling of the
CA either that the alleged defect in the Spouses Cos motion was cured when his
new counsel was served a copy of said motion for reconsideration of the RTCs June
28, 2005 Order.[8]

The three-day notice rule is not absolute. A liberal


construction of the procedural rules is proper where the lapse in the
literal observance of a rule of procedure has not prejudiced the
adverse party and has not deprived the court of its authority. Indeed,
Section 6, Rule 1 of the Rules of Court provides that the Rules should
be liberally construed in order to promote their objective of securing a
just, speedy and inexpensive disposition of every action and
proceeding. Rules of procedure are tools designed to facilitate the
attainment of justice, and courts must avoid their strict and rigid
application which would result in technicalities that tend to frustrate
rather than promote substantial justice.

In Somera Vda. De Navarro v. Navarro, the Court held that there


was substantial compliance of the rule on notice of motions even if the
first notice was irregular because no prejudice was caused the adverse
party since the motion was not considered and resolved until after
several postponements of which the parties were duly notified.
Likewise, in Jehan Shipping Corporation v. National Food
Authority, the Court held that despite the lack of notice of hearing in a
Motion for Reconsideration, there was substantial compliance with the
requirements of due process where the adverse party actually had the
opportunity to be heard and had filed pleadings in opposition to the
motion. The Court held:
This Court has indeed held time and again, that under Sections 4
and 5 of Rule 15 of the Rules of Court, mandatory is the requirement in
a motion, which is rendered defective by failure to comply with the
requirement. As a rule, a motion without a notice of hearing is
considered pro forma and does not affect the reglementary period for
the appeal or the filing of the requisite pleading.
As an integral component of the procedural due process, the
three-day notice required by the Rules is not intended for the benefit of
the movant. Rather, the requirement is for the purpose of avoiding
surprises that may be sprung upon the adverse party, who must be
given time to study and meet the arguments in the motion before a
resolution of the court. Principles of natural justice demand that the
right of a party should not be affected without giving it an opportunity
to be heard.
The test is the presence of opportunity to be heard, as
well as to have time to study the motion and meaningfully
oppose or controvert the grounds upon which it is based.
[9]
[Emphases and underscoring supplied]

[10]

Likewise, in the case of KKK Foundation, Inc. v. Hon. Adelina Calderon-Bargas,


this Court stated:
Anent the second issue, we have consistently held that a motion
which does not meet the requirements of Sections 4 and 5 of Rule 15 of
the Rules of Court is considered a worthless piece of paper, which the
Clerk of Court has no right to receive and the trial court has no authority
to act upon. Service of a copy of a motion containing a notice of the time
and the place of hearing of that motion is a mandatory requirement, and
the failure of movants to comply with these requirements renders their
motions fatally defective. However, there are exceptions to the
strict application of this rule. These exceptions are: (1) where a rigid
application will result in a manifest failure or miscarriage of justice
especially if a party successfully shows that the alleged defect in the
questioned final and executory judgment is not apparent on its face or
from the recitals contained therein; (2) where the interest of substantial
justice will be served; (3) where the resolution of the motion is
addressed solely to the sound and judicious discretion of the court; and
(4) where the injustice to the adverse party is not commensurate with
the degree of his thoughtlessness in not complying with the procedure
prescribed.
A notice of hearing is an integral component of procedural due
process to afford the adverse parties a chance to be heard before a
motion is resolved by the court. Through such notice, the adverse party
is given time to study and answer the arguments in the motion. Records
show that while Angeless Motion for Issuance of Writ of Execution
contained a notice of hearing, it did not particularly state the date and
time of the hearing. However, we still find that petitioner was not denied
procedural due process. Upon receiving the Motion for Issuance of Writ
of Execution, the trial court issued an Order dated September 9,
2002giving petitioner ten (10) days to file its comment. The trial court
ruled on the motion only after the reglementary period to file comment
lapsed. Clearly, petitioner was given time to study and comment
on the motion for which reason, the very purpose of a notice of
hearing had been achieved.
The notice requirement is not a ritual to be followed
blindly. Procedural due process is not based solely on a mechanical and
literal application that renders any deviation inexorably fatal. Instead,
procedural rules are liberally construed to promote their objective and to
assist in obtaining a just, speedy and inexpensive determination of any
action and proceeding. [Emphases supplied]

At any rate, it is undisputed that the August 21, 1991 RTC Decision[11] in Civil
Case No. 44940 is already final and executory. Once a judgment becomes final and
executory, all the issues between the parties are deemed resolved and laid to rest.
All that remains is the execution of the decision which is a matter of right. The

prevailing party is entitled to a writ of execution, the issuance of which is the trial
courts ministerial duty.[12]
The Court agrees with the respondents that petitioner mainly relies on mere
technicalities to frustrate the ends of justice and further delay the execution process
and enforcement of the RTC Decision that has been affirmed by the CA and this
Court. The record shows that the case has been dragging on for almost 30 years
since petitioner filed an action for annulment of sale in 1982. From the time the
Spouses Co bought the house from PSB in 1978, they have yet to set foot on the
subject house and lot.
To remand the case back to the lower court would further prolong the agony
of the Spouses Co. The Court should not allow this to happen. The Spouses Co
should not be prevented from enjoying the fruits of the final judgment in their favor.
In another protracted case, the Court wrote:

As a final note, it bears to point out that this case has been
dragging for more than 15 years and the execution of this Courts
judgment in PEA v. CA has been delayed for almost ten years now
simply because De Leon filed a frivolous appeal against the RTCs order
of execution based on arguments that cannot hold water. As a
consequence, PEA is prevented from enjoying the fruits of the final
judgment in its favor. The Court agrees with the Office of the Solicitor
General in its contention that every litigation must come to an end
once a judgment becomes final, executory and unappealable. Just as a
losing party has the right to file an appeal within the prescribed period,
the winning party also has the correlative right to enjoy the finality of
the resolution of his case by the execution and satisfaction of the
judgment, which is the "life of the law." To frustrate it by dilatory
schemes on the part of the losing party is to frustrate all the efforts,
time and expenditure of the courts. It is in the interest of justice that
this Court should write finis to this litigation. [13]

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

Sec. 5. Notice of hearing


Anama v. Phil. Savings Bank, G.R. No. 187021, January 25, 2012
(Supra.)
Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998
(Supra.)
FIRST DIVISION

[G.R. No. 130314. September 22, 1998]


ANNIE TAN, petitioner, vs. COURT OF APPEALS and BLOOMBERRY EXPORT
MANUFACTURING, INC.,respondents.
DECISION
PANGANIBAN, J.:
Before a trial court, a motion for reconsideration that does not contain the
requisite notice of hearing does not toll the running of the period of appeal. It is a
mere scrap of paper which the trial court and the opposite party may ignore.

The Case

Petitioner seeks to set aside the August 22, 1997 Decision of the Court of
Appeals[1] in CA-GR SP No. 43293, the dispositive portion of which reads: [2]
WHEREFORE, [i]n view of all the foregoing considerations, the petition for certiorari
and prohibition is granted. The Order dated October 4, 1996, of public respondent
is hereby SET ASIDE and public respondent is ordered to desist from further
proceeding with the hearing of the Motion for Reconsideration. The Decision dated
July 18, 1996, of public respondent is declared final and executory.

The Facts

Petitioner Annie Tan, doing business under the name and style AJ & T Trading,
leased a portion of the ground floor of her building, more specifically described as
Stall No. 623, Carvajal Street, Binondo, Manila, in favor of Bloomberry Export
Manufacturing, Inc. The lease was for a period of five years starting on February 17,
1995 and ending on February 17, 2000, at a monthly rental of P20,000 for the first

three years.[3] For several alleged violations of the lease contract, petitioners filed
against private respondent a complaint for ejectment, docketed as Civil Case No.
148798-CV.[4]As its rental payment was refused by petitioner, private respondent
instituted on July 13, 1995 a case for consignation, docketed as Civil Case No.
148814-CV.[5]
The two cases were consolidated. In due course, the Metropolitan Trial Court
(MTC) of Manila, Branch I, rendered on February 1, 1996 a Decision [6] which disposed
as follows:[7]
WHEREFORE, in Civil Case No. 148798-CV for [b]reach of [c]ontract, failure to pay
rentals on time, encroachment on the adjacent premises without the consent of
[petitioner], [she] failed to substantiate her case with that degree of proof required
by law. For this reason, except for the costs of suit, this Court hereby orders the
dismissal of the complaint of [petitioner]. The counterclaim and damages sought by
[private respondent are] likewise ordered dismissed. The case for consignation in
Civil Case No. 148814-CV has become moot and academic for failure of [petitioner]
to appeal the decision of the Metropolitan [Trial] Court, Branch 15, Manila, allowing
the [private respondent] to consign rental payments to the Court of
Manila. Besides, the [c]omplaint for consignation being in conformity with law,
[private respondent] is allowed to continue consigning with this Court all rentals
that [may be] due.
On appeal, the Regional Trial Court (RTC) of Manila, Branch 2, in its Decision
dated July 18, 1996, affirmed the aforementioned MTC Decision thus:
WHEREFORE, finding no cogent reasons to disturb the joint decision dated
February 1, 1996 of the Metropolitan Trial Court of Manila, Branch 1, the Court
sustains and affirms in toto the said decision.
Respondent Court related the incidents that ensued, as follows: [8]
xxx [F]rom the Decision of the [RTC] dated July 18, 1996, [petitioner] filed a Motion
for Reconsideration of the aforesaid decision. The Motion for Reconsideration did
not contain any notice of hearing as required under Section 5, Rule 15 of the
Revised Rules of Court.
On August 23, 1996, [private respondent] filed an ex-parte Motion for Entry of
Judgment upon the ground that said motion for reconsideration is a mere scrap of
paper which should not merit the attention of the [RTC] and in support thereof, cited
the case of Traders Royal Bank vs. Court of Appeals, 208 SCRA 199. [Private
respondent] contends that since the Motion for Reconsideration is a mere scrap of
paper aside from being pro forma, said Motion for Reconsideration did not toll the
period of appeal[;] hence, the Decision dated July 18, 1996, had become final and
executory.
"On September 3, 1996, [petitioner] filed a Motion to Set for Hearing the Motion for
Reconsideration which was vehemently opposed by [private respondent] on
September 23, 1996.

On October 4, 1996, [the RTC] issued an Order granting the motion to set for
hearing [petitioners] Motion for Reconsideration and set[ting] the hearing [for]
October 21, 1996, at 8:30 oclock in the morning. On October 20, 1996, [private
respondent] filed a Motion for Reconsideration of the Order dated October 4, 1996,
which was set for hearing on October 25, 1996.
On November 11, 1996, [the RTC] issued an Order denying [private respondents]
Motion for Reconsideration. Hence, the Petition for Certiorari and Prohibition. xxx.
In the assailed Decision, Respondent Court of Appeals reversed the trial courts
Order setting for hearing petitioners Motion for Reconsideration.

The Ruling of the Court of Appeals

Respondent Court held that the trial court acted with grave abuse of discretion
in setting for hearing petitioners Motion for Reconsideration, notwithstanding the
fact that said Motion contained no notice of hearing.
Citing a litany of cases, it ruled that petitioners failure to comply with the
mandatory provisions of Sections 4 and 5, Rule 15 of the Rules of Court, reduced her
motion to a mere scrap of paper which did not merit the attention of the
court. Respondent Court also held that those cases in which the Court allowed a
motion for reconsideration that had not been set for hearing -- Galvez v. Court of
Appeals,[9] Tamargo v. Court of Appeals[10] and Que v. Intermediate Appellate
Court[11]-- were inapplicable.
Respondent Court held that the facts in Galvez drastically differ from those in
the present case. Galvez involved a motion to withdraw the information -- not a
motion for reconsideration -- that was filed ex parte before the arraignment of the
accused. In that case, the Court held that there was no imperative need of notice
and hearing because, first, the withdrawal of an information rests on the discretion
of the trial court; and, second, the accused was not placed in jeopardy. On the
other hand, the subject of the present controversy is a motion for reconsideration
directed against the Decision of the RTC; thus, the motion affects the period to
perfect an appeal.
Que is not applicable, either. In said case, the trial court set the Motion for
Reconsideration (MR) for hearing, which was actually attended by the counsel for
the adverse party. This was not so in the case at bar; petitioners MR was set for
hearing, because she belatedly moved for it upon the filing of private respondents
Motion for Entry of Judgment. Likewise, the present case differs from Tamargo,
wherein the application of the aforesaid mandatory provisions was suspended. The
Court did so in order to give substantial justice to the petitioner and in view of the
nature of the issues raised which were found to be highly meritorious.
Hence, this petition.[12]

The Issue

In her Memorandum,[13] petitioner presents a fairly accurate statement of the


main issue to be resolved:[14]

Whether xxx the omission [through] inadvertence of a notice of hearing of


a motion for reconsideration filed with the trial court xxx is a fatal defect
which did not stop the running of the period to appeal[,] thus rendering the
assailed decision final [and] executory.

The Courts Ruling

The petition is devoid of merit.

Sole Issue:
Omission of Notice of Hearing Fatal

Petitioner admits the categorical and mandatory character of the directives in


Sections 4 and 5 of Rule 15 of the Rules of Court, which read: [15]
SEC. 4. Hearing of motion.Except for motions which the court may act upon
without prejudicing the rights of the adverse party, every written motion shall be set
for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof
shall be served in such a manner as to ensure its receipt by the other party at least
three (3) days before the date of hearing, unless the court for good cause sets the
hearing on shorter notice.(4a)
SEC. 5. Notice of hearing.The notice of hearing shall be addressed to all parties
concerned, and shall specify the time and date of the hearing which must not be
later than ten (10) days after the filing of the motion.(5a)
In De la Pea v. De la Pea, [16] the Court presented a resume of earlier decisions
regarding the necessity of the notice of hearing in motions for reconsideration:
In Pojas v. Gozo-Dadole,[17] we had occasion to rule on the issue of whether a
motion for reconsideration without any notice of hearing tolls the running of the
prescriptive period. In Pojas, petitioner received copy of the decision in Civil Case
No. 3430 of the Regional Trial Court of Tagbilaran on 15 April 1986. The decision
being adverse to him petitioner filed a motion for reconsideration. For failing to
mention the date when the motion was to be resolved as required in Sec. 5, Rule 15,
of the Rules of Court, the motion for reconsideration was denied. A second motion
for reconsideration met the same fate. On 2 July 1986 petitioner filed a notice of
appeal but the same was denied for being filed out of time as the motion for
reconsideration which the Court ruled as pro forma did not stop the running of the
15-day period to appeal.[18]
In resolving the issue of whether there was grave abuse of discretion in denying
petitioners notice of appeal, this Court ruled
Section 4 of Rule 15 of the Rules of Court requires that notice of motion be served
by the movant on all parties concerned at least three (3) days before its

hearing. Section 5 of the same Rule provides that the notice shall be directed to the
parties concerned, and shall state the time and place for the hearing of the
motion. A motion which does not meet the requirements of Section 4 and 5 of Rule
15 of the Rules of Court is considered a worthless piece of paper which the clerk has
no right to receive and the court has no authority to act upon. Service of copy of a
motion containing notice of the time and place of hearing of said motion is a
mandatory requirement and the failure of the movant to comply with said
requirements renders his motion fatally defective. [19]
In New Japan Motors, Inc. v. Perucho,[20] defendant filed a motion for
reconsideration which did not contain any notice of hearing. In a petition for
certiorari, we affirmed the lower court in ruling that a motion for reconsideration
that did not contain a notice of hearing was a useless scrap of paper. We held
further
Under Sections 4 and 5 of Rule 15 of the Rules of Court, xxx a motion is required to
be accompanied by a notice of hearing which must be served by the applicant on all
parties concerned at least three (3) days before the hearing thereof. Section 6 of
the same rule commands that (n)o motion shall be acted upon by the Court,
without proof of service of the notice thereof xxx. It is therefore patent that the
motion for reconsideration in question is fatally defective for it did not contain any
notice of hearing. We have already consistently held in a number of cases that the
requirements of Sections 4, 5 and 6 of Rules 15 of the Rules of Court are mandatory
and that failure to comply with the same is fatal to movants cause. [21]
In Sembrano v. Ramirez,[22] we declared that
(A) motion without notice of hearing is a mere scrap of paper. It does not toll the
running of the period of appeal. This requirement of notice of hearing equally
applies to a motion for reconsideration. Without such notice, the motion is pro
forma. And a pro forma motion for reconsideration does not suspend the running
of the period to appeal.
In In re Almacen,[23] defendant lost his case in the lower court. His counsel then
filed a motion for reconsideration but did not notify the adverse counsel of the time
and place of hearing of said motion. The Court of Appeals dismissed the motion for
the reason that the motion for reconsideration dated July 5, 1966 does not contain
a notice of time and place of hearing thereof and is, therefore a useless piece of
paper which did not interrupt the running of the period to appeal, and,
consequently, the appeal was perfected out of time. When the case was brought to
us, we reminded counsel for the defendant that
As a law practitioner who was admitted to the bar as far back as 1941, Atty.
Almacen knew or ought to have known that [for] a motion for reconsideration to
stay the running of the period of appeal, the movant must not only serve a copy of
the motion upon the adverse party x x x but also notify the adverse party of the
time and place of hearing x x x.

Also, in Manila Surety and Fidelity Co., Inc. v. Bath Construction and Company,
[24]
we ruled-The written notice referred to evidently is that prescribed for motions in general by
Rule 15, Sections 4 and 5 (formerly Rule 26), which provide that such notice shall
state the time and place of hearing and shall be served upon all the parties
concerned at least three days in advance. And according to Section 6 of the same
Rule no motion shall be acted upon by the court without proof of such
notice. Indeed, it has been held that in such a case the motion is nothing but a
useless piece of paper. The reason is obvious; unless the movant sets the time and
place of hearing the court would have no way to determine whether that party
agrees to or objects to the motion, and if he objects, to hear him on his objection,
since the Rules themselves do not fix any period within [which] he may file his reply
or opposition.'[25]
In fine, the abovecited cases confirm that the requirements laid down in Sec. 5 of
Rule 15 of the Rules of Court that the notice shall be directed to the parties
concerned, and shall state the time and place for the hearing of the motion, are
mandatory. If not religiously complied with, they render the motion pro forma. As
such the motion is a useless piece of paper that will not toll the running of the
prescriptive period.
For failing to attach a notice of hearing to the Motion for Reconsideration,
petitioner proffers the following excuses: (1) her former counsels messenger, due
to an honest mistake, inadvertently omitted the fourth page of the motion
containing the crucial Notice of Hearing; and (2) because of the pressure of work,
her former counsel was unable to follow up such motion until the day said counsel
requested the setting of a hearing.[26]
We are not in the least convinced. First, it is unfair to place the blame for such
omission on the messenger. The burden of preparing a complete pleading falls on
counsels shoulders, not on the messengers. The counsel is ultimately responsible
for the acts or omissions of his agents. Hence, the messengers conduct can neither
justify the counsels mistake nor warrant a departure from the mandate of the
aforesaid procedural rules.
Second, it is incredible that the fourth page containing the Notice of Hearing
was left behind due to honest mistake. In fact, there was no such
page. Petitioners claim is belied by the following pertinent portions of the subject
Motion for Reconsideration:[27]
WHEREFORE, premises considered, it is respectfully prayed that the Honorable
Court cause a further REVIEW and RECONSIDERATION of its decision on the abovecaptioned consolidated cases.
Quezon City for Manila, August 12, 1996.
(Sgd.)ANGELINA ARANDIA-VILLANUEVA
Counsel for Plaintiff-Appellant
39-L T. Morato Avenue, Quezon City
IBP No. 407450 6-26-96

PTR No. 227013 1-5-96 Manila


Copy furnished:
Atty. Arnel Zaragoza Dolendo
Counsel for Defendant
Rm 408, 413 First United Bldg.
Escolta, Manila
The normal practice is to note, at the end of the pleading, that a copy was
furnished to the adverse party. Thus, petitioners motion ended exactly at the
bottom of the third page as evidenced by the copy-furnished notation. It is safe to
conclude that there was no accidental or excusable neglect in not including a fourth
page in this case. In other words, petitioners counsel simply failed to include a
notice of hearing.
Finally, the fact that petitioners former counsel calendared the motion for
hearing for August 23, 1996[28] belies the excuse that an alleged fourth page had
been left behind. In the first place, if a notice of hearing had been included in the
Motion for Reconsideration, there would have been no need for petitioner to file the
Motion to set the time and date of hearing. What is clear is that said counsel filed
the latter Motion, only after private respondent had submitted its Motion for Entry of
Judgment[29] -- with copy furnished petitioners counsel [30]-- on the ground that
petitioners Motion for Reconsideration was a mere scrap of paper that did not stop
the period for appeal.
Petitioner pleads for liberal construction of the rule on notice of hearing,
citing Tamargo, Galvez and Que. In rebuttal, we adopt by reference the CAs
excellent disquisition, cited earlier, on why these cases are inapplicable.
Petitioner further alleges that, first, the nonadmission of her Motion for
Reconsideration would result in a miscarriage of justice, as the main case
(ejectment), which was tried under summary procedure, had been unnecessarily
prolonged; and, second, the tenant lessee would be occupying the premises without
paying rentals. She also relies on People v. Leviste,[31] in which the Court held:
While it is true that any motion that does not comply with the requirements of Rule
15, Rules of Court should not be accepted for filing and, if filed, is not entitled to
judicial cognizance, the Supreme Court has likewise held that where rigid
application of the rule will result in manifest failure or miscarriage of justice,
technicalities may be disregarded in order to resolve the case.
Liberal construction of this rule has been allowed by this Court in the following
cases: (1) where a rigid application will result in a manifest failure or miscarriage of
justice,[32] especially if a party successfully shows that the alleged defect in the
questioned final and executory judgment is not apparent on its face or from the
recitals contained therein;[33] (2) where the interest of substantial justice will be
served;[34] (3) where the resolution of the motion is addressed solely to the sound
and judicious discretion of the court; [35] and (4) where the injustice to the adverse
party is not commensurate with the degree of his thoughtlessness in not complying
with the procedure prescribed.[36] Petitioner has failed to demonstrate that the case
at bar falls under any of these exceptions.

Finally, petitioner claims that she will be deprived of property without due
process, as private respondent has accumulated P348,800 in unpaid rentals and
accrued interests.
We disagree. Petitioner can obtain proper payment of rentals through a motion
for execution in the case below. The MTC may have dismissed her ejectment case,
but it did not exculpate private respondent from its liabilities. Petitioner is,
therefore, not being deprived of her property without due process.
Indeed, there is no miscarriage of justice to speak of. Having failed to observe
very elementary rules of procedure which are mandatory, petitioner caused her own
predicament. To exculpate her from the compulsory coverage of such rules is to
undermine the stability of the judicial process, as the bench and bar will be
confounded by such irritating uncertainties as when to obey and when to ignore the
Rules. We have to draw the line somewhere.[37]
WHEREFORE, the petition is hereby DENIED and the assailed Decision is
AFFIRMED. Costs against the petitioner.
SO ORDERED.
Davide, Jr. (Chairman), Bellosillo, Vitug and Quisumbing, JJ., concur.

Sec. 6. Proof of service necessary

Sec. 7. Motion day

Sec. 8. Omnibus motion


Tung Ho Steel v. Ting Guan, G.R. No. 182153, April 7, 2014 (Supra.)

Sec. 9. Motion for leave

Sec. 10. Form

RULE 16- MOTION TO DISMISS

Sec. 1. Grounds.

See: Sec. 1, Rule 9


Obando v. Figueras, G.R. No. 134854, January 18, 2000
Spped
THIRD DIVISION
[G.R. No. 134854. January 18, 2000]
FELIZARDO S. OBANDO and the ESTATES of JOSE FIGUERAS and DOA
ALEGRIA STREBEL VDA. DE FIGUERAS,petitioners, vs. EDUARDO F.
FIGUERAS and AMIGO REALTY CORPORATION as represented by ANTONIO
A. KAW,respondents.
DECISION
PANGANIBAN, J.:
In resolving this appeal, the Court invokes the following principles: (1) a lawyers
standing in a case remains, until a substitute takes over pursuant to Section 26,
Rule 138 of the Rules of Court; (2) a trial court may act upon a motion to dismiss at
any time a ground therefor becomes available, even after a responsive pleading to
the complaint has already been filed; (3) a civil case initiated by an estate
administrator may be dismissed upon a showing that the said administrators
appointment as such has been revoked by the probate court; and (4) the dismissal
of an action may be made after the ground therefor becomes known, even if the
trial court has refused to do so earlier when that ground was not yet available.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to
annul the July 30, 1998 Decision of the Court of Appeals [1] in CA-GR SP No. 47594,
which affirmed the dismissal, without prejudice, of Petitioner Felizardo Obandos
action for annulment of contract and reconveyance earlier ordered by the Regional
Trial Court (RTC) of Quezon City,[2] Branch 218. Mis spped
The Facts
In 1964, Alegria Strebel Figueras, together with her stepsons, Eduardo and
Francisco, filed a Petition for settlement of the intestate estate of her deceased
husband Jose Figueras.[3] While settlement of the estate was pending, she died and
Eduardo assumed administration of the joint estates of Don Jose and Doa Alegria.
Hardly had the proceedings in both intestacies begun when Eduardo was served a

Petition for Probate of what purported to be Doa Alegrias Last Will and Testament,
filed by Felizardo S. Obando (herein petitioner), a nephew of Doa Alegria. [4]
The alleged Will bequeathed to Petitioner Obando and several other members of the
Obando clan properties left by the Figueras couple, including two parcels of land in
Gilmore Avenue, New Manila, Quezon City, covered by TCT Nos. 13741 and 17679.
[5]
When the probate case was consolidated with the intestate proceedings,
Petitioner Obando was appointed as Eduardos co-administrator of the joint estates.
[6]

As Eduardo insisted that the alleged Will was a forgery, the document was
submitted to the National Bureau of Investigation (NBI) for examination and
comparison of Doa Alegrias alleged signature therein with samples which both
parties accepted as authentic. The NBI found that the questioned and the standard
signatures were not made by the same person. [7] This led to the indictment and the
conviction of Petitioner Obando in Criminal Case 90-85819 [8]for estafa through
falsification of a public document.
On February 20, 1990, the probate court denied Eduardos Motion for authority to
sell the aforementioned two parcels of land in New Manila. [9] Despite such denial,
Eduardo sold the lots to Amigo Realty Corporation on the strength of an Order
issued by the probate court on May 15, 1991. New titles were issued for these lots
in the name of Amigo Realty.[10]
On June 4, 1992, Petitioner Obando, in his capacity as co-administrator and
universal heir of Doa Alegria, filed a Complaint against Eduardo and Amigo Realty
(collectively referred to as the respondents) for the nullification of the sale. The
proceedings were docketed as Civil Case No. Q-92-12384 and raffled to the Regional
Trial Court of Quezon City, Branch 79.
However, in Special Proceeding Nos. 61567 and 123948, the probate court, in its
Order dated December 17, 1997, removed Petitioner Obando from his office as coadministrator of the joint estate of the Figueras spouses. [11] Consequently, in the
civil case, respondents filed a Joint Motion to Dismiss dated January 27, 1998, after
Obando had rested his case. The respondents built their evidence around the loss of
his legal standing to pursue the case. [12] In its Order dated February 11, 1993, the
trial court granted the Motion and dismissed the civil case without prejudice.
[13]
Jo spped
Petitioner Obando filed a Motion for Reconsideration to no avail. As earlier stated,
the Court of Appeals likewise dismissed his Petition for Certiorari and Mandamus
and affirmed the dismissal Order of the RTC. [14]
Ruling of the Court of Appeals
The Court of Appeals rejected the contention of Obando that he did not lose his
legal personality to prosecute the civil case since there was no categorical
statement that the purported will was a forgery and its probate was still pending.

The CA affirmed the dismissal of the action for reconveyance because the probate
courts Order dated February 5, 1998 "alluded" to the fact that the alleged Will was
a forgery. That the probate of the alleged Will had not yet been decided on the
merits did not change the fact that the probate court had removed Petitioner
Obando as co-administrator. The dismissal of the civil case was without prejudice,
because the trial judge anticipated that Obando could regain co-administration of
the estates on appeal.
Hence, this Petition.[15]
Assignment of Errors
In their Memorandum, petitioners raise the following issues: [16]
"A........WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
SANCTIONING THE TRIAL COURTS ALLOWANCE OF RESPONDENTS
JOINT MOTION TO DISMISS, DESPITE THE FACT THAT ONE OF THE
LAWYER-MOVANTS THEREIN WAS NO LONGER THE COUNSEL OF
RECORD FOR RESPONDENT FIGUERAS AT THE TIME THE MOTION WAS
FILED.
"B........WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
SANCTIONING THE TRIAL COURTS RADICAL DEPARTURE FROM THE
LAW WHEN IT GRANTED A MOTION TO DISMISS ON LACK OF CAPACITY
TO SUE/LEGAL STANDING AT THE TIME WHEN THE [PETITIONERS] HAVE
ALREADY RESTED THEIR CASE AND THE [RESPONDENTS] HAVE BEGUN
PRESENTATION OF THEIR EVIDENCE.
"C........WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED
WHEN IT SANCTIONED THE TRIAL COURTS DISMISSAL OF THE CASE
BASED ON ORDERS OF OTHER COURTS THAT HAVE NOT YET ATTAINED
FINALITY. Sppedjo
"D........WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED
WHEN IT UPHELD THE TRIAL COURTS WHIMSICAL AND CAPRICIOUS
DEPARTURE FROM ITS PREVIOUS RULINGS DENYING RESPONDENTS
MOTION TO DISMISS AND MOTION TO SUSPEND PROCEEDINGS.
"E........WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED
WHEN IT RENDERED ITS 30 JULY 1998 DECISION IN CA-G.R. 47594
UPHOLDING THE TRIAL COURTS ORDERS DATED 11 FEBRUARY 1998
AND 12 MARCH 1998."
Simply stated, the following issues are raised by the petitioners: (1) whether the
trial court could act on a motion filed by a lawyer who was allegedly no longer
Eduardos counsel of record; (2) whether a motion to dismiss filed after the
responsive pleadings were already made can still be granted; (3) whether the
conviction of Petitioner Obando for estafa through falsification and the revocation of
his appointment as administrator, both of which are on appeal, constitute sufficient

grounds to dismiss the civil case; and (4) whether there was a conflict between the
Order dismissing the civil case and the previous actions of the trial court.
The Courts Ruling
The Petition is devoid of merit.
First Issue:
Counsel of Record
Petitioners claim that when Atty. Joaquin Yuseco filed the Motion to Dismiss, he no
longer represented the respondents, as shown by Eduardos Manifestation and
Motion dated January 8, 1998, dispensing with said counsels services in the
proceedings in view of a Compromise Agreement with Petitioner Obando. [17]
We disagree. Representation continues until the court dispenses with the services of
counsel in accordance with Section 26, Rule 138 of the Rules of Court. [18] Counsel
may be validly substituted only if the following requisites are complied with: (1) new
counsel files a written application for substitution; (2) the clients written consent is
obtained; and (3) the written consent of the lawyer to be substituted is secured, if it
can still be; if the written consent can no longer be obtained, then the application
for substitution must carry proof that notice of the motion has been served on the
attorney to be substituted in the manner required by the Rules. [19] Miso
In this case, we are convinced that Eduardo did not dismiss Attorney Yuseco. In fact,
the former manifested that he had been tricked by Petitioner Obando into signing
the aforesaid Manifestation and Motion and Compromise Agreement. Besides, the
filing of the Motion to Dismiss was not prejudicial but beneficial to the said
respondent; hence, he had no reason to complain. At the discretion of the court, an
attorney who has already been dismissed by the client is allowed to intervene in a
case in order to protect the clients rights. In the present case, had there been any
irregularity, it should have been raised by the respondents, not the petitioners.
Second Issue:
Timeliness of the Motion to Dismiss
The Rules provide that a motion to dismiss may be submitted only before the filing
of a responsive pleading.[20] Thus, petitioners complain that it was already too late
for Respondent Eduardo Figueras to file a Motion to Dismiss after Obando had
finished presenting his evidence.
This is not so. The period to file a motion to dismiss depends upon the
circumstances of the case. Section 1 of Rule 16 of the Rules of Court requires that,
in general, a motion to dismiss should be filed within the reglementary period for
filing a responsive pleading. Thus, a motion to dismiss alleging improper venue
cannot be entertained unless made within that period. [21] Nex old

However, even after an answer has been filed, the Court has allowed a defendant to
file a motion to dismiss on the following grounds: (1) lack of jurisdiction, [22] (2) litis
pendentia,[23] (3) lack of cause of action,[24] and (4) discovery during trial of evidence
that would constitute a ground for dismissal. [25] Except for lack of cause of action or
lack of jurisdiction, the grounds under Section 1 of Rule 16 may be waived. If a
particular ground for dismissal is not raised or if no motion to dismiss is filed at all
within the reglementary period, it is generally considered waived under Section 1,
Rule 9 of the Rules.[26] Mani kx
Applying this principle to the case at bar, the respondents did not waive their right
to move for the dismissal of the civil case based on Petitioner Obandos lack of legal
capacity. It must be pointed out that it was only after he had been convicted of
estafa through falsification that the probate court divested him of his representation
of the Figueras estates. It was only then that this ground became available to the
respondents. Hence, it could not be said that they waived it by raising it in a Motion
to Dismiss filed after their Answer was submitted. Verily, if the plaintiff loses his
capacity to sue during the pendency of the case, as in the present controversy, the
defendant should be allowed to file a motion to dismiss, even after the lapse of the
reglementary period for filing a responsive pleading.
Third Issue:
Removal from Administration
Petitioners aver that it was premature for the trial court to dismiss the civil case
because Obandos conviction for estafa through falsification was still on appeal.
We disagree. This argument has no bearing at all on the dismissal of the civil case.
Petitioner Obando derived his power to represent the estate of the deceased couple
from his appointment as co-administrator. [27] When the probate court removed him
from office, he lost that authority. Since he lacked the legal capacity to sue on
behalf of the Figueras estates, he could not continue prosecuting the civil case.
[28]
Thus the trial court properly granted the Motion to Dismiss on this ground.
[29]
Whether a final conviction for a crime involving moral turpitude is necessary to
remove him from his administration is not a proper issue in this Petition. He should
raise the matter in his appeal of the Decision removing him from administration of
the Figueras estates. Maniks
The fact that the conviction of Obando and his removal from administration are on
appeal only means that his legal standing could be restored; thus, the civil case was
correctly dismissed without prejudice. If his conviction is reversed and his
appointment restored by the probate court, the case may continue without being
barred by res judicata. The lower courts Decision showed that it was careful in its
action. On the other hand, Obando has yet to show that he has regained
administration of the Figueras estates. Noteworthy also is the fact that his removal
from office was predicated not only on his conviction for a crime, but also on his
failure to render an accounting of the rentals of a property leased to the Community
of Learners.

Fourth Issue:
No Conflicting Rulings
Respondent Eduardo Figueras earlier Motion to Dismiss was denied in the trial
courts March 4, 1993 Order which reads:
"x x x [I]t is pertinent to note that the criminal case of Estafa through
Falsification of Public Document filed against [petitioner] and the
Petition to Remove him as co-administrator are still pending
determination. Thus, suffice it to state that while herein [petitioner]
remains as the co-administrator of the estates of the deceased
Figueras the Court will continue to recognize his right to institute the
instant case in his capacity as judicial administrator, unless he be
removed as such by the probate Court pursuant to Rule 82 of the
Revised Rules of Court."[30]
Thus, petitioners allege that the trial court whimsically and capriciously departed
from its previous rulings when, in its Resolution dated February 11, 1993, it granted
Eduardos later Motion to Dismiss.[31]
We cannot see any conflict between these trial court rulings. Obviously, they were
based on different grounds. The first Motion to Dismiss was denied because, at the
time, Petitioner Obando still had legal capacity to sue as co-administrator of the
Figueras estates. On the other hand, the second Motion was granted because the
probate court had already removed him from his office as co-administrator. The
change in his legal capacity accounts for the difference in the adjudication of the
trial court. We see no reversible error in the appellate courts affirmance of the trial
court.
WHEREFORE,
the
Petition
is
hereby DENIED and
Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.2/29/00 10:57 AM
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

No jurisdiction over defendant


See: Sec. 20, Rule 14

the

assailed

Planters Development Bank v. Chandumal, G.R. No. 195619,


September 5, 2012 (Supra.)
Carandang v. Heirs of de Guzman, G.R. No. 160347, November 29,
2006 (Supra.)

No jurisdiction over the subject matter


Allied Domecq Phil. v. Hon. Villon, G.R. No. 156264, September 30,
2004 (Supra.)
Republic v. Bantigue Point Development, G.R. No. 162322, March 14,
2012 (Supra.)
Tijam v. Sibonghanoy, L-21450, April 15, 1968 (Supra.)

Improper Venue
See: Rule 4
Sec. 4, A.M. No. 02-11-10-SC, March 4, 2003
A.M. No. 02-11-10-SC

March 4, 2003

RE: PROPOSED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID


MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES
RESOLUTION
Acting on the letter of the Chairman of the Committee on Revision of the
Rules of Court submitting for this Court's consideration and approval the Proposed
Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages, the Court Resolved to APPROVE the same.
The Rule shall take effect on March 15, 2003 following its publication in a
newspaper of general circulation not later than March 7, 2003
March 4, 2003
Davide, C.J. Bellosillo, Puno, Vitug Mendoza, Panganiban, Quisumbing, SandovalGutierrez, Carpio, Austria-Martinez, Carpio Morales, Callejo, Sr. and Azcuna
Ynares-Santiago,
on
leave
Corona, on official leave
RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARIAGES AND
ANNULMENT OF VOIDABLE MARRIAGES

Section 1. Scope - This Rule shall govern petitions for declaration of absolute
nullity of void marriages and annulment of voidable marriages under the Family
Code of te Philippines.
The Rules of Court shall apply suppletorily.
Section 2. Petition for declaration of absolute nullity of void marriages.
(a) Who may file. - A petition for declaration of absolute nullity of void
marriage may be filed solely by the husband or the wife. (n)
(b) Where to file. - The petition shal be filed in the Family Court.
(c) Imprecriptibility ofaction or defense. - An Action or defense for the
declaration of absolute nullity of void marriage shall not prescribe.
(d) What to allege. - A petition under Article 36 of Family Code shall specially
allege te complete facts showing the either or both parties were
psychologically incapacitated from complying with the essential marital
obligations of marriages at the time of the celebration of marriage even if
such incapacity becomes manifest only after its celebration.
The complete facts should allege the physical manifestations, if any, as are
indicative of psychological incapacity at the time of the celebration of the marriage
but expert opinion need not be alleged.
Section 3. Petition for annulment of voidable marriages. (a) Who may file. - The following persons may file a petition for annulment of
voidable marriage based on any of the grounds under article 45 of the Family
Code and within the period herein indicated:
(1) The contracting party whose parent, or guardian, or person
exercising substitute parental authority did not give his or her consent,
within five years after attaining the age of twenty-one unless, after
attaining the age of twenty-one, such party freely cohabitated with the
other as husband or wife; or the parent, guardian or person having
legal charge of the contracting party , at any time before such party
has reached the age of twenty-one;
(2) The sane spouse who had no knowledge of the other's insanity; or
by any relative, guardian, or person having legal charge of the insane,
at any time before the death of either party; or by the insane spouse
during the a lucid interval or after regaining sanity, provided that the
petitioner , after coming to reason, has not freely cohabited with the
other as husband or wife;
(3) The injured party whose consent was obtained by fraud, within five
years after the discovery of the fraud, provided that said party, with

full knowledge of the facts constituting the fraud, has not freely
cohabited with the other as husband or wife;
(4) The injured party whose consent was obtained by force,
intimidation, or undue influence, within five years from the time the
force intimidation, or undue influence disappeared or ceased, provided
that the force, intimidation, or undue influence having disappeared or
ceased, said party has not thereafter freely cohabited with the other as
husband or wife;
(5) The injured party where the other spouse is physically incapable of
consummating the marriage with the other and such incapability
continues and appears to be incurable, within five years after the
celebration of marriage; and
(6) Te injured party where the other party was afflicted with a sexuallytransmissible disease found to be serious and appears to be incurable,
within five years after the celebration of marriage.
(b) Where to file. - The petition shall be filed in the Family Court.
Section 4. Venue. - The Petition shall be filed in the Family Court of the province or
city where the petitioner or the respondent has been residing for at least six months
prior to the date of filing. Or in the case of non-resident respondent, where he may
be found in the Philippines, at the election of the petitioner.
Section 5. Contents and form of petition. - (1) The petition shall allege the
complete facts constituting the cause of action.
(2) It shall state the names and ages of the common children of the parties
and specify the regime governing their property relations, as well as the
properties involved.
If there is no adequate provision in a written agreement between the
parties, the petitioner may apply for a provisional order for spousal support,
the custody and support of common children, visitation rights, administration
of community or conjugal property, and other matters similarly
requiringurgent action.
(3) It must be verified and accompanied celebration of marriage. (b) Where to
file.-The petition shall be filed in the Family Court.
Section 4. Venue. - The petition shall be filed in the Family Court of the province or
city where the petitioner or the respondent has been residing for at least six months
prior to the date of filing, or in the case of a non-resident respondent, where he may
be found in the Philippines at the election of the petitioner.
Section 5. Contents and form of petition. - (1) The petition shall allege the
complete facts constituting the cause of action.

(2) it shall state the names and ages of the common children of the parties
and specify the regime governing their property relations, as well as the
properties involved.
If there is no adequate provision in a written agreement between the
parties, the petitioner may apply for a provisional order for spousal support,
custody and support of common children, visitation rights, administration of
community or conjugal property, and other matters similarly requiring urgent
action.
(3) it must be verified and accompanied by a certification against forum
shopping. The verification and certification must be signed personally by me
petitioner. No petition may be filed solely by counsel or through an attorneyin-fact.
If the petitioner is in a foreign country, the verification and certification
against forum shopping shall be authenticated by the duly authorized officer
of the Philippine embassy or legation, consul general, consul or vice-consul or
consular agent in said country.
(4) it shall be filed in six copies. The petitioner shall serve a copy of the
petition on the Office of the Solicitor General and the Office of the City or
Provincial Prosecutor, within five days from the date of its filing and submit to
the court proof of such service within the same period.
Failure to comply with any of the preceding requirements may be a
ground for immediate dismissal of the petition.
Section 6. Summons. - The service of summons shall be governed by Rule 14 of
the Rules of Court and by the following rules:
(1) Where the respondent cannot be located at his given address or his
whereabouts are unknown and cannot be ascertained by diligent inquiry,
service of summons may, by leave of court, be effected upon him by
publication once a week for two consecutive weeks in a newspaper of general
circulation in the Philippines and in such places as the court may order In
addition, a copy of the summons shall be served on the respondent at his last
known address by registered mail or any other means the court may deem
sufficient.
(2) The summons to be published shall be contained in an order of the court
with the following data: (a) title of the case; (b) docket number; (c) nature of
the petition; (d) principal grounds of the petition and the reliefs prayed for;
and (e) a directive for the respondent to answer within thirty days from the
last issue of publication.
Section 7. Motion to dismiss. - No motion to dismiss the petition shall be allowed
except on the ground of lack of jurisdiction over the subject matter or over the

parties; provided, however, that any other ground that might warrant a dismissal of
the case may be raised as an affirmative defense in an answer.
Section 8. Answer. - (1) The respondent shall file his answer within fifteen days
from service of summons, or within thirty days from the last issue of publication in
case of service of summons by publication. The answer must be verified by the
respondent himself and not by counsel or attorney-in-fact.
(2) If the respondent fails to file an answer, the court shall not declare him or
her in default.
(3) Where no answer is filed or if the answer does not tender an issue, the
court shall order the public prosecutor to investigate whether collusion exists
between the parties.
Section 9. Investigation report of public prosecutor. - (1) Within one month after
receipt of the court order mentioned in paragraph (3) of Section 8 above, the public
prosecutor shall submit a report to the court stating whether the parties are in
collusion and serve copies thereof on the parties and their respective counsels, if
any.
(2) If the public prosecutor finds that collusion exists, he shall state the on the
finding of collusion within ten days from receipt of a copy of a report The
court shall set the report for hearing and If convinced that the parties are in
collusion, it shall dismiss the petition.
(3) If the public prosecutor reports that no collusion exists, the court shall set
the case for pre-trial. It shall be the duty of the public prosecutor to appear
for the State at the pre-trial.
Section 10. Social worker. - The court may require a social worker to conduct a
case study and submit the corresponding report at least three days before the pretrial. The court may also require a case study at any stage of the case whenever
necessary.
Section 11. Pre-trial. (1) Pre-trial mandatory. - A pre-trial is mandatory. On motion or motu
proprio, the court shall set the pre-trial after the last pleading has been
served and filed, or upon receipt of the report of the public prosecutor that no
collusion exists between the parties.
(2) Notice of pre-trial. - (a) The notice of pre-trial shall contain:
(1) the date of pre-trial conference; and
(2) an order directing the parties to file and serve their
respective pre-trial briefs in such manner as shall ensure the

receipt thereof by the adverse party at least three days before


the date of pre-trial.
(b) The notice shall be served separately on the parties and their
respective counsels as well as on the public prosecutor. It shall be their
duty to appear personally at the pre-trial.
(c) Notice of pre-trial shall be sent to the respondent even if he fails to
file an answer. In case of summons by publication and the respondent
failed to file his answer, notice of pre-trial shall be sent to respondent
at his last known address.
Section 12. Contents of pre-trial brief. - The pre-trial brief shall contain the
following:
(a) A statement of the willingness of the parties to enter into agreements as
may be allowed by law, indicating the desired terms thereof;
(b) A concise statement of their respective claims together with the
applicable laws and authorities;
(c) Admitted facts and proposed stipulations of facts, as well as the disputed
factual and legal issues;
(d) All the evidence to be presented, including expert opinion, if any, briefly
stating or describing the nature and purpose thereof;
(e) The number and names of the witnesses and their respective affidavits;
and
(f) Such other matters as the court may require.
Failure to file the pre-trial brief or to comply with its required contents shall
have the same effect as failure to appear at the pre-trial under the succeeding
paragraphs.
Section 13. Effect of failure to appear at the pre-trial. - {a) If the petitioner fails to
appear personally, the case shall be dismissed unless his counsel or a duly
authorized representative appears in court and proves a valid excuse for the nonappearance of the petitioner.
(b) If the respondent has filed his answer but fails to appear, the court shall
proceed with the pre-trial and require the public prosecutor to investigate the
non-appearance of the respondent and submit within fifteen days thereafter a
report to the court stating whether his non-appearance is due to any collusion
between the parties. If there Is no collusion, the court shall require the public
prosecutor to intervene for the State during the trial on the merits to prevent
suppression or fabrication of evidence.

Section 14. Pre-trial conference. -At the pre-trial conference, the court:
(a) May refer the issues to a mediator who shall assist the parties in reaching
an agreement on matters not prohibited by law.
The mediator shall render a report within one month from referral
which, for good reasons, the court may extend for a period not exceeding one
month.
(b) In case mediation is not availed of or where it fails, the court shall proceed
with the pre-trial conference, on which occasion it shall consider the
advisability of receiving expert testimony and such other makers as may aid
in the prompt disposition of the petition.
Section 15. Pre-trial order. - {a) The proceedings in the pre-trial shall be recorded.
Upon termination of the pre-trial, the court shall Issue a pre-trial order which shall
recite in detail the matters taken up In the conference, the action taken thereon, the
amendments allowed on the pleadings, and except as to the ground of declaration
of nullity or annulment, the agreements or admissions made by the parties on any
of the matters considered, including any provisional order that may be necessary or
agreed upon by the parties.
(b) Should the action proceed to trial, the order shall contain a recital of the
following;
(1) Facts undisputed, admitted, and those which need not be proved
subject to Section 16 of this Rule;
(2) Factual and legal issues to be litigated;
(3) Evidence, including objects and documents, that have been marked
and will be presented;
(4) Names of witnesses who will be presented and their testimonies in
the form of affidavits; and
(5) Schedule of the presentation of evidence.
(c) The pre-trial order shall also contain a directive to the public prosecutor to
appear for the State and take steps to prevent collusion between the parties
at any stage of the proceedings and fabrication or suppression of evidence
during the trial on the merits.
(d) The parlies shall not be allowed to raise issues or present witnesses and
evidence other than those stated in the pre-trial order.
The order shall control the trial of the case, unless modified by the court to
prevent manifest injustice.

(e) The parties shall have five days from receipt of the pre-trial order to
propose corrections or modifications.
Section 16. Prohibited compromise. - The court-shall not allow compromise on
prohibited matters, such as the following:
(a) The civil status of persons;
(b) The validity of a marriage or of a legal separation;
(c) Any ground for legal separation;
(d) Future support;
(e) The jurisdiction of courts; and
(f) Future legitime.
Section 17. Trial. - (1) The presiding judge shall personally conduct the trial of the
case. No delegation of the reception of evidence to a commissioner shall be allowed
except as to matters involving property relations of the spouses.
(2) The grounds for declaration of absolute nullity or annulment of marriage
must be proved. No judgment on the pleadings, summary judgment, or
confession of judgment shall be allowed.
(3) The court may order the exclusion from the courtroom of all persons,
including members of the press, who do not have a direct interest in the case.
Such an order may be made if the court determines on the record that
requiring a party to testify in open court would not enhance the
ascertainment of truth; would cause to the party psychological harm or
inability to effectively communicate due to embarrassment, fear, or timidity;
would violate the right of a party to privacy; or would be offensive to decency
or public morals.
(4) No copy shall be taken nor any examination or perusal of the records of
the case or parts thereof be made by any person other than a party or
counsel of a party, except by order of the court.
Section 18. Memoranda. - The court may require the parties and the public
prosecutor, in consultation with the Office of the Solicitor General, to file their
respective memoranda support of their claims within fifteen days from the date the
trial is terminated. It may require the Office of the Solicitor General to file its own
memorandum if the case is of significant interest to the State. No other pleadings or
papers may be submitted without leave of court. After the lapse of the period herein
provided, the case will be considered submitted for decision, with or without the
memoranda.

Section 19. Decision. - (1) If the court renders a decision granting the petition, it
shall declare therein that the decree of absolute nullity or decree of annulment shall
be issued by the court only after compliance with Article 50 and 51 of the Family
Code as implemented under the Rule on Liquidation, Partition and Distribution of
Properties.
(2) The parties, including the Solicitor General and the public prosecutor,
shall be served with copies of the decision personally or by registered mail. If
the respondent summoned by publication failed to appear in the action, the
dispositive part of the decision shall be published once in a newspaper of
general circulation.
(3) The decision becomes final upon the expiration of fifteen days from notice
to the parties. Entry of judgment shall be made if no motion for
reconsideration or new trial, or appeal Is filed by any of the parties the public
prosecutor, or the Solicitor General.
(4) Upon the finality of the decision, the court shall forthwith issue the
corresponding decree if the parties have no properties.
If the parties have properties, the court shall observe the procedure
prescribed in Section 21 of this Rule.
The entry of judgment shall be registered in the Civil Registry where the
marriage was recorded and In the Civil Registry where the Family Court'granting the
petition for declaration of absolute nullity or annulment of marriage is located.
Section 20. Appeal. (1) Pre-condition. - No appeal from the decision shall be allowed unless the
appellant has filed a motion for reconsideration or new trial within fifteen
days from notice of judgment.
(2) Notice of appeal. - An aggrieved party or the Solicitor General may appeal
from the decision by filing a Notice of Appeal within fifteen days from notice
of denial of the motion for reconsideration or new trial. The appellant shall
serve a copy of the notice of appeal on the adverse parties.
Section 21. Liquidation, partition and distribution, custody, support of common
children and delivery of their presumptive iegltimes. - Upon entry of the judgment
granting the petition, or, in case of appeal, upon receipt of the entry of judgment of
the appellate court granting the petition, the Family Court, on motion of either
party, shall proceed with the liquidation, partition and distribution of the properties
of the spouses, including custody, support of common children and delivery of their
presumptive legitimes pursuant to Articles 50 and 51 of the Family Code unless
such matters had been adjudicated in previous judicial proceedings.
Section 22. Issuance of Decree of Declaration of Absolute Nullity or Annulment of
Marriage." (a) The court shall issue the Decree after;

(1) Registration of the entry of judgment granting the petition for


declaration of nullity or annulment of marriage in the Civil Registry
where the marriage was celebrated and in the Civil Registry of the
place where the Family Court is located;
(2) Registration of the approved partition and distribution of the
properties of the spouses, in the proper Register of Deeds where the
real properties are located; and
(3) The delivery of the children's presumptive legitimes in cash,
property, or sound securities.
(b) The court shall quote in the Decree the dispositive portion of the
judgment entered and attach to the Decree the approved deed of partition.
Except in the case of children under Articles 36 and 53 of the Family Code,
the court shall order the Local Civil Registrar to issue an amended birth certificate
indicating the new civil status of the children affected.
Section 23. Registration and publication of the decree; decree as best evidence. (a) The prevailing party shall cause the registration of the Decree in the Civil
Registry where the marriage was registered, the Civil Registry of the place where
the Family Court is situated, and in the National Census and Statistics Office. He
shall report td the court compliance with this requirement within thirty days from
receipt of the copy of the Decree.
(b) In case service of summons was made by publication, the parties shall
cause the publication of the Decree once in a newspaper of general
circulation.
(c) The registered Decree shall be the best evidence to prove the declaration
of absolute nullity or annulment of marriage and shall serve as notice to third
persons concerning the properties of petitioner and respondent as well as the
properties or presumptive legitimes delivered to their common children.
Section 24. Effect of death of a party; duty of the Family Court or Appellate Court. (a) In case a party dies at any stage of the proceedings before the entry of
judgment, the court shall order the case closed and terminated, without prejudice to
the settlement of the estate in proper proceedings in the regular courts.
(b) If the party dies after the entry of judgment of nullity or annulment, the
judgment shall be binding upon the parties and their successors in interest in
the settlement of the estate in the regular courts.
Section 25. Effectlvity. - This Rule shall take effect on March 15, 2003 following its
publication in a newspaper of general circulation not later than March 7, 2003.

Universal Robina v. Lim, G.R. No. 154338, October 5, 2007

UNIVERSAL
CORPORATION,

ROBINA
Petitioner,

-versus-

G.R. No. 154338


Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

ALBERT LIM, doing business


under
the
name
and
style
New
H-R Grocery,
Respondent.
Promulgated:
October 5, 2007
x-----------------------------------------------------------------------------------------x
DECISION

SANDOVAL-GUTIERREZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Resolutions dated January 16,
2002 and July 1, 2002 of the Court of Appeals in CA-G.R. SP No. 67368.

The
present
controversy
stemmed
from
a
contract
of
sale between Universal Robina
Corporation,
petitioner,
and
Albert
Lim,
respondent. Pursuant to the contract, petitioner sold to respondent grocery
products in the total amount of P808,059.88. After tendering partial payments,
respondent refused to settle his obligation despite petitioners repeated demands.
Thus, on May 31, 1999, petitioner filed with the Regional Trial Court, Branch
227, Quezon City, a complaint against respondent for a sum of money, docketed as
Civil Case No. Q-99-37791.[1]
On June 22, 1999, the trial court issued an Order dismissing the
complaint motu proprio on grounds of lack of jurisdiction and improper venue, thus:
The case is misplaced with respect to jurisdiction and
venue. There is not even a remote connection by the parties
to Quezon City, where this Regional Trial Court sits, the plaintiff
corporation has principal office at Pasig City and the defendant is, as
provided in the complaint, from Laoag City.
Wherefore, premises considered, this case is hereby DISMISSED
without prejudice for improper venue and for lack of jurisdiction. [2]
Accordingly, petitioner filed a motion for reconsideration together with an
amended complaint alleging that the parties agreed that the proper venue for any
dispute relative to the transaction is Quezon City.
In an Order dated October 11, 1999, the trial court granted the motion and
admitted petitioners amended complaint.
On December 6, 1999, summons was served upon respondent. For his failure
to file an answer seasonably and upon motion of petitioner, the trial court issued an
Order
dated September
12,
2000 declaring
him
[3]
in default and allowing petitioner to present its evidence ex parte.
However, on April 17, 2001, the trial court, still unsure whether venue was
properly laid, issued an Order directing petitioner to file a memorandum of
authorities on whether it can file a complaint in Quezon City.[4] Subsequently,
on May 11, 2001, the trial court again issued an Order dismissing the complaint on
the ground of improper venue, thus:
It appears that there is no connection whatsoever
between Quezon City and the parties. Plaintiffs official place of
business is inPasig whereas the defendants residence is stated to be
in Laoag City both stipulated in the Complaint. The filing is based on
the stipulation at the back of the delivery receipt that venue shall be in
Quezon City --- which is not even stated in the Complaint nor admitted
to have been signed by the defendant.

WHEREFORE, premises considered, venue is hereby declared to


have been improperly laid. This case is hereby dismissed without
prejudice to filing in the proper venue. [5]

Petitioner filed a motion for reconsideration but it was denied by the trial
court in its Resolution dated August 15, 2001.[6]
Petitioner then filed with the Court of Appeals a petition for review. But it
was dismissed due to petitioners failure to attach thereto an explanation
why copies of the petition were not served by personal service but by registered
mail, in violation of Section 11, Rule 14 of the 1997 Rules of Civil Procedure, as
amended.[7] Petitioner filed a motion for reconsideration but it was likewise denied
by the appellate court in a Resolution dated July 1, 2002, thus:
After a careful assessment of the petitioners motion for
reconsideration of the Resolution dated March 21, 2002 dismissing the
instant case for failure to comply with Section 11, Rule 14, this Court
finds the reasons therein alleged to be not well-taken.
Moreover, Supreme Court Circular No. 1-88 and Administrative
Circular No. 3-96, provide that subsequent compliance with the
requirements of a petition for review/certiorari shall not warrant
reconsideration of the order of dismissal unless the court is fully
satisfied that the non-compliance with the said requirements was not
in any way attributable to the party, despite due negligence on his
part, and that there are highly justifiable and compelling reasons for
the court to make such other disposition as it may deem just and
equitable.
We find such reasons wanting in the present case.
Besides, after a restudy of the facts, law and jurisprudence, as
well as the dispositions already contained in the assailed Resolutions of
public respondent, we find the present petition for certiorari to
be patently without merit, and the questions raised therein are
too unsubstantial to require consideration.
WHEREFORE, the motion for reconsideration is hereby DENIED
for utter lack of merit.[8]
Hence, this petition.
The fundamental issue being raised is whether the trial court may
dismiss motu proprio petitioners complaint on the ground of improper venue.
Sections 2 and 4, Rule 4 of the same Rules provide:

Sec. 2. Venue of personal actions. All other actions may be


commenced and tried where the plaintiff or any of the principal
plaintiffs resides, or where the defendant or any of the principal
defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.
Sec. 4. When Rule not applicable. This Rule shall not apply
(a)
In those cases where a specific rule or law provides
otherwise; or
(b)
Where the parties have validly agreed in writing
before the filing of the action on the exclusive venue thereof.
Clearly, in personal actions, the plaintiff may commence an action either in
the place of his or her residence or the place where the defendant resides. However,
the parties may agree to a specific venue which could be in a place where neither of
them resides.
Corollarily, Section 1, Rule 9 of the same Rules provides for the instances
when the trial court may motu proprio dismiss a claim, thus:
Section
1. Defenses
and
objections
not
pleaded.

Defenses and objections not pleaded either in a motion to dismiss or in


the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction
over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court shall dismiss the
claim.
Implicit from the above provision is that improper venue not impleaded in the
motion to dismiss or in the answer is deemed waived. Thus, a court may not
dismiss an action motu proprio on the ground of improper venue as it is not one of
the grounds wherein the court may dismiss an action motu proprio on the basis of
the pleadings.
In Dacoycoy v. Intermediate Appellate Court,[9] this Court held that a trial
court may not motu proprio dismiss a complaint on the ground of improper venue,
thus:
Dismissing the complaint on the ground of improper venue is
certainly not the appropriate course of action at this stage of the
proceedings, particularly as venue, in inferior courts as well as in the
courts of first instance (now RTC), may be waived expressly or
impliedly. Where the defendant fails to challenge timely the venue in a
motion to dismiss as provided by Section 4 of Rule 4 of the Rules of
Court, and allows the trial to be held and a decision to be rendered, he

cannot on appeal or in a special action be permitted to belatedly


challenge the wrong venue, which is deemed waived.
Indeed, it was grossly erroneous for the trial court to have
taken a procedural short-cut by dismissing motu proprio the complaint
on the ground of improper venue without first allowing the procedure
outlined in the rules of court to take its proper course. Although we are
for the speedy and expeditious resolution of cases, justice and fairness
take primary importance. The ends of justice require that respondent
trial court faithfully adhere to the rules of procedure to afford not only
the defendant, but the plaintiff as well, the right to be heard on his
cause.
In Rudolf Lietz Holdings Inc. v. Registry of Deeds of Paraaque,[10] the Court
likewise held that a trial court may not motu proprio dismiss a complaint on the
ground of improper venue, thus:
Rule 9, Section 1 of the 1997 Rules of Civil Procedure states that
defenses and objections not pleaded either in a motion to dismiss or in
the answer are deemed waived. The court may only dismiss an
action motu proprio in case of lack of jurisdiction over the
subject
matter, litis
pendentia,
res
judicata and
prescription. Therefore, the trial court in this case erred when
it dismissed the petition motu proprio. It should have waited
for a motion to dismiss or a responsive pleading from
respondent, raising the objection or affirmative defense of
improper venue, before dismissing the petition.
In the instant case, respondent, despite proper service of summons, failed to
file an answer and was thus declared in default by the trial court. Verily, having
been declared in default, he lost his standing in court and his right to adduce
evidence and present his defense,[11] including his right to question the propriety of
the venue of the action.
WHEREFORE, the Petition for Review is GRANTED. The assailed Resolutions
of the Court of Appeals in CA-G.R. SP No. 67368 are REVERSED. The Regional Trial
Court, Branch 227, Quezon City is ordered to REINSTATE Civil Case No. Q-9937791 and conduct an ex parte hearing for the reception of petitioners evidence
and dispose of the case with dispatch.
SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

No legal capacity to sue


Evangelista v. Santiago, G.R. No. 157447, April 29, 2005
SECOND DIVISION

[G.R. No. 157447. April 29, 2005]


NEMENCIO C. EVANGELISTA, PASCUAL G. QUINTO, LUIS B. BUENA, EUSEBIA
V. TABLADA, CANUTO G. TISBE, DAVID R. CARULLO, SOFONIAS E.
COLEGADO, FELIX B. BUENA, TORIBIO C. EVANGELISTA, LEBRADA A.
NICOLAS, ALECIA J. RAMOS, MILA G. DE LOS REYES, SALVADOR I. DE
LA TORRE, MOISES CRUZ, RUFINO INFANTE, ALICIA ASTROLOGO,
TRINIDAD LUMIQUED, LUZMINIDA QUINIQUINI, & TEODORA C.
TEMERAS, petitioners, vs. CARMELINO M. SANTIAGO, respondent.
DECISION
CHICO-NAZARIO, J.:
In this Petition for Review under Rule 45 of the Rules of Court, petitioners pray
for the reversal of the Decision of the Court of Appeals in CA-G.R. CV No. 64957,
[1]
affirming the Order of the Regional Trial Court (RTC) of San Mateo, Rizal, Branch
77, in Civil Case No. 1220,[2]dismissing petitioners Complaint for declaration of
nullity of Original Certificate of Title (OCT) No. 670 and all other titles emanating
therefrom.
In their Complaint, petitioners alleged that they occupied and possessed parcels
of land, located in Sitio Panayawan, Barangay San Rafael, Montalban (now
Rodriquez), Province of Rizal (Subject Property), by virtue of several Deeds of
Assignment, dated 15 April 1994 and 02 June 1994, executed by a certain Ismael
Favila y Rodriguez.[3]
According to the Deeds of Assignment, the Subject Property was part of a vast
tract of land called Hacienda Quibiga, which extended to Paraaque, Las Pias,
Muntinlupa, Cavite, Batangas, Pasay, Taguig, Makati, Pasig, Mandaluyong, Quezon
City, Caloocan, Bulacan, and Rizal; awarded to Don Hermogenes Rodriguez by the
Queen of Spain and evidenced by a Spanish title. Ismael Favila claimed to be one of
the heirs and successors-in-interest of Don Hermogenes Rodriguez. Acting as
Attorney-in-Fact pursuant to a Special Power of Attorney executed by his mga
kapatid on 25 February 1965, Ismael Favila signed the aforementioned Deeds of
Assignment, assigning portions of the Subject Property to the petitioners, each
portion measuring around 500 to 1,000 square meters, in exchange for the labor
and work done on the Subject Property by the petitioners and their predecessors. [4]
Petitioners came by information that respondent was planning to evict them
from the Subject Property. Two of the petitioners had actually received notices to

vacate. Their investigations revealed that the Subject Property was included in
Transfer Certificates of Titles (TCTs) No. 53028, No. 281660, No. N-39258 and No.
205270, all originating from OCT No. 670, and now in the name of respondent. [5]
OCT No. 670 was issued in the name of respondents mother, Isabel Manahan y
Francisco, and three other individuals, pursuant to Decree No. 10248, dated 13
February 1913, in Case No. 8502 of the Court of Land Registration of the Philippine
Islands. The whole property covered by OCT No. 670 was subsequently adjudicated
in favor of Isabel Manahan Santiago (formerly Isabel Manahan y Francisco).
Consequently, OCT No. 670 was cancelled and TCT No. T-53028 was issued
exclusively in the name of Isabel Manahan Santiago. On 28 December 1968, Isabel
Manahan Santiago executed a Deed of Donation transferring the property to her
son, respondent herein, who subsequently secured TCTs No. 281660, No. N-39258
and No. 205270 in his own name.[6]
Petitioners filed with the trial court, on 29 April 1996, an action for declaration of
nullity of respondents certificates of title on the basis that OCT No. 670 was fake
and spurious. Among the defects of OCT No. 670 pointed out by petitioners were
that: (1) OCT No. 670 was not signed by a duly authorized officer; (2) Material data
therein were merely handwritten and in different penmanships; (3) OCT No. 670 was
not printed on the Official Form used in 1913, the year it was issued; (4) It failed to
indicate the Survey Plan which was the basis of the Technical Description of the
property covered by the title; (5) Decree No. 10248 referred to in OCT No. 670 was
issued only on 11 April 1913, while OCT No. 670 was issued earlier, on 13 February
1913; and (6) Decree No. 10248 was issued over a property other than the one
described in OCT No. 670, although also located in the Province of Rizal. [7]
Respondent filed his Answer with Prayer for Preliminary Hearing on the
Affirmative Defenses on 03 July 1996. According to respondent, [t]he allegations in
the Complaint would readily and patently show that the same are flimsy, fabricated,
malicious, without basis in law and in fact [8]
As an affirmative defense, respondent claimed that the petitioners had no legal
capacity to file the Complaint, and thus, the Complaint stated no cause of action.
Since OCT No. 670 was genuine and authentic on its face, then OCT No. 670 and all
of respondents land titles derived therefrom, are incontrovertible, indefeasible and
conclusive against the petitioners and the whole world. [9]
Citing the consolidated cases of Director of Forestry, et al. v. Hon. Emmanuel M.
Muoz, et al. and Pinagcamaligan Indo-Agro Development Corporation v. Hon.
Macario Peralta, Jr., et al., [10] respondent argued that the Spanish title, on which
petitioners based their claim, was neither indefeasible nor imprescriptible.
Moreover, Presidential Decree (P.D.) No. 892, which took effect on 16 February 1976,
required all holders of Spanish titles or grants to apply for registration of their lands
under Republic Act No. 496, otherwise known as the Land Registration Act, [11] within
six months from effectivity of the decree. After the given period, Spanish titles
could no longer be used as evidence of land ownership in any registration
proceedings under the Torrens System. [12]
Respondent also raised the affirmative defense of prescription. He pointed out
that any action against his certificates of title already prescribed, especially with
regard to OCT No. 670, which was issued in 1913 or more than 83 years prior to the
filing of the Complaint by the petitioners. At the very least, respondent contended,

it must be presumed that the questioned land titles were issued by the public
officials concerned in the performance of their regular duties and functions pursuant
to the law.[13]
Even assuming arguendo that the petitioners entered and occupied the Subject
Property, they did so as mere intruders, squatters and illegal occupants, bereft of
any right or interest, since the Subject Property was already covered by Torrens
certificates of title in the name of respondent and his predecessors-in-interest. [14]
Lastly, respondent denied knowing the petitioners, much less, threatening to
evict them. In fact, petitioners were not included as defendants in Civil Case No.
783 entitled, Carmelino M. Santiago v. Remigio San Pascual, et al., which
respondent instituted before the same trial court against squatters occupying the
Subject Property. In its decision, dated 01 July 1992, the trial court held that there
is no doubt that the plaintiff (respondent herein) is the owner of the land involved in
this case on which the defendants have built their houses and shanties Although
the decision in Civil Case No. 783 was appealed to the Court of Appeals, it had
become final and executory for failure of the defendants-appellants therein to file
their appellants brief.[15]
In the instant case, the trial court held a preliminary hearing on the affirmative
defenses as prayed for by the respondent. During said hearing, petitioners
presented their lone witness, Engineer Placido Naval, a supposed expert on land
registration laws. In response to questions from Honorable Judge Francisco C.
Rodriguez of the trial court, Engineer Naval answered that a parcel of land titled
illegally would revert to the State if the Torrens title was cancelled, and that it was
the State, through the Office of the Solicitor General, that should file for the
annulment or cancellation of the title. Respondent, on the other hand, did not
present any evidence but relied on all the pleadings and documents he had so far
submitted to the trial court.[16]
After the preliminary hearing, the trial court issued the questioned Order, dated
05 February 1999, dismissing petitioners Complaint. Pertinent portions of the
Order of the trial court read:
After considering the testimonial and documentary evidence presented, this Court is
inclined not to grant plaintiffs (sic) prayer. Finding credence and giving weight to
plaintiffs (sic) lone but expert witness, it is crystal clear that, to quote:
1.

a parcel of land titled illegally will revert to the State

2.

it is the State who must file the corresponding case of annulment


of title through the Office of the Solicitor General, and

3.

a land illegally titled in the name of private individual, the State


through the Office of the Solicitor General should file the
corresponding case for cancellation of title. (TSN August 26,
1997).

The above quoted testimony is straight from horse (sic) mouth so to speak as this
was the testimony of the plaintiffs (sic) expert witness. And judging from the said

testimony alone aforecited, plaintiffs (sic) cause [of action] is bound to fail.
Plaintiffs (sic) own testimony wrote finis to their case. From the record, this
case was initiated and filed by private individuals, Nemencio Evangelista, et. al.,
contradicting their witness (sic) testimony. To reiterate, this Court finds credence to
the testimony of the plaintiffs (sic) witness, i.e., is (sic) the State through the Office
of the Solicitor General who must initiate and file a case of this nature when title to
a land is being claimed to be obtained through fraud and allegedly spurious.
The opinion of this Court anent the testimony of the witness is not without basis.
Explicit is the pronouncement of the Supreme Court in the recent case of Heirs of
Marciano Nagano v. Court of Appeals, to wit:
An action for reversion has to be instituted by the Solicitor General pursuant to
Section 101, Commonwealth Act No. 141. (282 SCRA 43).
As to the documentary evidence, having gone through with the Deed of
Assignment/s purportedly executed by and between a certain Ismael Favila y
Rodriguez and the plaintiffs, which is the principal if not the only basis of plaintiffs
claim ownership and possession of the subject parcel of land, the same does not
hold water in a manner of speaking, for being self-serving. Assignor Ismael Favila y
Rodriguez claimed in said Deed that he is the Attorney-in-Fact by virtue of an
alleged Special Power of Attorney executed in his favor by his mga kapatid on
February 23, 1965, but said Special Power of Attorney was not presented before this
Court, thus there arises a doubt as to its existence and execution not to mention
doubt on the existence of his mga kapatid who as alleged executed said Special
Power Attorney (sic) in his favor.
Even if this Court granting arguendo would admit the authenticity of said Deeds of
Assignment/s, that will not alter the outcome of the pending incident/s before this
Court. Why? Because the said Deed of Assignment/s which were based on
Spanish title have lost their evidentiary value pursuant to the Presidential Decree
No. 892 i.e. DISCONTINUANCE OF THE SPANISH MORTGAGE SYSTEM OF
REGISTRATION AND OF THE USE OF SPANISH TITLES AS EVIDENCE IN LAND
REGISTRATION PROCEEDINGS.

There is no need to elaborate on the above-cited provisions of PD 892 as they are


self-explanatory. Suffice it to say that there is no showing, that plaintiffs complied
with the said law i.e. to apply for registration of their lands under Act No. 496,
otherwise known as the Land Registration Act, within six (6) months from the
effectivity of this decree (February 16, 1976). Thereafter, Spanish titles cannot be
used as evidence of land ownership in any registration proceedings under the
Torrens System.
This being the case and likewise being clear that plaintiffs were not the lawful
owners of the land subject of this case, for they did not comply with PD 892, the
said plaintiffs do not have the legal standing to bring before this Court the instant
complaint

Moreover, the principal issue in this case is for the declaration of nullity of
defendants title, which has nothing to do with plaintiffs (sic) claim of ownership and
possession even if we set aside, albeit momentarily, the truth that plaintiffs (sic)
claim were based on barred Spanish Title/s, and thus plaintiffs were never the
owners of the parcel of land subject of this case.
Further, defendants (sic) title especially so with the mother title OCT 670 was
entered and issued in 1913 or more than Eighty Three (83) years ago, the same not
having been questioned by any party. Only now that it is being questioned, but sad
to say, plaintiffs who are on the offensive and relying on their lone expert witness,
instead of bolstering their case, unwittingly sealed their fate [17]
After the trial court denied petitioners Motion for Reconsideration in its Order,
dated 20 July 1999,[18] petitioners appealed both Orders of the trial court to the
Court of Appeals.
The Court of Appeals, in its Decision, dated 29 July 2002, [19] affirmed the Order
of the trial court, dated 05 February 1999, dismissing petitioners Complaint. The
Court of Appeals denied petitioners Motion for Reconsideration in its Resolution,
dated 14 February 2003.[20]
Thus, petitioners filed this Petition for Review [21] under Rule 45 of the Rules of
Court, raising the following issues and praying for the reversal of the
aforementioned Decision of the Court of Appeals affirming the Order of dismissal of
the trial court:
I.

Whether the lower courts dismissal of the petitioners complaint should be


proscribed by the rules of evidence it being based inter alia on Engr. Navals
testimony, which was indisputably not based on facts but conclusion of law.

II.

Whether the lower courts dismissal of petitioners complaint should be


proscribed by the rules of evidence it being done sans ample evidence
except bare allegations of respondent.

III.

Whether the provision of P.D. 892, i.e., Spanish titles cannot be used as
evidence of land ownership in any registration proceedings under the
Torrens system, holds of an exception.

IV. Whether an action for quieting of title, specifically where petitioners are in
possession of subject land, can be subject of prescription.
In his Comment,[22] the respondent, for the most part, reiterated the findings of
the trial court and the Court of Appeals.
The Court believes that the trial court rightfully dismissed petitioners
Complaint, but for reasons different from those relied upon by the trial court and the
Court of Appeals.
According to the respondent, petitioners had no legal capacity to file the
Complaint, and thus, the Complaint filed before the trial court stated no cause of
action.

Before anything else, it should be clarified that the plaintiff has no legal
capacity to sue[23] and the pleading asserting the claim states no cause of
action[24] are two different grounds for a motion to dismiss or are two different
affirmative defenses. Failure to distinguish between the lack of legal capacity to
sue from the lack of personality to sue is a fairly common mistake. The
difference between the two is explained by this Court in Columbia Pictures, Inc. v.
Court of Appeals:[25]
Among the grounds for a motion to dismiss under the Rules of Court are lack of
legal capacity to sue and that the complaint states no cause of action. Lack of legal
capacity to sue means that the plaintiff is not in the exercise of his civil rights, or
does not have the necessary qualification to appear in the case, or does not have
the character or representation he claims. On the other hand, a case is dismissible
for lack of personality to sue upon proof that the plaintiff is not the real party-ininterest, hence grounded on failure to state a cause of action. The term "lack of
capacity to sue" should not be confused with the term "lack of personality to sue."
While the former refers to a plaintiffs general disability to sue, such as on account
of minority, insanity, incompetence, lack of juridical personality or any other general
disqualifications of a party, the latter refers to the fact that the plaintiff is not the
real party- in-interest. Correspondingly, the first can be a ground for a motion to
dismiss based on the ground of lack of legal capacity to sue; whereas the second
can be used as a ground for a motion to dismiss based on the fact that the
complaint, on the face thereof, evidently states no cause of action.
In the present case, this Court may assume that the respondent is raising the
affirmative defense that the Complaint filed by the petitioners before the trial court
stated no cause of action because the petitioners lacked the personality to sue, not
being the real party-in-interest. It is the respondents contention that only the State
can file an action for annulment of his certificates of title, since such an action will
result in the reversion of the ownership of the Subject Property to the State.
The affirmative defense that the Complaint stated no cause of action, similar to
a motion to dismiss based on the same ground, requires a hypothetical
admission of the facts alleged in the Complaint. In the case of Garcon v.
Redemptorist Fathers,[26] this Court laid down the rules as far as this ground for
dismissal of an action or affirmative defense is concerned:
It is already well-settled by now that, in a motion to dismiss a complaint based on
lack of cause of action, the question submitted to the court for determination is the
sufficiency of the allegations of fact made in the complaint to constitute a cause of
action, and not on whether these allegations of fact are true, for said motion must
hypothetically admit the truth of the facts alleged in the complaint; that the test of
the sufficiency of the facts alleged in the complaint is whether or not, admitting the
facts alleged, the court could render a valid judgment upon the same in accordance
with the prayer of said complaint. Stated otherwise, the insufficiency of the cause
of action must appear in the face of the complaint in order to sustain a dismissal on
this ground, for in the determination of whether or not a complaint states a cause of
action, only the facts alleged therein and no other matter may be considered, and
the court may not inquire into the truth of the allegations, and find them to be false
before a hearing is had on the merits of the case; and it is improper to inject in the

allegations of the complaint facts not alleged or proved, and use these as basis for
said motion.
In resolving whether or not the Complaint in the present case stated a cause of
action, the trial court should have limited itself to examining the sufficiency of the
allegations in the Complaint. It was proscribed from inquiring into the truth of the
allegations in the Complaint or the authenticity of any of the documents referred or
attached to the Complaint, since these are deemed hypothetically admitted by the
respondent. The trial court evidently erred in making findings as to the authenticity
of the Deeds of Assignment executed by Ismael Favila in favor of petitioners on 15
April 1994 and 02 June 1994; and questioning the existence and execution of the
Special Power of Attorney in favor of said Ismael Favila by his siblings on 25
February 1965. These matters may only be resolved after a proper trial on the
merits.
Petitioners alleged in their Complaint, and respondent hypothetically admitted
that: (1) Petitioners predecessors-in-interest, in the concept of owners, had been in
actual, physical, open, continuous and adverse possession of the Subject Property
against the whole world since time immemorial; (2) The Subject Property was part
of the vast tract of land called Hacienda Quibiga awarded to Don Hermogenes
Rodriguez by the Queen of Spain by virtue of a Spanish title; (3) Ismael Favila, an
heir and successor-in-interest of Don Hermogenes Rodriguez, acting as Attorney-inFact pursuant to a Special Power of Attorney executed by his mga kapatid on 25
February 1965, executed Deeds of Assignment covering the Subject Property in
favor of petitioners; (4) Petitioners still occupied and possessed the Subject
Property, on which their houses were erected, when they discovered that the
Subject Property was already covered by Torrens certificates of title in the name of
respondent; and (5) That petitioners filed the Complaint to prevent their eviction by
the respondent. To determine whether these allegations are sufficient to constitute
a cause of action, it is important for this Court to establish first the nature of
petitioners action.
Indeed, petitioners Complaint filed before the trial court was captioned as an
action for declaration of nullity of respondents certificates of title. However, the
caption of the pleading should not be the governing factor, but rather the
allegations therein should determine the nature of the action, because even without
the prayer for a specific remedy, the courts may nevertheless grant the proper relief
as may be warranted by the facts alleged in the Complaint and the evidence
introduced.[27]
The trial court believed that petitioners action was ultimately one for reversion
of the Subject Property to the public domain. Based on the testimony of Engineer
Naval and the case of Nagao v. Court of Appeals,[28] it declared that the State,
represented by the Office of the Solicitor General, is the party-in-interest in an
action for cancellation of a certificate of title illegally issued in the name of a private
individual, because the eventual effect of such cancellation is the reversion of the
property to the State.
The Court disagrees in this pronouncement of the trial court, and calls for a far
closer review of its decision in Nagao v. Court of Appeals,[29] wherein the Court held
that

It is then clear from the allegations in the complaint that private respondents claim
ownership of the 2,250 square meter portion for having possessed it in the concept
of an owner, openly, peacefully, publicly, continuously and adversely since 1920.
This claim is an assertion that the lot is private land, or that even assuming it was
part of the public domain, private respondents had already acquired imperfect title
thereto under Section 48(b) of C.A. No. 141, otherwise known as the Public Land
Act, as amended by R.A. No. 1942
Under Section 48, a subject lot is, for all legal intents and purposes, segregated
from the public domain, because the beneficiary is conclusively presumed to have
performed all the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this chapter.
Consequently, merely on the basis of the allegations in the complaint, the lot in
question is apparently beyond the jurisdiction of the Director of the Bureau of Lands
and could not be the subject of a Free Patent. Hence, dismissal of private
respondents complaint was premature and trial on the merits should have been
conducted to thresh out evidentiary matters.
It would have been entirely different if the action were clearly for reversion, in which
case, it would have to be instituted by the Solicitor General pursuant to Section 101
of C.A. No. 141, which provides:
Sec. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the [Republic] of the
Philippines.
In the more recent case of Heirs of Ambrocio Kionisala v. Heirs of Honorio Dacut,
the difference between an action for declaration of nullity of land titles from an
action for reversion was more thoroughly discussed as follows:
[30]

An ordinary civil action for declaration of nullity of free patents and certificates of
title is not the same as an action for reversion. The difference between them lies in
the allegations as to the character of ownership of the realty whose title is sought to
be nullified. In an action for reversion, the pertinent allegations in the complaint
would admit State ownership of the disputed land. Hence, in Gabila vs. Barriga [41
SCRA 131], where the plaintiff in his complaint admits that he has no right to
demand the cancellation or amendment of the defendants title because even if the
title were canceled or amended the ownership of the land embraced therein or of
the portion affected by the amendment would revert to the public domain, we ruled
that the action was for reversion and that the only person or entity entitled to relief
would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent and
certificate of title would require allegations of the plaintiffs ownership of the
contested lot prior to the issuance of such free patent and certificate of title as well
as the defendants fraud or mistake, as the case may be, in successfully obtaining
these documents of title over the parcel of land claimed by plaintiff. In such a case,
the nullity arises strictly not from the fraud or deceit but from the fact that the land

is beyond the jurisdiction of the Bureau of Lands to bestow and whatever patent or
certificate of title obtained therefore is consequently void ab initio. The real partyin-interest is not the State but the plaintiff who alleges a pre-existing right of
ownership over the parcel of land in question even before the grant of title to the
defendant
In their Complaint, petitioners never alleged that the Subject Property was part
of the public domain. On the contrary, petitioners asserted title over the Subject
Property by virtue of their actual, physical, open, continuous and adverse
possession thereof, in the concept of owners, by themselves and through their
predecessors-in-interest, since time immemorial. The Deeds of Assignment
executed in their favor and attached to their Complaint referred to a Spanish title
granted by the Queen of Spain to their predecessor-in-interest, Don Hermogenes
Rodriguez. Clearly, petitioners are asserting private title over the Subject Property,
and consequently, their action could not be one for reversion.
In their instant Petition, petitioners further averred that rather than an action for
nullity of respondents certificates of title, theirs was more appropriately an action
to remove a cloud on or to quiet their title over the Subject Property.
Article 476 of the Civil Code, on removal of a cloud on or quieting of title,
provides that:
Art. 476. Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable,
or unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.
Respondents certificates of title over the Subject Property appeared valid or
effective; but according to the petitioners, they were fake, spurious and/or
fraudulent, and a cloud on their title to the same property that needed to be
removed. A cloud on title has been defined as follows:
Cloud on Title. A cloud on title is an outstanding instrument, record, claim,
encumbrance or proceeding which is actually invalid or inoperative, but which may
nevertheless impair or affect injuriously the title to property. The matter
complained of must have a prima facie appearance of validity or legal efficacy. The
cloud on title is a semblance of title which appears in some legal form but which is
in fact unfounded. The invalidity or inoperativeness of the instrument is not
apparent on the face of such instrument, and it has to be proved by extrinsic
evidence[31]
Even as this Court agrees with the petitioners that their action was one for
removal of a cloud on or quieting of title, it does arrive at the same conclusion as
the trial court and the Court of Appeals that petitioners had no personality to file the
said action, not being the parties-in-interest, and their Complaint should be
dismissed for not stating a cause of action.

According to Article 477 of the Civil Code, the plaintiff, in an action to remove a
cloud on or to quiet title, must have legal or equitable title to, or interest in, the real
property which is the subject matter of the action. [32] Petitioners failed to establish in
their Complaint that they had any legal or equitable title to, or legitimate interest in,
the Subject Property so as to justify their right to file an action to remove a cloud on
or to quiet title.
Title to real property refers to that upon which ownership is based. It is the
evidence of the right of the owner or the extent of his interest, by which means he
can maintain control and, as a rule, assert right to exclusive possession and
enjoyment of the property.[33]
In their Complaint, petitioners claimed title to the Subject Property by virtue of
their actual and continuous possession of the same since time immemorial, by
themselves and through their predecessors-in-interest. Yet, the Deeds of
Assignment executed by Ismael Favila in their favor, attached to and an integral
part of their Complaint, revealed that petitioners predecessors-in-interest based
their right to the Subject Property on the Spanish title awarded to Don Hermogenes
Rodriguez.
There existed a contradiction when petitioners based their claim of title to the
Subject Property on their possession thereof since time immemorial, and at the
same time, on the Spanish title granted to Don Hermogenes Rodriguez. Possession
since time immemorial carried the presumption that the land had never been part
of the public domain or that it had been private property even before the
Spanish conquest.[34] If the Subject Property was already private property before
the Spanish conquest, then it would have been beyond the power of the Queen of
Spain to award or grant to anyone.
The title to and possession of the Subject Property by petitioners predecessorsin-interest could be traced only as far back as the Spanish title of Don Hermogenes
Rodriguez. Petitioners, having acquired portions of the Subject Property by
assignment, could acquire no better title to the said portions than their
predecessors-in-interest, and hence, their title can only be based on the same
Spanish title.
Respondent maintained that P.D. No. 892 prevents petitioners from invoking the
Spanish title as basis of their ownership of the Subject Property. P.D. No. 892
strengthens the Torrens system by discontinuing the system of registration under
the Spanish Mortgage Law, and by categorically declaring all lands recorded under
the latter system, not yet covered by Torrens title, unregistered lands. It further
provides that within six months from its effectivity, all holders of Spanish titles or
grants should apply for registration of their land under what is now P.D. No. 1529,
otherwise known as the Land Registration Decree. Thereafter, Spanish titles can no
longer be used as evidence of land ownership in any registration proceedings under
the Torrens system. [35] Indubitably, P.D. No. 892 divests the Spanish titles of any
legal force and effect in establishing ownership over real property.
P.D. No. 892 became effective on 16 February 1976. The successors of Don
Hermogenes Rodriguez had only until 14 August 1976 to apply for a Torrens title in
their name covering the Subject Property. In the absence of an allegation in
petitioners Complaint that petitioners predecessors-in-interest complied with P.D.
No. 892, then it could be assumed that they failed to do so. Since they failed to

comply with P.D. No. 892, then the successors of Don Hermogenes Rodriguez were
already enjoined from presenting the Spanish title as proof of their ownership of the
Subject Property in registration proceedings.
Registration proceedings under the Torrens system do not create or vest title,
but only confirm and record title already created and vested. [36] By virtue of P.D. No.
892, the courts, in registration proceedings under the Torrens system, are precluded
from accepting, confirming and recording a Spanish title. Reason therefore dictates
that courts, likewise, are prevented from accepting and indirectly confirming such
Spanish title in some other form of action brought before them (i.e., removal of
cloud on or quieting of title), only short of ordering its recording or registration. To
rule otherwise would open the doors to the circumvention of P.D. No. 892, and give
rise to the existence of land titles, recognized and affirmed by the courts, but would
never be recorded under the Torrens system of registration. This would definitely
undermine the Torrens system and cause confusion and instability in property
ownership that P.D. No. 892 intended to eliminate.
Petitioners argued that the Spanish title may still be presented as proof of
ownership on the basis of the exception provided in the fourth whereas clause of
P.D. No. 892, which reads:
WHEREAS, Spanish titles to lands which have not yet been brought under the
operation of the Torrens system, being subject to prescription, are now ineffective to
prove ownership unless accompanied by proof of actual possession; . . .
Since Petitioners alleged that they were in actual possession of the Subject
Property, then they could still present the Spanish title as evidence of their
ownership of the Subject Property. [37]
This Court cannot sustain petitioners argument. Actual proof of possession only
becomes necessary because, as the same whereas clause points out, Spanish titles
are subject to prescription. A holder of a Spanish title may still lose his ownership of
the real property to the occupant who actually possesses the same for the required
prescriptive period.[38] Because of this inherent weakness of a Spanish title, the
applicant for registration of his Spanish title under the Torrens system must also
submit proof that he is in actual possession of the real property, so as to discount
the possibility that someone else has acquired a better title to the same property by
virtue of prescription.
Moreover, legislative intent must be ascertained from a consideration of the
statute as a whole, and not just a particular provision alone. A word or phrase taken
in the abstract may easily convey a meaning quite different from the one actually
intended and evident when the word or phrase is considered with those with which
it is associated. An apparently general provision may have a limited application if
read together with other provisions of the statute. [39]
The fourth whereas clause of P.D. No. 892 should be interpreted and harmonized
with the other provisions of the whole statute. [40] Note that the tenor of the whole
presidential decree is to discontinue the use of Spanish titles and to strip them of
any probative value as evidence of ownership. It had clearly set a deadline for the
filing of applications for registration of all Spanish titles under the Torrens system
(i.e., six months from its effectivity or on 14 August 1976), after which, the Spanish
titles may no longer be presented to prove ownership.

All holders of Spanish titles should have filed applications for registration of their
title on or before 14 August 1976. In a land registration proceeding, the applicant
should present to the court his Spanish title plus proof of actual possession of the
real property. However, if such land registration proceeding was filed and initiated
after 14 August 1976, the applicant could no longer present his Spanish title to the
court to evidence his ownership of the real property, regardless of whether the real
property was in his actual possession.
Therefore, the fact that petitioners were in actual possession of the Subject
Property when they filed the Complaint with the trial court on 29 April 1996 does
not exclude them from the application of P.D. No. 892, and their Spanish title remain
inadmissible as evidence of their ownership of the Subject Property, whether in a
land registration proceeding or in an action to remove a cloud on or to quiet title.
The preceding discussion does not bar holders of Spanish titles from claiming
ownership of the real property on some other basis, such as those provided in either
the Land Registration Decree [41] or the Public Land Act.[42] Petitioners though failed to
allege any other basis for their titles in their Complaint aside from possession of the
Subject Property from time immemorial, which this Court has already controverted;
and the Spanish title, which is already ineffective to prove ownership over the
Subject Property.
Therefore, without legal or equitable title to the Subject Property, the petitioners
lacked the personality to file an action for removal of a cloud on, or quieting of, title
and their Complaint was properly dismissed for failing to state a cause of action. In
view of the dismissal of the case on this ground, it is already unnecessary for this
Court to address the issue of prescription of the action.
Wherefore, this Court DENIES the instant petition and AFFIRMS the Decision of
the Court of Appeals, dated 29 July 2002, and the Order of the Regional Trial Court
of San Mateo, Rizal, Branch 77, dated 05 February 1999, dismissing petitioners
Complaint for failure to state a cause of action.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

B. Van Zuiden v. GTVL Manufacturing, G.R. No. 147905, May 28,


2007

SECOND DIVISION

B. VAN ZUIDEN BROS., LTD.,


Petitioner,

G.R. No. 147905


Present:
QUISUMBING, J.,
Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

-versus-

GTVL MANUFACTURING
Promulgated:
INDUSTRIES, INC.,
Respondent.
May 28, 2007
x-----------------------------------------------------------------------------------------x
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review [1] of the 18 April 2001 Decision[2] of
the Court of Appeals in CA-G.R. CV No. 66236. The Court of Appeals affirmed the
Order[3] of the Regional Trial Court, Branch 258, Paraaque City (trial court)
dismissing the complaint for sum of money filed by B. Van Zuiden Bros., Ltd.
(petitioner) against GTVL Manufacturing Industries, Inc. (respondent).
The Facts
On 13 July 1999, petitioner filed a complaint for sum of money against
respondent, docketed as Civil Case No. 99-0249. The pertinent portions of the
complaint read:
1.
Plaintiff, ZUIDEN, is a corporation, incorporated under the laws
of Hong Kong. x x x ZUIDEN is not engaged in business in
thePhilippines, but is suing before the Philippine Courts, for the reasons
hereinafter stated.
xxxx
3. ZUIDEN is engaged in the importation and exportation of several
products, including lace products.

4.
On several occasions, GTVL purchased lace products from
[ZUIDEN].
5.
The procedure for these purchases, as per the instructions of
GTVL, was that ZUIDEN delivers the products purchased by GTVL, to a
certain Hong Kong corporation, known as Kenzar Ltd. (KENZAR),
x x x and the products are then considered as sold, upon receipt by
KENZAR of the goods purchased by GTVL.
KENZAR had the obligation to deliver the products to
the Philippines and/or to follow whatever instructions GTVL had on the
matter.
Insofar as ZUIDEN is concerned, upon delivery of the goods to
KENZAR in Hong Kong, the transaction is concluded; and GTVL became
obligated to pay the agreed purchase price.
xxxx
7.
However, commencing October 31, 1994 up to the present,
GTVL has failed and refused to pay the agreed purchase price for
several deliveries ordered by it and delivered by ZUIDEN, as abovementioned.
xxxx
9.
In spite [sic] of said demands and in spite [sic] of promises to
pay and/or admissions of liability, GTVL has failed and refused, and
continues to fail and refuse, to pay the overdue amount of U.S.
$32,088.02 [inclusive of interest]. [4]
Instead of filing an answer, respondent filed a Motion to Dismiss[5] on the
ground that petitioner has no legal capacity to sue. Respondent alleged that
petitioner is doing business in the Philippines without securing the required license.
Accordingly, petitioner cannot sue before Philippine courts.
After an exchange of several pleadings [6] between the parties, the trial court
issued an Order on 10 November 1999 dismissing the complaint.
On appeal, the Court of Appeals sustained the trial courts dismissal of the
complaint.
Hence, this petition.
The Court of Appeals Ruling
In affirming the dismissal of the complaint, the Court of Appeals relied
on Eriks Pte., Ltd. v. Court of Appeals. [7] In that case,Eriks, an unlicensed foreign
corporation, sought to collect US$41,939.63 from a Filipino businessman for goods

which he purchased and received on several occasions from January to May 1989.
The transfers of goods took place in Singapore, for the Filipinos account, F.O.B.
Singapore, with a 90-day credit term. Since the transactions involved were not
isolated, this Court foundEriks to be doing business in the Philippines. Hence, this
Court upheld the dismissal of the complaint on the ground that Eriks has no
capacity to sue.
The Court of Appeals noted that in Eriks, while the deliveries of the goods
were perfected in Singapore, this Court still foundEriks to be engaged in business in
the Philippines. Thus, the Court of Appeals concluded that the place of delivery of
the goods (or the place where the transaction took place) is not material in
determining whether a foreign corporation is doing business in the Philippines. The
Court of Appeals held that what is material are the proponents to the transaction, as
well as the parties to be benefited and obligated by the transaction.
In this case, the Court of Appeals found that the parties entered into a
contract of sale whereby petitioner sold lace products to respondent in a series of
transactions. While petitioner delivered the goods in Hong Kong to Kenzar, Ltd.
(Kenzar), another Hong Kong company, the party with whom petitioner transacted
was actually respondent, a Philippine corporation, and not Kenzar. The Court of
Appeals believed Kenzar is merely a shipping company. The Court of Appeals
concluded that the delivery of the goods in Hong Kong did not exempt petitioner
from being considered as doing business in the Philippines.
The Issue
The sole issue in this case is whether petitioner, an unlicensed foreign
corporation, has legal capacity to sue before Philippine courts. The resolution of this
issue depends on whether petitioner is doing business in the Philippines.
The Ruling of the Court
The petition is meritorious.
Section 133 of the Corporation Code provides:
Doing business without license. No foreign corporation
transacting business in the Philippines without a license, or its
successors or assigns, shall be permitted to maintain or intervene in
any action, suit or proceeding in any court or administrative agency of
the Philippines; but such corporation may be sued or proceeded
against before Philippine courts or administrative tribunals on any valid
cause of action recognized under Philippine laws.
The law is clear. An unlicensed foreign corporation doing business in the
Philippines cannot sue before Philippine courts. On the other hand, an unlicensed

foreign corporation not doing business in the Philippines can sue before Philippine
courts.
In the present controversy, petitioner is a foreign corporation which claims
that it is not doing business in the Philippines. As such, it needs no license to
institute a collection suit against respondent before Philippine courts.
Respondent argues otherwise. Respondent insists that petitioner is doing
business in the Philippines without the required license. Hence, petitioner has no
legal capacity to sue before Philippine courts.
Under Section 3(d) of Republic Act No. 7042 (RA 7042) or The Foreign
Investments Act of 1991, the phrase doing business includes:
x x x soliciting orders, service contracts, opening offices, whether
called liaison offices or branches; appointing representatives or
distributors domiciled in the Philippines or who in any calendar year
stay in the country for a period or periods totalling one hundred eighty
(180) days or more; participating in the management, supervision or
control of any domestic business, firm, entity or corporation in the
Philippines; and any other act or acts that imply a continuity of
commercial dealings or arrangements, and contemplate to that extent
the performance of acts or works, or the exercise of some of the
functions normally incident to, and in progressive prosecution of,
commercial gain or of the purpose and object of the business
organization: Provided, however, That the phrase doing business
shall not be deemed to include mere investment as a shareholder by a
foreign entity in domestic corporations duly registered to do business,
and/or the exercise of rights as such investor; nor having a nominee
director or officer to represent its interests in such corporation; nor
appointing a representative or distributor domiciled in the Philippines
which transacts business in its own name and for its own account.
The series of transactions between petitioner and respondent cannot be
classified as doing business in the Philippines under Section 3(d) of RA 7042. An
essential condition to be considered as doing business in the Philippines is the
actual performance of specific commercial acts within the territory of the Philippines
for the plain reason that the Philippines has no jurisdiction over commercial acts
performed in foreign territories. Here, there is no showing that petitioner performed
within the Philippine territory the specific acts of doing business mentioned in
Section 3(d) of RA 7042. Petitioner did not also open an office here in the
Philippines, appoint a representative or distributor, or manage, supervise or control
a local business. While petitioner and respondent entered into a series of
transactions implying a continuity of commercial dealings, the perfection and
consummation of these transactions were done outside the Philippines. [8]
In its complaint, petitioner alleged that it is engaged in the importation and
exportation of several products, including lace products. Petitioner asserted that on
several occasions, respondent purchased lace products from it. Petitioner also
claimed that respondent instructed it to deliver the purchased goods to Kenzar,
which is a Hong Kong company based in Hong Kong. UponKenzars receipt of the

goods, the products were considered sold. Kenzar, in turn, had the obligation to
deliver the lace products to the Philippines. In other words, the sale of lace
products was consummated in Hong Kong.
As earlier stated, the series of transactions between petitioner and respondent
transpired and were consummated in Hong Kong.[9] We also find no single activity
which petitioner performed here in the Philippines pursuant to its purpose and
object as a business organization. [10] Moreover, petitioners desire to do business
within the Philippines is not discernible from the allegations of the complaint or from
its attachments. Therefore, there is no basis for ruling that petitioner is doing
business in the Philippines.
In Eriks, respondent therein alleged the existence of a distributorship
agreement between him and the foreign corporation. If duly established, such
distributorship agreement could support respondents claim that petitioner was
indeed doing business in the Philippines. Here, there is no such or similar
agreement between petitioner and respondent.
We disagree with the Court of Appeals ruling that the proponents to the
transaction determine whether a foreign corporation is doing business in the
Philippines, regardless of the place of delivery or place where the transaction took
place. To accede to such theory makes it possible to classify, for instance, a series of
transactions between a Filipino in the United States and an American company
based in the United States as doing business in the Philippines, even when these
transactions are negotiated and consummated only within the United States.
An exporter in one country may export its products to many foreign importing
countries without performing in the importing countries specific commercial acts
that would constitute doing business in the importing countries. The mere act of
exporting from ones own country, without doing any specific commercial act within
the territory of the importing country, cannot be deemed as doing business in the
importing country. The importing country does not acquire jurisdiction over the
foreign exporter who has not performed any specific commercial act within the
territory of the importing country. Without jurisdiction over the foreign exporter, the
importing country cannot compel the foreign exporter to secure a license to do
business in the importing country.
Otherwise, Philippine exporters, by the mere act alone of exporting their
products, could be considered by the importing countries to be doing business in
those countries. This will require Philippine exporters to secure a business license in
every foreign country where they usually export their products, even if they do not
perform any specific commercial act within the territory of such importing
countries. Such a legal concept will have a deleterious effect not only on Philippine
exports, but also on global trade.
To be doing or transacting business in the Philippines for purposes of Section
133 of the Corporation Code, the foreign corporation must actually transact
business in the Philippines, that is, perform specific business transactions within the
Philippine territory on a continuing basis in its own name and for its own
account. Actual transaction of business within the Philippine territory is an essential

requisite for the Philippines to acquire jurisdiction over a foreign corporation and
thus require the foreign corporation to secure a Philippine business license. If a
foreign corporation does not transact such kind of business in the Philippines, even
if it exports its products to the Philippines, the Philippines has no jurisdiction to
require such foreign corporation to secure a Philippine business license.
Considering that petitioner is not doing business in the Philippines, it does not
need a license in order to initiate and maintain a collection suit against respondent
for the unpaid balance of respondents purchases.

WHEREFORE, we GRANT the petition. We REVERSE the Decision dated 18


April 2001 of the Court of Appeals in CA-G.R. CV
No. 66236. No costs.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

Litis Pendentia
Spouses Marasigan v. Chevron, G.R. No. 184015, February 8, 2012
(Supra.)
Quito v. Stop & Save Corp., G.R. No. 186657, June 11, 2014 (Supra.)
Benavidez v. Salvador, G.R. No. 173331, December 11, 2013 (Supra.)

Res Judicata
Heirs of Sotto v. Palicte, G.R. No. 159691, June 13, 2013 (Supra.)
Spouses Antonio v. Sayman, G.R. No. 149624, September 29, 2010
(Supra.)

Prescription/Statute of Limitations

Marquez v. Baldoz, G.R. No. 143779, April 4, 2003


SECOND DIVISION

[G.R. No. 143779. April 4, 2003]


FRANCISCA L. MARQUEZ and GASPAR
vs. SIMEON BALDOZ, respondent.

M.

MARQUEZ, petitioners,

RESOLUTION
QUISUMBING, J.:
This petition for review seeks to reverse the decision [1] dated April 24, 2000, of
the Court of Appeals in CA-G.R. SP No. 55068, affirming the orders in Civil Case No.
9-97, dated April 6, 1999 and August 4, 1999, of the Regional Trial Court of Taal,
Batangas City, Branch 86. The trial court denied herein petitioners motion to
dismiss in Civil Case No. 9-97, based on alleged prescription and failure to state a
cause of action, as well as their motion for reconsideration.
The facts of this case are culled from the records.
Respondent Simeon Baldoz is the son of Spouses Dionisia Leonor and Aurelio
Baldoz. They died intestate, leaving behind a parcel of land with an area of 33,675
square meters in Halang, Taal, Batangas. The lot was purchased by them from
Emiliano Baldoz on January 17, 1937, as evidenced by a deed of sale issued on the
same date.[2] The second paragraph of the deed of sale bears the following
statement:
Said property is owned in common by the herein vendor (Emiliano Baldoz) and by
Gregorio Leonor (father of petitioners) of Taal, Batangas. [3]
On March 24, 1997, Simeons co-heirs waived their rights over the lot in his
favor by virtue of a Deed of Extrajudicial Settlement with Waiver of Rights. [4] Later,
however, Simeon discovered that Francisca Leonor and Candelaria Orlina declared
certain portions of the same land in their name, as evidenced by Tax Declaration
Nos. 0056 to 0058.[5]
Simeon made several demands upon Francisca, Gaspar and Candelaria urging
them to vacate the premises and to surrender possession thereof, but his demands
remained unheeded. On September 3, 1997, Simeon filed Civil Case No. 9-97,
entitled Simeon Baldoz v. Spouses Francisca Leonor and Gaspar Marquez, and
Candelaria Orlina, for accion reivindicatoria and quieting of title, with preliminary
writ of injunction and damages.
On October 27, 1997, Francisca, Gaspar and Candelaria filed a motion to dismiss
on the ground of prescription and failure to state a cause of action. In an order
dated April 6, 1999, the RTC denied the motion to dismiss. It ruled that the
complaint has sufficiently alleged a cause of action. On the issue of prescription, the
RTC stated that it involves evidentiary matters which should be threshed out in a
full-blown trial on the merits and cannot be determined in a motion to dismiss as

the question has become a matter of proof. [6] The motion for reconsideration filed
with the RTC was likewise denied.
Seasonably, petitioners Francisca and Gaspar Marquez filed a petition for
certiorari with the Court of Appeals ascribing grave abuse of discretion to the RTC
for denying their motion to dismiss. On April 24, 2000, the appellate court dismissed
the petition for lack of merit. Petitioners then moved to reconsider the order of the
Court of Appeals, but it was denied in a resolution dated June 20, 2000.
In this petition for review, petitioners seek the reversal of the CA decision on
two grounds:
A. THE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION
WHEN IT COMPLETELY DISREGARDED THE EVIDENCE PRESENTED BY THE PARTIES
AND MERELY BASED ITS RULING THAT RESPONDENTS RIGHT OF ACTION HAS NOT
PRESCRIBED ON THE ALLEGATIONS IN THE COMPLAINT IN CONTRAVENTION OF
SECTIONS 2 AND 3, RULE 16 OF THE 1997 RULES OF CIVIL PROCEDURE; AND
B. THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE TRIAL COURT DID NOT
COMMIT GRAVE ABUSE OF DISCRETION DESPITE ITS FAILURE TO LIKEWISE
CONSIDER THE EVIDENCE ON RECORD AND TO RULE CATEGORICALLY ON THE ISSUE
OF PRESCRIPTION IN FLAGRANT DISREGARD OF THE EXPRESS PROVISION OF
SECTIONS 2 AND 3, RULE 16 OF THE 1997 RULES OF CIVIL PROCEDURE. [7]
The issue in this petition is whether the Court of Appeals committed grave
abuse of discretion as well as a reversible error in affirming the trial courts
orders. Resolution of this issue depends on whether the trial court had violated
Sections 2 and 3 of Rule 16, of the Rules of Court, in denying petitioners motion to
dismiss the complaint as well as their motion for reconsideration.
In Sections 2 and 3 of Rule 16, the Rules of Court provides:
SEC. 2. Hearing of motion. At the hearing of the motion, the parties shall submit
their arguments on the questions of law and their evidence on the questions of fact
involved except those not available at that time. Should the case go to trial, the
evidence presented during the hearing shall automatically be part of the evidence
of the party presenting the same.
SEC. 3. Resolution of motion. After the hearing, the court may dismiss the action
or claim, deny the motion, or order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable. (Stress supplied.)
In every case, the resolution shall state clearly and distinctly the reasons therefore.
Petitioners insist that the appellate court erred when it held that no grave abuse
of discretion was committed by the trial court when it deferred the resolution of the
issue of prescription raised in their motion to dismiss. According to petitioners,
deferring the resolution of this issue violates the abovecited provisions of the Rules
which provide that the court must either grant, deny or order the amendment of the
pleadings, but must not defer the resolution of the motion.

Considering the submissions of the parties on record, we find that the instant
petition lacks merit. In its Order dated April 6, 1999, the trial court did not violate
Sections 2 and 3 of Rule 16.
First. Section 2 of Rule 16 requires hearing in resolving the motion to
dismiss. From the records, it is clear that the trial judge conducted a hearing to
resolve petitioners motion to dismiss. In compliance with this requirement, both
testimonial and documentary evidence were submitted by the parties to resolve the
issues raised in the motion to dismiss. However, the summary hearing on the
motion to dismiss did not persuade the trial court that petitioners had proved the
respondents claim had already prescribed. Hence, the trial court resolved to require
a more in-depth and thorough determination of this issue, which could be done only
in a full-blown trial of the case.
Neither was there a circumvention of Section 3 of Rule 16. The trial court did
not defer the resolution of the motion to dismiss; in fact, the motion was expressly
denied. Said the Order dated April 6, 1999:
The above allegations in the complaint sufficiently state a cause of action against
the defendants. The complaint does not have to establish or allege the facts
proving the existence of a cause of action at the outset, this will have to be done at
the trial on the merits of the case. In fact, the complaint is not supposed to contain
evidentiary matters. Rule 6, section 3 of the Rules of Court provides that the
complaint must be limited to a concise statement of the plaintiffs cause of
action. Consequently, the motion to dismiss must be denied.
The above conclusion finds support in the cases of Republic Bank vs. Cuaderno, 19
SCRA 677; Boncato vs. Siasan, 138 SCRA 414 and Sumalinong vs. Doronio, 184
SCRA 187 where the Supreme Court has repeatedly held that so rigid is the norm
prescribed that if the Court should doubt the truth of the facts averred, it must not
dismiss the complaint but require an answer and proceed to hear the case on the
merits.
On the issue of prescription raised in the said motion, the Court finds the same
evidentiary matters which should be threshed out in a full-blown trial on the merits
and cannot be determined in a motion to dismiss as the question has become a
matter of proof. [8]
Petitioners palpably misinterpreted the trial courts Order, particularly in regard
to the matter of prescription. It ruled that the prescription issue is one involving
evidentiary matters which must be threshed out in a full-blown trial on the merits
and cannot be determined in a motion to dismiss as the question has become a
matter of proof. Petitioners misconstrued the trial courts ruling as one tantamount
todeferring the resolution of the motion to dismiss itself. This reading of the Order
is flawed. By denying the motion expressly, the Order resolved the motion to
dismiss as required by Section 3 of Rule 16.
It must be pointed that under the new Rules, deferment of the resolution of the
motion to dismiss is no longer permitted. The court must either grant the motion to
dismiss, deny it, or order the amendment of the pleadings. The purpose for the
above rule is to avoid and end the common practice of perfunctorily denying
motions to dismiss for lack of merit. Such cavalier disposition often creates

difficulty on the part of the aggrieved party in taking recourse therefrom and
likewise on the part of the higher court called upon to resolve the issue, usually
on certiorari.[9]
However, what is prohibited by the rules is the deferment until trial of the
resolution of the motion to dismiss itself. Here, the trial court did not defer
resolution of the motion itself but, in fact, categorically resolved to deny it based on
its finding that: (1) the complaint showed a sufficient cause of action, and (2) the
pleadings did not ipso facto establish prescription.
As required by Section 3, Rule 16, the trial courts Order also explains at length
the basis for its finding that in his complaint, plaintiff has shown a sufficient cause
of action. Corollary to its discussion on this issue, the trial court also touched on the
issue on prescription with a pronouncement that such issue is better threshed after
a full-blown trial on the merits. The trial courts reasoning, in our view, sufficiently
explained the reason for dismissing the motion to dismiss. It satisfactorily served
the purpose behind the new Rules of Court as earlier explained.
Moreover, the trial courts ruling requiring a full-blown trial on the merits to
resolve the issue of prescription, finds jurisprudential basis in our ruling in National
Irrigation Administration (NIA) v. Court of Appeals,[10] reiterating Francisco v. Robles.
[11]
In the NIA case, we stated that:
[A]n allegation of prescription can effectively be used in a motion to dismiss only
when the complaint on its face shows that indeed the action has already prescribed.
[12]

This precedent finds application in the present case. Nothing shows on the face of
the complaint filed by herein respondent as plaintiff in Civil Case No. 9-97 that the
action already prescribed at the time it was filed. The complaint merely averred that
Gregorio Leonor, father of herein petitioners, was a tenant of respondents
predecessor-in-interest. As observed by the Court of Appeals:
Notwithstanding the jurisprudence which states that prescription may be effectively
pleaded in a motion to dismiss if the complaint shows on its face that the action had
already prescribed at the time it was filed, We believe, however, that there is no
sufficient and convincing showing that prescription as regards the subject property
has set in already. The reason is simple: the court a quo noted on the face of the
complaint in Civil Case No. 9-97 that Gregorio Leonor, father of herein petitioners,
was the tenant of the parents of private respondent over the subject
property. Obviously, perusing the complaint with an allegation that the subject
property was a tenanted property, the contention of petitioners in establishing an
uninterrupted adverse possession for more than thirty (30) years seems
implausible. Besides, possession is not a definitive proof of ownership, nor is nonpossession inconsistent therewith. [13]
Based on the pleadings, the issue of prescription was not clearly
established. On this point, it is but logical and proper for the trial court to deny
petitioners motion to dismiss and, additionally, to require a full-blown trial on the
issue of prescription.
Accordingly, the Court of Appeals committed no grave abuse of discretion, much
less any reversible error, in affirming the Orders of the trial court.

WHEREFORE, the instant petition is DENIED for lack of merit. The challenged
decision of the Court of Appeals of April 24, 2000, in CA-G.R. SP No. 55068, and its
resolution dated June 20, 2000, are hereby AFFIRMED. Costs against the
petitioners.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Austria-Martinez, and Callejo, Sr., JJ., concur.

States no cause of action


Lucas v. Lucas, G.R. No. 190710, June 6, 2011 (Supra.)
SECOND DIVISION
JESSE U. LUCAS,
Petitioner,

G.R. No. 190710


Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

Promulgated:
JESUS S. LUCAS,
Respondent.

June 6, 2011

x----------------------------------------------------------------------------------------------x

DECISION
NACHURA, J.:
Is a prima facie showing necessary before a court can issue a DNA testing
order? In this petition for review on certiorari, we address this question to guide the
Bench and the Bar in dealing with a relatively new evidentiary tool. Assailed in this
petition are the Court of Appeals (CA) Decision [1] dated September 25, 2009 and
Resolution dated December 17, 2009.

The antecedents of the case are, as follows:


On July 26, 2007, petitioner, Jesse U. Lucas, filed a Petition to Establish
Illegitimate Filiation (with Motion for the Submission of Parties to DNA Testing)
[2]
before the Regional Trial Court (RTC), Branch 72, Valenzuela City. Petitioner
narrated that, sometime in 1967, his mother, Elsie Uy (Elsie), migrated
to Manila from Davao and stayed with a certain Ate Belen (Belen) who worked in a
prominent nightspot in Manila. Elsie would oftentimes accompany Belen to work. On
one occasion, Elsie got acquainted with respondent, Jesus S. Lucas, at Belens
workplace, and an intimate relationship developed between the two. Elsie
eventually got pregnant and, on March 11, 1969, she gave birth to petitioner, Jesse
U. Lucas. The name of petitioners father was not stated in petitioners certificate of
live birth. However, Elsie later on told petitioner that his father is respondent. On
August 1, 1969, petitioner was baptized at San Isidro Parish, Taft Avenue, Pasay City.
Respondent allegedly extended financial support to Elsie and petitioner for a period
of about two years. When the relationship of Elsie and respondent ended, Elsie
refused to accept respondents offer of support and decided to raise petitioner on
her own. While petitioner was growing up, Elsie made several attempts to introduce
petitioner to respondent, but all attempts were in vain.
Attached to the petition were the following: (a) petitioners certificate of live
birth; (b) petitioners baptismal certificate; (c) petitioners college diploma, showing
that he graduated from Saint Louis University in Baguio City with a degree in
Psychology; (d) his Certificate of Graduation from the same school; (e) Certificate of
Recognition from the University of the Philippines, College of Music; and (f) clippings
of several articles from different newspapers about petitioner, as a musical prodigy.
Respondent was not served with a copy of the petition. Nonetheless,
respondent learned of the petition to establish filiation. His counsel therefore went
to the trial court on August 29, 2007 and obtained a copy of the petition.
Petitioner filed with the RTC a Very Urgent Motion to Try and Hear the Case.
Hence, on September 3, 2007, the RTC, finding the petition to be sufficient in form
and substance, issued the Order [3] setting the case for hearing and urging anyone
who has any objection to the petition to file his opposition. The court also directed
that the Order be published once a week for three consecutive weeks in any
newspaper of general circulation in the Philippines, and that the Solicitor General be
furnished with copies of the Order and the petition in order that he may appear and
represent the State in the case.
On September 4, 2007, unaware of the issuance of the September 3, 2007
Order, respondent filed a Special Appearance and Comment. He manifested inter
alia that: (1) he did not receive the summons and a copy of the petition; (2) the
petition was adversarial in nature and therefore summons should be served on him
as respondent; (3) should the court agree that summons was required, he was
waiving service of summons and making a voluntary appearance; and (4) notice by
publication of the petition and the hearing was improper because of the
confidentiality of the subject matter.[4]

On September 14, 2007, respondent also filed a Manifestation and Comment


on Petitioners Very Urgent Motion to Try and Hear the Case. Respondent reiterated
that the petition for recognition is adversarial in nature; hence, he should be served
with summons.
After learning of the September 3, 2007 Order, respondent filed a motion for
reconsideration.[5] Respondent averred that the petition was not in due form and
substance because petitioner could not have personally known the matters that
were alleged therein. He argued that DNA testing cannot be had on the basis of a
mere allegation pointing to respondent as petitioners father. Moreover,
jurisprudence is still unsettled on the acceptability of DNA evidence.
On July 30, 2008, the RTC, acting on respondents motion for reconsideration,
issued an Order[6] dismissing the case. The court remarked that, based on the case
of Herrera v. Alba,[7] there are four significant procedural aspects of a traditional
paternity action which the parties have to face: a prima facie case, affirmative
defenses, presumption of legitimacy, and physical resemblance between the
putative father and the child. The court opined that petitioner must first establish
these four procedural aspects before he can present evidence of paternity and
filiation, which may include incriminating acts or scientific evidence like blood group
test and DNA test results. The court observed that the petition did not show that
these procedural aspects were present. Petitioner failed to establish a prima
facie case considering that (a) his mother did not personally declare that she had
sexual relations with respondent, and petitioners statement as to what his mother
told him about his father was clearly hearsay; (b) the certificate of live birth was not
signed by respondent; and (c) although petitioner used the surname of respondent,
there was no allegation that he was treated as the child of respondent by the latter
or his family. The court opined that, having failed to establish a prima facie case,
respondent had no obligation to present any affirmative defenses. The dispositive
portion of the said Order therefore reads:
WHEREFORE, for failure of the petitioner to establish compliance
with the four procedural aspects of a traditional paternity action in his
petition, his motion for the submission of parties to DNA testing to
establish paternity and filiation is hereby DENIED. This case is
DISMISSED without prejudice.
SO ORDERED.[8]
Petitioner seasonably filed a motion for reconsideration to the Order dated
July 30, 2008, which the RTC resolved in his favor. Thus, on October 20, 2008, it
issued the Order[9] setting aside the courts previous order, thus:
WHEREFORE, in view of the foregoing, the Order dated July 30,
2008 is hereby reconsidered and set aside.
Let the Petition (with Motion for the Submission of Parties to DNA
Testing) be set for hearing on January 22, 2009 at 8:30 in the
morning.
xxxx

SO ORDERED.[10]
This time, the RTC held that the ruling on the grounds relied upon by
petitioner for filing the petition is premature considering that a full-blown trial has
not yet taken place. The court stressed that the petition was sufficient in form and
substance. It was verified, it included a certification against forum shopping, and it
contained a plain, concise, and direct statement of the ultimate facts on which
petitioner relies on for his claim, in accordance with Section 1, Rule 8 of the Rules of
Court. The court remarked that the allegation that the statements in the petition
were not of petitioners personal knowledge is a matter of evidence. The court also
dismissed respondents arguments that there is no basis for the taking of DNA test,
and that jurisprudence is still unsettled on the acceptability of DNA evidence. It
noted that the new Rule on DNA Evidence [11] allows the conduct of DNA testing,
whether at the courts instance or upon application of any person who has legal
interest in the matter in litigation.
Respondent filed a Motion for Reconsideration of Order dated October 20,
2008 and for Dismissal of Petition, [12] reiterating that (a) the petition was not in due
form and substance as no defendant was named in the title, and all the basic
allegations were hearsay; and (b) there was no prima facie case, which made the
petition susceptible to dismissal.
The RTC denied the motion in the Order dated January 19, 2009, and
rescheduled the hearing.[13]
Aggrieved, respondent filed a petition for certiorari with the CA, questioning
the Orders dated October 20, 2008 and January 19, 2009.
On September 25, 2009, the CA decided the petition for certiorari in favor of
respondent, thus:
WHEREFORE, the instant petition for certiorari is hereby
GRANTED for being meritorious. The assailed Orders dated October 20,
2008 and January 19, 2009 both issued by the Regional Trial Court,
Branch 172 of Valenzuela City in SP. Proceeding Case No. 30-V-07 are
REVERSED and SET ASIDE. Accordingly, the case docketed as SP.
Proceeding Case No. 30-V-07 is DISMISSED.[14]
The CA held that the RTC did not acquire jurisdiction over the person of
respondent, as no summons had been served on him. Respondents special
appearance could not be considered as voluntary appearance because it was filed
only for the purpose of questioning the jurisdiction of the court over respondent.
Although respondent likewise questioned the courts jurisdiction over the subject
matter of the petition, the same is not equivalent to a waiver of his right to object to
the jurisdiction of the court over his person.
The CA remarked that petitioner filed the petition to establish illegitimate
filiation, specifically seeking a DNA testing order to abbreviate the proceedings. It

noted that petitioner failed to show that the four significant procedural aspects of a
traditional paternity action had been met. The CA further held that a DNA testing
should not be allowed when the petitioner has failed to establish a prima facie case,
thus:
While the tenor [of Section 4, Rule on DNA Evidence] appears to be absolute,
the rule could not really have been intended to trample on the substantive
rights of the parties. It could have not meant to be an instrument to promote
disorder, harassment, or extortion. It could have not been intended to
legalize unwarranted expedition to fish for evidence. Such will be the
situation in this particular case if a court may at any time order the taking of
a DNA test. If the DNA test in compulsory recognition cases is immediately
available to the petitioner/complainant without requiring first the
presentation of corroborative proof, then a dire and absurd rule would result.
Such will encourage and promote harassment and extortion.
xxxx
At the risk of being repetitious, the Court would like to stress that it
sees the danger of allowing an absolute DNA testing to a compulsory
recognition test even if the plaintiff/petitioner failed to establish prima
facie proof. x x x If at anytime, motu proprio and without pre-conditions, the
court can indeed order the taking of DNA test in compulsory recognition
cases, then the prominent and well-to-do members of our society will be easy
prey for opportunists and extortionists. For no cause at all, or even for [sic]
casual sexual indiscretions in their younger years could be used as a means
to harass them. Unscrupulous women, unsure of the paternity of their
children may just be taking the chances-just in case-by pointing to a sexual
partner in a long past one-time encounter. Indeed an absolute and
unconditional taking of DNA test for compulsory recognition case opens wide
the opportunities for extortionist to prey on victims who have no stomach for
scandal.[15]
Petitioner moved for reconsideration. On December 17, 2009, the CA denied
the motion for lack of merit.[16]
In this petition for review on certiorari, petitioner raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RESOLVED
THE ISSUE OF LACK OF JURISDICTION OVER THE PERSON OF HEREIN
RESPONDENT ALBEIT THE SAME WAS NEVER RAISED IN THE PETITION
FOR CERTIORARI.
I.A
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN
IT RULED THAT JURISDICTION WAS NOT ACQUIRED OVER
THE PERSON OF THE RESPONDENT.
I.B
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN
IT FAILED TO REALIZE THAT THE RESPONDENT HAD

ALREADY SUBMITTED VOLUNTARILY TO THE JURISDICTION


OF THE COURT A QUO.
I.C
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN
IT ESSENTIALLY RULED THAT THE TITLE OF A PLEADING,
RATHER THAN ITS BODY, IS CONTROLLING.
II.
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT ORDERED
THE DISMISSAL OF THE PETITION BY REASON OF THE MOTION (FILED
BY THE PETITIONER BEFORE THE COURT A QUO) FOR THE CONDUCT OF
DNA TESTING.
II.A
WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN
IT ESSENTIALLY RULED THAT DNA TESTING CAN ONLY BE
ORDERED AFTER THE PETITIONER ESTABLISHES PRIMA
FACIE PROOF OF FILIATION.
III.
WHETHER OR NOT THE COURT OF APPEALS ERRED WITH ITS
MISPLACED RELIANCE ON THE CASE OF HERRERA VS. ALBA,
ESPECIALLY AS REGARDS THE FOUR SIGNIFICANT PROCEDURAL
ASPECTS OF A TRADITIONAL PATERNITY ACTION.[17]
Petitioner contends that respondent never raised as issue in his petition
for certiorari the courts lack of jurisdiction over his person. Hence, the CA had no
legal basis to discuss the same, because issues not raised are deemed waived or
abandoned. At any rate, respondent had already voluntarily submitted to the
jurisdiction of the trial court by his filing of several motions asking for affirmative
relief, such as the (a) Motion for Reconsideration of the Order dated September 3,
2007; (b) Ex Parte Motion to Resolve Motion for Reconsideration of the Order dated
November 6, 2007; and (c) Motion for Reconsideration of the Order dated October
20, 2008 and for Dismissal of Petition. Petitioner points out that respondent even
expressly admitted that he has waived his right to summons in his Manifestation
and Comment on Petitioners Very Urgent Motion to Try and Hear the Case. Hence,
the issue is already moot and academic.
Petitioner argues that the case was adversarial in nature. Although the
caption of the petition does not state respondents name, the body of the petition
clearly indicates his name and his known address. He maintains that the body of the
petition is controlling and not the caption.
Finally, petitioner asserts that the motion for DNA testing should not be a
reason for the dismissal of the petition since it is not a legal ground for the dismissal
of cases. If the CA entertained any doubt as to the propriety of DNA testing, it
should have simply denied the motion. [18] Petitioner points out that Section 4 of the
Rule on DNA Evidence does not require that there must be a prior proof of filiation

before DNA testing can be ordered. He adds that the CA erroneously relied on the
four significant procedural aspects of a paternity case, as enunciated in Herrera v.
Alba.[19] Petitioner avers that these procedural aspects are not applicable at this
point of the proceedings because they are matters of evidence that should be taken
up during the trial.[20]
In his Comment, respondent supports the CAs ruling on most issues raised in
the petition for certiorari and merely reiterates his previous arguments. However, on
the issue of lack of jurisdiction, respondent counters that, contrary to petitioners
assertion, he raised the issue before the CA in relation to his claim that the petition
was not in due form and substance. Respondent denies that he waived his right to
the service of summons. He insists that the alleged waiver and voluntary
appearance was conditional upon a finding by the court that summons is indeed
required. He avers that the assertion of affirmative defenses, aside from lack of
jurisdiction over the person of the defendant, cannot be considered as waiver of the
defense of lack of jurisdiction over such person.
The petition is meritorious.
Primarily, we emphasize that the assailed Orders of the trial court were
orders denying respondents motion to dismiss the petition for illegitimate filiation.
An order denying a motion to dismiss is an interlocutory order which neither
terminates nor finally disposes of a case, as it leaves something to be done by the
court before the case is finally decided on the merits. As such, the general rule is
that the denial of a motion to dismiss cannot be questioned in a special civil action
for certiorari, which is a remedy designed to correct errors of jurisdiction and not
errors of judgment. Neither can a denial of a motion to dismiss be the subject of an
appeal unless and until a final judgment or order is rendered. In a number of cases,
the court has granted the extraordinary remedy of certiorari on the denial of the
motion to dismiss but only when it has been tainted with grave abuse of discretion
amounting to lack or excess of jurisdiction. [21] In the present case, we discern no
grave abuse of discretion on the part of the trial court in denying the motion to
dismiss.
The grounds for dismissal relied upon by respondent were (a) the courts lack
of jurisdiction over his person due to the absence of summons, and (b) defect in the
form and substance of the petition to establish illegitimate filiation, which is
equivalent to failure to state a cause of action.
We need not belabor the issues on whether lack of jurisdiction was raised
before the CA, whether the court acquired jurisdiction over the person of
respondent, or whether respondent waived his right to the service of summons. We
find that the primordial issue here is actually whether it was necessary, in the first
place, to serve summons on respondent for the court to acquire jurisdiction over the
case. In other words, was the service of summons jurisdictional? The answer to this
question depends on the nature of petitioners action, that is, whether it is an
action in personam, in rem, or quasi in rem.
An action in personam is lodged against a person based on personal liability;
an action in rem is directed against the thing itself instead of the person; while an

action quasi in rem names a person as defendant, but its object is to subject that
person's interest in a property to a corresponding lien or obligation. A petition
directed against the "thing" itself or the res, which concerns the status of a person,
like a petition for adoption, annulment of marriage, or correction of entries in the
birth certificate, is an action in rem.[22]

In an action in personam, jurisdiction over the person of the defendant is


necessary for the court to validly try and decide the case. In a proceeding in
rem or quasi in rem, jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court, provided that the latter has
jurisdiction over the res. Jurisdiction over the res is acquired either (a) by the
seizure of the property under legal process, whereby it is brought into actual
custody of the law, or (b) as a result of the institution of legal proceedings, in which
the power of the court is recognized and made effective. [23]
The herein petition to establish illegitimate filiation is an action in rem. By the
simple filing of the petition to establish illegitimate filiation before the RTC, which
undoubtedly had jurisdiction over the subject matter of the petition, the latter
thereby acquired jurisdiction over the case. An in rem proceeding is validated
essentially through publication. Publication is notice to the whole world that the
proceeding has for its object to bar indefinitely all who might be minded to make an
objection of any sort to the right sought to be established. [24] Through publication,
all interested parties are deemed notified of the petition.
If at all, service of summons or notice is made to the defendant, it is not for
the purpose of vesting the court with jurisdiction, but merely for satisfying the due
process requirements.[25] This is but proper in order to afford the person concerned
the opportunity to protect his interest if he so chooses. [26] Hence, failure to serve
summons will not deprive the court of its jurisdiction to try and decide the case. In
such a case, the lack of summons may be excused where it is determined that the
adverse party had, in fact, the opportunity to file his opposition, as in this case. We
find that the due process requirement with respect to respondent has been
satisfied, considering that he has participated in the proceedings in this case and he
has the opportunity to file his opposition to the petition to establish filiation.
To address respondents contention that the petition should have been
adversarial in form, we further hold that the herein petition to establish filiation was
sufficient in form. It was indeed adversarial in nature despite its caption which
lacked the name of a defendant, the failure to implead respondent as defendant,
and
the
non-service
of
summons
upon
respondent.
A
proceeding
isadversarial where the party seeking relief has given legal warning to the other
party and afforded the latter an opportunity to contest it. [27] In this petition
classified as an action in remthe notice requirement for an adversarial proceeding
was likewise satisfied by the publication of the petition and the giving of notice to
the Solicitor General, as directed by the trial court.
The petition to establish filiation is sufficient in substance. It satisfies Section
1, Rule 8 of the Rules of Court, which requires the complaint to contain a plain,
concise, and direct statement of the ultimate facts upon which the plaintiff bases his
claim. A fact is essential if it cannot be stricken out without leaving the statement
of the cause of action inadequate. [28] A complaint states a cause of action when it
contains the following elements: (1) the legal right of plaintiff, (2) the correlative
obligation of the defendant, and (3) the act or omission of the defendant in violation
of said legal right.[29]

The petition sufficiently states the ultimate facts relied upon by petitioner to
establish his filiation to respondent. Respondent, however, contends that the
allegations in the petition were hearsay as they were not of petitioners personal
knowledge. Such matter is clearly a matter of evidence that cannot be determined
at this point but only during the trial when petitioner presents his evidence.
In a motion to dismiss a complaint based on lack of cause of action, the
question submitted to the court for determination is the sufficiency of the
allegations made in the complaint to constitute a cause of action and not whether
those allegations of fact are true, for said motion must hypothetically admit the
truth
of
the
facts
alleged
in
the
complaint. [30]
The inquiry is confined to the four corners of the complaint, and no other. [31] The test
of the sufficiency of the facts alleged in the complaint is whether or not, admitting
the facts alleged, the court could render a valid judgment upon the same in
accordance with the prayer of the complaint. [32]
If the allegations of the complaint are sufficient in form and substance but
their veracity and correctness are assailed, it is incumbent upon the court to deny
the motion to dismiss and require the defendant to answer and go to trial to prove
his defense. The veracity of the assertions of the parties can be ascertained at the
trial of the case on the merits. [33]
The statement in Herrera v. Alba[34] that there are four significant procedural
aspects in a traditional paternity case which parties have to face has been widely
misunderstood and misapplied in this case. A party is confronted by these so-called
procedural aspects during trial, when the parties have presented their respective
evidence. They are matters of evidence that cannot be determined at this initial
stage of the proceedings, when only the petition to establish filiation has been filed.
The CAs observation that petitioner failed to establish a prima facie casethe first
procedural aspect in a paternity caseis therefore misplaced. Aprima facie case is
built by a partys evidence and not by mere allegations in the initiatory pleading.
Clearly then, it was also not the opportune time to discuss the lack of a prima
facie case vis--vis the motion for DNA testing since no evidence has, as yet, been
presented by petitioner. More essentially, it is premature to discuss whether, under
the circumstances, a DNA testing order is warranted considering that no such order
has yet been issued by the trial court. In fact, the latter has just set the said case for
hearing.
At any rate, the CAs view that it would be dangerous to allow a DNA testing
without corroborative proof is well taken and deserves the Courts attention. In light
of this observation, we find that there is a need to supplement the Rule on DNA
Evidence to aid the courts in resolving motions for DNA testing order, particularly in
paternity and other filiation cases. We, thus, address the question of whether
a prima facie showing is necessary before a court can issue a DNA testing order.
The Rule on DNA Evidence was enacted to guide the Bench and the Bar for
the introduction and use of DNA evidence in the judicial system. It provides the
prescribed parameters on the requisite elements for reliability and validity ( i.e., the
proper procedures, protocols, necessary laboratory reports, etc.), the possible

sources of error, the available objections to the admission of DNA test results as
evidence as well as the probative value of DNA evidence. It seeks to ensure that
the evidence gathered, using various methods of DNA analysis, is utilized effectively
and properly, [and] shall not be misused and/or abused and, more importantly, shall
continue to ensure that DNA analysis serves justice and protects, rather than
prejudice the public.[35]
Not surprisingly, Section 4 of the Rule on DNA Evidence merely provides for
conditions that are aimed to safeguard the accuracy and integrity of the DNA
testing. Section 4 states:
SEC. 4. Application for DNA Testing Order. The appropriate
court may, at any time, either motu proprio or on application of any
person who has a legal interest in the matter in litigation, order a DNA
testing. Such order shall issue after due hearing and notice to the
parties upon a showing of the following:
(a) A biological sample exists that is relevant to the case;
(b) The biological sample: (i) was not previously subjected to the
type of DNA testing now requested; or (ii) was previously
subjected to DNA testing, but the results may require
confirmation for good reasons;
(c) The DNA testing uses a scientifically valid technique;
(d) The DNA testing has the scientific potential to produce new
information that is relevant to the proper resolution of the
case; and
(e) The existence of other factors, if any, which the court may
consider as potentially affecting the accuracy or integrity of
the DNA testing.
This Rule shall not preclude a DNA testing, without need of a
prior court order, at the behest of any party, including law enforcement
agencies, before a suit or proceeding is commenced.
This does not mean, however, that a DNA testing order will be issued as a
matter of right if, during the hearing, the said conditions are established.
In some states, to warrant the issuance of the DNA testing order, there must
be a show cause hearing wherein the applicant must first present sufficient
evidence to establish a prima facie case or a reasonable possibility of paternity or
good cause for the holding of the test. [36] In these states, a court order for blood
testing is considered a search, which, under their Constitutions (as in ours), must
be preceded by a finding of probable cause in order to be valid. Hence, the
requirement of a prima facie case, or reasonable possibility, was imposed in civil
actions as a counterpart of a finding of probable cause. The Supreme Court of
Louisiana eloquently explained
Although a paternity action is civil, not criminal, the constitutional
prohibition against unreasonable searches and seizures is still
applicable, and a proper showing of sufficient justification under the
particular factual circumstances of the case must be made before a
court may order a compulsory blood test. Courts in various jurisdictions

have differed regarding the kind of procedures which are required, but
those jurisdictions have almost universally found that a preliminary
showing must be made before a court can constitutionally order
compulsory blood testing in paternity cases. We agree, and find that,
as a preliminary matter, before the court may issue an order for
compulsory blood testing, the moving party must show that there is a
reasonable possibility of paternity. As explained hereafter, in cases in
which paternity is contested and a party to the action refuses to
voluntarily undergo a blood test, a show cause hearing must be held in
which the court can determine whether there is sufficient evidence to
establish a prima facie case which warrants issuance of a court order
for blood testing.[37]
The same condition precedent should be applied in our jurisdiction to protect
the putative father from mere harassment suits. Thus, during the hearing on the
motion for DNA testing, the petitioner must present prima facie evidence or
establish a reasonable possibility of paternity.

Notwithstanding these, it should be stressed that the issuance of a DNA


testing order remains discretionary upon the court. The court may, for example,
consider whether there is absolute necessity for the DNA testing. If there is already
preponderance of evidence to establish paternity and the DNA test result would only
be corroborative, the court may, in its discretion, disallow a DNA testing.
WHEREFORE, premises considered, the petition is GRANTED. The Court of
Appeals Decision dated September 25, 2009 and Resolution dated December 17,
2009 are REVERSED and SET ASIDE. The Orders dated October 20, 2008 and
January 19, 2009 of the Regional Trial Court of Valenzuela City are AFFIRMED.
SO ORDERED.

ANTONIO EDUARDO B. NACHURA


Associate Justice

Lazaro v. Brewmaster, G.R. No. 182779, August 23, 2010

Republic of the Philippines


Supreme Court
Manila

SECOND DIVISION
VICTORINA (VICTORIA) ALICE LIM
LAZARO,
Petitioner,

- versus -

BREWMASTER INTERNATIONAL, INC.,

G.R. No. 182779


Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:

Respondent.
August 23, 2010
x------------------------------------------------------------------------------------x

RESOLUTION
NACHURA, J.:

Before the Court is a petition for review on certiorari of the Court of Appeals
(CA) Decision[1] dated September 4, 2007 and Resolution dated January 31, 2008,
which awarded the amount sought by respondent in its Complaint. As held by the
CA, to grant the relief prayed for by respondent is, in the words of Section 6 of the
Revised Rule on Summary Procedure, the judgment warranted by the facts alleged
in the complaint.

Respondent, Brewmaster International, Inc., is a marketing company engaged


in selling and distributing beer and other products of Asia Brewery, Inc. On
November 9, 2005, it filed a Complaint for Sum of Money against Prescillo G. Lazaro
(Prescillo) and petitioner, Victorina (also known as Victoria) Alice Lazaro, with the
Metropolitan Trial Court (MeTC) of MakatiCity. The complaint alleged as follows:
6. During the period from February 2002 to May 2002,
defendants obtained on credit from plaintiff beer and other products in
the total amount of ONE HUNDRED THIRTY EIGHT THOUSAND FIVE
HUNDRED TWO PESOS AND NINETY TWO CENTAVOS (Php 138,502.92),
evidenced by sales invoices photocopies of which are hereto attached
as Annexes A, A-1 to A-11,
7. Despite repeated demands, defendants have failed and
refused, and up to now, still fail and refuse to pay their aforesaid
obligation to plaintiff in the amount of ONE HUNDRED THIRTY EIGHT
THOUSAND FIVE HUNDRED TWO PESOS AND NINETY TWO CENTAVOS
(Php 138,502.92) as evidenced by the demand letters dated 21 April
2003, 12 May 2003, 5 August 2003 and 17 August 2005, photocopies
of which are hereto attached as Annexes B, C, C-1, D, D-1,
D-2, and E, E-1,
8. Under the terms of the sales invoices, defendants agreed
that in case of litigation, the venue shall only be at the proper courts
ofMakati City and to pay 24% interest on all overdue accounts.
WHEREFORE, it is respectfully prayed that judgment be
rendered in favor of plaintiff and against the defendants, ordering the
latter to pay the sum of Php138,502.92 representing plaintiffs claim
and the sum of Php33,240.00 as interest.
Plaintiff prays for such other or further relief and remedies that
are just and equitable in the premises.[2]

Annexes A, A-1 to A-11 are photocopies of sales invoices [3] indicating the
amount of the goods purchased and showing that they were sold to TOTAL and
received by a certain Daniel Limuco.

Prescillo filed an answer with counterclaim, denying any knowledge of the


obligation sued upon. According to Prescillo, he and petitioner had lived separately
since January 15, 2002 and he never authorized petitioner to purchase anything
from respondent. He pointed out that the purchaser of the items, as borne out by

the sales invoices attached to the complaint, was Total, which should have been the
one sued by respondent.[4]
Petitioner, in her own answer with counterclaims, likewise denied having
transacted with respondent, and averred that the documents attached to the
complaint showed that it was Total which purchased goods from respondent. [5]
On June 14, 2006, during the scheduled preliminary conference, petitioner
and her co-defendant did not appear. Hence, the MeTC declared the case submitted
for decision.[6]
On August 22, 2006, the MeTC dismissed the complaint, ratiocinating that
respondent, as plaintiff, failed to meet the burden of proof required to establish its
claim by preponderance of evidence. The court a quo noted that the sales invoices
attached to the complaint showed that the beer and the other products were sold to
Total and were received by a certain Daniel Limuco; they did not indicate, in any
way, that the goods were received by petitioner or her husband. [7]

Respondent elevated the case to the Regional Trial Court (RTC) through a
notice of appeal. Attached to its Memorandum was additional evidence, showing
that it transacted with petitioner and her husband, who were then the operators and
franchisees of the Total gasoline station and convenience store where the subject
goods were delivered, and that Daniel Limuco was their employee. [8]
Unmoved, the RTC found no reversible error in the assailed decision. It agreed
with the MeTC that respondent failed to submit any evidence proving that petitioner
and her husband were liable for the obligation. The RTC disregarded the documents
attached to the memorandum on the ground that admission of such additional
evidence would be offensive to the basic rule of fair play and would violate the
other partys right to due process. Thus, the RTC affirmed the assailed decision in
toto.[9]
Respondent then went to the CA through a petition for review. There, it
succeeded in obtaining a judgment in its favor. Applying Section 7 [10] of the Revised

Rule on Summary Procedure, in conjunction with Section 6 [11] thereof, the CA held
that judgment should have been rendered as may be warranted by the facts
alleged in the complaint considering that both defendants failed to appear during
the preliminary conference. The appellate court said that by instead referring to
the sales invoices and bypassing [the] ultimate facts [alleged in the complaint], the
MeTC contravened the evident purposes of the [Revised] Rule on Summary
Procedure directing that the judgment be based on the allegations of the complaint,
which were, firstly, to avoid delay and, secondly, to consider the non-appearance at
the preliminary conference as an admission of the ultimate facts. The CA
judiciously pronounced that:
In fact, evidentiary matters (like the sales invoices attached to
the complaint) were not yet to be considered as of that early stage of
the proceedings known under the Rule on Summary Procedure as the
preliminary conference. The evidentiary matters and facts are to be
required only upon the termination of the preliminary conference and
only if further proceedings become necessary to establish factual
issues defined in the order issued by the court. (citing Section 9, Rule
on Summary Procedure)

Thus, finding the amount claimed to be warranted by the allegations in the


complaint, the CA, in its September 4, 2007 Decision, reversed the trial courts
decision and ordered petitioner and her husband to pay the said amount plus
interests, thus:
WHEREFORE, the DECISION
2007 is REVERSED AND SET ASIDE.

DATED

MARCH

12,

The respondents are ORDERED to pay, jointly and severally, to


the petitioner the amount of P138,502.92, plus interest of 6% per
annum from the filing of the complaint until this judgment becomes
final and executory, and 12% per annum upon finality of this judgment
until full payment.
The respondents are also ORDERED to pay the costs of suit.
SO ORDERED.[12]

Petitioner filed a motion for reconsideration of the said Decision but the same
was denied by the CA in its January 31, 2008 Resolution. [13]

Petitioner submits the following issues to this Court for resolution:


Petitioner respectfully submits that the Honorable Court of Appeals
erred in the interpretation of Section 6 of the Revised Rules of
Summary Procedure when it reversed the Decision of the RTC, Branch
162 of Makati in Civil Case [N]o. 06-944.
Petitioner further submits that the Court of Appeals erred in giving
relief to the private respondent despite the lack of cause of action in its
complaint against the petitioner herein.[14]

Petitioner contends that the Revised Rule on Summary Procedure does not
warrant the automatic grant of relief in favor of the plaintiff when the complaint fails
to state a cause of action. She avers that respondents complaint fails to state a
cause of action; hence, no relief can be given to respondent. Petitioner points out
that the sales invoices formed part of the complaint and should be considered in
determining whether respondent has a cause of action against her. Consideration of
the said sales invoices, she avers, would show that there is no contractual
relationship between her and respondent; the invoices did not indicate in any way
that petitioner was liable for the amount stated therein.
Petitioner is correct in saying that no relief can be awarded to respondent if
its complaint does not state a cause of action. Indeed, if the complaint does not
state a cause of action, then no relief can be granted to the plaintiff and it would
necessarily follow that the allegations in the complaint would not warrant a
judgment favorable to the plaintiff.
The basic requirement under the rules of procedure is that a complaint must
make a plain, concise, and direct statement of the ultimate facts on which the
plaintiff relies for his claim.[15] Ultimate facts mean the important and substantial
facts which either directly form the basis of the plaintiffs primary right and duty or
directly make up the wrongful acts or omissions of the defendant. [16] They refer to
the principal, determinative, constitutive facts upon the existence of which the
cause of action rests. The term does not refer to details of probative matter or
particulars of evidence which establish the material elements. [17]

The test of sufficiency of the facts alleged in a complaint to constitute a


cause of action is whether, admitting the facts alleged, the court could render a
valid judgment upon the same in accordance with the prayer of the petition or
complaint.[18] To determine whether the complaint states a cause of action, all
documents attached thereto may, in fact, be considered, particularly when referred
to in the complaint.[19] We emphasize, however, that the inquiry is into the
sufficiency, not the veracity of the material allegations in the complaint. [20] Thus,
consideration of the annexed documents should only be taken in the context of
ascertaining the sufficiency of the allegations in the complaint.
Petitioner argues that the complaint fails to state a cause of action since
reference to the sales invoices attached to and cited in paragraph six of
the Complaint shows that it was not her who purchased and received the goods
from respondent.
Contrary to petitioners stance, we find that the Complaint sufficiently states
a cause of action. The following allegations in the complaint adequately make up a
cause of action for collection of sum of money against petitioner: (1) that petitioner
and her husband obtained beer and other products worth a total of P138,502.92 on
credit from respondent; and (2) that they refused to pay the said amount despite
demand.
As correctly held by the CA, the sales invoices are not actionable documents.
They were not the bases of respondents action for sum of money but were attached
to the Complaint only to provide details on the alleged transactions. They were
evidentiary in nature and not even necessary to be stated or cited in the Complaint.
At any rate, consideration of the attached sales invoices would not change
our conclusion. The sales invoices, naming Total as the purchaser of the goods, do
not absolutely foreclose the probability of petitioner being liable for the amounts
reflected thereon. An invoice is nothing more than a detailed statement of the
nature, quantity, and cost of the thing sold and has been considered not a bill of
sale.[21] Had the case proceeded further, respondent could have presented
evidence linking these sales invoices to petitioner.

In Pea v. Court of Appeals,[22] petitioners therein likewise argued that the


sales invoices did not show that they had any involvement in the transactions
covered by the same. What the Court said in reply to this argument bolsters our
view in this petition:
Although it appears in the other sales invoices that the
petitioners were the salespersons who brokered the sales of the
products covered by the said sales invoices to the vendees therein
named, the said entries are not conclusive of the extent and the
nature of the involvement of the petitioners in the sales of the products
under the said sales invoices which are not absolutely binding. They
may be explained and put to silence by all the facts and circumstances
characterizing the true import of the dealings to which they refer. The
facts contained in the said sales invoices may be contradicted by oral
testimony.[23]

WHEREFORE, premises considered, the Court of Appeals Decision dated


September 4, 2007 and Resolution dated January 31, 2008 are AFFIRMED.
SO ORDERED.

ANTONIO EDUARDO B. NACHURA


Associate Justice

NM Rothschild v. Lepanto, G.R. No. 175799, November 28, 2011


(Supra.)
Evangelista v. Santiago, G.R. No. 157447, April 29, 2005 (Supra.)

Paid, Waived, Abandoned, Extinguished


Star Two v. Ko, G.R. No. 185454, March 23, 2011
G.R. No. 185454

March 23, 2011

STAR
TWO
vs.
HOWARD KO, MIN MIN
ONG, Respondents.

(SPV-AMC),
SEE

KO,

JIMMY

INC., Petitioner,
ONG,

and

GRACE

NG

RESOLUTION
NACHURA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Court of Appeals (CA) Decision 1 dated October
15, 2008 and Resolution2 dated November 13, 2008 in CA-G.R. SP No. 101417.
The facts of the case, as found by the CA, are as follows:
Jianshe Motorcycle Industries Philippines Corporation (Jianshe) obtained various
credit facilities or loan accommodations from Rizal Commercial Banking Corporation
(RCBC) from 2003-2004 to finance its importation of motorcycles, motorcycle parts,
motorcycle accessories, and other related goods. To secure the goods imported by
Jianshe, RCBC required it to execute trust receipts over these goods. Moreover, to
secure payment of all existing and future obligations of Jianshe to RCBC,
respondents Howard Ko, Jimmy Ong, Min Min See Ko, and Grace Ng Ong executed a
Comprehensive Surety Agreement3 dated September 3, 2002, with a limited liability
ofP50 M.4
Despite demand, Jianshe failed to pay its obligations. RCBC thus filed a
Complaint5 for Specific Perfomance with Prayer for a Writ of Preliminary Attachment
against Jianshe as principal and respondents as sureties, before the Regional Trial
Court (RTC) of Makati City on December 27, 2005. The case was raffled to Branch
132 and docketed as Civil Case No. 05-1146.6
In an Order7 dated January 11, 2006, the RTC directed the issuance of a writ of
preliminary attachment against all the properties of Jianshe and respondents as
may be sufficient to satisfy RCBCs principal claim ofP25,636,339.40 conditioned
upon the filing of the required bond. The corresponding writ of preliminary
attachment was thereafter issued.
On February 6, 2006, Howard Ko and Min Min See Ko filed a Motion to Discharge
Preliminary Attachment8 for having been improperly or irregularly issued. RCBC,
however, opposed the motion. 9 On March 17, 2006, Howard Ko filed a Motion to
Dismiss10 on the ground that RCBCs claim had already been paid, waived,
abandoned, or otherwise extinguished. Min Min See Ko adopted Howard Kos
motion.
On June 15, 2006, the RTC ordered the immediate discharge of the attachment
issued against Howard Ko and Min Min See Ko, but denied Howard Kos Motion to
Dismiss.11
Unsatisfied, Howard Ko and RCBC filed their respective Motions for Reconsideration.
Howard Ko likewise filed a Motion to Set Case for Hearing for Reception of
Evidence.12
In an Order13 dated December 13, 2006, the RTC granted Howard Kos motion and
accordingly dismissed the case against respondents, leaving Jianshe as the only

defendant. In dismissing the case, the trial court stated that there was sufficient
evidence to prove that Howard Ko paid an amount more than the limit provided
under the Comprehensive Surety Agreement.14
Aggrieved by the dismissal of the case against respondents, RCBC filed a Motion for
Partial Reconsideration.15 It likewise filed a Manifestation/Substitution of
Parties,16 considering that it had sold, transferred, and assigned all its rights and
interests in the present case to petitioner Star Two (SPV-AMC), Inc.
On August 31, 2007, the RTC denied RCBCs motion for reconsideration, but granted
the inclusion of petitioner as plaintiff in substitution of RCBC. 17
Petitioner thus elevated the matter to the CA through a petition for certiorari under
Rule 65 of the Rules of Court. 18 On October 15, 2008, the CA rendered the assailed
Decision19 denying petitioners petition. The CA also denied its motion for
reconsideration on November 13, 2008. Hence, this petition raising the following
errors:
THE HONORABLE COURT [OF] APPEALS GRAVELY ERRED IN DISMISSING THE
PETITION AND AFFIRMING THE DECISION OF THE TRIAL COURT, CONSIDERING THAT:
1) THE TRIAL COURT ARBITRARILY AND WHIMSICALLY CONSIDERED AND
RELIED ON DOCUMENTS WHICH WERE NOT DULY IDENTIFIED BY TESTIMONY
OR OFFERED IN EVIDENCE;
2) IT HAS NOT BEEN ESTABLISHED THAT RESPONDENT HOWARD KO, AS
SURETY OF JIANSHE, HAS PAID AMOUNTS OVER THE P50 MILLION CAP UNDER
THE COMPREHENSIVE SURETY AGREEMENT; AND
3) SUPPOSED PAYMENTS OF HOWARD KO, AS STATED IN THE DECISION OF
THE TRIAL COURT, ONLY AMOUNT TO P46,539,134.42, WHICH IS STILL BELOW
THE P50 MILLION CAP UNDER THE COMPREHENSIVE SURETY AGREEMENT. 20
The petition is without merit.
At the outset, we settle the procedural question raised by petitioner on the
admissibility of the documentary evidence presented by respondents in support of
the dismissal of the case against them. It is petitioners postulation that the trial
court should not have relied on the documents presented by respondents as they
were not formally offered in evidence.
We do not agree.
Indeed, courts cannot consider evidence which has not been formally offered
because parties are required to inform the courts of the purpose of introducing their
respective exhibits to assist the latter in ruling on their admissibility in case an
objection thereto is made. Without a formal offer of evidence, courts are
constrained to take no notice of the evidence even if it has been marked and
identified.21

This rule, however, admits of an exception, provided that the evidence has been
identified by testimony duly recorded and that it has been incorporated in the
records of the case.22
In this case, the subject pieces of evidence were presented in support of
respondents motion for reconsideration of the denial of their motion to dismiss. A
hearing was set for the reception of their evidence, but petitioner failed to attend
the same. The pieces of evidence were thus identified, marked in evidence, and
incorporated in the records of the case. Clearly, the trial court correctly admitted
and considered the evidence of respondents warranting the dismissal of their case.
Now on the substantive aspect.
Respondents acted as sureties under the Comprehensive Surety Agreement to
secure the obligations of Jianshe to RCBC. A contract of suretyship is an agreement
whereby a party, called the surety, guarantees the performance by another party,
called the principal or obligor, of an obligation or undertaking in favor of another
party, called the obligee.23 The surety agreement is an accessory contract; and the
surety becomes directly, primarily, and equally bound with the principal as the
original promissor although the former possesses no direct or personal interest over
the latters obligations and does not receive any benefit therefrom. 24
Pursuant to Article 2054 of the Civil Code that "a guarantor [or surety] may bind
himself for less, but not for more than the principal debtor, both as regards the
amount and the onerous nature of the conditions," respondents limited their liability
to P50 M, which is less than Jianshes liability to RCBC. Howard Ko complied with his
obligations and made payments to RCBC through the following modes:
First mode of payment: certificates of time deposit of Howard Ko and Howard Ko
and/or Harry Ko which were admitted by RCBC as applied for the payment of
Jianshes obligation.
Second mode of payment: official receipts and trust receipt debit advices which
were debited from Howard Kos current account (1-155-13110-1) and savings
account (1-155-30805-9) and applied as payment to Jianshes obligation.
Third mode of payment: certificates of time deposit of Howard Ko which were
withdrawn upon maturity and deposited to Jianshes RCBC Savings Account No. 1166-30810-6. Thereafter, the said amounts were debited by RCBC as payment to
several trust receipts issued to [Jianshe].
Fourth mode of payment: certificates of time deposit of Harry Ko and Liu Guo Xuan
which were admitted as payment by RCBC. The proceeds of these CTDs were
borrowed by Howard Ko from Harry Ko and Liu Guo Xuan to be applied as payment
for Jianshes obligations.25
These modes of payment were adequately explained by respondents and supported
by documentary evidence. We quote with approval the CAs observations in this
wise:

The evidence in favor of the [respondents] consisted of no less than RCBC


documents showing that said bank debited from their various accounts the amounts
which Jianshe owed RCBC under the trust receipts. In the subject petition, the
petitioner has not claimed that these evidence were fabricated. It cannot say that, if
present at the hearing or, if there would be another hearing, it could prove that the
RCBC documents were false.1awphi1 It cannot because those were genuine RCBC
documents.
All it can say is that these were payments for "a different credit line" or different
"trust receipts" secured by the Comprehensive Surety Agreement which remains
unpaid.
Petitioner, however, could not even allege the specific "different credit line" or other
trust receipt. In the absence thereof, it could only mean that the payments were for
the Jianshe accounts.
Granting arguendo that the receipts and trust debit advices were for "a different
credit line" or different "trust receipts," it is immaterial as the [respondents], as
sureties, have already exceeded their liability cap of P50 M.
Petitioner further argues that [respondent] Howard Kos claim of overpayment is
incredible because he would not have paid the alleged amount of P89,656,002.67
as surety when his liability as such was only P50 M. In this regard, suffice it to state
that not all payments were direct as some were debited by RCBC from the accounts
of [Howard Ko]. So, he would not have known of the amounts he had paid in favor of
Jianshe at the time they were debited by RCBC. 26
The Court notes that the pieces of evidence presented by respondents were
documents, such as official receipts, trust debit advices, and passbooks, issued by
no less than petitioner itself. Payments were made by respondents through the
active participation of RCBC, primarily by debiting the subject amounts from
respondents accounts with the bank. Admittedly, it was Jianshe, as the principal,
which owed RCBC. Nowhere in petitioners pleadings was it claimed that
respondents also owed the bank aside from their obligation as surety to secure the
principal obligation of Jianshe. Undoubtedly, the debited amounts from Howard Kos
accounts were made to satisfy his obligation as surety. Petitioner cannot now claim
that the payments were made by Jianshe as principal and not by respondents as
sureties simply because the receipts were issued in the name of Jianshe. As aptly
observed by the CA, the issuance of the receipts in the name of Jianshe was done
only to indicate that it was the principal obligor. The issuance of the receipts does
not erase the fact that various amounts were debited from the accounts of Howard
Ko, and certificates of time deposit in the name of Howard Ko were applied as
payment for Jianshes obligations.
In view of the foregoing, the CA did not err in sustaining the dismissal of the case
against respondents as the claim or demand set forth in the complaint has been
paid or otherwise extinguished.

WHEREFORE, premises considered, the petition is hereby DENIED for lack of merit.
The Court of Appeals Decision dated October 15, 2008 and Resolution dated
November 13, 2008 in CA-G.R. SP No. 101417 are AFFIRMED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

Urethane v. Ong, G.R. No. 164632, October 29, 2008


THIRD DIVISION

URETHANE TRADING SPECIALIST, INC.,


Petitioner,

G.R. No. 164632


Present:

- versus -

EDWIN ONG and LETICIA ONG,


Respondents.

YNARES-SANTIAGO, J.,
Chairperson,
CARPIO,*
AZCUNA,**
CHICO-NAZARIO, and
NACHURA, JJ.
Promulgated:
October 29, 2008

x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the February 12, 2004 [1]and the July 26, 2004 [2] Resolutions
of the Court of Appeals (CA) in CA-G.R. SP No 79251.
The dispute between the parties started in June 2000 when petitioner filed a
Complaint[3] for sum of money against the respondents (docketed as Civil Case No.
8142) before the Metropolitan Trial Court (MeTC) of Pasig City. In the proceedings,
respondents were declared in default, and petitioner presented evidence ex parte.
[4]
On October 30, 2001, the MeTC rendered its Decision [5] ordering respondents,

jointly and severally, to pay the petitioner P295,026.01 with legal interest as actual
damages, and 25% thereof as attorneys fees.
Following the finality of the said decision, petitioner moved for execution
on January 10, 2002.[6] No opposition having been filed, the MeTC, on March 18,
2002, ordered the issuance of a writ of execution. [7]
On July 9, 2002, respondents filed a petition for annulment of judgment with
damages and prayer for injunctive relief before the Regional Trial Court (RTC)
of Pasig City. This was docketed as Civil Case No. 69034. [8] In their petition, they
claimed that they did not receive the summons issued by the MeTC; that the
sheriffs return of summons was manufactured; and that they were not furnished
copies of the order of default. Thus, they prayed that the MeTC decision be annulled
on grounds of extrinsic fraud and lack of jurisdiction over their persons. [9]
Petitioner moved for the dismissal of the petition on the following grounds:
(1) that the cause of action is barred by the statute of limitation; and (2) that the
claim or demand set forth in the petition has been waived, abandoned or otherwise
extinguished. It contended that the summons was in fact served on respondents;
that the MeTC Sheriff initially went to the business address of respondent Leticia
Ong at Nos. 777-779 Rizal Avenue, Manila, but as the hardware store therein had
already ceased its operation, he could not serve the summons at that given
address; that he then proceeded to respondents residence, but that on account of
the absence of respondents and of their domestic helpers refusal to receive the
summons, the Sheriff effected substituted service. [10] Petitioner further contended
that respondent Edwin Ong, in the hearing on their application for an injunctive
relief, admitted that he had attended one hearing in the proceedings before the
MeTC.[11]
Petitioner argued that in light of these facts, respondents cannot validly
invoke lack of jurisdiction over their persons as a ground in their petition; that only
extrinsic fraud could be raised by them; and as they did not file a petition for relief,
they were already barred by the statute of limitations and they could now be
considered as having waived or abandoned their claims. [12]
Unconvinced by petitioners arguments, the RTC denied the motion to dismiss
in its April 4, 2003 Omnibus Order.[13] OnAugust 8, 2003, it further denied
petitioners motion for reconsideration.[14]
Discontented, petitioner timely petitioned for the issuance of a writ
of certiorari before the CA (docketed as CA-G.R. SP No. 79251). The appellate court,
however, in the assailed February 12, 2004 Resolution,[15] dismissed the petition on
the ground that an interlocutory order is not the proper subject of the special civil
action of certiorari. In the further assailed July 26, 2004Resolution,[16] it denied
petitioners motion for reconsideration.
Aggrieved, petitioner raised the following issues for the Courts resolution in
the instant petition for review on certiorari:
I.

Whether or not, under existing laws, the Petition for Annulment of


Judgment filed by Respondents should be dismissed on two (2)
grounds, namely: (1) That the cause of action is barred by the statutes
of limitation or by laches; and (2) The claim or demand set forth in the
plaintiffs petition has been waived, abandoned, or otherwise
extinguished.
II.
Whether or not the Petition for Review [should be petition
for certiorari] filed by the Petitioner should be dismissed on the
ground that an order denying a motion to dismiss is an interlocutory
order which cannot be the subject of a petition for certiorari.[17]
The Court denies the petition and affirms the ruling of the CA.
Well-entrenched in our jurisdiction is the rule that the trial courts denial of
a motion to dismiss cannot be questioned in acertiorari proceeding under Rule 65 of
the Rules of Court. This is because a certiorari writ is a remedy designed to correct
errors of jurisdiction and not errors of judgment. [18] The appropriate course of action
of the movant in such event is to file an answer [19]and interpose as affirmative
defenses the objections raised in the motion to dismiss.[20] If, later, the decision of
the trial judge is adverse, the movant may then elevate on appeal the same issues
raised in the motion.[21]
The only exception to this rule is when the trial court gravely abused its
discretion in denying the motion. [22] This exception is, nevertheless, applied
sparingly, and only in instances when there is a clear showing that the trial court
exercised its judicial power in an arbitrary or despotic manner by reason of passion
or personal hostility.[23] Further, the abuse of the courts discretion must be
so patent and gross as to amount to an evasion of a positive duty or a virtual refusal
to perform the duty enjoined by, or to act at all in contemplation of, law. [24]
Here, the denial by the RTC of petitioners motion to dismiss is not tainted
with grave abuse of discretion. The CA is, therefore, correct in dismissing the
petition for certiorari.
To elucidate, the grounds raised in the motion are: (1) bar by the statute of
limitations or by laches; and (2) waiver, abandonment or extinguishment of claim.
These grounds are, however, based on petitioners assertion that respondents
cannot invoke lack of jurisdiction over their persons as a ground in the petition for
annulment of judgment. This is a conclusion of law that cannot be used as the
foundation of the motion to dismiss. The assertion still needs to be proven or
disproven by the parties and resolved by the trial court. Indeed, petitioners
allegations in the motion that respondents actually received the summons and that
one of them even voluntarily submitted to the jurisdiction of the MeTC, are matters
of evidence that need to be threshed out in the trial. True or not, respondents must

be given ample opportunity to prove their claim, and the petitioner to debunk the
same.[25]
The same principle holds true on the issues of laches, abandonment and
prescription alleged in the motion. These involve evidentiary matters requiring a
full-blown trial on the merits and cannot be resolved in a mere motion to dismiss.
[26]
Furthermore, prescription will warrant the dismissal of the case only when the
complaint on its face shows that indeed the action has already prescribed. [27]
WHEREFORE, the petition for review on certiorari is DENIED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice

Fernando v. Acuna, G.R. No. 161030, September 14, 2011

Republic of the Philippines


Supreme Court
Manila

FIRST DIVISION

JOSE FERNANDO, JR., ZOILO


FERNANDO, NORMA FERNANDO
BANARES, ROSARIO FERNANDO
TANGKENCGO, HEIRS OF TOMAS
FERNANDO, represented by
ALFREDO V. FERNANDO, HEIRS
OF GUILLERMO FERNANDO,
represented by Ronnie H.

G.R. No. 161030


Present:
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,

Fernando, HEIRS OF ILUMINADA


FERNANDO, represented by
Benjamin Estrella and HEIRS OF
GERMOGENA FERNANDO,
Petitioners,

BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

- versus LEON ACUNA, HERMOGENES


FERNANDO, HEIRS OF SPOUSES
ANTONIO FERNANDO AND FELISA
CAMACHO, represented by
HERMOGENES FERNANDO,
Respondents.
Promulgated:
September 14, 2011
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
LEONARDO-DE CASTRO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure seeking to reverse and set aside the Decision [1] dated November 24,
2003 of the Court of Appeals in CA-G.R. CV No. 75773, entitled Jose Fernando, Jr.,
et al. v. Heirs of Germogena Fernando, et al., which reversed and set aside the
Decision[2] dated May 16, 2002 of Branch 84, Regional Trial Court (RTC) of Malolos,
Bulacan in Civil Case No. 256-M-97.
At the heart of this controversy is a parcel of land covered by Original
Certificate of Title (OCT) No. RO-487 (997) [3]registered in the names of Jose A.
Fernando, married to Lucila Tinio, and Antonia A. Fernando, married to Felipe
Galvez, and located in San Jose, Baliuag, Bulacan. When they died intestate, the
property remained undivided. Petitioners herein namely, Jose Fernando, Jr., Zoilo
Fernando, Norma Fernando Banares, Rosario Fernando Tangkencgo, the heirs of
Tomas Fernando, the heirs of Guillermo Fernando, the heirs of Iluminada Fernando
and the heirs of Germogena Fernando are the heirs and successors-in-interest of
the deceased registered owners. However, petitioners failed to agree on the
division of the subject property amongst themselves, even after compulsory
conciliation before the Barangay Lupon.

Thus, petitioners, except for the heirs of Germogena Fernando, filed a


Complaint[4] for partition on April 17, 1997 against the heirs of Germogena
Fernando. In the Complaint, plaintiffs alleged, among others, that they and
defendants are common descendants and compulsory heirs of the late spouses Jose
A. Fernando and Lucila Tinio, and the late spouses Antonia A. Fernando and Felipe
Galvez. They further claimed that their predecessors-in-interest died intestate and
without instructions as to the disposition of the property left by them covered by
OCT No. RO-487 (997). There being no settlement, the heirs are asking for their
rightful and lawful share because they wish to build up their homes or set up their
business in the respective portions that will be allotted to them. In sum, they
prayed that the subject property be partitioned into eight equal parts,
corresponding to the hereditary interest of each group of heirs.
In their Answer[5] filed on May 20, 1997, defendants essentially admitted all
of the allegations in the complaint. They alleged further that they are not opposing
the partition and even offered to share in the expenses that will be incurred in the
course of the proceedings.
In his Complaint in Intervention[6] filed on January 12, 1998, respondent Leon
Acuna (Acuna) averred that in the Decision[7] dated November 29, 1929 of the
Cadastral Court of Baliuag, Bulacan, the portion of the property identified as Lot
1303 was already adjudicated to: (a) Antonio Fernando, married to Felisa Camacho;
(b) spouses Jose Martinez and Gregoria Sison; (c) spouses Ignacio de la Cruz and
Salud Wisco; and (d) Jose Fernando, married to Lucila Tinio, the petitioners
predecessor-in-interest. He likewise claimed that in a 1930 Decision of the
Cadastral Court, the portion identified as Lot 1302 was also already adjudicated to
other people as well.
Respondent Acuna further alleged that Salud Wisco, through her authorized
attorney-in-fact, Amador W. Cruz, sold her lawful share denominated as Lot 1303-D
with an area of 3,818 square meters to Simeon P. Cunanan, [8] who in turn sold the
same piece of land to him as evidenced by a Deed of Sale. [9] He also belied
petitioners assertion that the subject property has not been settled by the parties
after the death of the original owners in view of the Decision [10] dated July 30, 1980
of the Court of First Instance (CFI) of Baliuag, Bulacan, in LRC Case No. 80-389 which
ordered the Register of Deeds of Bulacan to issue the corresponding certificates of
title to the claimants of the portion of the subject property designated as Lot 1302.
[11]
Norma Fernando, one of the petitioners in the instant case, even testified in LRC
Case No. 80-389. According to respondent Acuna, this circumstance betrayed bad
faith on the part of petitioners in filing the present case for partition.

Respondent Acuna likewise averred that the action for partition cannot
prosper since the heirs of the original owners of the subject property, namely
Rosario, Jose Jr., Norma, Tomas, Guillermo, Leopoldo, Hermogena, Illuminada and
Zoilo, all surnamed Fernando, and Lucila Tinio, purportedly had already sold their
respective one-tenth (1/10) share each in the subject property to Ruperta Sto.
Domingo Villasenor for the amount of P35,000.00 on January 25, 1978 as evidenced
by a Kasulatan sa Bilihang Patuluyan.[12] He added that he was in possession of
the original copy of OCT No. RO-487 (997) and that he had not commenced the
issuance of new titles to the subdivided lots because he was waiting for the owners
of the other portions of the subject property to bear their respective shares in the
cost of titling.
Subsequently, a Motion for Intervention [13] was filed on June 23, 1998 by
respondent Hermogenes Fernando (Hermogenes), for himself and on behalf of the
heirs of the late spouses, Antonio A. Fernando and Felisa Camacho. According to
him, in the July 30, 1980 Decision of the CFI of Bulacan, their predecessors-ininterest had already been adjudged owners of Lots 1302-A, 1302-F, 1302-G,
[14]
1302-H and 1302-J of OCT No. RO-487 (997) and any adverse distribution of the
properties would cause respondents damage and prejudice. He would also later
claim, in his Answer-in-Intervention,[15] that the instant case is already barred by res
judicata and, should be dismissed.
In the interest of substantial justice, the trial court allowed the respondents to
intervene in the case.
The plaintiffs and defendants jointly moved to have the case submitted for
judgment on the pleadings on May 7, 1999.[16] However, the trial court denied said
motion in a Resolution[17] dated August 23, 1999 primarily due to the question
regarding the ownership of the property to be partitioned, in light of the intervention
of respondents Acuna and Hermogenes who were claiming legal right thereto.
In their Manifestation[18] filed on April 12, 2000, petitioners affirmed their
execution of a Deed of Sale in favor of Ruperta Sto. Domingo Villasenor in 1978,
wherein they sold to her 1,000 square meters from Lot 1303 for the sum of
35,000.00.
After the pre-trial conference, trial ensued. On September 19, 2000,
petitioner Elizabeth Alarcon testified that they (plaintiffs) are not claiming the entire
property covered by OCT No. RO-487 (997) but only the area referred to as Lot 1303
andSapang Bayan. She also admitted that Lot 1302 had already been divided into
ten (10) sublots and allocated to various owners pursuant to the July 30, 1980
Decision of the CFI of Baliuag, Bulacan and these owners already have their own
titles. She likewise claimed that the entire area consisting of Lot 1303 and Sapang

Bayan is based on the subdivision plan of Lot 1303. She admitted that plaintiffs
predecessor-in-interest was only allocated a portion of Lot 1303 based on the said
plan. However, she claimed that the November 29, 1929 Decision subdividing Lot
1303 was never implemented nor executed by the parties. [19]
Petitioner Norma Fernando testified on October 3, 2000 that she is one of the
children of Jose A. Fernando and Lucila Tinio. She affirmed that plaintiffs were only
claiming Lot 1303 and Sapang Bayan. She also testified that Sapang Bayan was
supposedly included in Lot 1302 and was previously a river until it dried up. Unlike
Lot 1302, the rest of the property was purportedly not distributed. She likewise
averred that she is aware of a November 29, 1929 Decision concerning the
distribution of Lot 1303 issued by the cadastral court but insisted that the basis of
the claims of the petitioners over Lot 1303 is the title in the name of her ascendants
and not said Decision.[20]
On November 16, 2000, as previously directed by the trial court and agreed
to by the parties, counsel for respondent Hermogenes prepared and submitted an
English translation of the November 29, 1929 Decision. The same was admitted
and marked in evidence as Exhibit X [21] as a common exhibit of the parties. The
petitioners also presented Alfredo Borja, the Geodetic Engineer who conducted a
relocation survey of the subject property.
After plaintiffs rested their case, respondent Hermogenes testified on
December 7, 2000. In his testimony, he claimed to know the plaintiffs and
defendants as they were allegedly his relatives and neighbors. He confirmed that
according to the November 29, 1929 Decision, portions of Lot 1303 was designated
as Lots 1303-A, 1303-B, 1303-C and 1303-D which were adjudicated to certain
persons, including Jose Fernando, while the rest of Lot 1303 was adjudicated to his
parents, Antonio A. Fernando married to Felisa Camacho. According to respondent
Hermogenes, his familys tenant and the latters children occupied the portion of Lot
1303 allotted to his (Hermogenes) parents while the rest of Lot 1303 was occupied
by the persons named in the said November 29, 1929 Decision. He admitted,
however, that nobody among the purported possessors of Lot 1303 registered the
lots assigned to them in the Decision.[22]
On January 18, 2001, respondent Hermogenes presented a witness, Engineer
Camilo Vergara who testified that the subject land is divided into Lots 1302 and
1303 with a creek dividing the two lots known as Sapang Bayan. He also identified
a Sketch Plan numbered as PSD-45657 and approved on November 11, 1955.
[23]
During the hearing on January 30, 2001, respondent Hermogenes made an oral
offer of his evidence and rested his case. On the same date, respondent Acuna, in
lieu of his testimony, offered for the parties to simply stipulate on the due execution
and authenticity of the Deeds of Sale dated April 6, 1979 and December 28,

1980, showing the transfer of Lot 1303-D from Salud Wisco to Simeon Cunanan
and subsequently to respondent Acuna. When counsel for plaintiffs and defendants
agreed to the stipulation, albeit objecting to the purpose for which the deeds of sale
were offered, the trial court admitted Acunas exhibits and Acuna rested his case. [24]
On February 15, 2001, plaintiffs recalled Norma Fernando as a rebuttal
witness. In her rebuttal testimony, she identified the tax declaration [25] over the
said property in the name of Jose A. Fernando; an official receipt [26] dated October 3,
1997 issued by the Office of the Treasurer of the Municipality of Baliuag, Bulacan for
payment of real property taxes from 1991 to 1997; and a real property tax
clearance[27] dated October 6, 1997, to show that plaintiffs have allegedly been
paying the real property taxes on the entire property covered by OCT No. RO-487
(997). However, she further testified that they were now willing to pay taxes only
over the portion with an area of 44,234 square meters, which is included in their
claim.[28]
In a Decision dated May 16, 2002, the trial court ruled that plaintiffs and
defendants (petitioners herein) were indeed the descendants and successors-ininterest of the registered owners, Jose A. Fernando (married to Lucila Tinio) and
Antonia Fernando (married to Felipe Galvez), of the property covered by OCT No.
RO-487 (997). After finding that the parties admitted that Lot 1302 was already
distributed and titled in the names of third persons per the July 30, 1980 Decision of
the CFI of Baliuag, Bulacan the trial court proceeded to rule on the allocation of Lot
1303 and Sapang Bayan.
With respect to Lot 1303, the trial court found that the November 29, 1929
Decision of the Cadastral Court, adjudicating said lot to different persons and
limiting Jose Fernandos share to Lot 1303-C, was never implemented nor executed
despite the lapse of more than thirty years. Thus, the said decision has already
prescribed and can no longer be executed. The trial court ordered the reversion of
Lot 1303 to the ownership of spouses Jose A. Fernando and Lucila Tinio and spouses
Antonia A. Fernando and Felipe Galvez under OCT No. RO-487 (997) and allowed the
partition of Lot 1303 among petitioners as successors-in-interest of said registered
owners. Excluded from the partition, however, were the portions of the property
which petitioners admitted had been sold or transferred to Ruperta Sto. Domingo
Villasenor and respondent Acuna.
As for the ownership of Sapang Bayan, the trial court found that the same
had not been alleged in the pleadings nor raised as an issue during the pre-trial
conference. Also, according to the trial court, the parties failed to clearly show
whether Sapang Bayanwas previously a dry portion of either Lot 1302 or Lot
1303. Neither was there any proof that Sapang Bayan was a river that just dried up
or that it was an accretion which the adjoining lots gradually received from the

effects of the current of water. It was likewise not established who were the owners
of the lots adjoining Sapang Bayan. The trial court concluded that none of the
parties had clearly and sufficiently established their claims over Sapang Bayan.
The dispositive portion of the May 16, 2002 Decision of the trial court reads:
WHEREFORE, all the foregoing considered, judgment is hereby
rendered ordering the reversion of Lot 1303, except the portions
allotted to Acuna and Ruperta Sto. Domingo Villasenor, to the
ownership of Jose Fernando and Lucia Tinio and Antonia Fernando and
Felipe Galvez under OCT No. 997 and thereafter allowing the partition
of said Lot 1303 among the plaintiffs and the defendants as
successors-in-interest of Jose and Lucia as well as Antonia and Felipe
after the settlement of any inheritance tax, fees, dues and/or
obligation chargeable against their estate. [29]

All the parties, with the exception of respondent Acuna, elevated this case to
the Court of Appeals which rendered the assailed November 24, 2003 Decision, the
dispositive portion of which reads:
WHEREFORE, premises considered, the decision dated May 16,
2002, of the Regional Trial Court of Malolos, Bulacan, Third Judicial
Region, Branch 84, in Civil Case No. 256-M-97, is hereby REVERSED
and SET ASIDE and the complaint dated April 17, 1997 filed by
plaintiffs-appellants is dismissed. Costs against plaintiffs-appellants. [30]

Hence, plaintiffs and defendants in the court a quo elevated the matter for
our review through the instant petition.
Petitioner raises the following issues for consideration:
1.

Whether or not the ownership of Lot 1303 and the Sapang Bayan
portion of the piece of land covered by O.C.T. No. RO-487 (997) or Plan
Psu-39080 should revert to the descendants and heirs of the late spouses
Jose Fernando and Lucila Tinio and Antonia Fernando, married to Felipe
Galvez;

2.

Whether or not a title registered under the Torrens system, as the


subject original certificate of title is the best evidence of ownership of land
and is a notice against the world.[31]

The petition is without merit.

Petitioners based their claims to the disputed areas designated as Lot 1303
and Sapang Bayan on their ascendants title, OCT No. RO-487 (997), which was
issued on February 26, 1927 in the name of Jose A. Fernando married to Lucila Tinio
and Antonia A. Fernando married to Felipe Galvez. The Court now rules on these
claims in seriatim.
Petitioners claim with respect to Lot 1303
As the records show, in the November 29, 1929 Decision of the Cadastral
Court of Baliuag, Bulacan (in Cadastral Record No. 14, GLRO Cad. Record No. 781)
which was written in Spanish, Lot 1303 had already been divided and adjudicated to
spouses Jose A. Fernando and Lucila Tinio; spouses Antonia A. Fernando and Felipe
Galvez; spouses Antonio A. Fernando and Felisa Camacho; spouses Jose Martinez
and Gregoria Sison; and spouses Ignacio de la Cruz and Salud Wisco from whom
respondent Acuna derived his title. The English translation of the said November
29, 1929 Decision was provided by respondent Hermogenes and was adopted by all
the parties as a common exhibit designated as Exhibit X. The agreed English
translation of said Decision reads:
Lot No. 1303 This lot is decreed in record No. 448, G.L.R.O.
Record No. 25414 and actually with Original Certificate No. 997
(exhibited today) in the name of Jose A. Fernando and Antonia A.
Fernando, who now pray that said lot be subdivided in accordance with
the answers recorded in the instant cadastral record, and the sketch,
Exh. A, which is attached to the records.
A part or portion of the lot has been claimed by Antonio A.
Fernando, of legal age, married to Felisa Camacho; another portion by
the spouses Jose Martinez and Gregoria Sison; another portion by
Antonia A. Fernando, of legal age, married to Felipe Galvez; another
portion by Jose A. Fernando, of legal age, married to Lucila Tinio; and
another portion by the spouses Ignacio de la Cruz and Salud Wisco,
both of legal age. The part claimed by the spouses Jose A. Martinez and
Gregoria Sison is Lot 1303-A of Exh. A; the part claimed by Antonia A.
Fernando is Lot 1303-B of said exhibit; the part claimed by Jose A.
Fernando is Lot 1303-C of said exhibit, and the part claimed by the
spouses Ignacio de la Cruz and Salud Wisco is Lot 1303-D of the
aforementioned Exhibit.
The subdivision of said lot is hereby ordered, separating from
the same the portions that correspond to each of the claimants, which
portions are known as Lots 1303-A, 1303-B, 1303-C, and 1303-D in the
sketch, Exh. A, and once subdivided, are adjudicated in favor of the
spouses, Jose Martinez and Gregoria Sison, of legal age, Lot No. 1303A, in favor of Antonia A. Fernando, of legal age, married to Felipe
Galvez, Lot No. 1303-B; in favor of Jose A. Fernando, of legal age,
married to Lucila Tinio, Lot 1303-C; in favor of the spouses Ignacio de

la Cruz and Salud Wisco, of legal age, Lot 1303-D; and the rest of Lot
1303 is adjudged in favor of Antonio A. Fernando married to Felisa
Camacho. It is likewise ordered that once the subdivision plan is
approved, the same be forwarded by the Director of Lands to this Court
for its final decision.
It is ordered that the expense for mentioned subdivision, shall be
for the account of the spouses Jose Martinez and Gregoria Sison,
Antonia A. Fernando, Jose A. Fernando, the spouses Ignacio de la Cruz
and Salud Wisco, and Antonio A. Fernando. [32]

From the foregoing, it would appear that petitioners ascendants themselves


petitioned for the cadastral court to divide Lot 1303 among the parties to the 1929
case and they were only allocated Lots 1303-B and 1303-C. Still, as the trial court
noted, the November 29, 1929 Decision was never fully implemented in the sense
that the persons named therein merely proceeded to occupy the lots assigned to
them without having complied with the other directives of the cadastral court which
would have led to the titling of the properties in their names. Nonetheless, it is
undisputed that the persons named in the said November 29, 1929 Decision and,
subsequently, their heirs and assigns have since been in peaceful and uncontested
possession of their respective lots for more than seventy (70) years until the filing of
the suit for partition on April 17, 1997 by petitioners which is the subject matter of
this case. Respondent Hermogenes, who testified that petitioners were his relatives
and neighbors, further affirmed before the trial court that the persons named in the
November 29, 1929 Decision took possession of their respective lots:

ATTY. VENERACION:
Q

This Jose A. Fernando married to Lucila Tinio, you testified


earlier are the parents of the plaintiffs. Did they take possession
of lot 1303-C?

Yes, sir. They took possession.

Did they take possession of the other lots?

No. Yes, the portion

The other lots in the name of the other persons. Did they take
possession of that?

Yes, they took took possession of the other No, sir.

I am asking you whether they took possession, the children

ATTY. SANTIAGO:

The questions are already answered, your Honor.


ATTY. VENERACION:
What is the answer?
ATTY. SANTIAGO:
Its in the record.
COURT:
The persons named in the Decision already took possession of
the lots allotted to them as per that Decision. So that was
already answered. Anything else?
ATTY. VENERACION;
No more question, Your Honor.[33]

It is noteworthy that petitioners do not dispute that the November 29, 1929
Decision of the cadastral court already adjudicated the ownership of Lot 1303 to
persons other than the registered owners thereof. Petitioners would, nonetheless,
claim that respondents purported failure to execute the November 29, 1929
Decision over Lot 1303 (i.e., their failure to secure their own titles) meant that the
entire Lot 1303 being still registered in the name of their ascendants rightfully
belongs to them. This is on the theory that respondents right to have the said
property titled in their names have long prescribed.
On this point, we agree with the appellate court.
Section 47 of Presidential Decree No. 1529, otherwise known as the Property
Registration Decree, states that [n]o title to registered land in derogation of the
title of the registered owner shall be acquired by prescription or adverse
possession. Thus, the Court has held that the right to recover possession of
registered land is imprescriptible because possession is a mere consequence of
ownership.[34]
However, in Heirs of Anacleto B. Nieto v. Municipality of Meycauayan,
Bulacan,[35] the Court had recognized the jurisprudential thread regarding the
exception to the foregoing doctrine that while it is true that a Torrens title is
indefeasible and imprescriptible, the registered landowner may lose his right to
recover possession of his registered property by reason of laches.

Thus, in Heirs of Batiog Lacamen v. Heirs of Laruan,[36] the Court had held that
while a person may not acquire title to the registered property through continuous
adverse possession, in derogation of the title of the original registered owner, the
heir of the latter, however, may lose his right to recover back the possession of such
property and the title thereto, by reason of laches.
In the more recent case of Bartola M. Vda. De Tirona v. Encarnacion,[37] we
similarly held that while jurisprudence is settled on the imprescriptibility and
indefeasibility of a Torrens title, there is equally an abundance of cases where we
unequivocally ruled that registered owners may lose their right to recover
possession of property through the equitable principle of laches.
Laches means the failure or neglect for an unreasonable and unexplained
length of time to do that which, by observance of due diligence, could or should
have been done earlier. It is negligence or omission to assert a right within a
reasonable time, warranting the presumption that the party entitled to assert his
right either has abandoned or declined to assert it. Laches thus operates as a bar in
equity.[38] The essential elements of laches are: (a) conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation complained
of; (b) delay in asserting complainants rights after he had knowledge of
defendants acts and after he has had the opportunity to sue; (c) lack of knowledge
or notice by defendant that the complainant will assert the right on which he bases
his suit; and (d) injury or prejudice to the defendant in the event the relief is
accorded to the complainant.[39]
In view of respondents decades long possession and/or ownership of their
respective lots by virtue of a court judgment and the erstwhile registered owners
inaction and neglect for an unreasonable and unexplained length of time in
pursuing the recovery of the land, assuming they retained any right to recover the
same, it is clear that respondents possession may no longer be disturbed. The
right of the registered owners as well as their successors-in-interest to recover
possession of the property is already a stale demand and, thus, is barred by
laches.
In the same vein, we uphold the finding of the Court of Appeals that the title
of petitioners ascendants wrongfully included lots belonging to third persons.
[40]
Indeed, petitioners ascendants appeared to have acknowledged this fact as
they were even the ones that prayed for the cadastral court to subdivide Lot 1303
as evident in the November 29, 1929 Decision. We concur with the Court of Appeals
that petitioners ascendants held the property erroneously titled in their names
under an implied trust for the benefit of the true owners. Article 1456 of the Civil
Code provides:

ART. 1456.
If property is acquired through mistake or fraud,
the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property
comes.

As aptly observed by the appellate court, the party thus aggrieved has the
right to recover his or their title over the property by way of reconveyance while the
same has not yet passed to an innocent purchaser for value. [41] As we held
in Medizabel v. Apao,[42] the essence of an action for reconveyance is that the
certificate of title is respected as incontrovertible. What is sought is the transfer of
the property, in this case its title, which has been wrongfully or erroneously
registered in another person's name, to its rightful owner or to one with a better
right. It is settled in jurisprudence that mere issuance of the certificate of title in
the name of any person does not foreclose the possibility that the real property may
be under co-ownership with persons not named in the certificate or that the
registrant may only be a trustee or that other parties may have acquired interest
subsequent to the issuance of the certificate of title. [43]
We cannot subscribe to petitioners argument that whatever rights or claims
respondents may have under the November 29, 1929 Decision has prescribed for
their purported failure to fully execute the same. We again concur with the Court of
Appeals in this regard. An action for reconveyance of registered land based on
implied trust prescribes in ten (10) years, the point of reference being the date of
registration of the deed or the date of the issuance of the certificate of title over the
property. However, this Court has ruled that the ten-year prescriptive period applies
only when the person enforcing the trust is not in possession of the property. If a
person claiming to be its owner is in actual possession of the property, the right to
seek reconveyance, which in effect seeks to quiet title to the property, does not
prescribe. The reason is that the one who is in actual possession of the land
claiming to be its owner may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right. [44]
Petitioners claim with respect to Sapang Bayan
As for the issue of the ownership of Sapang Bayan, we sustain the appellate
court insofar as it ruled that petitioners failed to substantiate their ownership over
said area. However, we find that the Court of Appeals erred in ruling that the
principle of accretion is applicable. The said principle is embodied in Article 457 of
the Civil Code which states that [t]o the owners of lands adjoining the banks of
rivers belong the accretion which they gradually receive from the effects of the
current of the waters. We have held that for Article 457 to apply the following
requisites must concur: (1) that the deposit be gradual and imperceptible; (2) that it

be made through the effects of the current of the water; and (3) that the land where
accretion takes place is adjacent to the banks of rivers. [45] The character of
the Sapang Bayan property was not shown to be of the nature that is being referred
to in the provision which is an accretion known as alluvion as no evidence had been
presented to support this assertion.
In fact from the transcripts of the proceedings, the parties could not agree
how Sapang Bayan came about. Whether it was a gradual deposit received from
the river current or a dried-up creek bed connected to the main river could not be
ascertained.
Even assuming that Sapang Bayan was a dried-up creek bed, under Article
420, paragraph 1[46] and Article 502, paragraph 1[47] of the Civil Code, rivers and
their natural beds are property of public dominion. In the absence of any provision
of law vesting ownership of the dried-up river bed in some other person, it must
continue to belong to the State.
We ruled on this issue in Republic v. Court of Appeals,[48] to wit:

The lower court cannot validly order the registration of Lots 1


and 2 in the names of the private respondents. These lots were
portions of the bed of the Meycauayan river and are therefore
classified as property of the public domain under Article 420 paragraph
1 and Article 502, paragraph 1 of the Civil Code of the Philippines. They
are not open to registration under the Land Registration act. The
adjudication of the lands in question as private property in the names
of the private respondents is null and void. [49]

Furthermore, in Celestial v. Cachopero,[50] we similarly ruled that a dried-up


creek bed is property of public dominion:

A creek, like the Salunayan Creek, is a recess or arm extending


from a river and participating in the ebb and flow of the sea. As such,
under Articles 420(1) and 502(1) of the Civil Code, the Salunayan
Creek, including its natural bed, is property of the public domain which
is not susceptible to private appropriation and acquisitive prescription.
And, absent any declaration by the government, that a portion of the
creek has dried-up does not, by itself, alter its inalienable character. [51]

Therefore, on the basis of the law and jurisprudence on the matter, Sapang
Bayan cannot be adjudged to any of the parties in this case.
WHEREFORE, premises considered, the petition is hereby DENIED. The
assailed Decision dated November 24, 2003 of the Court of Appeals in CA-G.R. CV
No. 75773 is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO


Associate Justice

Unenforceable
See: Art. 1403, Civil Code

Failure to comply with condition precedent


Exhaustion of Administrative Remedies
Earnest Efforts toward amicable settlement- Art. 151, Family Code
Certification of Non-Forum Shopping
Payment of Docket Fee
Demand to vacate/payment of rental- Sec. 2, Rule 70
Alternative Dispute Resolution
Referral to Katarungang Pambarangay
Secs. 399-422, 15, Local Government Code
SC Admin. Circular 1493
Morata v. Go, 125 SCRA 444 (1983)
G.R. No. L-62339 October 27, 1983

SPOUSES MARIA LUISA P. MORATA AND JULIUS MORATA, petitioners,


vs.
SPOUSES VICTOR GO and FLORA C. GO and HON. VALERIANO P. TOMOL, JR.,
Judge, Court of First Instance of Cebu, Branch XI, respondents.

Amado G. Olis for petitioners.


Paul G. Gorres for private respondents.

ESCOLIN., J.:
In this petition for certiorari and prohibition with prayer for writ of preliminary
injunction, the Court is called upon to determine the classes of actions which fall
within the coverage of Presidential Decree No. 1508, 1 otherwise known as
Katarungang Pambarangay Law. This law requires the compulsory process of
arbitration at the Barangay level as a pre-condition for filing a complaint in court,
Petitioners contend that said legislation is so broad and all-embracing as to apply to
actions cognizable not only by the city and municipal courts, now known as the
metropolitan trial courts and municipal trial courts, but also by the courts of first
instance, now the regional trial courts. Upon the other hand, respondents would
limit its coverage only to those cases falling within the exclusive jurisdiction of the
metropolitan trial courts and municipal trial courts.
The antecedent facts are not disputed. On August 5, 1982, respondents Victor Go
and Flora D. Go filed in the defunct Court of First Instance of Cebu, presided by
respondent Judge Valeriano P. Tomol, Jr., a complaint against petitioners Julius
Morata and Ma. Luisa Morata for recovery of a sum of money plus damages
amounting to P49,400.00. The case was docketed as Civil Case No. R-22154.
On the basis of the allegation in the complaint that the parties-litigants are all
residents of Cebu City, petitioners filed a motion to dismiss, citing as grounds
therefor, the failure of the complaint to allege prior availment by the plaintiffs of the
barangay conciliation process required by P.D. 1508, as well as the absence of a
certification by the Lupon or Pangkat Secretary that no conciliation or settlement
had been reached by the parties. The motion was opposed by private respondents.
On September 2, 1982, respondent judge issued an order denying the motion to
dismiss.
Petitioners filed a motion for reconsideration, but the same was denied in an order
dated October 3, 1982, as follows:
Considering the specific reference to City or Municipal Courts in the
provisions of Sections 11 and 12 of P.D. No. 1508, as the Courts to
which the dispute settled or arbitrated by the Lupon Chairman or the
Pangkat, shall be elevated for nullification of the award or for execution
of the same, and considering that from the provision of Section 14 of
the same law, the pre- condition to the filing of a complaint as provided
for in Section 6 thereof, is specifically referred to, it is the considered
opinion of this Court that the provision of Section 6 of the law applies
only to cases cognizable by the inferior courts mentioned in Sections
11 and 12 of the law.

In view of the foregoing, the motion for reconsideration filed by the


defendants, of the order of September 2. 1982, denying their motion to
dismiss, is hereby denied. [Annex 'G', p. 36, Rollo].
From this order, petitioners came to Us thru this petition. In a resolution dated
December 2, 1982, We required respondents to file an answer, and likewise granted
a temporary restraining order enjoining respondent judge from requiring petitioners
to file their answer and enter into trial in Civil Case No. R-22154.
We find the petition impressed with merit. Section 6 of P.D. 1508 reads as follows:
SECTION 6. Conciliation pre-condition to filing of complaint. No
complaint, petition, action for proceeding involving any matter within
the authority of the Lupon as provided in Section 2 hereof shall be filed
or instituted in court or any other government office for adjudication
unless there has been a confrontation of the parties before the Lupon
Chairman or the Pangkat and no conciliation or settlement has been
reached as certified by the Lupon Secretary or the Pangkat Secretary
attested by the Lupon or Pangkat Chairman, or unless the settlement
has been repudiated. However, the parties may go directly to court in
the following cases:
[1] Where the accused is under detention;
[2] Where a person has otherwise been deprived of
personal liberty calling for habeas corpus proceedings;
[3] Actions coupled with provisional remedies such as
preliminary injunction, attachment, delivery of personal
property and support pendente lite; and
[4] Where the action may otherwise be barred by the
Statute of Limitations
Section 2 of the law defines the scope of authority of the Lupon thus:
SECTION 2. Subject matters for amicable settlement.The Lupon of
each barangay shall have authority to bring together the parties
actually residing in the same city or municipality for amicable
settlement of all disputes except:
[1] Where one party is the government ,or any subdivision or
instrumentality thereof;
[2] Where one party is a public officer or employee, and the dispute
relates to the performance of his official functions;
[3] Offenses punishable by imprisonment exceeding 30 days, or a fine
exceeding P200.00;

[4] Offenses where there is no private offended party;


[5] Such other classes of disputes which the Prime Minister may in the
interest of justice determine upon recommendation of the Minister of
Justice and the Minister of Local Government.
Thus, except in the instances enumerated in sections 2 and 6 of the law, the Lupon
has the authority to settle amicably all types of disputes involving parties who
actually reside in the same city or municipality. The law, as written, makes no
distinction whatsoever with respect to the classes of civil disputes that should be
compromised at the barangay level, in contradistinction to the limitation imposed
upon the Lupon by paragraph (3), section 2 thereof as regards its authority over
criminal cases. In fact, in defining the Lupon's authority, Section 2 of said law
employed the universal and comprehensive term "all", to which usage We should
neither add nor subtract in consonance with the rudimentary precept in statutory
construction that "where the law does not distinguish, We should not
distinguish. 2 By compelling the disputants to settle their differences through the
intervention of the barangay leader and other respected members of the barangay,
the animosity generated by protracted court litigations between members of the
same political unit, a disruptive factor toward unity and cooperation, is avoided. It
must be borne in mind that the conciliation process at the barangay level is likewise
designed to discourage indiscriminate filing of cases in court in order to decongest
its clogged dockets and, in the process, enhance the quality of justice dispensed by
it. Thus, to say that the authority of the Lupon is limited to cases exclusively
cognizable by the inferior courts is to lose sight of this objective. Worse, it would
make the law a self-defeating one. For what would stop a party, say in an action for
a sum of money or damages, as in the instant case, from bloating up his claim in
order to place his case beyond the jurisdiction of the inferior court and thereby
avoid the mandatory requirement of P.D. 1508? And why, indeed, should the law
seek to ease the congestion of dockets only in inferior courts and not in the regional
trial courts where the log-jam of cases is much more serious? Indeed, the
lawmakers could not have intended such half-measure and self-defeating
legislation.
The objectives of the law are set forth in its preamble thus:
WHEREAS, the perpetuation and official recognition of the timehonored tradition of amicably settling disputes among family and
barangay level without judicial resources would promote the speedy
administration of justice and implement the constitutional mandate to
preserve and develop Filipino culture and to strengthen the family as a
basic social institution;
WHEREAS, the indiscriminate filing of cases in the courts of justice
contributes heavily and unjustifiably to the congestion of court
dockets, thus causing a deterioration in the quality of justice;
WHEREAS, in order to help relieve the courts of such docket congestion
and thereby enhance the quality of justice dispensed by the courts, it

is deemed desirable to formally organize and institutionalize a system


of amicably settling disputes at the barangay level.
There can be no question that when the law conferred upon the Lupon "the
authority to bring together the parties actually residing in the same city or
municipality for amicable settlement of all disputes, ... ," its obvious intendment
was to grant to the Lupon as broad and comprehensive an authority as possible as
would bring about the optimum realization of the aforesaid objectives. These
objectives would only be half-met and easily thwarted if the Lupon's authority is
exercised only in cases falling within the exclusive jurisdiction of inferior courts.
Moreover, if it is the intention of the law to restrict its coverage only to cases
cognizable by the inferior courts, then it would not have provided in Section 3
thereof the following rule on Venue, to wit:
Section 3. Venue. ... However, all disputes which involve real property
or any interest therein shall be brought in the Barangay where the real
property or and part thereof is situated.
for it should be noted that, traditionally and historically, jurisdiction over cases
involving real property or any interest therein, except forcible entry and detainer
cases, has always been vested in the courts of first instance [now regional trial
court].
But it is pointed out by the respondent judge that Sections 11, 3 12, 4 and 14, 5 of
the law speak of the city and/or municipal courts as the forum for the nullification or
execution of the settlement or arbitration award issued by the Lupon. We hold that
this circumstance cannot be construed as a limitation of the scope of authority of
the Lupon. As heretofore stated, the authority of the Lupon is clearly established in
Section 2 of the law; whereas Sections 11, 12 and 14, relied upon by respondent
judge, deal with the nullification or execution of the settlement or arbitration awards
obtained at the barangay level. These sections conferred upon the city and
municipal courts the jurisdiction to pass upon and resolve petitions or actions for
nullification or enforcement of settlement/arbitration awards issued by the Lupon,
regardless of the amount involved or the nature of the original dispute. But there is
nothing in the context of said sections to justify the thesis that the mandated
conciliation process in other types of cases applies exclusively to said inferior
courts.
Any doubt on the issue before Us should be dispelled by Circular No. 22 issued by
Chief Justice Enrique M. Fernando, 6 the full text of which is quoted as follows:
TO: ALL JUDGES OF THE COURTS OF FIRST INSTANCE, CIRCUIT
CRIMINAL COURTS, JUVENILE AND DOMESTIC RELATIONS COURTS,
COURTS OF AGRARIAN RELATIONS, CITY COURTS, MUNICIPAL COURTS
AND THEIR CLERKS OF COURT
SUBJECT: Implementation of the Katarungang Pambarangay Law.

Effective upon your receipt of the certification by the Minister of Local


Government and Community Development that all the barangays
within your respective jurisdictions have organized their Lupons
provided for in Presidential Decree No. 1508, otherwise known as
the Katarungang Pambarangay Law, in implementation of the
barangay system of settlement of disputes, you are hereby directed to
desist from receiving complaints, petitions, actions or proceedings in
cases falling within the authority of said Lupons.
Circular No. 12 dated October 20, 1978, issued by the late Chief Justice
Fred Ruiz Castro is to that extent modified.
This Circular takes effect immediately.
It is significant that the above-quoted circular embodying the directive "to desist
from receiving complaints, petitions, actions and proceedings in cases falling within
the authority of said Lupons," has been addressed not only to judges of city and
municipal courts, but also to all the judges of the courts of first instance, circuit
criminal courts, juvenile and domestic courts and courts of agrarian relations, now
known as regional trial courts under B.P. No. 129. The said circular was noted by
president Ferdinand E. Marcos in a Letter of Implementation, dated November 12,
1979, the first paragraph of which reads as follows: "with the view to easing up the
log-jam of cases and solving the backlogs in the case of dockets of all government
offices involved in the investigation, trial and adjudication of cases, it is hereby
ordered that immediate implementation be made by all government officials and
offices concerned of the system of amicably settling disputes at the barangay level
as provided for in the Katarungang Pambarangay Law [Presidential Decree No.
1508]."
Therefore, for the guidance of the bench and the bar, We now declare that the
conciliation process at the barangay level, prescribed by P.D. 1508 as a precondition for filing a complaint in court, is compulsory not only for cases falling
under the exclusive competence of the metropolitan and municipal trial courts, but
for actions cognizable by the regional trial courts as well.
ACCORDINGLY, the petition is granted, and the order of respondent judge denying
petitioners' motion to dismiss is hereby set aside. Respondent judge is restrained
from conducting further proceedings in Civil Case No. R-22154, except to dismiss
the case. No costs.
SO ORDERED.
Fernando, CJ Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana,
Relova and Gutierrez, Jr., JJ concur.
Makasiar and Teehankee, JJ., reserves his vote.
De Castro, J., is on leave.

Uy v. Contreras, 237 SCRA 167 (1994)


G.R. No. 111416 September 26, 1994

FELICIDAD
UY, petitioner,
vs.
HON. MAXIMO C. CONTRERAS, Presiding Judge, Metropolitan Trial Court,
Branch 61, Makati, Metro Manila; HON. MAURO M. CASTRO, Provincial
Prosecutor of Pasig, Metro Manila; SUSANNA ATAYDE and WINNIE
JAVIER, respondents.
Albon & Serrano Law Office for petitioner.
Ramon M. Velez for private respondents.

DAVIDE, JR., J.:


Assailed in this petition for certiorari under Rule 65 of the Rules of Court is the order
dated 2 July 1993 of public respondent Judge Maximo C. Contreras of Branch 61 of
the Metropolitan Trial Court (MTC) of Makati, Metro Manila, denying the petitioner's
motion to dismiss Criminal Cases Nos. 145233 and 145234 for slight physical
injuries. The motion to dismiss is based on the failure of the private respondents, as
the offended parties therein, to comply with Section 6 of P.D. No. 1508 and Section
18 of the 1991 Revised Rule on Summary Procedure requiring prior referral of
disputes to the Lupong Tagapamayapa of the proper barangay.
At the outset, it must be stated that were it not for the importance of the issue to be
resolved in the light of the revised law on katarungang pambarangay provided for in
the Local Government Code of 1991 (R.A. No. 7160) which took effect on 1 January
1992, 1 this Court would have declined to accept the invocation of its original
jurisdiction to issue the extraordinary writ prayed for. We have already ruled that
while it is true that this Court, the Court of Appeals, and the Regional Trial Courts
have
concurrent
original
jurisdiction
to
issue
writs
of certiorari,
prohibition, mandamus, quo warranto, and habeas corpus, such concurrence does
not accord litigants unrestrained freedom of choice of the court to which application
therefor may be directed. There is a hierarchy of courts determinative of the venue
of appeals which should also serve as a general determinant of the proper forum for
the application for the extraordinary writs. A becoming regard for this judicial
hierarchy by the petitioner and her lawyers ought to have led them to file the
petition with the proper Regional Trial Court. 2
The antecedent facts as disclosed by the pleadings of the parties are not
complicated.

Petitioner subleased from respondent Susanna Atayde (hereinafter Atayde) the


other half of the second floor of a building located at corner Reposo and Oliman
Streets, Makati, Metro Manila. She operated and maintained therein a beauty
parlor. 3
The sublease contract expired on 15 April 1993. However, the petitioner was not
able to remove all her movable properties.
On 17 April 1993, an argument arose between the petitioner and Atayde when the
former sought to withdraw from the subleased premises her remaining movable
properties such as cabinets, shelves, frames, a mirror, a shampoo bowl, and an
airconditioning casing. 4 The argument degenerated into a scuffle between the
petitioner, on the one hand, and Atayde and several of Atayde's employees,
including private respondent Winnie Javier (hereinafter Javier), on the other.
On 21 April 1993, the private respondent had themselves medically examined for
the alleged injuries inflicted on them by the petitioner. 5
On 23 April 1993, the private respondents filed a complaint with the barangay
captain of Valenzuela, Makati, which was docketed as Barangay Cases Nos.
1023 6 and 1024. 7
The confrontation of the parties was scheduled by the barangay captain for 28 April
1993. On the said date, only the petitioner appeared. The barangay captain then
reset the confrontation to 26 May 1993. 8
On 11 May 1993, the Office of the Provincial Prosecutor of Rizal filed two
informations for slight physical injuries against the petitioner with the MTC of
Makati, which were docketed as Criminal Cases Nos. 145233 and 145234 and
assigned to Branch 61 thereof.
On 21 May 1993, public respondent Judge Contreras of Branch 61 ordered the
petitioner to submit her counter-affidavit and those of her witnesses.
On 14 June 1993, the petitioner submitted the required counteraffidavits. 9 In her own counter-affidavit, the petitioner specifically alleged the
prematurity of the filing of the criminal cases for failure to undergo conciliation
proceedings as she and the private respondents are residents of Manila. 10 She also
attached to it a certification by the barangay captain of Valenzuela, Makati, dated
18 May 1993, that there was an ongoing conciliation between Atayde and the
petitioner in Barangay Case No. 1023. 11
On 18 June 1993, the petitioner filed a motion to dismiss Criminal Cases Nos.
145233 and 145234 for non-compliance with the requirement of P.D. No. 1508 on
prior referral to the Lupong Tagapamayapa and pursuant to Section 18 of the 1991
Revised Rule on Summary Procedure.
On 2 July 1993, public respondent Judge Contreras handed down an order denying
the motion to dismiss, pertinent portions of which read:

The court finds the motion to be without sufficient merit. In the first
place, the offense subject of these cases accussed in Makati, Metro
Manila on April 17, 1993; that Barangay Valenzuela of the Municipality
of Makati had started the conciliation proceedings between the parties
but as of May 18, 1993 nothing has been achieved by the barangay
(Annex "2" of the Counter-Affidavit of the accused); that the aboveentitled cases were filed directly with this court by the public
prosecutor on May 11, 1993; and the accused and her witnesses had
already filed their counter-affidavits and documents. At this stage of
the proceedings, the court believes that the accused had already
waived the right to a reconciliation proceedings before the barangay of
Valenzuela, Makati considering that accused and complainant are
residents of different barangays; that the offense charged occurred in
the Municipality of Makati; and finally, this offense is about to
prescribe.
Under the foregoing circumstances, the court believes, and so holds,
that the complainants may go directly to the court where their
complaint is about to prescribe or barred by statute of limitations
pursuant to Section 6 of PD 1508." 12
A motion to reconsider the above order was denied on 5 August 1993.
Hence this special civil action for certiorari. The petitioner contends that the
respondent judge committed grave abuse of discretion amounting to lack of
jurisdiction when he denied the motion to dismiss considering that the private
respondents failed to comply with the mandatory requirement of P.D. No. 1508, now
embodied in Section 412 of the Local Government Code of 1991 and further
required under the 1991 Revised Rule on Summary Procedure.
In their Comment, the private respondents contend that the denial of the motion to
dismiss is proper because prior referral of the dispute to the lupon is not applicable
in the case of private respondent Javier since she and the petitioner are not
residents of barangays in the same city or municipality or of adjoining barangays in
different cities or municipalities and that referral to the lupon is not likewise
required if the case may otherwise be barred by the statute of limitations. Moreover,
even assuming arguendo that prior referral to the lupon applies to the case of
private respondent Atayde, the latter had, nevertheless, substantially complied with
the requirement.
In its Comment, the Office of the Solicitor General agrees with the petitioner that
Criminal Cases Nos. 145233 and 145234 should be dismissed for non-compliance
with Sections 408, 409, 410, and 412 of the Local Government Code of 1991 in
relation to Section 7, Rule VI of the Rules Implementing P.D. No. 1508.
The petitioner replied to the comments of the private respondents and of the Office
of the Solicitor General. The private respondents filed a rejoinder to the petitioner's
reply to their comment and a reply to the comment of the Office of the Solicitor
General.

In the Resolution of 16 May 1994, this Court gave due course to the petition and
required the parties to submit their respective memoranda, which the petitioner and
the private respondents complied with. The Office of the Solicitor General, in view of
its prior submission, moved that it be excused from filing a memorandum.
The petition is impressed with merit.
The law on the katarungang pambarangay was originally governed by P.D. No. 1508
which was enacted on 11 June 1978. However, the Local Government Code of 1991,
specifically Chapter 7, Title I, Book III thereof, 13revised the law on the katarungang
pambarangay. As a consequence of this revision, P.D. No. 1508 was expressly
repealed pursuant to Section 534(b) of the Code. Pertinent portions of Chapter 7,
Title I, Book III thereof read as follows:
Sec. 408. Subject Matter for Amicable Settlement; Exception
Thereto. The luppon of each barangay shall have authority to bring
together the parties actually residing in the same city or municipality
for amicable settlement of all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;
(b) Where one party is a public officer or employee, and the dispute
relates to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a
fine exceeding Five thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different cities
or municipalities unless the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of
different cities or municipalities, except where such barangay units
adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by appropriate lupon;
(g) Such other classes of disputes which the President may determine
in the interest of justice or upon the recommendation of the Secretary
of Justice.
The court in which non-criminal cases not falling within the authority of
the lupon under this Code are filed may, at anytime before trial, motu
proprio refer the case to the lupon concerned for amicable settlement.

Sec. 409. Venue. (a) Disputes between persons actually residing in


the same barangay shall be brought for amicable settlement before
the lupon of said barangay.
(b) Those involving actual residents of different barangays within the
same city or municipality shall be brought in the barangay where the
respondent or any of the respondents actually resides, at the election
of the complainant.
(c) All disputes involving real property or any interest therein shall be
brought in the barangay where the real property or the larger portion
thereof is situated.
(d) Those arising at the workplace where the contending parties are
employed or at the institution where such parties are enrolled for study
shall be brought in the barangay where such workplace or institution is
located.
Objections to venue shall be raised in the mediation proceedings
before the punong barangay; otherwise, the same shall be deemed
waived. Any legal question which may confront the punong barangay
in resolving objections to venue herein referred to may be submitted to
the Secretary of Justice or his duly designated representative whose
ruling thereon shall be binding.
Sec. 410. Procedure for Amicable Settlement. . . .
xxx xxx xxx
(c) Suspension of prescriptive period of offenses. While the dispute
is under mediation, conciliation, or arbitration, the prescriptive periods
for offenses and cause of action under existing laws shall be
interrupted upon filing of the complaint with the punong barangay. The
prescriptive periods shall resume upon receipt by the complainant of
the complaint or the certificate of repudiation or of the certification to
file action issued by the lupon or pangkat secretary: Provided,
however, That such interruption shall not exceed sixty (60) days from
the filing of the complaint with the punong barangay.
xxx xxx xxx
Sec. 412. Conciliation. (a) Pre-condition to filing of complaint in
court. No complaint, petition, action, or proceeding involving any
matter within the authority of the lupon shall be filed or instituted
directly in court or any other government office for adjudication, unless
there has been a confrontation between the parties before
the lupon chairman or the pangkat, and that no conciliation or
settlement has been reached as certified by the lupon secretary or
pangkat secretary as attested to by the lupon chairman or pangkat

chairman or unless the settlement has been repudiated by the parties


thereto.
(b) Where parties may go directly to court. The parties may go
directly to court in the following instances:
(1) Where the accused is under detention;
(2) Where a person has otherwise been deprived of
personal liberty calling for habeas corpus proceedings;
(3) Where actions are coupled with provisional remedies
such as preliminary injunction, attachment, delivery of
personal property, and support pendente lite; and
(4) Where the action may otherwise be barred by the
statute of limitations.
xxx xxx xxx
Sec. 415. Appearance of Parties in Person. In all katarungang
pambarangay proceedings, the parties must appear in person without
the assistance of counsel or representative, except for minors and
incompetents who may be assisted by their next-of-kin who are not
lawyers.
Pursuant to the authority vested in him under Section 421 of the Code, the
Secretary of Justice promulgated theKatarungang Pambarangay Rules to implement
the revised law on katarungang pambarangay. Sections 8 and 11 of Rule VI
(Amicable Settlement of Disputes) thereof provide in part as follows:
SECTION 8. Failure to appear.
a. Sanctions
The complaint may be dismissed when complainant, after
due notice, refuses or willfully fails to appear without
justifiable reason on the date set for mediation,
conciliation or arbitration. Such dismissal ordered by the
Punong Barangay/Pangkat Chairman after giving the
complainant an opportunity to explain his non-appearance
shall be certified to by the Lupon or Pangkat Secretary as
the case may be, and shall bar the complainant from
seeking judicial recourse for the same cause of action as
that dismissed.
xxx xxx xxx

Sec. 11. Suspension of prescriptive period of offenses and cause of


action. The prescriptive periods for offenses and causes of action
under existing laws shall be interrupted upon filing of the complaint
with the Punong Barangay. The running of the prescriptive periods shall
resume upon receipts by the complainant of the certificate of
repudiation or of the certification to file action issued by the Lupon or
Pangkat Secretary: Provided, however, that such interruption shall not
exceed sixty (60) days from the filing of the complaint with the Punong
Barangay. After the expiration of the aforesaid period of sixty days, the
filing of the case in court or government office for adjudication shall be
subject to the provision of paragraph (b) (4) of Rule VIII of these Rules.
It may thus be observed that the revised katarungang pambarangay law has at
least three new significant features, to wit:
1. It increased the authority of the lupon in criminal offenses from
those punishable by imprisonment not exceeding thirty days or a fine
not exceeding P200.00 in P.D. No. 1508 to those offenses punishable
by imprisonment not exceeding one year or a fine not exceeding
P5,000.00.
2. As to venue, it provides that disputes arising at the workplace where
the contending parties are employed or at the institution where such
parties are enrolled for study, shall be brought in the barangay where
such workplace or institution is located.
3. It provides for the suspension of the prescriptive periods of offenses
during the pendency of the mediation, conciliation, or arbitration
process. Paragraph (c) of Section 410 of the law, however, suffers from
some ambiguity when it provides that the prescriptive periods "shall
resume upon receipt by the complainant of the complaint or the
certificate of repudiation or of the certification to file action issued by
the lupon or pangkat secretary." What is referred to as receipt by
the complainant of the complaint is unclear; obviously, it could have
been a drafting oversight. Accordingly, in the above quoted Section 11
of the Rules and Regulations issued by the Secretary of Justice, the
phrase "the complaint or" is not found, such that the resumption of the
running of the prescriptive period shall, properly, be from receipt by
the complainant of the certificate of repudiation or the certification to
file action issued by the lupon or the pangkat secretary. Such
suspension, however, shall not exceed sixty days.
The first feature has necessarily broadened the jurisdiction of the lupon and if the
mediation and conciliation process at that level would be effectively pursued, few
cases would reach the regular courts, justice would be achieved at less expense to
the litigants, cordial relationships among protagonists in a small community would
be restored, and peace and order therein enhanced.
The second feature, which is covered by paragraph (d), Section 409 of the Local
Government code, also broadens the authority of the lupon in the sense that

appropriate civil and criminal cases arising from incidents occurring in workplaces or
institutions of learning shall be brought in the barangay where such workplace or
institution is located. That barangay may not be the appropriate venue in either
paragraph (a) or paragraph (b) of the said section. This rule provides convenience to
the parties. Procedural rules including those relating to venue are designed to
insure a fair and convenient hearing to the parties with complete justice between
them as a result. 14 Elsewise stated, convenience is the raison d'etre of the rule on
venue.
The third feature is aimed at maximizing the effectiveness of the mediation,
conciliation, or arbitration process. It discourages any intentional delay of the
referral to a date close to the expiration of the prescriptive period and then invoking
the proximity of such expiration as the reason for immediate recourse to the courts.
It also affords the parties sufficient time to cool off and face each other with less
emotionalism and more objectivity which are essential ingredients in the resolution
of their dispute. The sixty-day suspension of the prescriptive period could spell the
difference between peace and a full-blown, wearisome, and expensive litigation
between the parties.
While P.D. No. 1508 has been repealed by the Local Government Code of 1991, the
jurisprudence built thereon regarding prior referral to the lupon as a pre-condition to
the filing of an action in court remains applicable because its provisions on prior
referral were substantially reproduced in the Code.
In Peregrina vs. Panis, 15 this Court stated:
Thus, Morata vs. Go, 125 SCRA 444 (1983), and Vda. de Borromeo vs.
Pogoy, 126 SCRA 217 (1983) have held that P.D. No. 1508 makes the
conciliation process at the Barangay level a condition precedent for the
filing of a complaint in Court. Non-compliance with that condition
precedent could affect the sufficiency of the plaintiff's cause of action
and make his complaint vulnerable to dismissal on the ground of lack
of cause of action or prematurity. The condition is analogous to
exhaustion of administrative remedies, or the lack of earnest efforts to
compromise suits between family members, lacking which the case
can be dismissed.
The parties herein fall squarely within the ambit of P.D. No. 1508. They
are actual residents in the same barangay and their disputes does not
fall under any of the excepted cases." (Emphasis omitted)
Such non-compliance is not, however, jurisdictional. This Court said so in Garces vs.
Court of Appeals: 16
In fine, we have held in the past that prior recourse to the conciliation
procedure required under P.D. 1508 is not a jurisdictional requirement,
non-compliance with which would deprive a court of its jurisdiction
either over the subject matter or over the person of the defendant.
Where, however, the fact of non-compliance with and non-observance

of such procedure has been seasonably raised as an issue before the


court first taking cognizance of the complaint, dismissal of the action is
proper.
xxx xxx xxx
The precise technical effect of failure to comply with the requirement
of P.D. 1508 where applicable is much the same effect produced by
non-exhaustion of administrative remedies; the complaint becomes
afflicted with the vice of pre-maturity; the controversy there alleged is
not ripe for judicial determination. The complaint becomes vulnerable
to a motion to dismiss. (emphasis omitted)
There were, of course, cases where this Court ruled that the failure of the defendant
to seasonably invoke non-referral to the appropriate lupon operated as a waiver
thereof. 17 Furthermore, when such defect was initially present when the case was
first filed in the trial court, the subsequent issuance of the certification to file action
by the barangay, which constituted substantial compliance with the said
requirement, cured the defect. 18
On 15 October 1991, this Court promulgated the Revised Rule on Summary
Procedure. 19 Section 18 thereof provides:
Sec. 18. Referral to Lupon. Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No. 1508 where
there is no showing of compliance with such requirement, shall be
dismissed without prejudice, and may be revived only after such
requirement shall have been complied with. This provision shall not
apply to criminal cases where the accused was arrested without a
warrant.
In the proceeding before the court a quo, the petitioner and the respondent had in
mind only P.D. No. 1508. The petitioner further invoked the aforequoted Section 18.
None knew of the repeal of the decree by the Local Government Code of 1991. Even
in her instant petition, the petitioner invokes the decree and Section 18 of the
Revised Rule on Summary Procedure. However, the private respondents, realizing
the weakness of their position under P.D. No. 1508 since they did refer their
grievances to what might be a wrong forum under the decree, changed tack. In
their Comment, they assert that on 20 April 1993 Atayde "filed a complaint against
petitioner before the barangay council of Barangay Valenzuela, Makati, in
compliance with the requirement of the Katarungang Pambarangay Law under the
Local Government Code." 20 Yet, in a deliberate effort to be cunning or shrewd,
which is condemnable for it disregards the virtue of candor, they assert that the
said law is not applicable to their cases before the court a quo because (a) the
petitioner and respondent Atayde are not residents of barangays in the same city or
municipality; (b) the law does not apply when the action, as in the said cases, may
otherwise be barred by the statute of limitations; and (c) even assuming that the
law applies insofar as Atayde is concerned, she has substantially complied with it.

The Office of the Provincial Prosecutor of Rizal should have exerted enough
diligence to inquire from the private respondents if prior referral to the lupon was
necessary before filing the informations.
Respondent judge did not do any better. His total unawareness of the Local
Government Code of 1991, more specifically on the provisions on the Katarungang
pambarangay, is distressing. He should have taken judicial notice thereof, ever
mindful that under Section 1, Rule 129 of the Rules of Court, courts are mandatorily
required to take judicial notice of "the official acts of the legislative, executive and
judicial departments of the Philippines." We have ruled that a judge is called upon to
exhibit more than just a cursory acquaintance with the statutes and procedural
rules. 21 He should have applied the revised katarungang pambarangay law under
the Local Government Code of 1991. Had he done so, this petition would not have
reached us and taken valuable attention and time which could have been devoted
to more important cases.
In view of the private respondents' failure to appear at the first scheduled mediation
on 28 April 1993 for which the mediation was reset to 26 May 1993, no complaint
for slight physical injuries could be validly filed with the MTC of Makati at any time
before such date. The filing then of Criminal Cases Nos. 145233 and 145234 with
the said court on 11 May 1993 was premature and, pursuant to paragraph (a),
Section 412 of the Local Government Code, respondent Judge Contreras should
have granted the motion to dismiss the criminal cases. He cannot justify its denial
by taking refuge under Section 6 of P.D. No. 1508 (more properly, Section 412(b)(4)
of the Local Government Code of 1991) which states that the parties may go
directly to court where the action is about to prescribe. This is because, as earlier
stated, pursuant to paragraph (c), Section 410 of the Code, the prescriptive period
was automatically suspended for a maximum period of sixty days from 23 April
1993 when the private respondents filed their complaints with the lupon of
Valenzuela Makati.
Moreover, having brought the dispute before the lupon of barangay Valenzuela,
Makati, the private respondents are estopped from disavowing the authority of the
body which they themselves had sought. Their act of trifling with the authority of
the lupon by unjustifiably failing to attend the scheduled mediation hearings and
instead filing the complaint right away with the trial court cannot be countenanced
for to do so would wreak havoc on the barangay conciliation system.
Granting arguendo that the petitioner did inflict the alleged physical injuries, the
offense for which she may be liable would only be slight physical injuries under
paragraph (2), Article 266 of the Revised Penal Code, considering that per the
medical certificates 22 the injuries sustained by the private respondents would
"heal" in nine days "in the absence of complication" and there is no showing that
the said injuries incapacitated them for labor or would require medical attendance
for such period. The penalty therefor would only be "arresto menor or a fine not
exceeding 200 pesos and censure." These penalties are light under Article 25 of the
Revised Penal Code and would prescribe in two months pursuant to Article 90.
Accordingly, since the slight physical injuries charged in Criminal Cases Nos. 145233
and 145234 were allegedly inflicted on 17 April 1993, the prescriptive period

therefor would have expired two months thereafter. Nevertheless, its running was
tolled by the filing of the private respondents' complaints with the lupon of
Valenzuela, Makati, on 23 April 1993 and automatically suspended for a period of
sixty days, or until 22 June 1993. If no mediation or conciliation could be reached
within the said period of suspension and, accordingly, a certification to file action is
issued, the private respondents would still have fifty-six days within which to file
their separate criminal complaints for such offense. Evidently, there was no basis for
the invocation by the respondent judge of the exception provided for in paragraph
(b), Section 412 of the Local Government Code.
Neither are we persuaded by the reasoning of the respondent Judge that the
petitioner "had already waived the right to a reconciliation proceedings before the
barangay of Valenzuela, Makati, considering that the accused and the complainant
are residents of different barangays." The petitioner did not waive the reconciliation
proceedings before the lupon of Valenzuela, Makati; she submitted to it and
attended the scheduled conciliation on 28 April 1993 and invoked the pre-condition
of referral to the lupon in her counter-affidavit. 23
Nor would this Court accept the contention of the private respondent that the
parties could not agree on a compromise and that they had to request the barangay
captain to issue a certification to file action. 24 The request is dated 23 June
1993, 25 or nearly one and a half months after Criminal Cases Nos. 145233 and
145234 were filed with the court a quo. Evidently, this was done to support their
contention in the said court that, in any event, there was substantial compliance
with the requirement of referral to the lupon. It must be stressed that the private
respondents, after failing to appear at the initial confrontation and long after the
criminal cases were filed, had no right to demand the issuance of a certification to
file action.
The respondent judge thus acted with grave abuse of discretion in refusing to
dismiss Criminal Cases Nos. 145233 and 145234.
Before closing these cases, this Court wishes to emphasize the vital role which the
revised katarungang pambarangay law plays in the delivery of justice at the
barangay level, in promoting peace, stability, and progress therein, and in
effectively preventing or reducing expensive and wearisome litigation. Parties to
disputes cognizable by the lupon should, with sincerity, exhaust the remedies
provided by that law, government prosecutors should exercise due diligence in
ascertaining compliance with it, and trial courts should not hesitate to impose the
appropriate sanctions for non-compliance thereof.
WHEREFORE, the instant petition is GRANTED. The Orders of respondent Judge of 2
July 1993 and 5 August 1993 in Criminal Cases Nos. 145233 and 1452334, both
entitled "People of the Philippines vs. Felicidad Uy" are hereby SET ASIDE and the
respondent Judge is hereby DIRECTED to DISMISS said cases within ten (10) days
from receipt of a copy of this decision.
Costs against the private respondents.

SO ORDERED.
Cruz, Bellosillo, Quiason and Kapunan, JJ., concur.

Wingarts v. Mejia, 242 SCRA 436 (1995)


A.M. No. MTJ-94-1012 March 20, 1995

JOHAN L.H. WINGARTS * and OFELIA


vs.
JUDGE SERVILLANO M. MEJIA, respondent.

A.

WINGARTS, complainants,

REGALADO, J.:
For resolution by the Court are three letter-complaints, two of which were filed by
complainant Johan L. H. Wingarts, 1 and the other filed jointly by him with
complainant Ophelia A. Wingarts, 2 against Judge Servillano M. Mejia of the
Municipal Trial Court of Santa Maria, Pangasinan.
These administrative complaints were an offshoot of three criminal cases decided
by respondent judge and involving the Wingarts and Col. Rodulfo Munar.
Complainant Johan L.H. Wingarts was the accused in Criminal Cases Nos. 2663 and
2664 filed in the aforesaid municipal trial court for malicious mischief and grave
threats. The first two criminal cases were initiated by Col. Munar as the private
complainant therein. Thereafter, the Wingarts made a counter-charge against Col.
Munar resulting in the third criminal case for usurpation of authority docketed in the
same court as Criminal Case No. 2696 with Col. Munar as the accused.
In the administrative complaint relative to Criminal Case No. 2663 for malicious
mischief, respondent judge is charged with malicious delay in the administration of
justice. The case allegedly dragged for one year and four months 3 in respondent's
sala and was ultimately dismissed in a decision dated June 8, 1994 after an ocular
inspection of the burned premises was conducted by the court personnel. 4
Herein complainants also charge respondent judge in their second complaint here
with incompetence, ignorance of the law and abuse of authority for taking
cognizance of Criminal Case No. 2664, entitled "People vs. Leo Wingarts," for grave
threats and for issuing a warrant of arrest against him despite lack of
prior barangayconciliation. The said case was later dismissed and indorsed to
the barangay official concerned. 5
Their third complaint charges respondent judge with rendering an unjust decision in
Criminal Case No. 2696, entitled "People vs. Capt. Manuel, et al." for usurpation of
authority. Complainants insist that in the said criminal case, the two accused
therein, Capt. Dominador Manuel and Col. Rodulfo Munar who are both military

lawyers, violated the prohibition against their appearing in civil courts without the
necessary authorization. 6 However, in a decision dated May 12, 1994, respondent
judge acquitted both accused, holding that "accused Col. Rodulfo Munar is the
complainant in criminal cases no(s). 2662 and 2664 for malicious mischief and
grave oral defamation respectively and what the accused have performed or
exercise(d) was not that of the fiscal or public prosecutor's duties but in their
capacity as the offended party and private counsel respectively . . . ." 7
Required to comment on these administrative charges, respondent judge explained
that he took cognizance of Criminal Case No. 2664 in the belief that there had been
substantial compliance with the requirements of theKatarungang Pambarangay
Law since a certification of the barangay captain regarding a confrontation of the
parties, the fact that no amicable settlement was reached by them, and that he was
endorsing the filing of the case in court, had been duly submitted to respondent
judge. 8
With regard to the complaint for malicious delay in the administration of justice,
respondent judge contended that "(t)he proceedings were continuous
until the complainant was acquitted of the crime charged against him. The case was
decided one (1) month and three (3) days after it was submitted for
decision . . . ." 9
Anent the third complaint, respondent judge submits that his judgment of acquittal
in the criminal case against the aforenamed military lawyers for usurpation of
authority was the result of his honest findings and conclusion based on the evidence
and the law in the hearing of the case. He denied having rendered an unjust
judgment and reiterated that due process was observed and the case was
prosecuted to the fullest extent, giving the prosecution all the time and opportunity
to present their evidence. 10
The Office of the Court Administrator, in a memorandum dated December 27, 1994,
made the following findings:
The first charge is meritorious. Had respondent Judge exercised greater
prudence, he could have known at the outset that under Art. 408 (c),
Chapter 7, Title One, Book III, R.A. 7160, otherwise known as the Local
Government Code of 1991 (The Revised Katarungang Pambarangay
Law), offenses punishable by imprisonment not exceeding one (1) year
or a fine not exceeding Five Thousand Pesos (P5,000.00) require prior
barangay conciliation. The crime of grave threats punishable under Art.
282 of the Revised Penal Code falls within the (p)urview of that section.
Furthermore, Sec. 412 (a) of the same law likewise provides:
Sec. 412. CONCILIATION (a) Precondition to filing of
Complaint in Court No complaint, petition, action or
proceeding involving any matter within the authority of
the lupon shall be filled (SIC) or instituted directly in court
or any other government office for adjudication unless
there has been a confrontation between the parties before
the lupon chairman or the pangkat, and that no

conciliation or settlement has been reached as certified


by the lupon secretary or pangkat secretary as attested to
by the lupon or pangkat chairman or unless the
settlement has been repudiated by the parties thereto.
Had respondent Judge observed the mandate of the aforequoted
provision of law he could have remanded the case to the lupon instead
of taking cognizance thereof and prematurely issuing the warrant of
arrest against the accused. Such an actuation, however, does not
appear to be tainted with malice or evil intent. As can be gleaned from
the records, respondent Judge dismissed Criminal Case No. 2664 in his
Order of April 16, 1993 (Rollo, pp. 42-43) upon motion of the defense
counsel. This notwithstanding, administrative sanction is warranted
against respondent Judge.
In his Supplemental Comment dated November 9, 1994 respondent
Judge avers that his decision in the case convicting the accused was
affirmed by the Regional Trial Court with modification as to the fine
imposed. A copy of the said Decision dated October 10, 1994 is
attached to the said letter.
xxx xxx xxx
A perusal of the records reveal that while there was a delay in hearing
the case, such a delay does not appear to be malicious nor deliberate.
Firstly, while the case appears to have been filed only on February 1,
1993, it was remanded back to respondent's sala sometime in June
1993 and was set for hearing on July 9, 1993. Secondly, the
postponements were all on account of the absence or unavailability of
the fiscal and/or the defense counsel and not of the Judge's own
making. While Judges should not allow the parties to control the
proceedings in their Court, in the case of respondent, he had no
alternative but to grant the postponements if only to better serve the
ends of justice. On January 10, 1994, he had to reset the hearing as the
assigned fiscal was still in the USA. On April 21, 1994 (Rollo, p. 52),
respondent Judge issued an Order giving the prosecution fifteen days
within which to file its position paper and thereafter, the case is
deemed submitted for decision. Counting fifteen (15) days from April
21, 1994, the case was deemed submitted for decision last May 6,
1994. It was decided on June 8, 1994 or barely a month after it was
deemed submitted for decision. Obviously, therefore there was no
delay in deciding the case. If at all, the delay was in the hearing of the
case and for apparently excusable grounds.
xxx xxx xxx
The prosecution contends that the two (2) accused, who are military
lawyers, appeared in the hearing of Crim. Case No. 2696 on March 19,
1993 without the required authority, thus they violated Art. 177 of the
Revised Penal Code which penalizes usurpation of authority.

Respondent Judge acquitted the accused for the following reasons: 1)


the accused were authorized by Circular No. 2 of the Dept. of National
Defense (Rollo, pp. 16 to 17) to appear as such. Thus, they were able
to secure their permit to appear as private prosecutors on April 12,
1993; 2) that their lack of permit does not strip them of their
qualifications as military lawyers and such failure merely calls for an
administrative sanction, there being no penal sanction imposed under
DND Adm. Circular No. 3; 3) that the accused submitted a written
manifestation from Asst. Provincial Prosecutor Trece R. Mapili (ibid, p.
12) authorizing them to act as private prosecutors when he is not
available, but such authority ceases upon his actual intervention; and
4) that the prosecution is one for an offense penalized under the
Revised Penal Code where criminal intent must be present and that the
prosecution failed to prove such a criminal intent on the part of the
accused. Respondent Judge likewise took judicial notice of the fact that
accused Col. Munar is also the complainant in Criminal Cases Nos.
2662 and 2664 and that what he performed was not that of the public
prosecutor's duty but that of an offended party and private counsel
and cited jurisprudence to that effect. . . .
Respondent Judge is being charged with knowingly rendering an unjust
judgment which is penalized under Art. 204 of the Revised Penal Code.
For a judge to be held liable therefor, it must be established that the
judgment is unjust and that the judge knew it to be unjust. A judgment
may be said to be unjust when it is manifestly against the law and
contrary to the weight of evidence (Rule 37, sec. 1, par. c). It is,
therefore, necessary that the judgment was rendered with conscious
and deliberate intent to perpetuate an injustice. A judicial officer, when
required to exercise his judgment or discretion, is not criminally liable
for any error he commits, provided that he acts in good faith. (In re
Climaco, Adm. Case No. 134-J, January 21, 1974, 55 SCRA 107)
From a review of the questioned decision and without ruling on its
propriety,
we
do
not
find
that
respondent
Judge
has knowingly rendered an unjust judgment. He does not appear to
have been motivated by an evil or corrupt motive to deliberately
perpetuate an injustice. 11
After a careful examination of the records of this case, and although we disagree
with the punitory sanction recommended by the Office of the Court Administrator,
we find no reason to depart from its conclusion that respondent judge is indeed
liable for incompetence and ignorance of the law for taking cognizance of Criminal
Case No. 2664 despite the legal obstacles thereto.
A judge should be the embodiment of competence, integrity and independence and
should administer justice impartially and without delay. 12 He should be faithful to
the law and maintain professional competence, dispose of the court's business
promptly and decide cases within the required periods.

A judge owes it to the public and to the legal profession to know the factual bases of
the complaint and the very law he is supposed to apply to a given controversy. He is
called upon to exhibit more than just cursory acquaintance with the statutes and
procedural rules. Party litigants will have greater faith in the administration of
justice if judges cannot just be accused of apparent deficiency in the analysis of the
facts of the case and in their grasp of the legal principles. For, service in the
judiciary means a continuous study and research on the law from beginning to
end. 13
Although there is no clear proof of malice, bad faith, bias or partiality on his part,
respondent judge should have exercised the requisite prudence, especially under
the environmental circumstances of the aforesaid criminal case where personal
liberty was involved. He should have carefully examined all relevant facts and
issues and avoided the improvident issuance of the warrant of arrest without a
circumspect review of the case which, after all, did not exhibit abstruse factual
matters or complicated legal questions. The present controversy could have been
avoided had he kept faith with the injunction that a member of the bench must
continuously keep himself abreast of legal and jurisprudential developments
because the learning process in law never ceases. 14
In the present case, assuming that he did not act with malice or bad faith and that
he subsequently issued an order to recall the warrant or prevent the arrest of
complainant, such considerations can mitigate but will not altogether exculpate him
from the charge of incompetence and ignorance of the law, which accordingly
warrants the imposition of an appropriate penalty on him. If judges wantonly misuse
the powers vested in them by law, there will not only be confusion in the
administration of justice but even oppressive disregard of the basic requirements of
due process.
Moreover, judges are directed to desist from improvidently receiving and desultorily
acting on complaints, petitions, actions or proceedings in cases falling within the
authority of the Lupon Tagapamayapa. 15 We have repeatedly ruled that the
proceedings before the lupon are a precondition to the filing of any action or
proceeding in court or other government office. Such an initiatory pleading, if filed
without compliance with the precondition, may be dismissed on motion of any
interested party on the ground that it fails to state a cause of action. 16
As to the charge of malicious delay in the administration of justice, we agree with
the observation of the Office of the Court Administrator that while there was some
delay in hearing the case, the same does not appear to be malicious nor deliberate.
Respondent
judge
should
not
be
unfairly
subjected
to
liabilities
for contretemps which were brought about by the parties and their lawyers.
Complainants could not have been unaware that the delay of the hearing was due
to postponements sought and obtained by the parties and their respective counsel.
Litigants should not blame a judge for the delay which was not of his own making.
However, the Court finds this as an appropriate occasion to once again remind the
members of the judiciary to adopt measures to prevent unnecessary delays in the
disposition of their cases. A judge should administer justice not only impartially but
also without delay. As expressly mandated by the Code of Judicial Conduct, he shall

dispose of the court's business promptly and decide cases within the required
periods. 17
In connection with his decision in Criminal Case No. 2696, after a careful analysis of
the assailed decision, we find no showing that respondent judge was motivated by
bad faith, fraud, dishonesty or corruption in rendering the same. As held in De La
Cruz, et al, vs. Judge Concepcion, etc.: 18
Knowingly rendering an unjust judgment is both a criminal and an
administrative charge. As a crime, it is punished under Article 204 of
the Revised Penal Code the elements of which are: (a) the offender is a
judge; (b) he renders a judgment in a case submitted to him for
decision; (c) the judgment is unjust, and (d) the judge knows that his
judgment is unjust. The gist of the offense therefore is that an unjust
judgment be rendered maliciously or in bad faith, that is, knowing it to
be unjust.
An unjust judgment is one which is contrary to law or is not supported
by the evidence, or both. The source of an unjust judgment may be
error or ill will. There is no liability at all for a mere error. It is wellsettled that a judicial officer, when required to exercise his judgment or
discretion, is not liable crimina