[G.R. No. 80491. August 12, 1992.]
Interpreting this article in the case of Universal Food
J. ARTIE VERGEL DE DIOS, petitioner, vs. COURT OF APPEALS AND EDUARDO
LOPINGCO, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SERVICE OF ANOTHER
SUMMONS IN CASE OF AMENDED COMPLAINT; RULE; CASE AT BAR. — The
rule is that it is only when new causes of action are alleged in an amended
complaint filed before the defendant has appeared in court that another
summons must be served on the defendant with the amended complaint. . . .
In demanding that the trial court serve new summons upon him because of
the amendment of the complaint, the petitioner manifested his bad faith all
too clearly. The amendment made was not substantial and did not change the
original complaint so as to require the service of new summons upon him.
Even if it was, it has been established that a copy of the amended complaint
had been legally delivered to and received by him and that he in fact referred
it to his counsel, albeit, through his own negligence, not soon enough. He
cannot now claim that he was unaware of the amended complaint and was
thus unable to answer it. That is a rank pretense. The trial court was not
obliged to perform a charade. Courts do not lend themselves to empty
gestures or useless rituals that can only impede the speedy administration of
justice. The petitioner's pious invocation of due process is nothing short of
heretical and deserves to be dismissed.
2. ID.; ID.; RULES OBSERVED IN DETERMINING WHETHER
AMENDMENT STATES NEW CAUSE OF ACTION. — In determining whether a
different cause of action is introduced by amendments to the complaint, the
court must ascertain if the defendant shall be required to answer for a liability
or legal obligation wholly different from that which was stated in the original
complaint. An amendment will not be considered as stating a new cause of
action if the facts alleged in the amended complaint show substantially the
same wrong with respect to the same transaction, or if what are alleged refer
to the same matter but are more fully and differently stated, or where
averments which were implied are made in express terms, and the subject of
the controversy or the liability sought to be enforced remains the same.
3. ID.; ID.; JUDGMENT BY DEFAULT; LOOKED UPON WITH DISFAVOR
BY THE SUPREME COURT; EXCEPTION. — It is true that this Court looks with
disfavor upon default judgments, preferring to give the parties full opportunity
to argue their respective positions at a regular trial. But there are limits to our
forbearance. As we held in Pahilanga vs. Luna: It is within the sound discretion
of the court to set aside an order of default and to permit a defendant to file
his answer and to be heard on the merits even after the reglementary period
for the filing of the answer has expired, but it is not error, or an abuse of
discretion, on the part of the court to refuse to accept the answer where it
finds no justifiable reason for the delay in the filing of the answer. In motions
for reconsideration of an order of default, the moving party has the burden of
showing such diligence as would justify his being excused from not filing the
answer within the reglementary period as provided by the Rules of Court,
otherwise, these guidelines for an orderly and expeditious procedure would
be rendered meaningless. Unless it is shown clearly that a party has justifiable
reason for the delay, the court will not ordinarily exercise its discretion in his
favor.
4. CIVIL LAW; OBLIGATIONS AND CONTRACTS; RESCISSION OF
CONTRACT; ORDERED ONLY IN CASE OF SUBSTANTIAL BREACH OF
AGREEMENT; CASE AT BAR. — Art. 1191. The power to rescind obligations is
implied in reciprocal ones, in case one of the obligors should not comply with
what is incumbent upon him. The injured party may choose between the
fulfillment and the rescission of the obligation, with the payment of damages
in either case. He may also seek rescission, even after he has chosen fulfillment,
if the latter should become impossible. The court shall decree the rescission
claimed, unless there be just cause authorizing the fixing of a period. This is
understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385 and 1388 and the
Mortgage Law.
Corporation vs. Court of Appeals, we stated that "rescission will be ordered
only where the breach complained of is so substantial as to defeat the object
of the parties in entering into the agreement." In the case at bar, we find that
the non-performance by the petitioner of his obligation to execute the deed
of assignment, which has not been denied, was a substantial breach that
warranted rescission. . . . The petitioner submits that by claiming that the
agreements did not reflect the true intention of the parties, the private
respondent thereby limited his recourse to reformation of the contract. We
think not. Given a choice of remedies, the private respondent had a right to
reject reformation of the contract as an available option and to choose
rescission instead as the more effective relief for the protection of his interests.
DECISION
CRUZ, J p:
Procedural rules are designed to insure the orderly and expeditious
administration of justice by providing for a practical system by which the
parties to a litigation may be accorded a full and fair opportunity to present
their respective positions and refute each other's submissions under the
prescribed requirements, conditions and limitations. Adjective law is not the
counterfoil of substantive law. In fact, there is a symbiotic relationship
between them. By complying faithfully with the Rules of Court, the bench and
the bar are better able to discuss, analyze and understand substantive rights
and duties and consequently to more effectively protect and enforce them.
The other alternative is judicial anarchy.
It is unfortunate, however, that on occasion procedural rules are invoked not
to uphold but to frustrate the prescriptions of substantive law. This usually
happens where the party does not expect to win on the merits of his cause
and so seeks to out-maneuver and delay his opponent by resorting to clever if
futile technicalities. The many ingenious gambits to this end are not unknown
to the Court. It was not born yesterday. When it comes across any such
subterfuge, it easily recognizes and rejects it, that the rules of procedure may
not be perverted into engines of injustice.
By its Board Resolution No. 939B-82, adopted on December 28, 1982, the
Philippine Veterans Bank conveyed a parcel of land under a conditional sale to
Averdi Marketing and Development Corporation. 1 Petitioner Artie Vergel de
Dios, as general manager of Averdi, then transferred his rights to Eduardo
Lopingco, herein private respondent, subject to the terms and conditions
specified in their Memorandum of Agreement 2 and the Addendum thereto,
3 both concluded in February 1983.
On June 21, 1984, Lopingco filed with the Regional Trial Court of Manila a
complaint against the petitioner and the Philippine Veterans Bank for
revocation of the said board resolution and the rescission of his contract with
the petitioner. Copies of the complaint, together with the corresponding
summons, were served on the defendants.
On July 6, 1984, the Philippine Veterans Bank filed a motion to dismiss the
complaint on the grounds of lack of a cause action and improper party. LibLex
On July 13, 1984, at 9:15 o'clock in the morning, Lopingco filed an amended
complaint and at the same time served a copy thereof on the petitioner by
registered mail.
On the same day, but after the filing of the amended complaint, the law firm
of Fornier, Defensor, Rubinos and Fornier, through Atty. Alarico T. Mundin,
filed its entry of appearance and motion for extension of time to file
responsive pleading on behalf of the petitioner. The motion was subsequently
granted but only for ten days.
On August 10, 1984, the petitioner filed through counsel an omnibus motion
asking that he be furnished a copy of the amended complaint. This was
opposed by the private respondent, who said that the copy sought had already
been sent directly to the petitioner by registered mail "because at the time
1
said copy was mailed, there was as yet no appearance of counsel for said
defendant."
On September 12, 1984, at the hearing on the motion to dismiss, counsel for
the private respondent moved for a declaration of default against the
petitioner for failure to file his answer within the reglementary period. The
trial court deferred resolution of the motion pending receipt of proof that the
petitioner had indeed received the copy of the amended complaint sent to
him by registered mail.
On December 6, 1984, upon presentation of a certification from the Makati
Central Post Office that the petitioner had received a copy of the amended
complaint on July 17, 1984, he was declared in default and evidence for the
other parties was subsequently received ex parte.
On April 30, 1985, Judge Arsenio M. Gonong rendered a decision disposing as
follows:
WHEREFORE, based on the allegations and prayer on the complaint
and the evidences adduced in support thereof, JUDGMENT is
hereby rendered, ordering the rescission of the Memorandum-
Agreement and the Addendum thereto entered into between
plaintiff Eduardo Lopingco and defendant J. Artie Vergel de Dios;
ordering the defendant J. Artie Vergel de Dios to refund the plaintiff
his downpayment of P725,000.00 with legal interest thereon from
February 18, 1983, ordering defendant J. Artie de Dios to indemnify
plaintiff in the amount of P140,000.00 yearly from February 18,
1983 until plaintiff shall have received a complete refund of his
investment; ordering defendant J. Artie Vergel de Dios to pay the
plaintiff P20,000.30 as actual damages; P1,000.00 as litigation
expenses, 10% of the total amount due as and for attorney's fees
and to pay the costs.
The case is hereby DISMISSED in so far as defendant Philippine
Veterans Bank is concerned.
On June 5, 1985, the petitioner filed a motion for new trial alleging error on
the part of the trial court for declaring him in default although he had not yet
been served with a copy of the amended complaint and his omnibus motion
had not yet been resolved. Assuming that such service was not necessary, he
contended that he was nonetheless not negligent for failing to file his answer
within the extended reglementary period.
This motion was denied in an order dated August 7, 1985. 4 On the validity of
the service of the amended complaint, the trial court declared:
. . . To repeat, the service of amended complaint directly on
defendant De Dios is in accordance with Sec. 2, R-13, Revised Rules
of Court, to the effect that service of notice, pleadings, orders, and
the like, should be made on the party, if not represented by counsel
(Elli vs. Ditan, 5 SCRA 503; PLDT vs. NLRC, 128 SCRA 402-403) for
"Without any record before it of any attorney appearing for said
party, it certainly was in accordance with Section 2 of Rule 13 of the
Rev. Rules of Court to serve the judgment upon the party affected
thereby. It would be an absurdity to hold otherwise." (Luzon
Rubber & Manufacturing Co. vs. Estaris, 52 SCRA 392). By analogy,
the instant plaintiff could only serve his amended complaint
directly on defendant De Dios. Because of all this, it is not correct
then for movant De Dios to claim that this Court did not resolve his
Omnibus Motion before declaring him in default and that the
default order has no legal basis.
The trial court also found that the petitioner was negligent in not filing his
answer on time, for reasons to be cited below.
On August 30, 1985, the petitioner filed an appeal with the respondent court,
alleging that the trial court erred in declaring him in default without first ruling
on his omnibus motion and in denying his motion for new trial. The appellate
tribunal affirmed the questioned order. 5 The petitioner than came to this
Court, contending that the Court of Appeals committed grave abuse of
discretion: (a) in holding that he was properly declared in default: (b) in not
setting aside the judgment by default as improper for unjustly depriving him
of his constitutional right to be heard, the right to fair trial and the right to due
process of law; (c) in not declaring that the proper remedy or action of
respondent Lopingco is reformation and not rescission of the Memorandum
of Agreement and the Addendum thereto; and (d) in not declaring that the
decision appealed from as tainted with an award of excessive damages,
insufficiency of evidence, and violation of the law. LexLib
The petitioner submits that inasmuch as the amended complaint completely
replaced the original complaint, the latter was stricken from the record and
considered non-existent. So was the summons that accompanied it. As the
amended complaint was a completely new pleading, a new summons should
have been issued requiring the defendants to answer the same, conformably
to Rule 14, Sec. 1, of the Rules of Court. For failing to do this and thereafter
declaring him in default, the trial court denied him the right to be heard in
violation of due process.
This argument is not acceptable.
The rule is that it is only when new causes of action are alleged in an amended
complaint filed before the defendant has appeared in court that another
summons must be served on the defendant with the amended complaint. 6
In determining whether a different cause of action is introduced by
amendments to the complaint, the court must ascertain if the defendant shall
be required to answer for a liability or legal obligation wholly different from
that which was stated in the original complaint. 7 An amendment will not be
considered as stating a new cause of action if the facts alleged in the amended
complaint show substantially the same wrong with respect to the same
transaction, or if what are alleged refer to the same matter but are more fully
and differently stated, or where averments which were implied are made in
express terms, and the subject of the controversy or the liability sought to be
enforced remains the same. 8
A reading of the amended complaint in the case at bar shows that it merely
supplemented an incomplete allegation regarding the subject property. The
purpose of the amendment was merely to include the additional information
that the subject property "was and is still under litigation and the contract was
entered into without the knowledge and approval of the litigants or of
competent judicial authority."
It is clear from a comparison of the allegations appearing in the original
complaint and in the amended complaint that the cause of action of the
private respondent had not been changed. The amended complaint also asked
for the rescission of the Memorandum of Agreement and the Addendum and
the return of the sum of P725,000.00 which had been given by Lopingco to the
petitioner as down payment on the subject property. Plainly, what was sought
to be enforced against the petitioner both in the original complaint and in the
amended complaint was his obligation to refund the said sum to the private
respondent. The amended complaint did not change the cause of action but
simply advanced the above-quoted additional information.
We hold therefore that no new summons on the amended complaint was
necessary.
Apart from this, the record shows that, contrary to the petitioner's allegation,
he received a copy of the amended complaint on July 17, 1984, through his
authorized agent, as certified to by the Makati Central Post Office. The
certification stated that Registered Letter No. 1933 (the amended complaint)
posted on "July 13, 1984 at GSIS Post Office addressed to Artie Vergel de Dios,
Studio 20, 3rd Floor, Makati Townhouse, 100 Gil J. Puyat Avenue, Makati,
Metro Manila, was delivered to and received by the authorized representative
of the addressee, administrator Dado on July 17, 1984." 9 This certification
has not been denied by the petitioner.
2
The trial court was correct in holding that when the private respondent sent
by registered mail a copy of the amended complaint directly to the petitioner,
he was acting in accordance with Sec. 2 of Rule 13 of the Rules of Court,
allowing direct service on a party if not represented by counsel. At the time
the amended complaint was filed, the defendant was not yet represented by
counsel, which entered its appearance only after the private respondent had
filed his amended complaint.
It is noteworthy that the trial court cautiously suspended resolution of the
motion to declare the petitioner in default until the private respondent shall
have furnished proof of service of the amended complaint upon the petitioner.
It was only on December 6, 1984, after the private respondent had submitted
the above-quoted certification, that the trial court declared the petitioner in
default.
As the trial court granted the motion for extension before declaring the
petitioner in default, he cannot say that it had unduly favored the private
respondent. Neither has the petitioner been denied due process, for he was
given adequate opportunity, even extended by ten days more beyond the
reglementary period, to file his answer to the amended complaint.
It is true that this Court looks with disfavor upon default judgments, preferring
to give the parties full opportunity to argue their respective positions at a
regular trial. But there are limits to our forbearance. As we held in Pahilanga
vs. Luna: 10
It is within the sound discretion of the court to set aside an order
of default and to permit a defendant to file his answer and to be
heard on the merits even after the reglementary period for the
filing of the answer has expired, but it is not error, or an abuse of
discretion, on the part of the court to refuse to accept the answer
where it finds no justifiable reason for the delay in the filing of the
answer. In motions for reconsideration of an order of default, the
moving party has the burden of showing such diligence as would
justify his being excused from not filing the answer within the
reglementary period as provided by the Rules of Court, otherwise,
these guidelines for an orderly and expeditious procedure would
be rendered meaningless. Unless it is shown clearly that a party has
justifiable reason for the delay, the court will not ordinarily exercise
its discretion in his favor.
In not exercising that discretion in the petitioner's favor. Judge Gonong
correctly observed:
. . . As a matter of fact, defendant De Dios was aware of his task to
file his answer to the instant complaint within the time constraint
provided by the Rules as can be gleaned from his motion through
his counsel, Atty. Mundin, reading thus: 2. Undersigned counsel
was informed by defendant that the LAST DAY FOR FILING HIS
ANSWER AND/OR RESPONSIVE PLEADING IS TOMORROW, 13 July
1984, the summons and copy of the complaint having been
received by herein defendant on 23 June, 1984' (par. 2, Entry of
Appearance and Motion for Extension of Time to File Responsive
Pleading, page 38, record; capitalization supplied). And yet, in spite
of this consciousness upon receipt of the summons directing him
within fifteen days after service to answer complaint, and also to
serve a copy of said answer, within the same period, and failure to
do so, judgment by default may be taken against him, still he (De
Dios) did not upon receipt of the Amended Complaint sent on 13
July, 1984, and received by him four days after, on 17 July, 1984,
rush to his counsel and handed to the latter the said amended
complaint so that he would not run the risk of being declared in
default. As it turned out, it was only when he filed, thru Atty.
Defensor, his Motion For New trial on June 5, 1985, that he
disclosed the fact that he did not consult his counsel as regards his
receipt of the amended complaint (or 11 months and 18 days from
July 17, 1984).
This circumstance or inattention on his part simply demonstrates that
defendant De Dios did not exercise due diligence and concern on the matter
as an ordinary prudent person would do in order to have his answer filed
within the reglementary period. Practical wisdom in taking care of one's affairs
dictates that he should pay attention to the summons and at once see his
lawyer without any delay. He did not. And so he has only himself to blame for
the consequences of his act in treating the summons and complaint served
upon him for granted. This court can do no less than to withhold exercising its
discretion in his favor, it being convinced that said defendant's actuations of
delay as pictured above can only be subsumed as one 'not excusable
negligence, mistake or accident.'
On the merits, the petition must also fail. cdll
The petitioner argues that the private respondent has no cause of action for
rescission and contends that the proper action is for reformation of the
Memorandum of Agreement and the Addendum.
In the Memorandum of Agreement, the petitioner assigned to the private
respondent the property rights he had acquired under Board Resolution No.
939B-82, subject to the following term and conditions:
1. The downpayment of 20% for the purchase of the land
(P700,000.00) from the Philippine Veterans Bank shall be paid by
the PARTY OF THE SECOND PART through the PARTY OF THE FIRST
PART, on or before ____________________, so that the latter
could obtain a conditional sale of the property from the bank.
2. The PARTY OF THE SECOND PART shall pay the sum of
P1,000,000.00 to the PARTY OF THE FIRST PART in the following
manner:
a. P500,000.00 upon payment of the 20% downpayment
over the land;
b. 7500,000.00 in five (5) equal installments for a period of
five (5) months beginning on the date of this agreement.
FINAL ASSIGNMENT: The sale by the bank of the property to the
PARTY OF THE FIRST PART being conditioned upon the payment of
the 20% downpayment shall, upon fulfillment thereof, obligate the
PARTY OF THE FIRST PART thereupon to automatically execute in
favor of the PARTY OF THE SECOND PART a deed of assignment
over the said property.
We find that the above-quoted conditions, specifically the stipulation in the
last paragraph, are susceptible of only one interpretation. The plain meaning
is that upon the down payment of the amount of P700,000.00 to the Philippine
Veterans Bank by Lopingco, De Dios, as the first party, shall execute in favor of
Lopingco, as the second party, a deed of assignment over the property subject
of the agreement.
The petitioner does not deny that he has not executed that deed. He submits,
though, that it was the private respondent who violated the express terms of
the contracts for failing and refusing to pay the amount of P500,000.00 to the
petitioner upon his payment of the 20% downpayment to Philippine Veterans
Bank. We are not persuaded. What we read from the agreement is that the
private respondent shall pay the P500,000.00 to the petitioner only upon
execution by the latter of the deed of assignment in favor of the private
respondent as required by the above-quoted last paragraph. Otherwise, the
private respondent would be paying P700,000.00 to the Philippine Veterans
Bank and P500,000.00 to the petitioner without one single document to prove
that the property rights acquired by the petitioner under Board Resolution No.
939B-82 no longer belong to him but have already been transferred to
Lopingco.
3
Under the circumstances of this case, there is no question that the private
respondent could avail himself of the remedy of rescission as authorized under
Art. 1191 of the Civil Code, thus:
Art. 1191. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is
incumbent upon him.
The injured party may choose between the fulfillment and the rescission of
the obligation, with the payment of damages in either case. He may also seek
rescission, even after he has chosen fulfillment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period. LLjur
This is understood to be without prejudice to the rights of third persons who
have acquired the thing, in accordance with articles 1385 and 1388 and the
Mortgage Law.
Interpreting this article in the case of Universal Food Corporation vs. Court of
Appeals, 11 we stated that "rescission will be ordered only where the breach
complained of is so substantial as to defeat the object of the parties in entering
into the agreement." In the case at bar, we find that the non-performance by
the petitioner of his obligation to execute the deed of assignment, which has
not been denied, was a substantial breach that warranted rescission.
We again quote the trial court with approval:
If there be any actionable wrong under the facts obtaining
hereunder it would be the act of defendant J. Artie Vergel de Dios.
By entering into the contract (Memorandum-Agreement and its
Addendum) conveying his rights arising from Veterans Bank Board
Resolution No. 9391-82 and having succeeded in having the
plaintiff agree thereto on the assurance that defendant de Dios will
be able to procure the approval and conformity of the Bank, of
which he was not able to do so, and his subsequent receipt of the
partial consideration of P700,000.00 and an additional amount of
P25,000.00 knowing fully well that he could not transfer or convey
his rights is a wrong, enforceable against him.
Under the facts presented, rescission is the proper remedy and as provided for
under Art. 1385 of the New Civil Code: Rescission creates the obligation to
return the things which were the object of the contract, together with their
fruits, and the price with its interest, consequently, it can be carried out only
when he who demands rescission can return whatever he may be obliged to
restore." In the case at bar, the plaintiff is very well entitled to the rescission
of the Memorandum-Agreement and its Addendum, in fact the plaintiff was
never in possession of the object of said contract as title and possession
thereto cannot be transferred by the defendant de Dios, and pursuant to the
same provision the plaintiff is likewise entitled to an indemnity for damages.
The petitioner submits that by claiming that the agreements did not reflect the
true intention of the parties, the private respondent thereby limited his
recourse to reformation of the contract. We think not. Given a choice of
remedies, the private respondent had a right to reject reformation of the
contract as an available option and to choose rescission instead as the more
effective relief for the protection of his interests.
In demanding that the trial court serve new summons upon him because of
the amendment of the complaint, the petitioner manifested his bad faith all
too clearly. The amendment made was not substantial and did not change the
original complaint so as to require the service of new summons upon him.
Even if it was, it has been established that a copy of the amended complaint
had been legally delivered to and received by him and that he in fact referred
it to his counsel, albeit, through his own negligence, not soon enough. He
cannot now claim that he was unaware of the amended complaint and was
thus unable to answer it. That is a rank pretense. The trial court was not
obliged to perform a charade. Courts do not lend themselves to empty
gestures or useless rituals that can only impede the speedy administration of
justice. The petitioner's pious invocation of due process is nothing short of
heretical and deserves to be dismissed. cdll
In these circumstances, the petitioner cannot complain that the damages
awarded against him are excessive. Indeed they are not, and we sustain them
completely.
WHEREFORE, the petition is DENIED. The challenged decision is AFFIRMED,
with costs against the petitioner.
Griño-Aquino, Medialdea and Bellosillo, JJ ., concur.
[G.R. No. L-30353. September 30, 1982.]
PATRICIO BELLO, plaintiff-appellee, vs. EUGENIA UBO and PORFERIO REGIS,
defendants-appellant.
Numeriano R. Avila, Jr. for plaintiff-appellee.
Benito R. Cuesta I for defendants-appellants.
SYNOPSIS
For their failure to file an answer to a complaint lodged against them by
plaintiff-appellee for recovery of real property with damages, defendants-
appellants were declared in default. Based on plaintiff-appellee's ex parte
evidence, the trial court rendered judgment by default. Appellants' petition
for relief from judgment was denied as well as their motion for reconsideration
of said denial. On appeal, appellants contend that the proceedings in the lower
court are null and void for there was no valid and effective service of summons
on them as defendants in the civil case. Hence, the trial court did not acquire
jurisdiction over their person. Appellants argue that the policeman who
tendered the summons to them was not among those authorized to serve
summons under Section 5, Rule 14 of the Rules of Court;and even assuming
that said policeman could be considered a proper person to serve the
summons still there was no valid and effective service since he merely
tendered the summons and thereafter brought back the same with him
together with the copy of the complaint. Appellee on the other hand,contends
that the cited provision of the rules is merely directory and its specification of
persons who are to serve summons is not exclusive.
On review, the Supreme Court ruled that contrary to appellee's contention,the
enumeration in the subject role is exclusive, hence, a service of summons by a
policeman who is not one of those enumerated by the rule as a proper person
to serve summons is not valid; that the summons was irregularly served having
been merely tendered and no copy of the summons nor the complaint was
given; and the return of service was not made under oath in violation of the
rules.
Assailed orders set aside and the trial court is directed to accept defendants-
appellants' answer to the complaint and to conduct further proceedings on
the case.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; ENUMERATION OF
PERSONS ESPECIALLY AUTHORIZED BY THE RULES TO SERVE SUMMONS,
EXCLUSIVE. — The enumeration of persons who may serve summons under
Section 5, Rule 14 of the Rules of Court is exclusive. Hence, in the case at bar
where summons was served by a police officer who is not included in the
specification of the said rule, this Court has to rule that the court which issued
the summons did. not acquire jurisdiction over the person of the defendants.
(See Sequito vs. Letrondo, G.R. No. L-11588, July 20, 1959,105 Phil. 1139;
Spouses Olar vs. Cuna,G.R. No. L-47935, May 5, 1979, 90 SCRA 114.).
2. ID.; ID.; ID.; IRREGULARITIES IN THE SERVICE THEREOF IN CASE AT
BAR. — Other irregularities attended the service of summons in the case at
4
bar. Thus, the serving policeman merely tendered the summons to defendants
and did not give them a copy of the same and of the complaint; the return of
service shows that the summons was first served on the plaintiff; and such
return was not made under oath — in violation of Sec. 20, Rule 14 of the Rules
of Court.
3. ID.; ID.; ID.; PROCEEDINGS HELD WITHOUT VALID SERVICE
THEREOF, NULL AND VOID. — Since a court acquires jurisdiction over the
person of the defendant only by means of a valid service of summons, trial and
judgment without such valid service are, therefore, null and void.
DECISION
ABAD SANTOS, J p:
Defendants-appellants Eugenia Ubo and Porferio Regis pray in this appeal that
the following be declared null and void for having been issued without
jurisdiction by the Court of First Instance of Leyte, Branch II, in Civil Case No.
4031 which is an action for recovery of real property with damages, namely;
(1) the order dated July 22, 1967, declaring defendants-appellants' in default;
(2) the judgment by default dated July 31, 1967; (3) the order dated September
16, 1967, denying defendants-appellants' motion for relief from judgment;
and (4) the order dated January 8, 1968, denying their motion for
reconsideration. Defendants-appellants further pray that the case be
remanded to the court of origin for further proceedings.
The records of the case bear out the following antecedents:
On April 29, 1967, the plaintiff, thru counsel, filed with the Court of First
Instance of Leyte a complaint for recovery of real property with damages
against the defendants praying, among other things, that he be declared the
true and lawful owner of the parcel of land which had been forcibly occupied
by the defendants since 1962 under claim of ownership, and that the
defendants be ordered to pay him the sums representing the value of the
coconuts harvested from the land since 1962; moral damages in an amount
the court may find reasonable; P260.00 for expenses of relocation survey;
P300.00 attorney's fees and the incidental expenses and costs of the
proceeding.
Summons were issued on May 4, 1967, requiring the defendants to file their
answer to the complaint within 15 days from service thereof. A certain
Patrolman Castulo Yobia of the Police Department of Jaro, Leyte, served the
summons on the defendants on May 15, 1967.
As no answer was filed by the defendants, plaintiff's counsel, on July 17, 1967,
filed a motion to declare defendants in default. Acting upon said motion, the
Court of First Instance of Leyte issued an order dated July 22, 1967, declaring
the defendants in default and directing the plaintiff to present ex-parte his
evidence on the 24th day of the same month. Thereafter a judgment by
default dated July 31, 1967, was rendered by said court, the dispositive portion
of which reads as follows:
"WHEREFORE, and in view of all the foregoing, the Court renders
decision declaring the plaintiff the owner of the western portion of
the land covered by Original Certificate of Title No. P-225
containing an area of 16,410 square meters as shown in Exhibit "C-
1"; ordering the defendants to vacate the said portion occupied by
them; to pay the sum of P900.00 a year from July, 1962, up to the
time the said defendant will deliver the land in question to the
plaintiff; to pay the amount of P300.00 as attorney's fees; and to
pay the costs."
The order of default and the judgment by default were received by the
defendants on August 2, 1967, and August 11, 1967, respectively.
Upon receipt of the order of default, the defendants contracted the services
of Atty. Generoso Casimpan who immediately inquired from Pat. Castulo Yobia
about the service of the summons. Pat. Yobia then showed him a copy of the
complaint which he failed to deliver to the defendants.
On August 17, 1967, defendants' counsel filed a motion for relief from
judgment charging irregularity in the service of the summons and praying that
the order of default dated July 22, 1967, and the judgment by default dated
July 31, 1967, be set aside and that defendants' answer, which was attached
to said motion, be admitted. The defendants alleged in said motion that the
subject land was inherited by them so that they have a good and valid right
thereto. They further alleged that they had been paying taxes on the land that
the complaint was filed merely to compel them to settle a criminal case for
frustrated homicide which they had filed against the plaintiff's son. LLpr
On September 16, 1967, the Court of First Instance of Leyte issued an order
denying the motion for relief from judgment on the ground that the same was
not accompanied by an affidavit of merit. A copy of said order was received by
the defendants on September 28, 1967.
On October 4, 1967, defendants' counsel filed a motion for reconsideration
contending that since the motion for relief from judgment was predicated on
lack of jurisdiction over the person of the defendants, the same need not be
accompanied by an affidavit of merit, However, before the court could act on
the motion for reconsideration, the defendants' counsel amended the same
and attached thereto, their affidavit of merit which reads as follows:
"WE, EUGENIA UBO and PORFERIO REGIS, the mother and son,
respectively, the former widow, and the latter married, both of age,
Filipinos and residents of Barrio Tuba, Jaro, Leyte, Philippines, after
being duly sworn to in accordance with law, hereby depose and
say:
"1. That I, Eugenia Ubo, am the defendant in Civil Case No.
4031, entitled Patricio Bello vs. Eugenia Ubo, et al.,; that although
it appears that in the summons I received a copy of the complaint
and served with the summons, the truth of the matter is that I did
not receive a copy of the complaint, nor my son, Porferio Regis.
Said complaint was served instead to the plaintiff, Patricio Bello, as
appearing in the said summons, and that the signature appearing
in the said summons is actually not mine, not knowing how to read
or write myself;
"2. That I, Porferio Regis, am a co-defendant in the
aforementioned civil case; that the signature in the summons now
attached to the record of the case is mine, but although it appears
that I was served with summons together with the complaint, the
truth about it is that I did not receive the complaint supposed to be
delivered to me or my mother; instead, the summons was
withdrawn after I had signed it;
"3. That sometime on August 2, 1967, through the aid of
our lawyer, Atty. Generoso Casimpan, it was then that we received
of copy of the complaint from the serving policeman, Castulo Yobia,
in the presence of Attys. Marcelo Caoelin and Alfredo Lastrilla;
"4. That because of our own ignorance and the mistake of
the serving policeman, it was perhaps the reason why the Hon.
Judge Lorenzo Garlitos declared us in default and the default
judgment rendered copy of which we received on August 11,
1967."
On November 16, 1967, the plaintiff's counsel filed an opposition to the
amended motion for reconsideration attaching thereto a counter-affidavit
executed before said counsel by Pat. Castulo Yobia, to wit:
"I, CASTULO YOBIA, of age, Filipino, married and a resident of Jaro,
Leyte, Philippines, after having been duly sworn to according to law,
depose and say:
5
 "1. That I am presently a member of the Police Force of the
Municipality of Jaro, Leyte; and that sometime in the month of May,
1967, I was ordered by our Chief of Police to serve summons to
which was attached a copy of the complaint upon the persons of
Eugenia Ubo and Porferio Regis, mother and son, respectively, in
the outskirts of Bo. Tuba, Jaro, Leyte, which is three kilometers
away from the national road and only accessible on foot as there is
no regular trip of passenger vehicle to that place;
"2. That definitely on May 15, 1967, taking the opportunity
that there was a cargo truck which passed by the Municipal Hall
going to the aforementioned barrio to get copra, I hurriedly went
inside the Office of the Police Department to get the summons and
the office clerk readily gave the same to me and to which was
attached a copy of the complaint;
"3. Upon reaching the said barrio I immediately went to the
house of Eugenia Ubo, whom I know personally and was also able
to contact at the same place Porferio Regis. At first they refused to
receive the summons and complaint. However, after explaining to
them the nature of the summons and the case against them, both
of them signed the summons in my presence reluctantly and I
detached the complaint and handed the same to them although
refusing. I further advised them to look for a lawyer at once to
handle their case;
"4. That when I returned back to our office in Jaro I was told
by the office clerk that there was another copy of the summons and
complaint intended for the other defendant;
"5. That in the afternoon of the same day, I incidentally met
plaintiff Patricio Bello and his son Juan Bello in the poblacion of Jaro,
Leyte, whom I informed that their complaint was already served on
defendants that morning and requested Patricio Bello sign the
summons, but was instead signed by the son Juan Bello show that
they were already informed about the service upon defendants and
so that they can inform their lawyer. I then requested the said
Patricio Bello to give the other copy of the complaint to the other
defendant thru anybody in the barrio, as they are the ones that use
to frequent the said barrio Tuba of Jaro;
"6. That almost a month after, the son of Patricio Bello
came to my house handing me the copy of the complaint I gave to
Patricio Bello to be delivered to the other defendant thru anybody
in barrio Tuba, telling me that the same copy of the complaint was
not delivered because his father was afflicted with rheumatism the
past weeks."
On January 8, 1968, the Court of First Instance of Leyte issued an order denying
defendants' motion for reconsideration, to wit: LLphil
"After a consideration of the ground of the Opposition to the Motion for
Reconsideration, particularly the affidavit of Pat. Castulo Yobia, the serving
officer of the summons who had, upon the service of summons, explained to
both defendants the nature of the summons and the complaint which should
have warned the defendants of the existence of a case against them, especially
because a copy of the complaint was delivered to both of them at the time of
service, the irregularity consisting in the failure of the serving officer to deliver
to each one of them a copy of the complaint is, therefore, neutralized by such
explanation made by the policeman to them. It was, therefore incumbent
upon the defendants to have checked up their case. Their failure to do so does
not constitute excusable negligence, nor could it be said to be one of accident
or excusable mistake. For lack of merit of the Motion for Reconsideration
therefore, the same is hereby denied."
A copy of said order was received by the defendants on January 9, 1968.
On January 23, 1968, the defendants, thru counsel, filed a notice of appeal and
a motion to appeal as pauper and submitted to the court for approval their
record on appeal. The plaintiff, on the other hand, filed on January 31,1968, a
motion for execution pending appeal.
On February 10, 1968, the Court of First Instance of Leyte issued an omnibus
order approving defendants' record on appeal and directing that the appeal
be given due course; granting defendants' motion to appeal as pauper; and
denying plaintiff's motion for execution pending appeal.
The main thrust of the appeal is that there was no valid and effective service
of summons on the defendants and that, consequently, the Court of First
Instance of Leyte did not acquire jurisdiction over their person.
The appellants contend that Pat. Castulo Yobia of the Police Department of
Jaro, Leyte, was not a proper person to serve the summons under Sec. 5, Rule
14 of the Rules of Court since he was not a sheriff or a court officer of the
province where service was made; and neither was he a person who, for
special reasons, was specially authorized to serve the summons by the judge
who issued the same. Furthermore, appellants contend that even assuming
that said policeman could be considered as a proper person to serve the
summons, still there was no valid and effective service since he brought back
the summons with him together with the copy of the complaint. Cdpr
The appellee, on the other hand, admits that the person who served the
summons — Pat. Castulo Yobia of the Police Department of Jaro, Leyte — is
not one of those enumerated by Sec. 5, Rule 14 of the Rules of Court as the
proper person to serve the summons but contends that said provision of the
rules is merely directory and its specification of persons who are to serve
summons is not exclusive. He claims that Pat. Yobia had duly served the
summons upon the defendants and had even explained to them the nature of
the summons and advised them to look for a lawyer. He contends that said
policeman did equally if not more effectively what a sheriff or his deputy or a
court officer was expected to have done and, therefore, said service of
summons had the same force and effect as though summons had been served
by any of the regular officers mentioned by the Rules.
After consideration of the material antecedents of this case and the pertinent
jurisprudence on the matter, We hold that there was no valid service of
summons on the defendants and, consequently, the Court of First Instance of
Leyte did not acquire jurisdiction over their person.
Sec. 5, Rule 14 of the Rules of Court, expressly provides that summons may be
served by the sheriff or other proper court officer of the province or, for
special reasons, by a person especially authorized to serve the summons by
the judge of the court which issued the same. Contrary to appellee's
contention, this enumeration is exclusive. Thus, in Sequito vs. Letrondo, G.R.
No. L-11588, July 20, 1959, 105 Phil. 1139, We considered as irregular the
service of summons by a police sergeant who was not a sheriff or a court
officer and who was not authorized by the court to deliver the summons. And
in the more recent case of Spouses Olar vs. Cuna, G.R. No. L-47935, May 5,
1979, 90 SCRA 114, We ruled that the postmaster of Bato, Leyte, not being a
sheriff or court officer, or a person authorized by the court to serve the
summons cannot validly serve the summons. There, as in the case at bar where
summons was served by one who is not included in the specification of Sec. 5,
Rule 14 of the Rules of Court, this Court had to rule that the court which issued
the summons did not acquire jurisdiction over the person of the defendants.
Furthermore, the appellants point to other irregularities which attended the
service of summons by Pat. Yobia. Thus, it is alleged that said policeman
merely tendered the summons to them and did not give them a copy of the
same and of the complaint. While it is true that Pat. Yobia had denied such
allegation in his counter-affidavit which We have heretofore quoted,
nevertheless, We find appellants' version to be more credible. For, the records
of the case are replete with indications that the serving policeman was grossly
ignorant of the rules concerning summons. Thus, the return of service shows
that the summons was first served on the plaintiff (back of p. 3, records).
6
Besides, such return of service was not made under oath - in violation of Sec.
20, Rule 14 of the Rules of Court — which requires that "the proof of service
of a summons . . . shall be sworn to when made by a person other than the
sheriff or his deputy." And even if We were to give credence to Pat. Yobia's
counter-affidavit, We would still find the service of the summons to be
irregular since it is expressly admitted therein that only one copy of the
summons and of the complaint was served on the two defendants. LexLib

Since a court acquires jurisdiction over the person of the defendant only by
means of a valid service of summons, trial and judgment without such valid
service are, therefore, null and void.

WHEREFORE. the trial court's order of default and judgment by default are set
aside and said court is directed to accept defendants-appellants' answer to the
complaint and to conduct further proceedings on the case. Costs against
plaintiff-appellee.

SO ORDERED.

Barredo (Chairman), Aquino, Concepcion, Jr., Guerrero, De Castro and Escolin

JJ., concur.

7
[G.R. No. 126947. July 15, 1999.]
HARRY ANG PING, petitioner, vs. THE HONORABLE COURT OF APPEALS, RTC-
MAKATI, BRANCH 149 AND UNI-BANCARD CORPORATION, respondents.
Aquilino Q. Pimentel, Jr., and Associate Law Office for petitioner.
Perez and Calima Law Offices for private respondent.
SYNOPSIS
Ang Ping was a co-obligor in the credit card issued by Unibancard Corp. to
Tingson. Thus, when the latter defaulted in the payment of his monthly
charges, the Corporation filed a collection suit against the two. The
summonses for both of them were allegedly served and received by a certain
Umali. Then, Atty. Salazar filed an answer on their behalf; and, at the pre-trial,
Atty. Sandoval represented the two. During the trial, defendants' counsel did
not present any evidence on their behalf and the trial court deemed that the
defendants had waived their right to present evidence. The Court ruled in
favor of the Corporation and a writ of execution was subsequently issued. The
same was enforced against Ang Ping, who filed a petition to annul the
judgment of the trial court on the ground that the same was rendered without
the court acquiring jurisdiction over his person. However, the Court of Appeals
dismissed the petition ruling that Ang Ping was properly placed under the
jurisdiction of the trial court.
The rule is that summons must be served upon the defendant himself. If
served by substituted service, the requirements thereof must be followed
strictly to be effective. Here, there was no explanation justifying resort to
substituted service, the process server did not file any proof of service, and
there was no report indicating that the person who received the summons in
behalf of Ang Ping was one with whom he had relation of confidence that
would ensure that Ang Ping will receive or be notified of the summons issued.
As regards the alleged appearance of a lawyer in behalf of Ang Ping, the same
cannot be considered as voluntary appearance contemplated by the rules. The
records were bereft of any showing that Ang Ping personally appeared at any
stage in the proceedings of the trial court, and there was no document
whatsoever vesting authority in the lawyer who purportedly represented him.
On the delay in filing the petition for annulment of judgment, it is enough to
say that where the ground invoked as basis for annulment of judgment is lack
of jurisdiction, the petition may be filed at anytime before it is barred by
estoppel or laches, neither of which obtains in the present case. Hence, the
decision of the Court of Appeals was REVERSED and the decision of the RTC
was SET ASIDE. IcSADC
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION OVER THE
PERSON OF THE DEFENDANT; HOW ACQUIRED. — Jurisdiction over the person
of the defendant in civil cases is acquired either by his voluntary appearance
in court and his submission to its authority or by service of summons. CTSDAI
2. ID.; ID.; ID.; ID.; SERVICE OF SUMMONS; IMPORTANCE THEREOF. —
It should be emphasized that the service of summons is not only required to
give the court jurisdiction over the person of the defendant, but also to afford
the latter an opportunity to be heard on the claim made against him. Thus,
compliance with the rules regarding the service of summons is as much an
issue of due process as of jurisdiction.
3. ID.; ID.; SUMMONS; SUBSTITUTED SERVICE. — Well settled is the
rule that summons must be served upon the defendant himself. It is only when
the defendant cannot be served personally within a reasonable time that
substituted service may be resorted to and such impossibility of prompt
service should 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 and 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.
4. ID.; EVIDENCE; PRESUMPTION OF REGULARITY IN THE
PERFORMANCE OF PUBLIC FUNCTIONS; NOT APPLICABLE WHEN THERE IS NO
SHOWING OF SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF THE
LAW; CASE AT BAR. — The presumption of regularity in the performance of
public functions finds no application in the case at bar. Surely, there must be,
at the very least, compliance with the procedure of law applicable. Here, the
process server did not file any proof of service. And since substituted service
was resorted to, there should have been a report indicating that the person
who received the summons in Ang Ping's behalf was one with whom petitioner
had a relation of confidence that would ensure that the latter will receive or
be notified of the summons issued in his name. Certainly, it was never
intended that the presumption of regularity in the performance of official duty
will be applied even in cases where there is no showing of substantial
compliance with the requirements of the rules of procedure. This is all the
more so in the present case where the duty to be performed has a direct
bearing on the acquisition of jurisdiction of the trial court over the person of
the defendant. aDIHTE
5. ID.; CIVIL PROCEDURE; JURISDICTION ACQUIRED THROUGH
VOLUNTARY APPEARANCE; NOT PRESENT. — As regards the alleged
appearance of a lawyer in behalf of the petitioner during the proceedings in
the trial court, the same cannot be considered as the voluntary appearance
contemplated by the rules. In the first place, the records are bereft of any
showing that petitioner Ang Ping personally appeared at any stage in the
proceedings of the trial court. Second, no document vesting authority in the
lawyer who purportedly represented him appears on record. Although the
proceedings in the trial court were conducted under the old rules of civil
procedure, the same procedural requirement applies to the case at bar since
well settled is the rule that remedial rules have retroactive application. In any
case, the aforecited new rule is merely a crystallization of a procedure long
established by jurisprudence and practice.
6. ID.; ID.; PETITION FOR ANNULMENT OF JUDGMENT FOR LACK OF
JURISDICTION; PERIOD OF FILING. — With respect to the appellate court's
holding that because of petitioner's delay in filing the petition for annulment
of judgment, he is deemed to have forfeited his opportunity to present his side,
it is enough to say that where the ground invoked as basis for annulment of
judgment is lack of jurisdiction, the petition may be filed anytime before it is
barred by estoppel or laches, neither of which obtains in the present case. As
held by this Court before, it is the better rule that courts, under the principle
of equity, will not be guided or bound strictly by the statute of limitations or
the doctrines of laches when to do so, manifest wrong or injustice would result.
7. ID.; ID.; WHEN JUDGMENT SOUGHT TO BE EXECUTED WAS
RENDERED WITHOUT JURISDICTION. — The judgment sought to be executed
against Ang Ping was indeed rendered without jurisdiction as he was not
properly served with summons and neither did he voluntarily submit himself
to the authority of the trial court. The essence of due process is to be found in
the reasonable opportunity to be heard and submit any evidence one may
have in support of his defense. It is elementary that before a person can be
deprived of his property, he should first be informed of the claim against him
and the theory on which such claim is premised. Not having been duly
accorded his day in court, petitioner cannot thus be bound by the judgment in
the collection suit. DHEaTS
DECISION
ROMERO, J p:
Before us is a petition for review on certiorari assailing the Decision 1 of the
Eleventh Division of the Court of Appeals dated June 14, 1996 dismissing
petitioner's prayer for annulment of the judgment of the Regional Trial Court
8
of Makati Branch 149 in Civil Case No. 18843 entitled "Unibancard Corporation
vs. Tiongson and Ang Ping." Likewise under review is the Court of Appeals'
Resolution 2 dated September 16, 1996 denying the petitioner's motion for re-
consideration. cdphil
The antecedent facts are as follows:
In April 1987, Juan Tiongson applied for and was issued a Unicard credit card
by respondent Corporation with petitioner Harry Ang Ping as co-obligor. As
part of the terms and conditions governing the issuance and use of the credit
card, Tingson and Ang Ping agreed to jointly and severally pay Unibancard all
purchases and charges made through the said credit card within twenty (20)
days from receipt of the monthly statement without necessity of demand.
Tingson and Ang Ping likewise bound themselves to pay interest and penalty
fees on any unpaid balance and attorney's fees in case of suit.
Tingson defaulted on his monthly charges which amounted to P49,988.42 as
of December 5, 1987 and despite repeated demands, failed or refused to settle
his accounts with respondent Corporation prompting the latter to file a
collection suit with the Regional Trial Court of Makati.
The summonses for both Tingson and Ang Ping were allegedly served on
February 15, 1988 at 189 I. Lopez St., Mandaluyong, Metro Manila and 34
Coolidge St., Greenhills West, San Juan, Metro Manila, respectively. In both
cases, the person who received the summons was a certain Jonas Umali.
On May 12, 1988, a certain Atty. Benito Salazar filed an answer purportedly on
behalf of defendants Tingson and Ang Ping, denying the substantial averments
in the complaint and alleging inter alia that the unpaid charges were much less
than P49,988.42 and that no proper demand was made on the defendants. At
the pre-trial, on the other hand, a certain Atty. Lauro Sandoval represented
Tingson and herein petitioner. Later, during trial, defendant's counsel did not
present any evidence on their behalf; hence, the trial court deemed that the
defendants had waived their right to present evidence and submitted the case
for decision on the basis solely of the respondent Corporation's evidence. cdll
The trial court rendered judgment on June 11, 1990, holding Tingson and Ang
Ping jointly and severally liable for "the sum of P35,233.62 plus 3% interest
and 5% penalty charge from August 3, 1987 until the entire amount is fully
paid" plus 25% attorney's fees. 3
A writ of execution was subsequently issued and the same was enforced on
May 3, 1993 at Ang Ping's Greenhills address where Ruth Ang Ping, petitioner's
sister, informed the sheriff that petitioner was no longer residing at the said
address. The writ was later returned unsatisfied since a third party claim over
the properties attached was filed and successfully proven. Thereafter, on
November 5, 1993 and on motion of respondent Corporation, an alias writ of
execution was issued and a notice of garnishment was served on San Lorenzo
Bus Service Co. covering shares believed to be owned by Ang Ping. Another
alias writ of execution was issued on August 29, 1994 by virtue of which, the
sheriff levied on certain personal properties found inside Harrod's
Haberdashery at SM Megamall, the Certificate of Business Name of which was
issued to herein petitioner. During the enforcement of the writ on September
15, 1994, Ang Ping tried to stop the sheriff from carrying away personalty from
the establishment and a scuffle between them ensued. The records show that
the petitioner grabbed the sheriff by the neck while pulling him to the door,
causing injury to the latter.
On October 27, 1994, Ang Ping filed with the Court of Appeals a petition 4 to
annul the judgment of the trial court which was the basis of the various writs
of execution issued against him. He alleged that the judgment in question was
rendered without due process of law as he was not given his day in court.
Petitioner argued that since there was no valid service of summons upon him
and he never appeared before the court by himself or by counsel, the trial
court never acquired jurisdiction over his person, thus, the judgment cannot
be enforced against him. LibLex
The Court of Appeals dismissed the petition after finding that petitioner Ang
Ping was properly placed under the jurisdiction of the trial court which
rendered the assailed judgment. First, the appellate court said, the petitioner
was duly represented by counsel who, aside from filing a responsive pleading,
had religiously appeared for him and his co-defendant before the lower court
and petitioner's claim that said counsel was not duly authorized by him was
never satisfactorily substantiated. Second, respondent Court noted that there
was a valid service of summons on petitioner Ang Ping because the copy of the
summons addressed to him was signed by a certain Jonas Umali. The Court of
Appeals likewise pointed out that the delay in filing the petition to nullify the
judgment of the lower court buttressed private respondent's contention that
the same was just a ploy resorted to by petitioner to stymie the enforcement
of the alias writ of execution issued against him.
Hence, this petition.
Petitioner insists that the trial court never acquired jurisdiction over his person
since he was never validly served with summons and neither did he appear in
court. In particular, he assails the substituted service resorted to by the
process server on the ground that he never actually received the summons.
He pointed to the irregularities in the conduct of the substituted service of
summons such as: the fact that the same person, a certain Jonas Umali,
received the summonses for both Tingson and petitioner Ang Ping on the same
date at different addresses and the failure of the process server to file the
proof of service together with the return thus dispensing with the explanation
as to why substituted service was resorted to. He further claims that he never
authorized the lawyers who filed an answer and appeared in court purportedly
in his behalf.
In its comment, private respondent Corporation, on the other hand, prayed
for the dismissal of the present petition reiterating that the trial court properly
acquired jurisdiction over the person of petitioner Ang Ping.
Jurisdiction over the person of the defendant in civil cases is acquired either
by his voluntary appearance in court and his submission to its authority or by
service of summons. 5 In this case, the records show that the summons
addressed to petitioner Ang Ping was delivered by substituted service, with a
certain Jonas Umali signing as the one who received the summons. As correctly
pointed out by the petitioner, however, there was no explanation in the proof
of service justifying the resort to substituted service. In fact, the records are
bereft of any showing that a proof of service was even filed after such
substituted service. cdll
Well settled is the rule that summons must be served upon the defendant
himself. It is only when the defendant cannot be served personally within a
reasonable time that substituted service may be resorted to and such
impossibility of prompt service should 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 and 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. 6
It should be emphasized that the service of summons is not only required to
give the court jurisdiction over the person of the defendant, but also to afford
the latter an opportunity to be heard on the claim made against him. 7 Thus,
compliance with the rules regarding the service of summons is as much an
issue of due process as of jurisdiction.
Moreover, as likewise pointed out by the petitioner, the presumption of
regularity in the performance of public functions finds no application in the
case at bar. Surely, there must be, at the very least, compliance with the
procedure outlined in Sections 6 and 20 of Rule 14 of the rules of civil
procedure then applicable (now Sections 4 and 18, Rule 14 of the new rules),
to wit:
9
 SECTION 6. Return. — When the service has been heard and submit any evidence one may have in support of his defense. 10 It
completed, the server shall give notice thereof, by registered mail, is elementary that before a person can be deprived of his property, he should
to plaintiff or his counsel, and shall return the summons to the clerk first be informed of the claim against him and the theory on which such claim
who issued it, accompanied with the proof of service. is premised. 11 Not having been duly accorded his day in court, petitioner
cannot thus be bound by the judgment in the collection suit.
SECTION 20. Proof of Service. — The proof of service of
summons shall be made in writing by the server and shall set forth WHEREFORE, the instant petition is hereby GRANTED and the decision of the
the manner, place, and date of service; shall specify any papers Court of Appeals is REVERSED. Accordingly, the decision of the Regional Trial
which have been served with the process and the name of the Court in Civil Case No. 18843 is SET ASIDE as to herein petitioner Ang Ping. No
person who received the same; and shall be sworn to when made costs. cdll
by a person other than a sheriff or his deputy.
SO ORDERED.
A cursory examination of the records shows that the process server did not file
any proof of service in Civil Case No. 18843. In this case, since substituted Vitug, Panganiban and Purisima, JJ., concur.
service was resorted to, there should have been a report indicating that the
Gonzaga-Reyes, J., took no part; signatory to CA decision.
person who received the summons in Ang Ping's behalf was one with whom
petitioner had a relation of confidence that would ensure that the latter will
receive or be notified of the summons issued in his name. Certainly, it was
never intended that the presumption of regularity in the performance of
official duty will be applied even in cases where there is no showing of
substantial compliance with the requirements of the rules of procedure. This
is all the more so in the present case where the duty to be performed has a
direct bearing on the acquisition of jurisdiction of the trial court over the
person of the defendant. llcd

As regards the alleged appearance of a lawyer in behalf of the petitioner

during the proceedings in the trial court, the same cannot be considered as
the voluntary appearance contemplated by the rules. In the first place, the
records are bereft of any showing that petitioner Ang Ping personally
appeared at any stage in the proceedings of the trial court. Second, no
document vesting authority in the lawyer who purportedly represented him
appears on record. At the pre-trial, for instance, Atty. Sandoval who claimed
to be the counsel for the defendants did not present any special power of
attorney executed by the petitioner herein. The rules require that the party-
litigant himself must appear for pre-trial but if he chooses to be represented
thereat, he should grant a special power of attorney to his counsel or
representative. Thus, Section 4 of Rule 18 of the 1997 Rules of Civil Procedure
requires:

SECTION 4. Appearance of parties. — It shall be the duty

of the parties and their counsel to appear at the pre-trial. The non-
appearance of a party may be excused only if a valid cause is shown
therefor or if a representative shall appear in his behalf fully
authorized in writing to enter into an amicable settlement, to
submit to alternative modes of dispute resolution, and to enter into
stipulations or admissions of facts and of documents.

Although the proceedings in the trial court were conducted under the old rules
of civil procedure, the same procedural requirement applies to the case at bar
since well settled is the rule that remedial rules have retroactive application.
In any case, the aforecited new rule is merely a crystallization of a procedure
long established by jurisprudence and practice. cda

With respect to the appellate court's holding that because of petitioner's delay
in filing the petition for annulment of judgment, he is deemed to have
forfeited his opportunity to present his side, it is enough to say that where the
ground invoked as basis for annulment of judgment is lack of jurisdiction, the
petition may be filed anytime before it is barred by estoppel or laches, 8
neither of which obtains in the present case. As held by this Court before, it is
the better rule that courts, under the principle of equity, will not be guided or
bound strictly by the statute of limitations or the doctrine of laches when to
do so, manifest wrong or injustice would result. 9

All told, the judgment sought to be executed against Ang Ping was indeed
rendered without jurisdiction as he was not properly served with summons
and neither did he voluntarily submit himself to the authority of the trial court.
The essence of due process is to be found in the reasonable opportunity to be

10
[G.R. No. 146553. November 27, 2002]
BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. Spouses WILLIE and JULIE
L. EVANGELISTA and LTS PHILIPPINES CORPORATION, respondents.
DECISION
PANGANIBAN, J.:
A defect in the service of summons, which is apparent on the face of the return,
does not necessarily constitute conclusive proof that the actual service has in
fact been improperly made. In the interest of speedy justice, the trial court
should immediately ascertain whether the defect is real and, if so, to cause the
service of a new summons thereafter.
The Case
The Petition for Review before us assails the November 6, 2000 Decision[1] of
the Court of Appeals (CA) in CA-GR SP No. 60081, as well as the December 27,
2000 CA Resolution[2]denying the Motion for Reconsideration. The dispositive
portion of the challenged Decision reads as follows:
WHEREFORE, premises considered, the petition is GIVEN DUE COURSE and the
writ prayed for accordingly GRANTED. The Resolution dated June 19, 2000 of
respondent Judge Salvador S. Abad Santos of Branch 65 of the Regional Trial
Court of Makati City in Civil Case No. 00-495 entitled Bank of the Philippine
Islands v. Spouses Willie Evangelista and Julie L. Evangelista, and the Order
dated July 21, 2000 denying the motion for reconsideration thereof, are both
hereby ANNULLED and SET ASIDE.
The respondent court is hereby ordered to DISMISS Civil Case No. 00-
495 WITHOUT PREJUDICE.
The Facts
The appellate court narrated the facts of the case in this manner:
Factual antecedents show that on April 12, 2000, private respondent [now
petitioner] Bank of the Philippine Islands (BPI) filed Civil Case No. 00-495 to
collect a sum of money against herein petitioners [now respondents] before
the Regional Trial Court of Makati City. The case was raffled off to the sala of
herein respondent Judge.
Petitioner [now respondent] LTS Philippines Corporation (LTS) has obtained
various loans from BPI in the aggregate amount of TWENTY MILLION PESOS
(P20,000,000.00) and as security for the said loans, Spouses Evangelista, also
herein petitioners, executed in favor of BPI a continuing suretyship and bound
themselves to pay any or all indebtedness of the LTS in the principal amount
of THIRTY MILLION PESOS (P30,000,000.00) and other charges thereon, and to
pay BPI, its successors, assigns or its subsidiaries in case of default of LTS.
Later on, a loan was obtained by Spouses Evangelista from BPI in the amount
of SIX MILLION SIX HUNDRED THOUSAND PESOS (P6,600,000.00). As security
for the said loan, Spouses Evangelista executed a real estate mortgage over
one (1) parcel of land located at Quezon City, covered by Transfer Certificate
of Title No. N-134746 of the Registry of Deeds of Quezon City. The real estate
mortgage executed in favor of BPI not only secured the obligation of Spouses
Evangelista, but also the obligation of LTS on the basis of the continuing
suretyship executed by Spouses Evangelista in favor of BPI.
After LTS and Spouses Evangelista failed to pay their respective loan
obligations, BPI instituted an extrajudicial foreclosure on the mortgaged
land. The mortgaged property was sold at public auction to BPI as the highest
bidder therefor for the amount of EIGHT MILLION THIRTEEN THOUSAND TWO
HUNDRED PESOS (P8,013,200.00). As alleged in BPIs complaint, petitioners
outstanding obligation with BPI was THIRTY FOUR MILLION FIFTEEN
THOUSAND FOUR HUNDRED THIRTY TWO AND 22/100 [PESOS] (P34,015,
432.22), exclusive of interest, penalty and other charges as of July 12, 1999.
It turns out, however, that the proceeds of the auction sale of the mortgaged
property were insufficient to cover/pay petitioners outstanding
obligation. The deficiency obligation, exclusive of interest, penalty and other
charges as of July 12, 1999, was pegged as TWENTY SIX MILLION TWO
THOUSAND TWO HUNDRED THIRTY TWO AND 22/100 [PESOS]
(P26,002,232.22).
BPI unilaterally reduced its claim from TWENTY SIX MILLION TWO THOUSAND
TWO HUNDRED THIRTY TWO AND 22/100 [PESOS] (P26,002,232.22) to only
TWENTY ONE MILLION EIGHT HUNDRED TWELVE THOUSAND FIVE HUNDRED
THIRTY FOUR AND 60/100 [PESOS] (P21,812,534.60).
However, despite demands therefor, petitioners failed to pay the
aforementioned deficiency obligation. Hence, BPI was prompted to file the
collection suit.
On May 15, 2000, the summons issued by the court a quo on April 14, 2000
for the individual petitioners was served, and the return or proof of service by
the process server was correspondingly made on May 16, 2000.
Petitioners, however, assailed the summons for being improperly served and
accordingly filed their Motion to Dismiss dated May 23, 2000 on the grounds
of (a) lack of jurisdiction over the persons of herein petitioners, (b) lack of
cause of action and (c) non-compliance with a condition precedent for filing
the collection suit.
On June 19, 2000, respondent Judge issued the assailed resolution denying
petitioners Motion to Dismiss. The court a quo reasoned, among other things,
that the allegations of irregularity in the service of summons are insufficient
to overcome the presumption of regularity in the performance of a court
officers official duties. On July 21, 2000, petitioners motion for reconsideration
thereof was also denied.[3](Citations omitted)
Ruling of the Court of Appeals
In granting the Petition for Certiorari, the CA ruled that the Regional Trial Court
(RTC) had not acquired jurisdiction over the persons of respondents because
of the defective service of summonses. The return failed to indicate any
reason why the process server had resorted to substituted, in lieu of personal,
service. It merely stated the names of the recipients of the summonses, who
were neither the defendants nor the proper officers of respondent
corporation. Sections 7 and 11 of Rule 14 of the Rules of Court were thereby
violated, warranting the dismissal of the case. And since the RTC never
acquired jurisdiction over the persons of herein respondents, there was no
more necessity to pass upon the other issues raised.
Hence, this Petition.[4]
Issues
In its Memorandum dated October 5, 2001, petitioner raises the following
issues for our consideration:
I
Whether or not the Honorable Court of Appeals gravely abused its discretion
by committing serious reversible error in holding that the court a quo did not
acquire jurisdiction over the person of the respondents allegedly due to
defective service of summons when the process server of the court a quo who
enjoys a presumption of regularity in the performance of official duty declared
that the summons were duly served upon respondents.
II
Whether or not the Honorable Court of Appeals gravely abused its discretion
by committing serious reversible error in ordering the dismissal of Civil Case
No. 00-495 entitled BPI vs. Spouses Willie and Julie Evangelista, LTS
Corporation in the court a quo, by setting aside the consideration of
11
substantial justice and equity and putting premium instead to the rules and
technicalities which are not the object of the Rules of Procedure.
III
Whether or not the Honorable Court of Appeals gravely abused its discretion
by committing serious reversible error by departing from consideration of
justice and equity in ordering the dismissal of Civil Case No. 00-495 entitled
BPI vs. Spouses Willie and Julie Evangelista, LTS Corporation in the court a quo,
thus, penalizing petitioner through no fault of its own but for the neglect of
the process server of the court a quo, who caused the alleged defective service
of summons upon the respondents.[5]
In short, this Court is called upon to determine whether the trial court, through
the service of summonses, acquired jurisdiction over respondents.
The Courts Ruling
The Petition is partly meritorious.
Main Issue:
Jurisdiction over Respondents
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.[6] As a rule,
if defendants have not been summoned, the court acquires no jurisdiction
over their person, and a judgment rendered against them is null and void.[7] To
be bound by a decision, a party should first be subject to the courts
jurisdiction.[8]
Petitioner argues that the summonses were validly served upon
respondents. On the return, the process server indicated that these had been
duly served upon them. It cannot be gainsaid that because she is a public
officer, she enjoys the presumption of regularity in the performance of her
duties. To overcome this presumption, clear and convincing evidence to the
contrary must be presented.
Respondents, on the other hand, maintain that the said returns show prima
facie the nonbinding character of the service of the summonses upon
them. The process server herself stated on the returns that she had served the
summonses upon Ms Paanto and Ms Cabrera, respectively. She had not served
them upon the spouses as required by Section 6, Rule 14 of the Rules of Court;
or upon respondent corporations president, general manager, corporate
secretary, treasurer or in-house counsel as required by Section 11, Rule 14 of
the Rules of Court. Therefore, the presumption of regularity in the
performance of duty finds no application to the present case, because the
process servers pronouncement that the summonses were duly served is a
mere conclusion of law.
We agree with respondents that the RTC did not acquire jurisdiction over their
persons, because (1) there is no showing that the summonses were properly
served upon them, and (2) they had not appeared before it and submitted to
its jurisdiction. The defect in the service thereof is apparent on the face of the
returns which failed to comply with Sections 7 and 11, Rule 14 of the Rules of
Court.
We cannot sustain petitioners argument, which is anchored on the
presumption of regularity in the process servers performance of duty. The
Court already had occasion to rule that [c]ertainly, it was never intended that
the presumption of regularity in the performance of official duty will be
applied even in cases where there is no showing of substantial compliance
with the requirements of the rules of procedure.[9] Such presumption does not
apply where it is patent that the sheriffs or servers return is
defective.[10] Under this circumstance, respondents are not duty-bound to
adduce further evidence to overcome the presumption, which no longer holds.
Nevertheless, notwithstanding the patent defect in the service of the
summonses, the RTC failed to ascertain fully whether resort to the substituted,
in lieu of the personal, service thereof was justified. Although the returns did
not show adherence to the rules, the actual service may still be proven by
evidence extraneous to it. If it was indeed improper, the trial court should
thereafter issue new summonses and serve them anew, as explained in Laus
v. Court of Appeals.[11]
The service of summons on the spouses was patently defective as shown by
the Certificate of Return[12] dated May 16, 2000, which merely stated the
following:
THIS IS TO CERTIFY that on the 15th day of May 2000, a copy of
Summons together with the complaint and its annexes attached
thereto in the above-entitled case were served to Sps. Willie & Julie
L. Evangelista at #6 Yellowstone Street, White Plains, Quezon City
thru Ms. Carmen Paanto, a person of suitable age and [discretion],
living therein and who acknowledged receipt thereof.
The defect is likewise apparent in the service of summons on LTS Philippines
Corporation. On the same return, the process server merely stated:
THIS IS TO CERTIFY that on the same date the undersigned cause[d]
the service of Summons together with the complaint and its
annexes attached thereto in the above-entitled case to LTS
Philippines Corporation at Orcell II Bldg., 1611 Quezon City thru Ms.
Julie Cabrera, but she refused to sign.[13]
The general rule requires that summonses be personally served upon the
defendants. However, if this mode of service cannot be effected within a
reasonable time, a substituted service may be resorted to. Failure to justify a
resort from one to the other violates the clear import of Section 7, Rule 14 of
the Rules of Court, which 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 affected (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.
In the present case, no justification for resorting to a substituted service of
summons upon the spouses was indicated on the return.
On the other hand, the apparent defect in the service of summons upon LTS
Philippines Corporation contravenes not only Section 7, but also Section 11 of
Rule 14 of the Rules of Court which 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.
The return of the summons served upon respondent corporation failed to
indicate the designation or title of the recipient, who should be the
corporations president, managing partner, general manager, corporate
secretary, treasurer, or in-house counsel. The service of summons on a
corporation is exclusive to the persons specified in Section 11, as held
in Villarosa v. Benito[14] which pertinently ruled as follows:
The designation of persons or officers who are authorized to accept summons
for a domestic corporation or partnership is now limited and more clearly
specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule
now states general manager instead of only manager; corporate secretary
instead of secretary; and treasurer instead of cashier. The phrase agent, or any
of its directors is conspicuously deleted in the new rule.
12
Clearly, on both returns, there is no showing that there were prior but failed
attempts at proper personal service, attempts that would have justified the
servers resort to substituted service.
Again, Laus v. Court of Appeals held that [s]tatutes prescribing modes other
than personal service of summons must be strictly complied with to give the
court jurisdiction, and such compliance must appear affirmatively on the
return.[15] In that case, finding that there was a defective service of summons,
the Court reversed the trial court that had conducted a hearing to determine
whether the summons had properly been served. The former remanded the
case to the latter for further proceedings and ordered that the summons be
validly served upon the defendants. In its ruling, the Court referred to
Administrative Circular No. 59, which mandated strict compliance with the
prescribed manner of effecting substituted service as outlined in Venturanza
v. Court of Appeals.[16] The pertinent portion of the Circular provides:
The substituted service should be availed of only when the
defendant cannot be served promptly in person. Impossibility of
prompt service should be shown by stating the efforts made to find
the defendant personally and the failure of such efforts. The
statement should be made in the proof of service. This is necessary
because substituted service is in derogation of the usual method of
service. It has been held that it is a method extraordinary in
character, and hence may be used only as prescribed in the
circumstances authorized by statute. Thus, the statutory
requirements of substituted service must be followed strictly,
faithfully, and any substituted service other than that authorized
by the statute is considered ineffective.
To repeat, the impossibility of personal service must first be shown before
resort to substituted service can be made. It is only when the summons cannot
be served personally on the defendant within a reasonable time that
substituted service may be resorted to. This fact must be shown by stating that
efforts have been made to locate the defendant personally, but that those
efforts failed.[17]
And since substituted service is a derogation of the usual method of service, it
must be used only as prescribed and under the circumstances authorized by
the Rules. Laws providing for modes other than the personal service of
summons must be strictly observed to enable the court to acquire personal
jurisdiction. Compliance therewith must appear affirmatively on the return.[18]
In the present case, the return did not (1) indicate the impossibility of a
personal service of summons within a reasonable time; (2) specify the efforts
exerted by the process server to locate respondents; and (3) with regard to
LTS Philippines Corporation, state that the summonses had been served upon
its president, managing partner, general manager, corporate secretary,
treasurer, or in-house counsel.
In the case before us, it appears from the records that the server effected
substituted service right on her first attempt to serve the summonses.
We note that while the case was pending before the CA, new summons was
served upon respondent corporation. The process server accomplished a
corresponding return[19] which, according to petitioner, already complied with
the Rules. In this appeal, however, this allegation cannot be taken up, because
it is being presented for the very first time. The new return, which was
accomplished after new summons had been served upon LTS Philippines
Corporation, cannot be accepted by this Court on its face; to do so would be
tantamount to a denial of respondents right to due process.
Since the service of summonses was patently defective, it follows that the trial
court did not acquire jurisdiction over the persons of respondents. As
described earlier, such jurisdiction in civil cases is acquired either by the
defendants voluntary appearance in court and submission to its authority or
by the service of summons.[20] Since respondents did not voluntarily submit to
the jurisdiction of the trial court, personal service became imperative.[21]
Petitioner further argues that ruling against the RTCs acquisition of jurisdiction
may be putting more premium on technical rules of procedure rather than on
substantive justice. While it may be true that the provision of the Rules of
Court should be applied with substantial justice as the paramount end, their
clear tenor and the supporting jurisprudence cannot simply be
disregarded. The Rules were painstakingly conceived in order to guarantee the
orderly dispensation of justice. Unjustifiably relegating them to the periphery
by arguing that their imposition would be in contravention of justice would
smack of inadvertence, negligence or even malice.
Actual Defect in the
Service of Summons
Nonetheless, notwithstanding the RTCs lack of jurisdiction, it has been held
that the absence in the sheriffs return of a statement about the impossibility
of personal service does not conclusively prove that the service is
invalid. Proof of prior attempts at personal service may be submitted by the
plaintiff during the hearing of any incident assailing the validity of the
substituted service. While the sheriffs return carries with it the presumption,
albeit disputable, of regularity in the sense that inter alia, the entries therein
are deemed correct, it does not necessarily follow that an act done in relation
to the official duty for which the return is made was not done simply because
it [was] not disclosed therein. Besides, the sheriffs neglect in making such a
disclosure should not unduly prejudice the plaintiff if what was undisclosed
was in fact done.[22]
Even if the defect is apparent on the face of the returns, evidence that would
prove proper compliance with the Rules on substituted service may be
presented.[23] In the present case, no hearing was conducted to determine
whether the summonses had actually and correctly been served. The trial
court merely relied on the return that declared that they had indeed been duly
served.
In the same wise, the process servers neglect or inadvertence in the service of
summonses should not unduly prejudice petitioner. To repeat, evidence may
be presented to ascertain whether prior attempts at personal service have in
fact been done. Resort to substituted service may still be valid, if properly
justified in a hearing to verify the matter. If not, new summonses should be
issued and served properly.
Duty of Petitioner
in the Service of Summonses
Respondents cite BAC Manufacturing & Sales Corporation v. Court of
Appeals,[24] which held that the plaintiff carried the burden of seeing to it that
the process server had immediatelycaused its service to the defendant. In that
case, however, we made no pronouncement on whether the plaintiff had the
corresponding duty to see to it that the manner in which the process server
had effected the summons was proper. Herein respondents aver that
petitioner cannot simply wash its hands, if there is a defect in the service of
summonses.
We agree with petitioner that it should not be directly faulted for the defective
service of summonses. Strictly speaking, it should not be held responsible for
the manner in which summonses were served or for ensuring that the
corresponding returns complied with the Rules. This is because its
representative is not required by the Rules to be physically present when the
summonses were served, or when the return was accomplished. It was the
duty of the process server to serve and accomplish the return. Only after the
summonses had been served and the return accomplished would petitioner
have known whether there had been any defect in the service.
We now take time to remind trial courts, clerks of court and process servers
to ensure that summonses and other court processes are properly served in
order to spare them, the litigants and the government from waste of effort,
time and resources resulting from the improper service of summonses. It is
13
their duty to see to it that these are validly served in order to avoid needless
delays in the outcomes of cases.

Lack of Verification and Certification

of Non-Forum Shopping

Finally, we find no merit in respondents prayer for the dismissal of this Petition
for lack of verification and certification of no forum shopping in petitioners
Motion for Extension of Time to File Petition[25] dated January 12, 2001. We
have held that the submission of a certification of no forum shopping is not
always necessary when one files a motion for extension of time to file a
petition.[26] As a rule, pleadings need not be verified unless required by law,
the Rules or jurisprudence.[27] Section 4 of Rule 7 of the Rules of Court
provides:

SEC. 4. Verification. Except when otherwise specifically required by law or rule,

pleadings need not be under oath, verified or accompanied by affidavit.

x x x x x x x x x.

Petitioners Motion for Extension of Time to File Petition need not be verified
simply because no law, rule or jurisprudence requires its verification.

In view of the foregoing, we find it reasonable to remand the case to its court
of origin to determine whether the summonses were actually defective. If
they were, the trial court should issue an order calling for the service of new
ones, to be served properly consistent with this Decision.

WHEREFORE, the Petition is PARTLY GRANTED and the assailed Decision of the
Court of Appeals MODIFIED. The case is hereby REMANDED to the RTC for
further proceedings.Those proceedings shall include a determination of
whether there was actually a valid service of summonses. If, after hearing,
such service is found to have been improper, then new summonses should be
issued and served forthwith. No costs.

SO ORDERED.

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Puno, (Chairman), J., abroad on official business.

14
[G.R. No. L-29067. May 31, 1977.]
JAMES A. KEISTER, petitioner, vs. THE HON. PEDRO C. NAVARRO, as Judge of
the Court of First Instance of Rizal, and BATJAK, INC., respondents.
DECISION
ANTONIO, J p:
Special civil action of prohibition to prevent respondent Judge Pedro C.
Navarro of the Court of First Instance of Rizal from enforcing his Order dated
March 28, 1968 in Civil Case No. 10392 requiring the petitioner to answer the
complaint and from proceeding with the trial of the case, on the ground that
the Court has not acquired jurisdiction over the person of the petitioner.
Respondent Batjak, Inc. is a corporation duly organized and existing under the
laws of the Philippines, with offices at the NIDC Building, 259-263 Buendia
Avenue, Makati, Rizal; while petitioner James A. Keister is an American citizen
and a resident of 11 Narra Road, Forbes Park, Makati, Rizal. Said respondent
Batjak, Inc. is the registered owner of an automobile, Dodge 440, 4-door Sedan,
with Motor No. 4248123752, Serial No. VE-132825C which it bought on
November 12, 1965 for P19,000.00 from the Filipinas Auto Motor Corporation,
and covered by Registration Certificate No. 1160094, dated November 23,
1965 issued by the Land Transportation Commission.
On December 27, 1966, petitioner James A. Keister, as President-General
Manager of respondent Batjak, Inc., sold the automobile to Juan T. Chuidian
for P5,000.00. Two (2) days later, or on December 29, 1966, J.T. Chuidian also
sold and reconveyed the same automobile for P5,000.00 to James A. Keister,
who registered the same in his name with the Land Transportation
Commission. It is claimed by respondent Batjak, Inc., that these transactions
were without its authority, knowledge and consent.
On March 30, 1967, respondent Batjak, Inc. took possession of the automobile,
but sometime in May, 1967 the said automobile disappeared from the NIDC
Compound at 259-263 Buendia Avenue, Makati, Rizal, where it was parked.
However, on October 16, 1967, the automobile was recovered by the Land
Transportation Commission, which, in turn, delivered it to the Criminal
Investigation Service of the Philippine Constabulary for investigation.
When the Philippine Constabulary (CIS) refused to deliver said automobile to
respondent Batjak, Inc. despite its repeated demands for its return, the latter
filed, on November 22, 1967, a complaint for annulment of Sale with
Attachment against the Philippine Constabulary (CIS) and petitioner James A.
Keister in the Court of First Instance of Rizal, Branch II (Civil Case No. 10392).
Batjak, Inc. then prayed, among others, that an Order be issued: (1) annulling
the sale of the automobile by James A. Keister in the name of Batjak, Inc. to J.
T. Chuidian and the resale of said automobile by J.T. Chuidian to James A.
Keister; (2) ordering the attachment of the automobile by directing the
Provincial Sheriff of Rizal to take possession of it from the custody of the
Philippine Constabulary (CIS), Camp Crame, Quezon City, and to deliver it to
respondent Batjak, Inc.; (3) ordering the Land Transportation Commission to
cancel the Registration Certificate No. 326456 dated January 5, 1967 issued in
favor of James A. Keister, and to issue, in lieu thereof, a new registration
certificate in favor of Batjak, Inc.; and (4) ordering James A. Keister and any
and all persons acting on his behalf, jointly and severally, to pay Batjak, Inc.
the sum of P5,000.00 as attorney's fees, expenses of litigation, and costs of the
suit. 1 It was alleged in the complaint that defendant James A. Keister,
American citizen, and deposed President and General Manager of plaintiff may
"be served with summons at c/o Chuidian Law Office, Suite 801, J M T Bldg.,
Ayala Avenue, Makati, Rizal". It also alleged that on or about March 27, 1967,
said defendant "without notice to plaintiff and/or any of its officers and
employees secretly and surreptitiously left the Philippines for the United
States and up to the present time, he has not returned . . . ."
On December 1, 1967, the summons, 2 with the complaint attached thereto,
was served purportedly upon petitioner at "c/o Chuidian Law Office, Suite 801,
JMT Bldg., Ayala Avenue, Makati, Rizal". 3 The receipt of service was signed
by one Vicente Basallote, Clerk of said Chuidian Law Office. 4
On December 15, 1967, the petitioner, thru his counsel, filed a special
appearance questioning the jurisdiction of the court over the person of
petitioner and moved to dismiss the complaint. 5 It was asserted that the
Court had acquired no jurisdiction over the person of the defendant because
the summons was improperly served at the Chuidian Law Office, Suite 801,
JMT Bldg., Ayala Avenue, Makati, Rizal and not at the residence or place of
business of the petitioner, contrary to the requirements of Section 8 of Rule
14 of the Revised Rules of Court. 6
On December 23, 1967, the Motion to Dismiss was heard and argued.
Thereafter, or on January 12, 1968, respondent Judge issued an Order denying
the afore-mentioned Motion to Dismiss for the reasons; (1) that the address
of the defendant James A. Keister given in the complaint is c/o Chuidian Law
Office, Suite 801, JMT Bldg., Ayala Avenue, Makati, Rizal; (2) that the service
of summons and copy of the complaint was made at the said place and
received by one Vicente Basallote, Office Clerk; and (3) that, as far as the
service of summons and complaint was concerned, the allegation in the
complaint must prevail. In the same Order, the defendants in said Civil Case
No. 10392 were given ten (10) days from receipt of said Order within which to
file their answer. 7
On February 9, 1968, petitioner, thru his counsel, filed a Motion for
Reconsideration dated February 7, 1968 of the Order of January 12, 1968 of
the respondent Judge, reiterating the grounds relied upon in his Motion to
Dismiss. 8 On February 17, 1968, respondent Batjak, Inc. filed its opposition
thereto. 9 On March 28, 1968, respondent Judge issued an Order denying
petitioner's Motion for Reconsideration. 10
Hence, the present petition for prohibition with preliminary injunction praying
that respondent Judge be prohibited from enforcing the Order requiring
petitioner to answer the complaint and to enter trial in Civil Case No. 10392 of
said Court, and from further proceeding in said action, which is clearly beyond
its jurisdiction; and that, pending the resolution of this petition, a preliminary
writ of injunction be issued against the respondent Judge upon the filing of a
bond. cdll
On June 22, 1968, this Court issued, as prayed for, the writ of preliminary
injunction. 11
The sole issue for determination in this case is whether or not jurisdiction was
lawfully acquired by the court a quo over the person of the petitioner.
We find the petition meritorious.
Service of summons upon the defendant is the means by which the court may
acquire jurisdiction over his person. In the absence of a valid waiver, trial and
judgment without such service are null and void. 12 This process is solely for
the benefit of the defendant. 13 Its purpose is not only to give the court
jurisdiction of the person of the defendant, but also to afford the latter an
opportunity to be heard on the claim made against him. 14
The summons must be served to the defendant in person. 15 It is only when
the defendant cannot be served personally within a reasonable time that a
substituted service may be made. 16 Impossibility of prompt service should
be shown by stating the efforts made to find the defendant personally and
the fact that such efforts failed. This statement should be made in the proof
of service. 17 This is necessary because substituted service is in derogation
of the usual method of service. It has been held that this method of service is
"in derogation of the common law; it is a method extraordinary in character,
and hence may be used only as prescribed and in the circumstances
authorized by statute." 18 Thus, under the controlling decisions, the
statutory requirements of substituted service must be followed strictly,
faithfully and fully, and any substituted service other than that authorized by
the statute is considered ineffective. 19
15
Indeed, the constitutional requirement of due process requires that the
service be such as may be reasonably expected to give the desired notice to
the party of the claim against him. 20
Under the Rules, substituted service may be effect (a) by leaving copies of the
summons at the defendant's dwelling house or 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 . 21 The terms "dwelling house" or "residence" are generally
held to refer to the time of service, hence it is not sufficient "to leave the copy
at defendant's former dwelling house, residence, or place of abode, as the
case may be, after his removal therefrom." 22 They refer 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.
Similarly, the terms "office" or "regular place of business" refer to the office or
place of business of defendant at the time of service. Note that the rule
designates the persons to 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
It is not disputed that the dwelling house or residence of the defendant, herein
petitioner James A. Keister, is at 11 Narra Road, Forbes Park, Makati, Rizal, and
that his office or regular place of business, prior to his temporary departure to
the United States on March 27, 1967, is at the Batjak Corporation office in
Sarmiento Building, Ayala Avenue, Makati, Rizal. It is, however, conceded that
in neither of these places was service of summons effected in the manner
prescribed by the procedural law.
The circumstance that "defendant James A. Keister, without notice to plaintiff
and/or any of its officers and employees, secretly and surreptitiously left the
Philippines for the United States and up to the present time he has not
returned" does not warrant much less justify the service of summons upon
petitioner at a place which is neither his residence nor regular place of
business. cdll
In Montalban v. Maximo, 24 this Court explained that summons in a suit in
personam against a resident of the Philippines temporarily absent therefrom
may be validly effected by substituted service under Section 8, Rule 14 of the
Revised Rules of Court, and that Section 18 of Rule 14 is not the sole provision
that governs summons upon a defendant temporarily absent from the
Philippines in personal actions.
As above indicated, the service of summons, in the case at bar, was fatally
defective and, therefore, insufficient to confer jurisdiction on the court a quo
over the person of petitioner James A. Keister. Consequently, the Orders of
January 12, 1968 and March 28, 1968 are null and void.
WHEREFORE, the petition for prohibition is hereby GRANTED, and the writ of
preliminary injunction issued on June 22, 1968 is made permanent. Costs
against respondent Batjak, Inc.
Fernando (Chairman), Aquino and Martin, JJ., concur.
[G.R. No. L-57892. September 21, 1982.]
ANASTACIO AREVALO and PILAR SILVERIO, petitioners, vs. VALENTIN
QUILATAN, LOPE DE LA CRUZ, JUDAN DE LA CRUZ, SALUD DE LA CRUZ and
her spouse EMILIANO MEDINA, EMILIANO DE LA CRUZ, MARIA DE LA CRUZ
and her spouse DOMINADOR LUCENA, FAUSTINA DE LA CRUZ and her spouse
ROSAURO JULIO, CELESTINO DE LA CRUZ, FELIPA DE LA CRUZ and her spouse
ENGRACIO BOCAL, JEREMIAS DE LA CRUZ, NATALIA DE LA CRUZ and her
spouse RUFINO BOTO, EUGENIA SANTIAGO and her spouse PATRICIO
JIMENEZ, PRIMITIVO SANTIAGO, EMILIA SANTIAGO and her spouse SERGIO
GUEVARA, ESTEBAN SANTIAGO, FERMIN SANTIAGO, BENITA SANTIAGO and
her spouse TEOTIMO CRUZ, RICARDO SANTIAGO, NICANOR G. SALAYSAY,
and THE HONORABLE COURT OF APPEALS, respondents.
Jose S. Balajadia for petitioners.
Jose S. Atienza for private respondents.
SYNOPSIS
In Civil Case No. 11045 filed by petitioners as plaintiffs, respondents as
defendants, were declared in default for failure to file an answer within the
reglementary period despite substituted service of summons. In his return of
the summons, the Deputy Sheriff certified that he personally served copies of
the summons together with a copy of the complaint upon defendants through
their daughter-in-law at Pulanglupa, Las Piñas, Rizal. However, the return does
not show on its face the impossibility of prompt service and the efforts made
to find the defendants personally; nor the fact that service was made in the
defendant's dwelling house or residence as required by Section 8, Rule 14 of
the Rules. Judgment by default was thereafter rendered by the trial court
against defendants. On appeal, the Court of Appeals, in a split decision,
annulled and set aside the default judgment rendered by the Court of First
Instance. Hence, this petition for review.
The Supreme Court held that substituted service of summons to defendants,
as was done here by the Deputy Sheriff, may be availed only under the
conditions provided for under Section 8, Rule 14 of the Rules; consequently,
failure of the sheriff's return to indicate the impossibility of prompt service
and the efforts made to find the defendants personally, and to show on its
face that the service was made in the "defendant's dwelling house or
residence" as required by said Rule renders the service ineffective.
Decision of the Court of Appeals is reversed and the case remanded to the trial
court for further proceedings.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; DISPUTABLE PRESUMPTION;
REGULARITY OF ALL OFFICIAL ACTIONS. — "It is fundamental rule that the
regularity of all official actions and proceedings will be presumed until the
contrary is proved. It is therefore incumbent upon the oppositors to rebut this
presumption with competent and proper evidence such as the return made by
the sheriff who served the summons in question" (Associated Insurance and
Surety Co., Inc. vs. Banson, 26 SCRA 268).
2. ID.; CIVIL PROCEDURE; SUMMONS; SUBSTITUTED SERVICE;
REQUIREMENTS OF RULES NOT FULFILLED IN CASE AT BAR. — Where the
return of the sheriff does not in any remote sense indicate the impossibility of
prompt service and the efforts made to find the defendants personally, which
efforts according to Moran, "should be (stated) in the proof of service;" nor
does such return show on its face that the service was made in the
"defendant's dwelling house or residence" as required by Section 8 to effect a
valid substituted service, the presumption of regularity in the performance of
official function can hardly hold.
3. ID.; ID.; SUMMONS; RESIDENCE, DEFINED. — Residence is "the
place where he (defendant) is habitually present, and from which when he
departs, he intends to return." It also has been held to be equivalent to the
term "permanent abode" and to the word "home" in the sense of a house to
which one, whenever absent, intends to return. (Vol. I, pp. 791-800, Francisco
on the Rules of Court, 2nd ed.) Otherwise stated, it is the house where the
defendants eat and sleep, to use plain layman's language.
DECISION
BARREDO, J p:
Petition for review of the split (3-2) decision on reconsideration of the Court
of Appeals in CA G.R. No. 57728-R, Anastacia Arevalo, et al. vs. Valentin
Quilantan, et al. which reversed a decision of September 3, 1974 rendered by
the Court of First Instance of Rizal in its Civil Case No. 12229 in which the
Arevalos were the plaintiffs and the Quilatans et al. the defendants, annulling
16
and setting aside the judgment by default dated February 14, 1969 of the same
Court of First Instance against the Arevalos in Case No. 11045.
According to the decision of the Court of Appeals presently under review:
"Dissatisfied, appellants raise the following assignments of error:
"'I. THE TRIAL COURT ERRED IN ITS FINDING THAT THE PLAINTIFFS-
APPELLEES HAVE TRANSFERRED THEIR RESIDENCE FROM HOUSE NO. 211 TO
HOUSE NO. 196 PULANG-LUPA, LAS PIÑAS, RIZAL SOMETIME IN THE YEAR
1967.
"II. THE LOWER COURT ERRED IN FAILING TO CONSIDER APPELLEE'S
VOTER'S REGISTRATION RECORD (EXH. '6') AS EVIDENCE SHOWING SAID
APPELLEE'S CONTINUED RESIDENCE AT HOUSE NO. 211 PULANG-LUPA, LAS
PIÑAS, RIZAL.
"III. THE DECIDING COURT ERRED IN HOLDING AND DECLARING THAT
THERE WAS NO VALID SUBSTITUTED SERVICE OF SUMMONS AND COPIES OF
THE COMPLAINT UPON THE HEREIN PLAINTIFFS-APPELLEES.' (pp. 7-8,
Appellants' Brief)
"Appellants were plaintiffs while appellees were defendants in Civil Case No.
11045 before the CFI of Rizal. Suit commenced with the filing of a complaint
dated July 10, 1968. Summons was duly issued on July 25, 1968. After serving
the summons on August 2, 1968, the Deputy Sheriff of Rizal made the
following Sheriff's Return:
"'I CERTIFY that on this 2nd day of August 1968, I personally served copies of
enclosed SUMMONS together with copies of the Complaints, issued by the
court in connection with the above-entitled case, upon ANASTACIO AREVALO
and PILAR SILVERIO, thru their daughter-in-law, LUZ ESGUERES, a person with
sufficient age and discretion residing therein, who refused to acknowledge the
receipt thereof, at Pulang lupa, Las Piñas, Rizal.' (Exh. C).
"For failure of appellees to file an answer within the reglementary period,
appellants moved to declare the former in default and to be allowed to adduce
evidence ex-parte. Thereafter judgment was rendered on February 14, 1969.
Appellee Pilar Silverio received a copy of this decision through the mails on
June 20, 1969 while the copy intended for the other appellee Anastacio
Arevalo, husband of Pilar, mailed on May 2, 1969 was returned unclaimed. He
ultimately received a copy of the decision and the writ of execution on August
26, 1969.
"Appellees make it appear that they no longer resided at No. 211 Pulanglupa,
Las Piñas, Rizal where summons were served on August 2, 1968, but at No. 196
Pulanglupa, Las Piñas, Rizal. However they admit that No. 211 belongs to them
although only their son and daughter-in-law Luz dwelled therein. They aver
that Luz Esgueres forgot all about the papers left by the sheriffs. Moreover,
appellee Pilar Silverio claimed that she was illiterate and ignorant to fully
realize the significance of the decision which she received through the mails
on June 20, 1969.
"On December 11, 1970, the judge issued this pre-trial order in the annulment
case:
"'Upon calling this case for pre-trial, the parties agreed that the only issue in
this case is whether or not the defendant in Civil Case No. 11045 and who are
the plaintiffs in the present case were duly served with summons.' (p. 54,
Record on Appeal).
"We find no merit in the second of the assignment of errors. A review of Exhibit
6 reveals that the voter registration record of Anastacio Arevalo was filed on
March 25, 1965 and approved on April 6, 1965. It could not accurately
establish the residence of appellee Anastacio Arevalo on or about August 2,
1968, a period of more than 3 years hence.
"However, a thorough scrutiny of the records as well as the applicable
jurisprudence on the matter warrants the conclusion that the first and third of
the assignment of errors are meritorious. In Associated Insurance & Surety Co.,
Inc. vs. Banzon, G. R. No. L-23971, Nov. 29, 1968, 26 SCRA 268, the Supreme
Court sustained the ruling of the trial judge therein, to wit:
"'It is a fundamental rule that the regularity of all official actions and
proceedings will be presumed until the contrary is proved . . . It is therefore
incumbent upon the oppositors to rebut this presumption with competent and
proper evidence such as the return made by the sheriff who served the
summons in question.'
"The certificate of service by the sheriff is prima facie evidence of the facts set
out therein (1 MARTIN 453, Second Edition). Without any clear and convincing
evidence that the summons was served irregularly, the validity of the service
must be upheld. The testimonies presented by appellees do not convince Us
of any fatal defect in the substituted service of summons. Luz Esgueres Arevalo
the daughter-in-law of appellees who received the summons, herself admitted
that no instrument was ever executed to transfer ownership of No. 211 from
the appellees to her husband. Moreover, this same witness testified that
important documents of appellees are still kept in a steel safe at No. 211, and
that appellees have still some furnitures in this house. Even their complaint (p.
6, R.A.) gives their address as merely Pulangpula without specifying 196 or 211.
Residence is a broad term that must not be given a restricted interpretation.
It is possible that a person may have more than one residence at any given
time. Thus in Aznar vs. Garcia, G. R. No. L-16525, January 31, 1963, 7 SCRA 89,
the Supreme Court adopted this interpretation of residence:
"'Sec. 16. Residence is a term used with many shades of meaning from mere
temporary presence to the most permanent above. Generally, however, it is
used to denote something more than mere physical presence. (Goodrich on
Conflict of Laws, p. 29'" (Pp. 29-31, Record.)
Petitioners' motion for reconsideration was denied because:
"Firstly, appellees admitted receipt of summons by their daughter-in-law at
211 Pulanglupa, Las Piñas, Rizal. She answered the sheriff that this place was
the house of Anastacio Arevalo. She received the summons but she allegedly
'forgot all about the papers left with her by Sheriff Bernardo, the same never
came to the knowledge of the plaintiffs-appellees.' (pp. 3-5, Appellees' Brief).
"Secondly, appellee Pilar Silverio received a copy of the decision in Civil Case
No. 11045 via registered mail on June 20, 1969, but 'because of her illiteracy
and ignorance, she did not know what she actually received, nor was she
aware of its importance and effects or consequences.' (Complaint, p. 102,
Record on Appeal).
"Thirdly, 'the letter containing the decision addressed to plaintiff Anastacio
Arevalo was mailed on May 2, 1969, but was returned unclaimed'. (Complaint,
p. 12, Record on Appeal).
"It was only upon receipt of the writ of execution on August 26, 1969 did the
Arevalos jerk out of the world of fantasy and face the harsh facts of reality. It
is highly unnatural that Luz forgot to give the summons, which she properly
acknowledged, to her in-laws. Moreover, it is also unnatural for Mrs. Arevalo
not to have inquired from more literate individuals the contents of what she
received from the mails. It is only natural for the Arevalos that, upon knowing
the contents of the mail to Mrs. Arevalo, Anastacio would dispense with
claiming his mail, thinking he could forego with the effects of a court decision
by so doing. Only with the imminence of execution did they decide to act." (Pp.
34-35, Record.)
There were two dissenters to the said denial, Justices Onofre Villaluz and
Carolina Griño-Aquino, who maintained that:
"After a careful and thorough scrutiny of the argument raised by the said
motion, and the record of the case at bar. We are constrained to sustain
appellees' contention.
17
"It is not borne by the record that the Sheriff exerted his utmost effort to
locate the exact address of the plaintiffs-appellees (defendants in Civil Case
No. 11045). Instead, the record reveals that the summons was served to the
daughter-in-law of appellees whose residence is different from that of the
appellees themselves. Although it was stated there that they are both residing
in Pulanglupa, Las Piñas, Metro Manila, the Sheriff should have been accurate
in locating said house of movants (appellees) in order to avoid mishandling of
summons.
"It is a settled rule that strict compliance with the different modes of service
is required in order that the court may acquire jurisdiction over the person of
the defendants (Sequito vs. Letrondo, 105 Phil. 1139; Pantaleon vs. Asuncion,
56 O.G. No. 37, p. 5745). And, service of summons under the principle of
substituted service cannot be declared valid where it was served through a
person not authorized to receive any pleading in behalf of said defendant at a
house which though owned by the defendant is not the defendant's dwelling
house or residence (J.M. Tuason & Co. vs. Fernandez, 12 SCRA 335).
"Likewise, the rule is that when a copy of the summons and of the complaint
were served upon a person not authorized by the defendant to receive for him,
the defendant may raise the legality of service which was erroneous for him,
and if he is declared in default for failure to comply therewith he can appeal
from the order declaring him in default (Fernandez vs. Caluag, 3 SCRA 857)."
(Pp. 40-41, Record.)
We are more inclined to uphold the view that the presumption of regularity in
the performance of official functions heavily relied upon by the majority in the
Court of Appeals can hardly hold in this case, for the simple reason that on its
face, the return of the sheriff quoted above does not fulfill all the
requirements of Section 8 of Rule 14 which provides:
"SEC. 8. Substituted Service. — If the defendant cannot be served within a
reasonable time as provided in the preceding section, service may he effected
(a) by leaving copies of the summons at the defendant's dwelling house or
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."
"The substituted service should be availed of only when the defendant cannot
be served promptly in person. Impossibility of prompt service should he shown
by stating the efforts made to find the defendant personally and the failure of
such efforts. The statement should be made in the proof of service. This is
necessary because substituted service is in derogation of the usual method of
service. It has been held that it is a method extraordinary in character, and
hence may he used only as prescribed in the circumstances authorized by
statute. Thus, the statutory requirements of substituted service must be
followed strictly, faithfully and fully, and any substituted service other than
that authorized by the statute is considered ineffective. Among the two modes
of substituted service, the sheriff may choose that which will more likely insure
the effectiveness of the service. The two modes are: (a) by leaving copies of
the summons at the defendant's dwelling house or usual residence, with some
person of suitable age and discretion then residing therein; and (b) by leaving
copies at defendant's office or regular police of business with some competent
person in charge thereof, and in this connection it has been held that service
of summons upon the manager of a factory is service upon the owner." (Moran,
Vol. 1, 1979 Ed., p. 441.)
Contrary to the clear import of the foregoing authoritative commentary, citing
Keister vs. Navarro, 77 SCRA 215 and Lezama vs. Lezama, et al., 50 O. G. 4788,
the return here does not in any remote sense indicate the impossibility of
prompt service and the efforts made to find the defendants personally, which
efforts, according to Moran, "should be (stated) in the proof of service." Nor
does such return show on its face that the service was made in the
"defendant's dwelling house or residence" as required by Section 8 above.
While it does state that Luz Esgueres, to whom the summons were left was "a
person of sufficient age and discretion residing therein and that she is the
daughter-in-law of the defendants (herein petitioners), "the fact remains that
it is only by evidence aliunde that attempts have been made to prove that the
petitioners did reside therein also. The general reference to the place of
service as "at Pulanglupa, Las Piñas, Rizal" fails to specify the very house where
such service was made.
True it is that Luz Esgueres, admittedly the daughter-in-law of petitioners, told
the sheriff that petitioners were living at 211 Pulanglupa, Las Piñas, where she
was, but such declaration cannot legally bind petitioners who presented proof,
believed by the trial court, that they actually lived at 196 Pulanglupa. More,
while according to majority opinion under review, it was admitted that no
document of transfer was exhibited to prove conveyance by the petitioners to
their son and his wife of the house at 211 Pulanglupa in 1967, the decision of
the trial court, Annex C of the petition, contains the finding that "in 1967, the
store located at 211 Pulanglupa, Las Piñas, Rizal was registered in the name of
Luz Esgueres as shown by Exhibits '1', '1-1', '1-2' and '1-3"'.
Again, it may be conceded that the house at 211 Pulanglupa was still owned
by petitioners when the service in question was made in 1968, but Section 8
of Rule 14 does not refer to ownership but to living or dwelling therein. As the
dissent of Justice Villaluz well points out, this Court has held in J. M. Tuazon &
Co. vs. Fernandez, 12 SCRA 335, it is not valid to serve summons "at a house
which though owned by the defendant is not defendant's dwelling house or
residence."
The majority opinion of the Court of Appeals invokes the liberality injunction
of Section 2, Rule 1 in the construction of the rules. But, in the instant case,
the special division of five of the Court of Appeals was split three to two on the
pivotal factor of where petitioners were residing in 1968 when the service at
issue was served. As against positive testimony of petitioners as to their
dwelling place separate and distinct from that of their son and daughter-in-
law, the majority gave decisive importance, erroneously in Our opinion, to the
fact that some belongings of petitioners were still found at 211 Pulanglupa.
But residence is "the place where he (defendant) is habitually present, and
from which when he departs, he intends to return." It also has been held to be
equivalent to the term "permanent abode" and to the word "home" in the
sense of a house to which one, whenever absent, intends to return. (Vol. I, pp.
791-800, Francisco on the Rules of Court, 2nd ed.) Otherwise stated, it is the
house where the defendants eat and sleep, to use plain layman's language.
Incidentally, the construction adopted by the Court of Appeals in Korean
Airlines vs. Valencia, CA G.R. No. 08515-SP, May 30, 1980, to which review was
denied by this Court, may be differentiated from the instant case, if only
because the lawyer of Korean Airlines to whom the service must have been
relayed after being served at the office of the company was also the very agent
designated to receive summons for the foreign corporation. Just as, in the
instant case, the petitioners cannot legally be held to have had two "dwelling
houses or residences" at the same time vis-a-vis service of summons, that
lawyer in Korean Airlines could not split himself into two personalities for the
purpose of avoiding the effectivity of such service.
After all, since the result of the judgment herein is not yet finally decisive of
the rights of the parties to the property in question, as there will still be
another trial where petitioners are only asking the opportunity to be heard,
We feel it would be more equitable to give petitioners that chance.
WHEREFORE, the decision of the Court of Appeals is hereby reversed and the
case (Civil Case No. 12229 of the Court of First Instance of Rizal) is ordered
remanded in the said trial court for further proceedings. No costs.
Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur.
Aquino, and Escolin, JJ., no part.
18
G.R. No. 77760. December 11, 1987.]
SPOUSES VIOLETA S. VENTURANZA and ROMY VENTURANZA, petitioners, vs.
HON. COURT OF APPEALS, HON. JUDGE BERNARDO P. PARDO, PRESIDING
JUDGE OF REGIONAL TRIAL COURT OF MANILA, BRANCH XLIII, HON. JUDGE
ERNESTO MADAMBA, PRESIDING JUDGE OF METROPOLITAN TRIAL COURT
OF MANILA, BRANCH XVII AND NIEVES SENORAN, respondents.
DECISION
PADILLA, J p:
Petition for review on certiorari of the decision * of the Court of Appeals,
dated 6 March 1987, in CA-G.R. No. SP-08971 entitled "Spouses Violeta S.
Venturanza and Romy Venturanza, petitioners, vs. Hon. Judge Bernardo Pardo,
et al., respondents," affirming the decision ** of the Regional Trial Court of
Manila, Branch XLIII.
On 22 May 1985, plaintiff Nieves Y. Senoran (now private respondent) filed a
complaint against spouses Violeta S. Venturanza and Romy Venturanza (now
petitioners) with the Metropolitan Trial Court of Manila, Branch XVII, docketed
as Civil Case No. 109950, for collection of sums of money in the aggregate
amount of P9,711.50, representing several loans evidenced by promissory
notes which had become due and demandable but unpaid despite repeated
demands. 1 On 10 June 1985, summons was issued against the petitioners
and served on Augusto Soan, father of petitioner Violeta S. Venturanza, at
3412 B.A. Tan Street, Barrio Obrero, Tondo, Manila, the address of petitioners
stated in the complaint. The sheriff's Return, states as follows: 2
"I certify that on this date I served a copy of this Summons together with a
copy of the corresponding Complaint on Violeta Venturanza and Romy
Venturanza at the address designated herein/at _________ Manila,
personally/thru Mr./Miss/Mrs. Augusto Soan, father, a person
working/residing therein who is of sufficient age and discretion and/or duly
authorized to receive services of this nature and who signed/but who,
however, refused to sign for the receipt hereof, as evidenced by his/her/the
latter's signature appearing on the face of this summons.
Manila, Philippines, June 10, 1985."
For failure of the petitioners to file their Answer, a decision dated 12 August
1985 was rendered by the court a quo based on the allegations of fact in the
complaint, and ordering the petitioners to pay jointly and severally the private
respondent the sum of P9,711.50 with interest thereon at the rate of twelve
percent (12%) per annum from due date per promissory notes until fully paid,
to pay P1,000.00 as attorney's fees and costs of suit. 3 Considering that, as
per sheriff's Return, dated 17 August 1985, said decision could not be served
upon the petitioners at 3412 B.A. Tan St., Barrio Obrero, Tondo, Manila, on the
ground that they were no longer at said address, the same was served on 16
September 1985 upon Violeta S. Venturanza in her office at Asian
Development Bank, Roxas Blvd., Pasay City. 4
On 22 September 1985, petitioners filed a "Motion to Set Aside Decision and
to Declare Past Proceedings Null and Void for Lack of Jurisdiction," alleging
that there had been no proper and valid service of summons upon them in
accordance with either Section 7 or Section 8 of Rule 14 of the Rules of Court
5 and that the court a quo never acquired jurisdiction over the person of the
petitioners, considering that the address where the summons was served is
the residence of Violeta S. Venturanza's father, Augusto Soan, and not the
residence or dwelling house of the petitioners, and that since April 1985,
petitioners had been already residing at Aurora Street, Pasay City. 6 In an
order dated 20 October 1985, the court a quo denied the motion, for lack of
merit, stating thus: cdrep
"The preponderance of evidence weighs heavily in favor of an affirmative
resolution of the issue.
"In the affidavit of Deputy Sheriff, Jose L. Cruz, attached as Annex "A" of
plaintiff's opposition to the motion under consideration, he positively states
that upon his service at defendants' abovementioned given address, he
inquired from one Augusto Soan, who identified himself to be defendant's
father whether defendants were residents of the place. Upon confirming that
defendants were in fact residents thereat, Jose L. Cruz forthwith handed to
said Augusto Soan the summons together with a copy of the complaint
requesting the latter to serve the same upon defendants.
"The Telephone Directory of Asian Development Bank for February, 1984,
attached and marked as Annex "B" of plaintiff's opposition clearly indicates
therein that defendant Violeta S. Venturanza is a resident of 3412 B.A. Tan, Bo.
Obrero, Tondo, Manila (Annex "B"). The Telephone Directory of the same
Asian Development Bank, where defendant, Violeta S. Venturanza is employed
for October, 1984 (Annex "C"), bears the same information (Annex "C-1").
Indeed the PLDT Telephone Directory for 1985-1986 (Annex "F") also bears a
substantial identical information as to defendant, Violeta S. Venturanza's
residence.
In the light of all the foregoing evidence indubitably showing that defendants
have always been residents of 3412 B.A. Tan St., Bo. Obrero, Tondo, Manila up
to the present, the bare allegation in defendants' motion that they have been
residing at Aurora St., Pasay City since April 1985, unsupported by any other
independent competent evidence, is, utmost (sic), self-serving, and devoid of
any probative value.
WHEREFORE, let defendants, motion be, as it is hereby denied for lack of merit.
SO ORDERED." 7
On appeal to the Regional Trial Court of Manila, Branch XLIII, the appeal being
docketed as Civil Case No. 86-34319, the decision of the court a quo was
affirmed with a slight modification, i.e., lowering the amount of attorney's fees
to P500.00. 8 On 6 March 1987, a petition for review was filed with the Court
of Appeals. Said RTC decision was affirmed in toto. 9 Hence, this petition for
review on certiorari. cdll
The issues raised and to be resolved in this instance, are the following:
I. Whether or not the Metropolitan Trial Court validly acquired
jurisdiction over the persons of the petitioners when the summons was served
upon Augusto Soan, father of petitioner Violeta S. Venturanza at 3412 B.A. Tan
St., Bo. Obrero, Tondo, Manila, which address is no longer the residence nor
the place of business of petitioners.
II. Whether or not the provisions of Section 8, Rule 14 of the Rules of
Court was legally complied with by the Sheriff in serving the summons upon
the father of one of the petitioners. 10
The court a quo, in its findings of fact, reached the conclusion that the address
at 3412 B.A. Tan St., Bo. Obrero, Tondo, Manila, where summons was served
by the branch sheriff, Jose L. Cruz, was the place of residence of the petitioners,
after the latter allegedly failed to submit any evidence to prove their allegation
that they were no longer residents of said address and had transferred to 2511
Aurora St., Pasay City. 11 The court a quo relied heavily on what appeared in
the 1984 Telephone Directory of Asian Development Bank, where defendant
Violeta S. Venturanza is employed, in the PLDT Telephone Directory for 1985-
1986, and the sheriff's affidavit dated 16 October 1985 stating that, upon
inquiry from Augusto Soan on whether the defendants were residents of the
above-said address, the latter confirmed the same. 12
It is the general rule that findings of fact of the Court of Appeals when
supported by substantial evidence, are beyond this Court's power of review.
13 However, in the instant case, we cannot but consider that the address of
defendant Violeta S. Venturanza found in the 1984 Asian Development Bank
Directory and the PLDT Telephone Directory for 1985-86, together with the
affidavit of the branch sheriff, are not sufficient to substantiate the findings of
the court a quo that petitioners were bona fide residents of 3412 B.A. Tan St.,
19
Barrio Obrero, Tondo, Manila at the time summons was served on Augusto
Soan. prLL
There is no question, and in fact it was admitted by the petitioners, that in
1984 they were actual residents of 3412 B.A. Tan St., Barrio Obrero, Tondo,
Manila and, as correctly reflected in the 1984 Asian Development Bank
Directory. However, the change of their address, upon their transfer to Pasay
City in April 1985, could not be reflected in the 1985-86 PLDT Telephone
Directory, because this directory had already been printed and circulated to
the public before their transfer in April 1985 to Aurora St. in Pasay City.
Moreover, the copy of the contract of lease dated April 1985 between
petitioner Romualdo Venturanza as lessee and Linda Galvez as lessor over an
apartment unit located at 2511 Aurora St., Pasay City 14 and the affidavit of
Augusto Soan dated 29 April 1986 stating that he never told the sheriff that
the defendants were residing in his house at 3412 B.A, Tan St., Barrio Obrero,
Tondo, Manila, sufficiently negate the conclusion of the court a quo. 15
Under Rule 14 of the Rules of Court, there are three (3) methods of service of
summons in civil actions, namely: 1) personal service (Sec. 7); 2) substituted
service (Sec. 8); and 3) service by publication. 16 Strict compliance with these
modes of service is required in order that the court may require jurisdiction
over the person of the defendant. 17 Service of summons upon the defendant
is the means by which the court acquires jurisdiction over his person. This
process is for the benefit of the defendant, and is intended to afford the latter
an opportunity to be heard on the claim against him. 18 In the absence of valid
waiver, trial and judgment, without such service, are null and void.
statute. Thus, the statutory requirements of substituted service must be
followed strictly, faithfully, and any substituted service other than that
authorized by the statute is considered ineffective." . . . (Arevalo vs. Quitalon,
166 SCRA 707)
Upon careful examination of the sheriff's Return in this case, dated 10 June
1985, which purports to serve as proof that summons had been served upon
the defendants, together with a copy of the complaint, through Augusto Soan,
no statement is made that an effort or attempt was exerted to personally
serve the summons on the defendants and that the same had failed. In fact,
said Return does not even indicate the address of the defendants to whom
summons was supposed to have been served. The presumption of regularity
in the performance of official functions by the sheriff is not applicable in this
case where it is patent that the sheriff's return is defective.
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET
ASIDE. The case is remanded to the court of origin for further proceedings,
including a valid service of summons. No costs.
SO ORDERED.
Yap, Melencio-Herrera, Paras and Sarmiento, JJ., concur.

There is no question that the case at bar which is an action for collection of
sum of money is an action in personam thereby requiring personal service of
summons on the defendants.

"In an action strictly in personam, personal service of summons within the

forum is essential to the acquisition of jurisdiction over the person of the
defendant who does not voluntarily submit himself to the authority of the
court." (Pantaleon vs. Asuncion, 105 Phil. 761; Sequito vs. Letrondo, 10 Phil.
1139)

It is only when a defendant can not be personally served with summons within
a reasonable time that a substituted service may be availed of, the same to be
effected in the following manner: a) by leaving copies of the summons at the
defendants' dwelling house or 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. 19 For a substituted service to be valid, summons served at the
defendant's residence must be served at his residence at the time of such
service and not at his former place of residence. LLpr

"The terms "dwelling house" or "residence" are generally held to refer to the
time of service, hence it is not sufficient "to leave the copy at defendant's
former dwelling house, residence, or place of abode, as the case may be, after
his removal therefrom." They refer 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." (Keister v. Navarro, 77
SCRA 209, May 31, 1977)

It is further required by law that an effort or attempt should first be made to

personally serve the summons and after this has failed, a substituted service
may be caused upon the defendant, and the same must be reflected in the
proof of service. 20

"The substituted service should be availed of only when the defendant cannot
be served promptly in person. Impossibility of prompt service should be shown
by stating the efforts made to find the defendant personally and the failure of
such efforts. The statement should be made in the proof of service. This is
necessary because substituted service is in derogation of the usual method of
service. It has been held that it is a method extraordinary in character, and
hence may be used only as prescribed in the circumstances authorized by

20
G.R. No. 149380 - July 3, 2002
FEDERICO S. SANDOVAL II, Petitioner, vs. HOUSE OF REPRESENTATIVES
ELECTORAL TRIBUNAL (HRET) and AURORA ROSARIO A. ORETA, Respondents.
BELLOSILLO, J.:
Was substituted service of summons validly effected on herein petitioner
Federico S. Sandoval II in the election protest filed by herein respondent
Aurora Rosario A. Oreta before the House of Representatives Electoral
Tribunal (HRET)? This is the only issue for resolution in the instant Petition for
Certiorari with Prayer for Temporary Restraining Order and/or Preliminary
Injunction under Rule 65 of the 1997 Rules of Civil Procedure assailing
HRET Resolutions Nos. 01-081 dated 12 July 2001 and 01-118 dated 9 August
2001.
Petitioner Sandoval and respondent Oreta were candidates for the lone
congressional district of Malabon-Navotas during the 14 May 2001 national
elections. The canvass of the election returns yielded ninety two thousand and
sixty-two (92,062) votes for petitioner while respondent obtained seventy two
thousand eight hundred sixty-two (72,862) votes,1or a difference of nineteen
thousand two hundred (19,200) votes. On 22 May 2001 petitioner was
proclaimed duly elected representative by the District Board of Canvassers of
Malabon-Navotas. After taking his oath of office, he assumed the post at noon
of 30 June 2001.2
On 1 June 2001 respondent Oreta filed with HRET an election protest against
petitioner, docketed as HRET Case No. 01-027. The protest assailed the alleged
electoral frauds and anomalies in one thousand three hundred eight (1,308)
precincts of the Malabon-Navotas District.3 On 4 June 2001 HRET issued the
corresponding summons for service upon petitioner.4 On 7 June 2001 HRET
Process Server Pacifico Lim served the summons by substituted service upon
a certain Gene Maga who signed the process server's copy of the summons
and indicated thereon his position as "maintenance"along with the date and
time of his receipt thereof as 7 June 2001 at 1:25 p.m.5 The pro-forma affidavit
of service executed by the process server a day after service of the summons
stated -
That on 6/7/01 I personally served the following document to counsels and
parties at their respective addresses.
DOCUMENT – Summons
HRET CASE NO. - 01-027
PARTY/COUNSEL - Rep. Federico S. Sandoval
ADDRESS - No. 992 M. Naval St., Navotas, M.M.
RECEIVED BY - Gene Maga
POSITION - Maintenance6
On 12 July 2001 HRET issued Resolution No. 01-081 which took note of
petitioner Sandoval's failure to file an answer to the election protest within
ten (10) days from date of service of the summons on 7 June 2001 and entered
in his behalf a general denial of the allegations set forth in the protest.7 The
HRET also ordered the parties to proceed to preliminary conference.8 On 18
July 2001 the HRET ordered both petitioner and respondent to file their
respective preliminary conference briefs.9 Petitioner received the order on 20
July 2001 as shown by the rubber stamp bearing his name and his district office
in Navotas and indicating the time and date of receipt as well as the person
with corresponding position, i.e., administrative staff, who received the
order.10 Initially, on 1 August 2001, it was only respondent Oreta who filed the
required preliminary conference brief.11
On 6 August 2001, instead of filing a preliminary conference brief, petitioner
moved for reconsideration of Resolution No. 01-081 and prayed for the
admission of his answer with counter-protest.12 He argued that the
substituted service of summons upon him was improperly effected upon a
maintenance man Gene Maga who was "neither a regular employee nor
responsible officer at [petitioner's] office."13 In Resolution No. 01-118, the
HRET denied reconsideration of the assailed resolution and admission of
petitioner's answer with counter-protest.14
On 30 August 2001 petitioner Sandoval filed the instant petition with prayer
for temporary restraining order and preliminary injunction
questioning Resolutions Nos. 01-081 and 01-118 and assailing the HRET's
jurisdiction over his person. In due time, we denied the plea for injunctive
writs.15 Petitioner was constrained to file his preliminary conference brief ad
cautelam and to attend the preliminary conference on 18 October 2001, which
had been postponed several times upon his request.
On 29 October 2001 respondent Oreta filed her Comment to the instant
petition. On 3 January 2002 the Office of the Solicitor General filed
a Manifestation and Motion In Lieu of Comment. The Solicitor General found
that the substituted service of summons upon petitioner was faulty and thus
recommended favorable action on the petition. On 12 February 2002 HRET
also submitted a Manifestation and Motion In lieu of Comment manifesting
that as a nominal party in the instant case it was not filing a "separate
comment" from the Solicitor General's pleading.
We agree with the Solicitor General. Preliminarily, we note the established
rule vesting jurisdiction in this Court over the instant petition
for certiorari. While the Constitution provides that the HRET shall be the sole
judge of all contests relating to the elections, returns and qualifications of
members of Congress,16 this regime however does not bar this Court from
entertaining petitions where the threshold of legitimate review is breached.
Indeed, it is well-settled that judicial guidance is appropriate where
jurisdictional issues are involved or charges of grave abuse of discretion are
presented in order that we may vindicate established claims of denial of due
process or correct veritable abuses of discretion so grave or glaring that no
less than the Constitution itself calls for remedial action.17
That this Court may very well inquire into jurisdictional issues concerning the
HRET may be inferred from Sec. 1, Art. VIII, of the Constitution which has
expanded judicial power to include the determination of "whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government". Previously,
we have taken cognizance of certiorari proceedings where the rules of
procedure of the HRET, as in the instant case, were involved. Garcia v. Ang
Ping18 involved the requirement of cash deposit in addition to filing fees under
Rule 32 of the 1998 HRET Rules. In Loyola v. HRET19 we explained the import
of a general denial under Rule 27 of the Revised Rules of the House of
Representatives Electoral Tribunal. Lazatin v. HRET20 affirmed the power of the
HRET to set its own prescriptive periods for filing election protests. We
explored in Arroyo v. HRET21 the suppletory applicability of the rules of
evidence to the HRET rules to adjudge the correct number of votes for each of
the two (2) competing congressional candidates.
The instant petition is intricately related to the election protest filed by
respondent Oreta with the HRET where the integrity of the election
proceedings in one thousand three hundred and eight (1,308) precincts of the
Malabon-Navotas congressional district is attacked as having been grossly
manipulated to distort the people's will. This is a serious charge which if true
would taint the assumption of petitioner as congressman of this district. In
view of the delicate nature and the gravity of the charge, the observance of
the HRET Rules of Procedure, in conjunction with our own Rules of Court, must
be taken seriously. Indubitably these rules affect not only the inherent fairness
of the proceedings below, a matter of due process, but equally important,
influence the speedy and orderly determination of the true will of the
electorate, our democratic ideal.
The propriety of the substituted service of summons upon petitioner Sandoval
is therefore no less pivotal, for upon it depends not simply the jurisdiction of
the HRET over the person of petitioner but also the breadth of fairness of the
21
proceedings therein, where the opportunity to be heard on the grave
accusations against him and more significantly on his own counter-protest is
properly withheld or compulsorily observed. Compliance with the rules on the
service of summons is both a concern of jurisdiction as it is of due
process.22 Petitioner should have been given by public respondent a fair
chance to defend the legitimacy of his lead of nineteen thousand two hundred
(19,200) votes over respondent Oreta and dispel any cloud on his election.
The matter of serving summons is governed by the 1997 Rules of Civil
Procedure which applies suppletorily to the Revised Rules of the House of
Representatives Electoral Tribunal through its Rule 80.23 Sections 6 and 7 of
Rule 14 of the 1997 Rules of Civil Procedure provide -
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 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 well-established that summons upon a respondent or a defendant (i.e.,
petitioner herein) must be served by handing a copy thereof to him in person
or, if he refuses to receive it, by tendering it to him. Personal service of
summons most effectively ensures that the notice desired under the
constitutional requirement of due process is accomplished. If however efforts
to find him personally would make prompt service impossible, service may be
completed by substituted service, i.e., by leaving copies of the summons at his
dwelling house or residence with some person of suitable age and discretion
then residing therein or by leaving the copies at his office or regular place of
business with some competent person in charge thereof.
Substituted service derogates the regular method of personal service. It is an
extraordinary method since it seeks to bind the respondent or the defendant
to the consequences of a suit even though notice of such action is served not
upon him but upon another whom the law could only presume would notify
him of the pending proceedings. As safeguard measures for this drastic
manner of bringing in a person to answer for a claim, it is required that
statutory restrictions for substituted service must be strictly, faithfully and
fully observed.24 In our jurisdiction, for service of summons to be valid, it is
necessary first to establish the following circumstances, i.e., (a) impossibility
of service of summons within a reasonable time, (b) efforts exerted to locate
the petitioners and, (c) service upon a person of sufficient age and discretion
residing therein or some competent person in charge of his office or regular
place of business. It is also essential that the pertinent facts proving these
circumstances be stated in the proof of service or officer's return itself and
only under exceptional terms may they be proved by
evidence aliunde.25 Failure to comply with this rule renders absolutely void the
substituted service along with the proceedings taken thereafter for lack of
jurisdiction over the person of the defendant or the respondent.26
We find no merit in respondent Oreta's austere argument that personal
service need not be exhausted before substituted service may be used since
time in election protest cases is of the essence. Precisely, time in election
protest cases is very critical so all efforts must be realized to serve the
summons and a copy of the election protest by the means most likely to reach
the protestee. No speedier method could achieve this purpose than by
personal service thereof. As already stated, the preferential rule regarding
service of summons found in the Rules of Court applies suppletorily to
the Revised Rules of the House of Representatives Electoral Tribunal.27 Hence,
as regards the hierarchy in the service of summons, there ought to be no
rational basis for distinguishing between regular court cases and election
protest cases pending before the HRET.
In affirming the substituted service of summons and its jurisdiction over the
person of petitioner Sandoval and rejecting admission of his answer with
counter-protest, the HRET rationalized -
Based on the records of the case, summons was received by a Gene Maga of
the Maintenance, District Office on June 7, 2001 at 1:25 p.m. On July 27, 2001,
an Affidavit of Service, attached to the Tribunal's receiving copy of the
summons, was jointly executed by Process Server Pacifico Lim and Accounting
Clerk Aurora Napolis. This Affidavit of Service states that Pacifico Lim found a
certain Gene Maga at Protestee's district office who identified himself as a
member of the staff of Protestee and thus, Pacifico Lim left the summons with
him (Maga). This Affidavit likewise stated that after Pacifico Lim left the
Tribunal premises to serve the summons to Protestee, Aurora Napolis talked
to Primitivo P. Reyes, a congressional staff of Protestee's father, Rep. Vicente
A. Sandoval, who came to the HRET and who assured that there was somebody
at Protestee's district office who could receive the summons. On June 16, 2001
or on the 9th day from June 7, 2001, the Chief of Staff of Protestee at the
House of Representatives inquired by telephone with the Office of the
Secretary of the Tribunal as to the last day for Protestee to file his answer x x
x x There was valid service of summons effected on Protestee. Pacifico Lim
attested to the fact that he found Gene Maga at Protestee's district office
during office hours, i.e., 1:25 p.m., who presented himself as Protestee's staff
at said office. The tribunal finds no fault on the part of its process server in
effecting substituted service through Gene Maga.28
We seriously disagree. In the first place, the conclusions relied upon by HRET
are nowhere stated in the process server's affidavit of service. The record will
show that the affidavit of service, which is dated 8 June 2001 and not 27 July
2001 as above-quoted, gives only barren details, such as the date of receipt
and the position of the person receiving the summons. The HRET findings were
instead based on the 27 July 2001 joint affidavit of Process Server Pacifico Lim
and Accounting Clerk Aurora Napolis executed long after the summons was
served on 7 June 2001. The joint affidavit is clearly not the officer's return
referred to in the rules on substituted service of summons but a specie of
evidence aliunde generally inadmissible to prove compliance with the
requirements of substituted service unless under exceptional circumstances,
which were nowhere in this case.
It is truly unfortunate that the purported substituted service of summons upon
petitioner Sandoval was irregularly executed. Except for the time and place of
service and the signature of the "maintenance" man who received the
summons, there is absolutely nothing in the process server's affidavit of
service indicating the impossibility of personal service of summons upon
petitioner within a reasonable time. We can take judicial notice of the fact that
petitioner is a very visible and active member of Congress such that to effect
personal service upon him, all it would have taken the process server was a
few hours more of a little extra work. Regrettably, the affidavit of service,
indeed the entire record of this case, does not specify the efforts exerted to
serve the summons personally upon petitioner. Upon this ground alone, the
assailed service of summons should already fail miserably.
Moreover, we do not find in the record, much less in the affidavit of service
executed by the process server, that the summons and a copy of the election
protest were served on a competent person in charge of petitioner's office. It
must be emphasized that Gene Maga, the recipient of the summons, was
merely a "maintenance" man who offered his services not only to petitioner
but to anyone who was so minded to hire his assistance. His occupation as a
freelance service contractor, not as employee of petitioner Sandoval, is very
clear not only from the assertion of petitioner in his motion for
reconsideration of Resolution No. 01-081 that Maga was "neither a regular
employee nor responsible officer at [petitioner's] office"29 but also from Maga's
own adverse admission under oath -
1. Ako po ay isang maintenance man na naglilinis at nag-rerepair ng mga
bagay-bagay sa mga opisina at bahay ng kung sino man ang mag-utos at
umupa sa aking serbisyo.
22
2. Noong June 7, 2001,ako po ay napagutusan ni Gng. Jeannie N. Sandoval,
asawa ni Cong. Federico S. Sandoval II, na linisan ang "district office" ni Cong.
Sandoval sa M. Naval St., San Jose, Navotas, Metro Manila. Si Gng. Sandoval
ay regular kong pinagsisilbihan at gumagawa para sa kanya ng kung anumang
ipag-utos niya sa akin.30
It bears emphasis that these assertions were not rebutted, despite the
opportunity to do so, in a separate comment we required the HRET to file, as
a result of its decision to submit instead a Manifestation and Motion In Lieu of
Comment. Clearly, the fact that Maga was not an employee of petitioner as
Representative of the Malabon-Navotas Congressional District but an
independent contractor for odd maintenance jobs deserves credence since it
is petitioner and Maga themselves who would be in the best position to verify
the latter's professional status. It follows from this that Maga, not being an
employee thereof, would be an incompetent person to receive the summons
in petitioner's behalf.
Granting that Gene Maga was an employee of petitioner at his district office,
an assumption that we stress is contrary to the evidence on record, still it
cannot be said that he was qualified to receive the summons. To be a
"competent" person to receive the summons means that he should be "duly
qualified" and "having sufficient capacity, ability or authority."31In Keister v.
Navarro32 we set out the qualifications of the persons designated by the Rules
of Court to 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."
The mere fact that Maga allegedly identified himself to the process server as
"member of the staff of [petitioner] Rep. Federico S. Sandoval II,"33 does
not ipso facto render him competent to receive the summons. By this alleged
statement, Maga did not communicate any assurance that he could take
delivery of the summons effectively to justify the process server to assume
such authority. Even in the affidavit of service, which should have proved first
hand the pertinent facts justifying substituted service, Maga's indisputable
representation was only that of a "maintenance" man, an affirmation which
should have immediately alerted the process server to the fact that he had no
authority to receive the summons for petitioner Sandoval. There is certainly
nothing contained in the record to demonstrate that he was the "receiving
(employee?) of said office, which sufficiently conveys that he was tasked as he
is to receive for the office," which would have given rise to the presumption
that the process server left or tendered the summons on a duly qualified
person.34
As "maintenance" man, it is reasonable to assume that Gene Maga was not
tasked to deal with or handle documents flowing in and out of petitioner's
office. He may have been very efficient in tinkering with the light bulbs of the
district office or plugging leaking water pipes, but it is also reasonable for
anyone to assume, especially the process server who must have been oriented
about the requirements of substituted service, that petitioner could not have
reposed such confidence in Maga to accept official documents for the district
office or to turn over as a matter of course documents that he would have
received. Clearly, in being assigned to do maintenance work and by ordinary
human understanding, Maga could not be presumed to appreciate the
importance of the papers delivered to him. With due diligence which the
process server ought to have exercised, he would not have been oblivious to
this delineation of tasks.
Moreover, by virtue of his functions and presumed expertise, the process
server could have easily discerned the absence of authority on the part of
Maga to receive documents from the very informal manner by which he
received the summons, i.e., he merely wrote his name and signed the receiving
copy of the summons and indicated therein his humble position. This
unceremonious receipt of the important summons is in stark contrast with the
manner by which the same process server secured the proof of receipt by
petitioner's district office of the HRET Order of 18 July 2001 which was done
by rubber stamp bearing the name of petitioner and his district office in
Navotas and indicating the time and date of receipt as well as the person with
corresponding position, i.e., administrative staff, who received the order.
Not only was Gene Maga an incompetent person to receive the summons, he
was also, more plainly, not in charge of petitioner's office. To be "in charge"
means to have "care and custody of, under control of, or entrusted to the
management or direction of."35 Applied to the instant case, Maga had
obviously no control and management of the district office as noticeably
shown by his occupation as "maintenance" man. While it is not necessary that
the person in charge of a defendant's regular place of business be specially
authorized to receive summons, it being enough that he appears to be in
charge,36 we do not think that anyone, more so the process server, would be
led to believe that Maga has been entrusted the management of office records
to ensure the smooth flow of important documents therein. As in Far
Corporation v. Francisco,37 no one would think that Maga was so
"integrated" in the responsibilities and duties of petitioner as Congressman for
Malabon-Navotas to make it a priori supposable that he would realize and
know what should be done with any legal papers served on him. We would
not dare establish a precedent whereby any employee or anyone who
pretends to be an employee, although found in the office of his employer,
could validly receive summons for him.
We also do not find any evidence aliunde to prove the requisites of a valid
substituted service of summons. The process server or any other responsible
HRET employee did not present evidence confirming the necessity for such
method of serving the summons nor exhibiting the authority of Maga, the
"maintenance" man, to receive the document. There is also nothing in this
case to prove, under the rules of evidence consistently relied upon by
HRET,38 that anyone with whom petitioner had a relationship of confidence
knew of the outstanding summons and pending election protest to have
ensured petitioner's receipt or at least notification thereof.
On its face, there is no evidentiary value to the allegation that an HRET
employee, Accounting Clerk Aurora Napolis, was assured by the staff39 of
petitioner's father, Congressman Vicente A. Sandoval, that someone at
petitioner's district office would be receiving the summons.40 In the first place,
the process server could not have relied upon this purported assurance since
it was not made nor communicated subsequently to him while in the process
of serving the summons.41More importantly, the record is bereft of any basis
to show that the staff of Congressman Vicente A. Sandoval was petitioner's
own "speaking agent"42 who had knowledge and authority to guarantee
receipt of the summons by a competent person in charge of his district office.
Moreover, we cannot give weight to the allegation appearing in the
assailed Resolution No. 01-118 that a person who supposedly identified
himself as the Chief of Staff of petitioner Sandoval called up the Office of the
Secretary of the HRET to inquire about the last day for filing petitioner's
answer to the election protest,43 a claim apparently intended to establish that
petitioner had notice of the summons and the election protest against him.
For one, neither the 27 July 2001 joint affidavit of Process Server Pacifico Lim
and Accounting Clerk Aurora Napolis, which the HRET mistook to be the
affidavit of service, nor the 24 August 2001 supplemental affidavit of Process
Server Pacifico Lim44 made any reference to this supposed telephone call. It
further appears that no document on record discloses the alleged employee
at the HRET Office of the Secretary with whom the purported Chief of Staff
had talked on the phone. At any rate, the Chief of Staff of petitioner has under
oath denied having placed such call.45
It must also be stressed that, as a matter of reliability and trustworthiness, a
telephone conversation must first be authenticated before it can even be
received in evidence. To this end, it is critical that the person with whom the
witness was conversing on the phone is first satisfactorily identified, by voice
recognition or any other means, as the Chief of Staff.46 In the instant case,
there is no evidence to conclude that the person who called up the HRET Office
of the Secretary was the Chief of Staff of petitioner Sandoval except for the
unverified and hearsay identification allegedly made by the caller
himself/herself. Worst, the record does not even divulge the alleged employee
23
at the HRET Office of the Secretary from whom the purported caller asked
about the relevant matter.
Lastly, there is no proof that petitioner actually received the summons as well
as a copy of the election protest which would have otherwise satisfied the
purpose of giving notice of the pending suit. What we can infer from the record
is his knowledge of the HRET Order of 18 July 2001, copy received by his staff
on 20 July 2001, requiring him to file his preliminary conference brief. On the
other hand, we certainly cannot presume his knowledge of the election
protest in the absence of a reasonable basis for so doing.
In the absence of even the barest compliance with the procedure for
substituted service of summons outlined in the Rules of Court, the
presumption of regularity in the performance of public functions does not
apply.47 It is unmistakable that the process server hastily served the summons
upon petitioner Sandoval by substituted service without first attempting to
personally serve the process. This violates the rule granting absolute
preference to personal service of summons and, only secondarily, when the
defendant cannot be promptly served in person and after compliance with
stringent formal and substantive requirements, permitting resort to
substituted service. In light of the defective and irregular substituted service
of summons, the HRET did not acquire jurisdiction over the person of
petitioner and consequently the period within which to file his answer with
counter-protest did not start to run.
Under the circumstances, petitioner was thus justified in promptly filing his
motion for reconsideration of Resolution No. 01-081 and in praying without
delay for admission of his answer with counter-protest on 6 August 2001,
barely seventeen (17) days from receipt of the HRET Order, which was what
presumably called his attention with certainty as to the pendency of the
election protest. Clearly, there was no delay in filing the motion. At any rate,
it is enough to say that where the ground invoked as basis for affirmative relief
is lack of jurisdiction, the appropriate pleading or motion may be filed anytime
before it is barred by estoppel or laches.48 Needless to state, neither of these
equitable principles obtains in the instant case to bar reconsideration of the
assailed HRET resolutions.
In granting the petition, we note that petitioner Sandoval is not seeking the
annulment of the proceedings a quo or any part thereof. On the contrary, all
he is asking for is the admission of his answer with counter-protest to the
election protest filed by respondent Oreta. No legitimate policy considerations,
much less legal obstacles, exist to deny him this relief. The result would have
been different if he had asked for the dismissal of the HRET proceedings for,
in that event, the prayer would be denied and the proceedings would continue
although the wrongful substituted service would be immediately corrected by
serving an alias summons upon the defendant.49
Finally, the only benefit which petitioner will reap from the admission of his
answer with counter-protest is his standing to prove his affirmative defenses
and to present evidence in support of his own allegations of fraud. To be sure,
the relief does not grant him the right to require respondent Oreta as
protestant before the HRET to prove the material facts necessary to her cause
of action - he already possesses this right when a general denial was entered
in his behalf.50Balancing thus what he stands to gain from the instant petition
and any inconvenience that a party may suffer therefrom, allowing him to file,
and for the HRET to admit, his answer with counter-protest upon a clear
jurisdictional ground, certainly, does not exact any momentous adjustment of
the proceedings before the HRET. Be that as it may, the correction of
jurisdictional errors is an established function of the writ of certiorari and
more imperatively, our mandate under the Constitution.
WHEREFORE, the instant Petition for Certiorari is GRANTED. Resolutions Nos.
01-081 and 01-118 of respondent House of Representatives Electoral Tribunal
(HRET) are MODIFIED to the effect that the Answer with Counter-Protest of
petitioner Federico S. Sandoval II is admitted to form part of the record of the
election protest filed by respondent Aurora Rosario A. Oreta and to govern, in
a manner appropriate under the Revised Rules of the House of Representatives
Electoral Tribunal, the proceedings to be taken hereafter, including but not
limited to the right to present evidence on his counter-protest. No
pronouncement as to costs.
[G.R. No. 78252. April 12, 1989.]
PALUWAGAN NG BAYAN SAVINGS BANK, petitioner, vs. ANGELO KING, KEN
SUY WAT, JOSE FERRER, JR., QUINTIN CALDERON, FE SARIÑO and DOMINGO
K. LI, respondents.
Cruz, Durian, Agabin, Atienza, Alday and Tuason for petitioner.
Simeon C. Sato for respondent Domingo K. Li.
Syquia Law Offices for respondents King, Ken Suy Wat, Calderon and Ferrer, Jr.
DECISION
GANCAYCO, J p:
The rule on service of summons in this jurisdiction is too well-known. In civil
cases, the service of summons on a defendant is made by handing a copy
thereof to the defendant in person, or if he refuses to receive it, by tendering
it to him. 1 Such service of summons may be made at the defendant's dwelling
house or residence or at his office or regular place of business. The essence of
personal service is the handing or tendering of a copy of the summons to the
defendant himself.
However, when the defendant cannot be served personally within a
reasonable time, substituted service may be effected (a) by leaving copies of
the summons at the defendant's dwelling house or 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. 2
It is only when the defendant cannot be served personally within a reasonable
time that substituted service may be resorted to. The impossibility of prompt
service should be shown by stating the efforts made to find the defendant
personally and the fact that such efforts failed. This statement should be made
in the proof of service. This is necessary because substituted service is in
derogation of the usual method of service. It has been held that this method
of service is in derogation of the common law; it is a method extraordinary in
character, and hence may be used only as prescribed and in the circumstances
authorized by statute." Thus, under the controlling decisions, the statutory
requirements of substituted service must be followed strictly, faithfully and
fully, and any substituted service other than that authorized by the statute is
considered ineffective. 3
The application of the foregoing rules is the issue in this petition for review by
certiorari of a decision of the Court Appeals in G.R. CV No. 03386 entitled
"Paluwagan ng Bayan Savings Bank vs. Mercantile Financing Corporation, et
al." dated January 27, 1987, and its resolution dated April 22, 1987. 4
The facts are undisputed. Petitioner sued Mercantile Financing Corporation
(MFC) and private respondents, as directors and officers of MFC, for the
recovery of money market placements through certain promissory notes. They
were charged jointly and solidarily in accordance with Section 31 of the
Corporation Code 5 which provides as follows: LexLib
"Section 31. Liability of Directors, Trustees, Officers. — Directors or
trustees who willfully and knowingly vote for or assent to patently unlawful
acts of the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation shall be liable jointly and severally for
all damages resulting therefrom suffered by the corporation, its stockholders
or members and other persons."
Summons and copies of the complaints were served upon MFC and private
respondents at the 4th Floor, LTA Building, No. 118 Perea Street, Makati,
Metro Manila, which is the stated office address of MFC in the complaint,
24
through its Assistant Manager Mr. Nasario S. Najomot, Jr. who acknowledged
receipt thereof for and in behalf of MFC and the private respondents. This is
so recited in the certification of deputy sheriff Bernardo San Juan dated May
11, 1983.
On May 24, 1983, the law firm of Guillermo E. Aragones and Associates filed a
motion for extension of time to file a responsive pleading and/or motion to
dismiss. The said motion was signed by Atty. Guillermo E. Aragones as counsel
for the defendants. The motion was granted in an order dated May 26, 1983
giving the defendants an extension of twenty (20) days from the expiration of
the reglementary period within which to file the responsive pleading and/or
motion to dismiss. On June 13, 1983, said counsel for defendants filed a
motion asking for a suspension of the action for a period of sixty (60) days on
the ground that there was an on-going negotiation for an amicable settlement
of the case between the parties. The motion was denied. On June 27, 1983,
counsel for plaintiff filed a motion to declare defendants in default for failure
to file an answer. This motion was granted in an order dated June 29, 1983.
On July 14, 1983, the parties, assisted by their counsel, submitted a
Compromise Agreement for the approval of the court. It reads as follows:
"1. The defendants propose to pay, jointly and severally, their account
with the plaintiff as of June 15, 1983, in the sum of P707,500.01 with 20%
interest per annum as follows:
P100,000.00 — on or before July 18, 1983
100,000.00 — on or before August 30, 1983
100 000.00 — on or before September 30, 1983
100,000.00 — on or before October 30, 1983
100,000.00 — on or before November 30, 1983
100,000.00 — on or before December 30, 1983
100,000.00 — on or before January 30, 1984.
"2. Except those mentioned above, the plaintiff has no more claim
against the defendants.
"3. The plaintiff agrees to the proposal of settlement offered by the
defendants provided that in case the latter fail to pay, jointly and severally,
two or more successive monthly installments, the plaintiff is entitled to secure
from the Court a writ of execution for the collection of the unpaid account of
the defendants." 6
On July 18, 1983, a decision was rendered by the trial court approving the said
Compromise Agreement and enjoining the parties to comply with the terms
and conditions embodied therein. Partial payments were made under the
compromise judgment. Upon failure of private respondent to make the other
payments, petitioner filed a motion for the issuance of a writ of execution of
judgment. The trial court granted the motion on December 16, 1983.
On January 16, 1984, counsel for defendants filed a pleading entitled
"Clarification" thereby seeking a correction of the compromise judgment on
the ground that he erroneously filed the Compromise Agreement in behalf of
all the defendants when in fact he was the counsel for MFC only. On January
17, 1984, said counsel filed a "Motion To Correct Compromise Agreement"
attaching thereto a copy of the resolution of the Board of Directors of MFC of
July 6, 1983 showing that he was the attorney-in-fact of MFC only, and praying
for the correction of the judgment, accordingly. The motion for clarification
was denied on January 20, 1984. cdll
On January 24, 1984, the Syquia Law Offices, in behalf of private respondents
Angelo King, Keng Suy Wat, Quintin Calderon and Jose J. Ferrer, Jr., filed a
motion to set a decision dated July 18, 1983, the Compromise Agreement and
the writ of execution dated December 21, 1983 on the ground that there was
no service of summons upon each of them as the corporate address of the
corporation was not their address as they were no longer connected
therewith; that Atty. Aragones had no authority to represent them in the
action and compromise agreement; that they were not served copies of the
decision of the court; that they learned about the same only when it was being
executed; and that they did not participate as directors or officers of MFC in
the subject transaction.
On January 26, 1984, private respondent Domingo F. Li filed a petition for relief
from judgment with a prayer for the issuance of a writ of preliminary
injunction alleging therein that there was no service of summons upon him
and that Atty. Aragones was not authorized to represent him or to enter into
the Compromise Agreement. After an opposition to said motion was filed by
the petitioner, the lower court denied the same in its order dated April 6, 1984.
Separate motions for reconsideration filed by the private respondents were
also denied on May 4, 1984.
Thus, private respondents appealed to the respondent Court of Appeals,
reiterating that there was no service of summon, upon each of them as service
of summons was made at the address of the firm with which they had severed
connections; that the counsel of record of MFC has no authority to represent
them in the case and in the Compromise Agreement; that they have not
ratified the same by a partial payment of the compromise judgment; and that
they were no longer connected with MFC at the time they were sued. In due
time, a decision was rendered by the appellate court on January 27, 1987, the
dispositive part of which reads as follows:
"In view of the foregoing, the other errors assigned by the appellants need not
be resolved:
Wherefore:
(1) the decision dated July 18, 1983 approving the compromise
agreement rendered by the lower court as well writ of execution issued
pursuant thereto as against appellants Angelo King, Keng Suy Wat, Quintin
Calderon, Jose Jr., and Domingo Li are hereby SET ASIDE; and
(2) the case is remanded to the court of origin which is hereby ordered
to direct proper service of summons aforesaid individual appellants at their
respective correct addresses and thereafter to proceed in accordance with law.
SO ORDERED." 7
A motion for reconsideration of the said decision filed by petitioner was
denied by the appellate court on April 22, 1987. Hence, the instant petition
predicated on the following grounds:
(A) THAT THE CASE AT BAR (a) PERTAINS TO (AN) APPEAL FROM ORDER
OF TRIAL COURT DATED APRIL 6, 1984, DENYING (i) PRIVATE RESPONDENT
DOMINGO K. LI'S `PETITION FOR RELIEF FROM JUDGMENT' FILED JANUARY 25,
1984, AND (ii) MOTION TO SET ASIDE DECISION, COMPROMISE AGREEMENT
AND QUASH EXECUTION FILED JANUARY 14, 1984 BY PRIVATE RESPONDENTS
ANGELO KING, KENG SUY WAT, QUINTIN CALDERON and JOSE FERRER, JR. and
(b) DOES NOT INVOLVE ANY APPEAL FROM TRIAL COURT'S DECISION DATED
JULY 19, 1983 APPROVING THE COMPROMISE AGREEMENT WHICH HAS LONG
BECOME FINAL AND EXECUTORY.
(B) THAT RESPONDENT COURT OF APPEALS COMPLETELY IGNORED
THE BASIC QUESTION OF WHETHER (a) PRIVATE RESPONDENT DOMINGO K.
LI'S `PETITION FOR RELIEF FROM JUDGMENT' FILED JANUARY 25, 1984, and (b)
`THE MOTION SET ASIDE DECISION, COMPROMISE AGREEMENT AND QUASH
EXECUTION' FILED JANUARY 14, 1984 BY PRIVATE RESPONDENTS ANGELO
KING, KENG SUY WAT, QUINTIN CALDERON AND JOSE FERRER, JR., WERE FILED
OUT OF TIME.
(C) THAT PRIVATE RESPONDENTS WHO WERE SUED AS DIRECTORS
AND OFFICERS OF MFC WERE PROPERLY SERVED WITH SUMMONS.
The petition is devoid of merit.
25
Although private respondents were sued in their capacity as directors and who holds office at the 9th Floor of the Finasia Building, 6774 Ayala Avenue,
officers of MFC, they are, nevertheless, being held personally liable for the Makati, Metro Manila. No costs. This decision is immediately executory.
obligation subject of the litigation under the complaint filed by petitioner.
Hence, the rule on personal service of summons must be observed in that SO ORDERED.
summons must be served personally on private respondents or, if they refuse
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
to receive the same, by tendering it to them.

The proof of service. prepared by the sheriff does not show that such personal
service of summons was effected. The office address of the corporation as
indicated in the complaint does not appear to be the office address of private
respondents as they were no longer connected with the corporation then.
Personal service of summons should have been made on them at their
residences as shown in the records of the Securities and Exchange Commission
and the Central Bank. Instead, the sheriff effected substituted service by
leaving copies of the summons with the Assistant Manager of MFC at the place
of business of said corporation with which as above stated private
respondents were no longer connected. Such substituted service is not valid.
There was no compliance with the requirements of the rule that there must
be a previous personal service and a failure to effect the same before
substituted service could be resorted to. As the private respondents have not
been duly served with summons, the trial court never acquired jurisdiction
over their persons. LLjur

It is true that Atty. Aragones, who entered his appearance in behalf of MFC
and private respondents, sought an extension of time to file an answer or a
responsive pleading, and suspension of the proceedings pending a possible
settlement of the case; that thereafter, he signed a Compromise Agreement
in behalf of MFC and private respondents which was submitted to the court
on the basis of which a compromise judgment was rendered; that said
judgment was partially complied with but upon default in the payment of the
balance, a writ of execution was sought from and granted by the trial court;
and that it was only then that Atty. Aragones informed the court that he
committed an oversight in having filed the Compromise Agreement in behalf
of private respondents when it was only MFC which hired his services. If Atty.
Aragones was duly authorized to appear in behalf of the defendants, his
voluntary appearance in their behalf by the filing of the aforementioned
pleadings and the Compromise Agreement would constitute a waiver of the
defect in the service of summons. However, the lack of authority of Atty.
Aragones was revealed when he produced the resolution of the Board of
Directors of MFC to the effect that the authority of said counsel was in behalf
of said corporation only and not in behalf of the private respondents.

Since the Compromise Agreement was signed by Atty. Aragones in behalf of

the private respondents without their authority, the same is null and void in
so far as they are concerned. By the same token, the compromise judgment is
also null and void as to private respondents. The ruling of the lower court that
the motion to set aside the judgment and the petition for relief from judgment
were filed beyond the reglementary period is untenable. An action to declare
the nullity of a void judgment does not prescribe. 8

One last word, Atty. Aragones appears to be remiss in his duties and reckless
in the performance of his responsibility as counsel of record in said case. He
represented himself to be the counsel for the defendants including the private
respondents not only in the motions he filed but also in the Compromise
Agreement he submitted. It was only after the writ of execution of the
compromise judgment was being enforced that he was perked up by saying
that he committed an oversight and that he was not authorized by the private
respondents to represent them as counsel, much less in the Compromise
Agreement. Candor towards the courts is a cardinal requirement of the
practicing lawyer. To say one thing today and another tomorrow is a
transgression of this imperative. Counsel should be made to account before
his peers.

WHEREFORE, the petition is DENIED. Let a copy of this decision be furnished

the Integrated Bar of the Philippines for an appropriate administrative
investigation, report and recommendation on Atty. Guillermo E. Aragones

26
[G.R. No. L-48955. June 30, 1987.]
BERNARDO BUSUEGO, petitioner, vs. HONORABLE COURT OF APPEALS, JOSE
LAZARO, ROMEO LAZARO and VIVENCIO LOPEZ, respondents.
DECISION
FELICIANO, J p:
In this petition for review on certiorari, petitioner asks us to set aside the
decision of the Court of Appeals in CA-G.R. No. SP-06556, declaring null and
void the judgment by default and the orders issued by the Court of First
Instance of Pasig 1 in Civil Case No. 18860.
On 20 January 1974, petitioner Bernardo Busuego commenced action 2
before the Pasig Court of First Instance against Jose Lazaro, Romeo Lazaro,
Ernesto Lazaro, and Vivencio Lopez (three of whom are respondents herein),
to recover possession of a parcel of land and a three (3) unit apartment house
standing thereon, situated at No. 260-A. Bonifacio Avenue, Bo. Jesus de la
Peña, Marikina, Rizal.
Immediately thereafter, summons was issued in the name of the four
defendants and per sheriff's return, was personally served at the address given
in the complaint, upon the defendants "through [defendant] Dr. Ernesto
Lazaro, personally."
On 13 February 1974, defendants, through Atty. Gerardo B. Roldan, Jr., filed a
motion for an extension of fifteen (15) days to file answer, stating that "his
[Atty. Roldan's] services was (sic) secured by the defendants formally only the
other day," and that he "need[ed] sufficient time to study the case, before
filing any responsive pleading or pleadings." 3 The motion was granted by the
lower court in an order dated 6 March 1974.
On 28 February 1974, defendants through Atty. Roldan asked for another
extension of ten (10) days to answer, as "[Atty. Roldan] has not yet conferred
with all of [the four (4) defendants] which [was] necessary before any
responsive pleading [could be] filed by him." 4 The lower court granted this
second extension in an order dated 14 March 1974.
Notwithstanding the extensions granted, no answer was filed by the
defendants, for which reason, and upon motion of plaintiff Busuego, the lower
court declared the defendants in default in an order dated 20 May 1974.
Subsequently, plaintiff's case was heard and his evidence received, and on the
basis of that evidence the trial court rendered its decision 5 on 26 August 1974
in favor of the plaintiff.
Almost two years later, on 12 July 1976, plaintiff filed before the lower court
an ex parte motion for execution of the default judgment, which the lower
court granted in an order dated 18 August 1976.
On 3 September 1976, Romeo Lazaro, one of the defendants and a respondent
herein, "on his [own] behalf and on behalf of other defendants," filed a motion
to hold execution in abeyance praying that "for humanitarian reasons, an
extension of 30 days, within which to vacate the premises [be allowed] to give
them sufficient time to look for another place where the five families
composed mostly of little children, can reside." 6
On 18 September 1976, the lower court granted Romeo's motion and
accordingly, the execution of the default judgment was held in abeyance.
On 28 September 1976, the defendants through Atty. Roldan filed with the
lower court a motion for reconsideration of the judgment by default and/or to
dissolve the writ of execution, solely on the ground that neither the
defendants nor their counsel were ever furnished a copy of the judgment by
default. This motion was verified by Romeo Lazaro who described himself as
"one of the defendants in the — case" and as "representing them [the
defendants] in the instant pleadings [sic]," and stated that "we [the
defendants] have caused the filing of this motion, have read the contents
thereof and that an the allegations [therein] are true and correct to the best
of our knowledge and belief" 7 (Emphasis and brackets supplied). Upon
opposition of petitioner, the lower court denied the motion by order of 11
October 1976, finding the above-motion to be purely dilatory in nature and
plain harrasment on the part of the defendants.
On 3 November 1976, the respondents, through their new counsel, Atty. Oliver
Lozano, filed with the same court an omnibus motion, which included a motion
to lift the order of default, a second motion for reconsideration and a motion
to quash the writ of execution issued pursuant to the default judgment,
alleging for the first time that their failure to answer was due to lack of notice.
Petitioner opposed vigorously the above motion contending that, the
defendants could not pretend absence of proper notice after they, through
counsel, had filed the two motions for extension of time to answer.
On 27 December 1976, the lower court denied the omnibus motion, holding
the motion for extension of time to vacate filed by respondent Romeo Lazaro
for all the defendants to be equivalent to waiver of service of summons.
On 10 January 1977, defendants, through their new counsel, filed what in
effect was a third motion for reconsideration of the judgment by default,
alleging that: the lower court never acquired jurisdiction over their persons
because of lack of proper service of summons; and that the motion for
extension of time to vacate the premises, filed by their co-defendant Romeo
Lazaro, after the judgment by default had become executory, was not
equivalent to waiver of summons.
The third motion for reconsideration having been denied, defendants brought
a petition for certiorari before the Court of Appeals, asserting that the orders,
judgment and writs complained of were all void for want of jurisdiction over
their persons.
On 13 July 1978, the Court of Appeals promulgated its decision, 8 basically
upholding the respondents' contention and providing, in its dispositive portion,
as follows:
"WHEREFORE, this Court hereby renders judgment as follows:
(a) insofar as the petitioner Ernesto Lazaro is concerned. dismissing
the petition; and
(b) insofar as the petitioners Romeo Lazaro, Jose Lazaro and Vivencio
Lopez, are concerned, granting the petition and the writs prayed for, declaring
null and void the order of default, judgment by default, order of execution,
writ of execution, notice to vacate, order of December 27, 1976, and order of
March 21, 1977, issued in Civil Case No. 18860 of the court below (Annexes B,
D, E, I and M, petition, and Annexes 6-A and 9, answer), and making
permanent the restraining order heretofore issued in these proceedings."
Hence, the petition before us.
In their respective briefs, the parties posed the following issues:
1. whether or not there was a valid service of summons upon the
persons of respondents Romeo Lazaro, Jose Lazaro and Vivencio Lopez.
2. whether or not there was voluntary appearance by the
respondents as defendants below, through Atty. Gerardo B. Roldan and their
co-respondent Romeo Lazaro.
The issues raised may be further simplified into whether or not jurisdiction
was lawfully acquired by the court a quo over the persons of the respondents
Jose Lazaro, Romeo Lazaro and Vivencio Lazaro.
Basically, there are two (2) ways by which a court acquires jurisdiction over
the person of the defendant or respondent: (a) by service of summons upon
the defendant; and (b) by voluntary appearance of the defendant in court and
his submission to its authority.
27
With respect to service of summons, the Revised Rules of Court prescribe that
a copy of the summons be served personally upon the defendant by "handing
him a copy thereof in person or if he refuses to receive it, by tendering it to
him." 9 Personal service, however, may be dispensed with and substituted
service may be availed of if the defendant cannot be served personally "within
a reasonable time." 10
In the present case, it appears that the sheriff had availed of substituted
service in seeking to serve the summons upon all the defendants by serving a
copy thereof "through Dr. Ernesto Lazaro personally." Perusal, however, of the
sheriff's return 11 reveals that the sheriff failed to specify therein what prior
efforts, if any, had been exerted to serve summons upon the other defendants
personally within a reasonable period of time, and the lack of success of such
efforts, before proceeding to substituted service. Such specification in the
sheriff's return is essential for enforcement of the rule under the Revised Rules
of Court that substituted service may be resorted to only where it is not
possible to serve the defendant or defendants promptly in person. As this
Court ruled in Keister vs. Navarro, 12
"[T]he impossibility of prompt service in person should be shown by stating
the efforts made to find the defendant personally and the fact that such efforts
failed. This statement should be made in the proof of service. This is necessary
because substituted service is in derogation of the usual method of service —
"
We therefore uphold the respondent appellate court's finding that, while
Ernesto Lazaro was validly served, with respect to respondents Jose Lazaro,
Romeo Lazaro and Vivencio Lopez, there was no valid service of summons
effected. We are, nonetheless, unable to sustain its conclusion that the trial
court never acquired jurisdiction over the persons of the said respondents.
As earlier noted, jurisdiction over the person of the defendant can also be
acquired by his voluntary appearance in court and his submission to its
authority, for voluntary appearance is equivalent to service of summons. 13
As long ago as 1918, the essence of voluntary appearance was explained by
this Court through Mr. Justice Johnson in Flores vs. Zurbito, 14 as follows:
"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. . . ."
In the case before us, the defendants appeared before the trial court a number
of times without raising any objection to the improper service of summons (1)
the defendants, through Atty. Gerardo Roldan, appeared in court and filed two
successive motions for extension of time to file an answer to the complaint;
(2) more than two years after rendition of the judgment by default by the trial
court, defendants, through their co-defendant Romeo Lazaro, filed a motion
for extension of time within which to vacate the premises involved and to look
for another place to live in, raising no question concerning the jurisdiction of
the trial court over the persons of the defendants; and (3) the defendants,
through their counsel Atty. Roldan, moved for reconsideration of the
judgment of the trial court and for dissolution of the writ of execution, again
without contesting the jurisdiction of the court over their persons. We hold
that by anyone or more of these acts, and certainly by the whole series of acts,
the defendants, respondents herein, effectively waived the initial lack of
jurisdiction over their persons and submitted to the authority of the trial court.
The respondents assert that only voluntary appearance during trial is
equivalent to waiver of service, and that therefore, the motion for extension
of time within which to vacate the premises filed by Romeo Lazaro after trial
and after rendition of judgment, was not equivalent to waiver of summons.
We are not persuaded by this argument of the respondents. In Soriano vs.
Palacio, 15 this Court, speaking through Mr. Justice J.B.L. Reyes, held that:
"Assuming, arguendo, that the court below originally did not acquire
jurisdiction over petitioner Soriano, the latter certainly submitted to it when
he filed his first motion for reconsideration and for annulment of previous
proceedings on 14 March 1960. Therefore, the denial of that motion, by the
order of 19 March 1960, was binding on petitioner Soriano."
The respondents also cite a joint affidavit dated 5 February 1977 executed by
some of them: Jose Lazaro, Ernesto Lazaro and Vivencio Lopez, stating that
they had not authorized Atty. Roldan nor Romeo Lazaro to file any pleading on
their behalf. 16 In another joint affidavit dated 10 January 1977, Jose Lazaro
and Romeo Lazaro asserted that Romeo Lazaro had no authority to file the
motion of 3 September 1976 seeking "for humanitarian reasons" an extension
of time to vacate the premises in question. In a third affidavit dated 5 February
1977, Atty. Roldan in effect repudiates the motion for extension of time that
he had filed on 14 February 1974 with the trial court. In his 1977 affidavit, Atty.
Roldan states that he had instructed Mr. Romeo Lazaro to secure the
conformity of the other defendants to his serving as their counsel before
agreeing to represent them, that he had asked for an extension of time to file
an answer without the knowledge of the defendants to gain time to confer
with them and obtain a written agreement with respect to his "proposed legal
service;" that when the defendants again failed to meet with him, he filed his
second motion for extension to file an answer to have "another opportunity
to find out if the said defendants would agree that [he] represent them;" that
he eventually abandoned the idea of representing the defendants. 17
We are unable to give the above affidavits any credence or weight. They
appear to us as very late second thoughts, transparently devised to conform
with the posture of "no voluntary appearance" adopted by the defendants'
subsequent counsel. Those affidavits were submitted too late in the day, as it
were, to avoid the effect of their voluntary appearance before the trial court.
The affidavits concerning lack of authority of respondent Romeo Lazaro to file
the motion pleading "for humanitarian reasons" for an extension of time to
locate an alternative residence are thoroughly unpersuasive. We note, in this
connection, that all the defendants were not only immediate neighbors
residing in adjacent units of a single apartment house but also members of the
same family. Ernesto Lazaro is the father of respondents Jose Lazaro and
Romeo Lazaro. Thus, the natural tendency of Ernesto Lazaro, upon receipt of
the summons issued by the trial court, must have been to inform his children
living beside him about the summons; similarly, the natural tendency of
Romeo Lazaro must have been to inform his father and brother and other
relatives living in the same apartment house about the steps taken to defer
their ejectment.
The affidavit of Atty. Roldan is particularly deplorable. An attorney is
presumed to be authorized by his client in a case in which he appears. 18 Thus,
Atty. Roldan was correctly presumed by the trial court to have been authorized
by the defendants below to appear on their behalf when he filed the motions
for extension of time to answer and, what is more, when he filed the first
motion for reconsideration of the judgment of the trial court. Either Atty.
Roldan's 1977 affidavit is plain perjury or he was misleading and trifling with
and imposing upon the trial court back in 1974. Even when an attorney is
employed by an unauthorized person to represent a client, the client will be
bound where he has knowledge of the fact that he is being represented by an
attorney in a particular litigation and takes no prompt measure to repudiate
28
the assumed authority. The security and finality of judicial proceedings are
matters of insistent public policy and require that the evasions and
tergiversations of unsuccessful litigants and their counsel be firmly rejected
and not permitted to overcome the presumption of authority on the part of
an attorney. 19
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET
ASIDE insofar as concerns respondents Romeo Lazaro, Jose Lazaro and
Vivencio Lopez. With respect, however, to defendant Ernesto Lazaro, same
decision is hereby AFFIRMED. This decision is immediately executory. Costs
against respondents.
G.R. No. L-42230 November 26, 1986
LAURO IMMACULATA, represented by his wife AMPARO VELASCO as
Guardian Ad Litem, petitioner,
vs.
HON. PEDRO C. NAVARRO, in his capacity as Presiding Judge of the Court of
First Instance of Rizal, Branch No. II, and HEIRS OF JUANITO VICTORIA,
namely: LOLITA, TOMAS, BENJAMIN, VIRGINIA, BRENDA AND ELVIE, all
surnamed RIA, and JUANITA NAVAL, surviving widow; and the PROVINCIAL
SHERIFF OF RIZAL, respondents.
Pedro N. Belmi for petitioner.
Deogracias O. Felizardo for respondents.
PARAS, J.:
This is a petition for review on certiorari of the: (1) July 21, 1975 Order of the
Court of First Instance (now Regional Trial Court) of Rizal, Branch II, in Civil
Case No. 20968, entitled "LAURO IMMACULATA, etc. vs. Heirs of JUANITO
VICTORIA, et al." dismissing the complaint seeking the annulment of a
judgment rendered by Hon. Gregorio Pineda of the Court of First Instance of
Rizal, Branch XXI, as well as the deed of sale with reconveyance of real
property allegedly executed by plaintiff Lauro Immaculata in favor of Juanito
Victoria; and (2) the Order dated December 5, 1975 denying the motion for
reconsideration of the decision of July 21, 1975.
The records disclose that on March 24, 1975, petitioner Lauro Immaculate,
represented by his wife Amparo Velasco as guardian ad litem filed in the Court
of First Instance of Rizal, Branch II, a complaint, for annulment of judgment
and deed of sale with reconveyance of real property, against private
respondents herein and respondent sheriff, docketed as Civil Case No. 20968,
entitled "LAURO IMMACULATA, etc. vs. Heirs of JUANITO VICTORIA, et al. "
The complaint alleged that on or about December, 1969 or sometime prior
thereto, Juanito Victoria with the cooperation of defendant Juanita Naval, one
of the private respondents herein, and others succeeded in causing plaintiff
Lauro Immaculata, petitioner herein, to execute a Deed of Absolute Sale in
favor of Juanito Victoria, by unduly taking advantage of the mental illness
and/or weakness of petitioner and thru deceit and fraudulent means,
purportedly disposed of by way of absolute sale, a 5,000-square meter parcel
of land covered by Transfer Certificate of Title No. 76069, for the sum of P
58,000.00, which petitioner supposedly received, but in truth and in fact did
not; that although it was made to appear that petitioner voluntarily and freely
appeared before the Notary Public on January 13, 1970, petitioner, then
already suffering from chronic mental illness, could not possibly appear before
the said Notary Public; and that said Deed of Sale was not freely and voluntarily
executed by petitioner, and the same was absolutely fictitious and simulated,
and, consequently, null and void; that based on said fictitious and simulated
sale, an action for specific performance was filed by Juanito Victoria, during
his lifetime, against petitioner herein before the respondent Court on August
6, 1970 docketed as Civil Case No. 13734, entitled "Juanito Victoria vs. Lauro
Immaculata," for the purpose of compelling petitioner to execute a document
registerable with the Register of Deeds of Rizal in order that Juanito Victoria
may be able to obtain title over the property; that no proper and valid service
of summons was ever made upon the petitioner, and thus, notwithstanding,
the latter was declared in default and judgment by default was rendered
against him; that said judgment by default was null and void, having been
rendered against a person who is/was admittedly insane and over whose
person, the respondent court did not validly acquire jurisdiction; that the
judgment by default was not properly served upon the petitioner and/or the
supposed guardian ad litem, and this, notwithstanding, Juanito Victoria, thru
counsel, succeeded in securing the issuance of a writ of execution to enforce
the judgment by default rendered by the respondent Court against the
petitioner; that Juanito Victoria, alleging that the herein petitioner failed to
comply with the alleged writ of execution, prayed before the respondent Court
that the respondent Sheriff be directed to execute the necessary deed of
conveyance in favor of Juanito Victoria covering the property subject matter
of the complaint (Civil Case No. 13734); and, accordingly, respondent Court
directed the respondent Sheriff to execute the deed of conveyance prayed for
by Juanito Victoria, by reason of which, without the knowledge and consent of
petitioner, a new Transfer Certificate of Title No. 453711 was issued in favor
of Juanito Victoria; that the said TCT No. 453711 is null and void having been
based on void proceedings; that, in the alternative, petitioner prays that he be
allowed to repurchase the property within five (5) years from the time
judgment is rendered by the respondent court upholding the validity of the
proceedings and the sale since the land in question was originally covered by
a Free Patent title; and finally, petitioner prays for actual and moral damages
as well as exemplary damages, attorney's fees, expenses of litigation and costs
of suit (Rollo, pp. 18-30).
On May 28, 1975, private respondents, thru counsel, filed a motion to dismiss
the complaint based on three grounds: (a) that respondent Court had no
jurisdiction over the case; (b) that plaintiff's cause of action, if any, was barred
by res judicata; and (c) that the complaint stated no cause of action (Rollo, pp.
41-44).
On July 21, 1975, respondent Court dismissed the complaint on the ground of
res judicata, as follows:
Based on the grounds alleged in the motion to dismiss copy of which appears
to have been served upon Atty. Pedro Belmi for the plaintiffs and who filed no
opposition thereto, and it further appearing that the issues raised in the
complaint have already been the subject-matter of the decision rendered by a
court of competent jurisdiction in Civil Case No. 13734 before Branch XXI of
this Court, as prayed by the defendants this case is hereby ordered dismissed
for being res judicata.
With costs against the plaintiffs.
SO ORDERED. (Rollo, p. 47.)
On September 8, 1975, petitioner moved for the reconsideration of the
aforesaid order on the ground that res judicata is not applicable when the
main cause of action is to annul the very judgment (Rollo, pp. 48-51), to which
motion, private respondents filed their opposition dated October 21, 1975
(Rollo, pp. 52-53).
On December 5, 1975, the respondent trial court issued an order denying the
motion for reconsideration of the July 21, 1975 decision (Rollo, pp. 55-56).
Hence, this petition for review on certiorari, filed on January 2, 1976 (Rollo, pp.
1-1 7).
In a resolution dated January 15, 1976, the Supreme Court, First Division,
denied the petition for having been filed late and for late payment of the legal
fees on January 2, 1976 due date being December 18, 1975 (Rollo, p. 59), but
on motion for reconsideration of petitioner on February 5, 1976, (Rollo, pp.
67-71) the Supreme Court reconsidered the resolution of January 15, 1976, in
the resolution of February 11, 1976, and required the respondents to
comment thereon (Rollo, p. 73).
29
Private respondents filed their comment on the petition on May 28, 1976
(Rollo, pp. 91-96) and in a resolution dated June 9, 1976, the Supreme Court
resolved to give due course to the petition (Rollo, p. 116).
Briefs were filed on September 27, 1976, by petitioner (Rollo, p. 135) and on
January 20, 1977 by the private respondents (Rollo, p. 164).
In a resolution dated March 14, 1977, the Supreme Court resolved to declare
the case submitted for decision without petitioner's reply brief (Rollo, p. 186).
The sole issue to be resolved in this case is whether respondent court acted
with grave abuse of discretion in dismissing the complaint filed by petitioner
herein and in denying the motion for reconsideration thereof.
Petitioner contends that the complaint in Civil Case No. 20968 for annulment
of a judgment and deed of sale is not barred by the judgment in Civil Case No.
13734 on the ground of res judicata because the judgment by default in Civil
Case No. 13734 is void for lack of jurisdiction over the person of the petitioner
and for lack of due process, and that there is no Identity between the two
cases because the complaint in Civil Case No. 20968 seeks to nullify the
judgment by default rendered in Civil Case No. 13734 and the deed of sale
while the previous complaint in Civil Case No. 13734 sought to compel
petitioner to deliver to Juanito Victoria the owner's copy of Transfer Certificate
of Title No. 280711.
The contention is not tenable.
It is true that the complaint for specific performance filed on August 6, 1970
by Juanito Victoria was not initially served upon defendant Lauro Immaculata
as he was confined at the National Mental Hospital. It appears, however, that
Amparo V. Immaculata, wife of defendant Lauro Immaculata, was appointed
guardian ad litem as per order of the lower court dated March 20, 1971.
Admittedly, the guardian ad litem Amparo Immaculata, received and accepted
on March 6, 1972 the alias summons issued by the lower court on April 28,
1971. Despite the service of the alias summons, petitioner Lauro Immaculata,
now represented by his wife, as guardian ad litem failed to file the answer to
the complaint in Civil Case No. 13734. On March 23, 1972, private respondents
moved that petitioner, as defendant therein, be declared in default on the
ground that petitioner received the summons and copy of the complaint on
March 6, 1972 and up to the time of the filing of said motion, he had not filed
his answer.
The lower court, in its order dated May 31, 1972, held in abeyance the
resolution of the aforesaid motion until after the return of the summons shall
have been made by the provincial Sheriff of Rizal. On July 17, 1972, private
respondents herein again moved to declare petitioner in default. Since
petitioner, defendant therein, had not filed his answer, an order of default was
issued on July 27, 1972, and on October 4, 1972, judgment was rendered
ordering defendant Lauro Immaculata to deliver to plaintiff Juanito Victoria
the Certificate of Title of the lot in question.
Clearly, when the alias summons and a copy of the complaint were duly served
upon petitioner, through his guardian ad litem, the lower court acquired
jurisdiction over his person. Upon receipt of said summons and complaint,
defendant's wife knew that her husband was impleaded as a defendant in a
case involving their property and she should have exerted every effort to
answer the complaint for the protection of their rights.
It must be pointed out also that the lower court did not act hastily or arbitrarily
in declaring defendant. Lauro Immaculata in default, Defendant, through his
wife as guardian ad litem, had a reasonable opportunity to answer the
complaint. As aforestated the alias summons and a copy of the complaint were
duly served upon defendant's wife on March 6, 1972. While, private
respondents, as plaintiffs in Civil Case No. 13734, moved to declare defendant
in default as early as March 23, 1972, the lower court did not act on it until
July 23, 1972 when it acted on the manifestation and motion to declare
defendant in default filed on July 17, 1972.
Assuming, arguendo, that there was no proper and valid service of summons
upon petitioner herein, he should be deemed to have voluntarily submitted to
the jurisdiction of the court when he filed on September 24, 1973 a petition to
set aside the decision dated October 4, 1972 and the order dated July 12, 1973.
It is generally said that "a party cannot invoke the jurisdiction of a court to
serve affirmative relief against his opponent and, after obtaining or failing to
obtain such relief, repudiate or question that same jurisdiction." (Tijam vs.
Sibonghanoy, 23 SCRA 20, 35 [1968]. Petitioner cannot now be allowed to
belatedly adopt an inconsistent posture by attacking the jurisdiction of the
court to which he submitted his cause voluntarily. Furthernore, it may be
noted that on November 12, 1973, the lower court, after due hearing on
petitioner's petition, denied the same on the ground that there is no new and
compelling reason to warrant a reconsideration of the decision dated October
4, 1972 and the Order dated July 23, 1972 declaring defendant Lauro
Immaculata, petitioner herein, in default.
It cannot be said therefore, that the judgment by default dated July 23, 1972
nor the decision dated October 4, 1972 rendered by the lower court was null
and void because the court validly acquired jurisdiction over the person of the
petitioner, and there was no denial of due process as petitioner was duly
notified about the complaint in Civil Case No. 13734, and he received a copy
of the decision dated October 4, 1972 and the order dated July 12, 1973 issuing
a writ of execution, and he actively participated in the case by filing a petition
to set aside the aforesaid decision and order. It appears also that petitioner
had knowledge of the order of default dated July 23, 1972.
Petitioner also claims that the dismissal of Civil Case No. 20968 on the ground
of res judicata is unwarranted.
The claim is not meritorious.
It is true that Civil Case No. 13734 is an action for specific performance which
seeks to enforce the right of the plaintiff therein, Juanito Victoria, to the title
over the lot in question. However, when the lower court rendered its decision
dated October 4, 1972, it in effect ruled on the validity of the contract of sale
as it ordered the defendant therein, Lauro Immaculata, to deliver to the
plaintiff therein, Juanito Victoria, the owner's copy of Transfer Certificate of
Title No. 280711 and to execute the necessary documents in order that the
sale in favor of the plaintiff may be registered. Hence, herein petitioner Lauro
Immaculata can no longer question the validity of the sale in the present case,
Civil Case No. 20968, because the said issue was already settled in Civil Case
No. 13734, although it was an action for specific performance. It may also be
noted that the issues raised in petitioner's complaint in Civil Case No. 20968
are substantially the same issues raised in his petition to set aside the decision
dated October 4, 1972 and the order dated July 12, 1973 earlier filed on
September 24, 1973 in Civil Case No. 13734, which, however, was denied by
the lower court in its order dated November 12, 1973.
Finally, the respondent court did not act with grave abuse of discretion when
it dismissed the complaint in Civil Case No. 20968 and denied the motion for
reconsideration on the ground of res judicata.
It has been repeatedly held that in order for a judgment to be a bar to a
subsequent case, the following requisites must be present: (1) it must be a
final judgment; (2) the court which rendered it had jurisdiction over the
subject matter and the parties; (3) it must be a judgment on the merits; and
(4) there must be Identity between the two cases, as to parties, subject matter
and cause of action (Heirs of Juan Cuano Panotes and Rafael Obusan vs. Hon.
Court of Appeals and Pedro Ibana, G.R. No. L-46073, August 13, 1986, and
other cases cited).
In the case at bar, there appears to be no dispute that the judgment in Civil
Case No. 13734 had already become final and executory. As a matter of fact,
respondent court had already ordered on July 12, 1973 the issuance of the writ
of execution in favor of the plaintiff, Juanito Victoria and against the defendant,
Lauro Immaculata. It has been shown that the court which rendered the
decision in Civil Case No. 13734 had jurisdiction over the subject matter and
30
the parties in the case particularly Lauro Immaculata. There also appears to be
no question that there was judgment on the merits in Civil Case No. 13734,
and there was Identity of parties, subject matter, and in effect in the causes of
action in the two cases. Moreover, the issues raised in the complaint in Civil
Case No. 20968 have already been the subject matter of the decision rendered
by a court of competent jurisdiction in Civil Case No. 13734. Therefore, the
judgment in Civil Case No. 13734 is a bar to Civil Case No. 20968 under the
principle of res judicata.

PREMISES CONSIDERED, this petition is hereby DENIED.

SO ORDERED.

31
[G.R. No. L-57218. December 12, 1986.]
FAR CORPORATION and ROSA O. DE CARAM, petitioners, vs. HON. RICARDO
J. FRANCISCO, Presiding Judge of Branch VI, CFI of Rizal at Pasig, Metro
Manila, and ELIZABETH P. NICOLAS, respondents.
Melquiades Paredes for petitioners.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SERVICE OF COURT
PROCESSES; UPON COUNSEL OF CORPORATION CONSIDERED VALID SERVICE
ON PARTY. — As correctly observed by private respondents, he is not an
ordinary lawyer of the corporation but an internal counsel thereof who is in
charge of legal matters affecting petitioner corporation inclusive of case filed
for or against it. In fact he is petitioners' counsel both in the lower court and
in the Supreme Court in this case. In Filoil marketing Corporation v. Marine
Development Corp. of the Phil. (117 SCRA 89 [1982]), the Court considered
counsel for defendant corporation as performance defendant's agent and
ruled that under Section 13, Rule 14 of the Rules of Court, service upon him is
sufficient.
2. ID.; ID.; CHIEF OF FINANCE, FALLS UNDER TERM 'AGENT';
AUTHORIZED TO RECEIVE PROCESSES. — Be that as it may, the issue before
the Court is the validity of the summons received by the Chief of Finance and
Administrative Section who is not the chief of said corporation. In the case at
Bar, Mr. Dizon as Administrative Chief is responsible for the management of
the corporation which places him on the level of a manager contemplated by
the Rules. As Chief of Finance, he is conferred with vital and sensitive functions
and responsibilities. Under corporate and management organizational
structure, a finance officer even holds a higher position than that of a cashier.
Otherwise stated, Mr. Dizon is not one of the lesser officers of the corporation
who would not have been able to appreciate the importance of the papers
delivered to him. On the contrary, he falls squarely under the term Agent who
is authorized by law to receive the processes of the Court for the corporation.
3. ID.; ID.; SUBSTITUTED SERVICE; ADMINISTRATIVE CHIEF,
CONSIDERED COMPETENT PERSON TO VALIDLY RECEIVE SERVICE OF
SUMMONS. — For the same reasons above-stated, Mr. Enrique Dizon as Chief
of Administrative and Finance Section can be considered a competent person
in charge of the office of defendant owner and manager of the corporation as
provided for in Section 8, Rule 14 of the Rule of Court , to validly receive the
service of summons for her who could not receive the same personally
because she was absent from the office at the time service was being made.
4. ID.; ID.; WRONGFUL SERVICE OF SUMMONS, NOT VALID GROUND
FOR DISMISSAL. — It has been ruled that a case should not be dismissed simply
because an original summons was wrongfully served, as it is difficult to
conceive that where a defendant appears before the court complaining that
he had not been validly summoned, the case against him would be dismissed.
An alias summons can be actually served on such defendant. (Linger & Fisher
GMBH v. Intermediate Appellate Court (125 SCRA 527 [1983]).
DECISION
PARAS, J p:
This petition for certiorari seeks the annulment of the Orders of respondent
Honorable Ricardo L. Francisco of the Court of First Instance of Rizal, Branch
VI, to wit: (a) the Order dated March 18, 1981 denying petitioners' motion to
dismiss the complaint in Civil Case No. 40297 "Elizabeth P. Nicolas vs. Far
Corporation et al." for lack of jurisdiction over the persons of the petitioners
and (b) the Order dated June 1, 1981 denying petitioners' motion for
reconsideration of aforesaid order.
Petitioner Far Corporation, existing under the laws of the Philippines, is the
owner of a residential apartment located at No. 250 Amapola St., Palm Village,
Makati, Metro Manila while its co-petitioner Rosa O. de Caram is the manager
and owner of said corporation.
Private respondent Elizabeth P. Nicolas is the lessee of the above-mentioned
apartment who allegedly received a notice from petitioner Corporation signed
by its "manager and owner Caram, that the contract of lease was being
terminated as of February 15, 1981. Private respondent allegedly requested
that the lease be terminated instead on March 15, 1981 to enable her to look
for another place. However, petitioners, allegedly refused to accept private
respondent's tender of payment of rental for the period covering January 16,
1981 to February 15, 1981 but padlocked instead, the apartment unit occupied
by private respondent. Consequently, on February 19, 1981, private
respondent filed a complaint for damages with prayer for preliminary
injunction in the above cited Civil Case No. 40297, at the Court of First Instance
of Rizal, Pasig, Metro Manila (Rollo, pp. 20-23).
On February 27, 1981, the deputy sheriff of Rizal served the summonses and
copies of the complaint for both defendants-petitioners at 2256 Pasong Tamo,
Makati, Metro Manila, first upon Atty. Melquiades Paredes, the corporation's
retained counsel, holding office at the same address, who however, declined
to accept said process claiming that he is neither an agent nor officer of the
corporation and suggested instead that the Sheriff find out if Mr. Enrique
Dizon was the cashier of said corporation, and if so, to serve the summons on
him for the defendant corporation. The summonses were finally served on Mr.
Enrique Dizon who turned out to be not the cashier but the Finance and
Administrative Manager of the Corporation. (Rollo, pp. 5-6).
Both petitioners filed motions to dismiss on the ground that the lower court
did not acquire jurisdiction over their persons (Rollo, pp. 25-26; 29-31).
Private respondent (plaintiff therein) filed her opposition to both motions to
dismiss on March 17, 1981. As above-stated, aforesaid motions as well as the
motion for reconsideration, all filed by the petitioners, were denied in the
lower court's Orders dated March 18, 1981 and May 4, 1981, respectively.
Hence, this petitioner.
In the resolution of July 6, 1981, the Second Division of this Court required
private respondent to comment (Rollo, p. 56) and issued a restraining Order
enjoining further proceedings in said case. Because of private respondent's
failure to comment on the petition, the Court required her to explain such
failure and to file the required comment, in the resolution of October 5, 1981.
(Rollo, p. 62). Counsel for private respondent filed the required explanation
(Rollo, p. 63) and comment (Rollo, p. 69), both on November 10, 1981. In the
resolution of November 23, 1981, the Court accepted both explanation and
comment and required petitioners to file a reply to the latter, (Rollo, p. 85)
which Resolution was complied with on January 20, 1982 (Rollo, pp. 89-94). In
the resolution of February 10, 1982, the Court gave due course to the petition
and required the parties to file memoranda (Rollo, p. 95). Petitioner's
memorandum was filed on April 26, 1982 (Rollo, pp. 101-113) while
respondents' memorandum was filed on August 6, 1982 (Rollo, pp. 114-126)
and the case was considered submitted for deliberation in the resolution of
February 4, 1985. (Rollo, p. 131).
The only issue in this case is whether or not there was valid service of
summons on both petitioners by which the lower court acquired jurisdiction
over their persons in Civil Case No. 40297.
Petitioners opposed the service of summons (1) for the corporation, on
Enrique Dizon, the head of the Finance and Administrative Section of Far
Corporation's branch office at Makati, Metro Manila who allegedly is not one
of those authorized to receive the same under Section 13, Rule 14 of the Rules
of Court and (2) for the owner and manager of said Corporation Rosa O. de
Caram who could not be served personally because she was absent from the
office, also on Enrique Dizon in a substituted service.
—1—
32
Petitioners argue that as contemplated in Section 13, Rule 14 of the Rules of
Court, service of summons may be made on the president, manager, secretary,
cashier, agent or any of the directors of the corporation. Hence, Mr. Dizon who
is the head of the Finance and Administrative Section of said corporation and
does not fall under any of the above-enumerated corporate officers, allegedly
cannot validly receive the court processes in question for the corporation.
This contention is untenable.
It is undisputed that aforesaid court processes were initially served on Atty.
Melquiades Paredes, the lawyer of the corporation and holding office within
its premises. As correctly observed by private respondent, he is not an
ordinary lawyer of the corporation but an internal counsel thereof who is in
charge of legal matters affecting petitioner corporation inclusive of cases filed
for or against it. (Rollo, pp. 116-117). In fact he is petitioners' counsel both in
the lower court and in the Supreme Court in this case. In Filoil Marketing
Corporation v. Marine Development Corp. of the Phil. (117 SCRA 89 [1982]),
the Court considered counsel for defendant corporation, as perforce
defendant's agent and ruled that under Section 13, Rule 14 of the Rules of
Court, service upon him is sufficient.
However, in the case at bar, petitioners' counsel did not receive the service of
summons as in his opinion he was not an agent of the corporation and instead
referred the Sheriff to Mr. Enrique Dizon under the impression that the latter
is the corporation's cashier but who turned out to be otherwise. Indeed, it is
inconceivable that he does not know who is the cashier of the corporation or
for that matter, any other officer authorized to receive summons of the Court.
All these notwithstanding, Atty. Paredes had at least constructive notice that
a case was filed against the corporation and that its appearance is being
ordered by the court. In good faith, he could have verified if the processes of
the Court which came to his knowledge were in fact received instead of
resorting to technicalities in an apparent attempt to frustrate the ends of
justice.
not possible. As stated by the Court in Ablaza vs. C.I.R. (126 SCRA 254 [1983]),
"The purpose of summons is to give notice to the defendant or respondent
that an action has been commenced against him. The defendant or
respondent is thus put on guard as to the demands of the plaintiffs or
petitioners." In the case at bar, no less than petitioners' counsel himself is
aware of the processes being served on his clients so that the element of
surprise is the least that can be invoked by petitioners in this case; much less
can it be said that respondent Judge erred in holding that the reasons
advanced against the validity of the service of summons for Rosa O. de Caram
border on mere technicality. (Rollo, p. 45).
Finally, it has been ruled that a case should not be dismissed simply because
an original summons was wrongfully served, as it is difficult to conceive that
where a defendant appears before the court complaining that he had not been
validly summoned, the case against him would be dismissed. An alias
summons can be actually served on such defendant. (Linger & Fisher GMBH v.
Intermediate Appellate Court (125, SCRA 527 [1983]).
PREMISES CONSIDERED, this petition is hereby DISMISSED, the restraining
order previously issued is hereby LIFTED, and the case is REMANDED to the
lower court for further proceedings.
SO ORDERED.
Feria, Fernan, Alampay and Gutierrez, Jr., JJ ., concur.

Be that as it may, the issue before the Court is the validity of the summons
received by the Chief of Finance and Administrative Section who is not the
cashier of said corporation. In Villa Rey Transit Inc. v. Far East Motor
Corporation (81 SCRA 303 [1978]) the Court held that "According to
jurisprudence, the rationale of all rules for service of process on corporation is
that service must be made on a representative so integrated with the
corporation sued as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on
him." This case was cited in a recent decision Summit Trading and
Development Corp. v. Avendaño (135 SCRA 397 [1985]) where it was ruled that
the secretary of the president of the corporation in that case, is an agent of
the corporation under Section 13, Rule 14 of the Rules of Court.

In the case at bar, Mr. Dizon as Administrative Chief is responsible for the
management of the corporation which places him on the level of a manager
contemplated by the Rules. As Chief of Finance, he is conferred with vital and
sensitive functions and responsibilities. Under corporate and management
organizational structure, a finance officer even holds a higher position than
that of a cashier (Rollo, pp. 74-75). Otherwise stated, Mr. Dizon is not one of
the lesser officers of the corporation who would not have been able to
appreciate the importance of the papers delivered to him. On the contrary, he
falls squarely under the term Agent who is authorized by law to receive the
processes of the Court for the corporation.

—2—

For the same reasons above-stated, Mr. Enrique Dizon can be considered a
competent person in charge of the office of defendant owner and manager of
the corporation as provided for in Section 8, Rule 14 of the Rules of Court, to
validly receive the service of summons for her who could not receive the same
personally because she was absent from the office at the time service was
being made. (Rollo, pp. 78-79). In the same manner, the Sheriff could not be
faulted in resorting to substituted service where prompt personal service is

33
G.R. No. 79374 October 2, 1992
TOMAS G. MAPA, petitioner,
vs.
COURT OF APPEALS, JUDGE MAXIMO A. SAVELLANO, JR., REGIONAL TRIAL
COURT OF MANILA, BRANCH LIII, and LAND BANK OF THE
PHILIPPINES, respondents.
G.R. No. 82986 October 2, 1992
TOMAS G. MAPA, petitioner,
vs.
COURT OF APPEALS and LAND BANK OF THE PHILIPPINES, respondents.
DAVIDE, JR., J.:
The validity of a substituted service of summons upon the petitioner is raised
as the common issue in these two (2) cases. Since identical parties are involved
in both, this Court ordered their consolidation. 1
G.R. No. 79374 involves a petition filed under Rule 45 of the Rules of Court to
review the 3 June 1987 Decision of public respondent Court of Appeals in C.A.-
G.R. SP No. 08535 2 denying, for lack of merit, the petition therein which
sought to set aside the decision of Branch 53 of the Regional Trial Court (RTC)
of Manila.
A similar petition under Rule 45 of the Rules of Court was filed in G.R. No.
82986 to review the decision of public respondent Court of Appeals, dated 20
January 1988, in C.A.-G.R. SP No. 13252. 3 The said decision set aside (a) the 4
May 1987 Order of Branch 10 of the Regional Trial Court of Manila in Civil Case
No. 82-13465 reversing its earlier decision of 18 September 1983 on the
ground that the herein petitioner was not validly served with summons and
(b) the 16 October 1987 Order denying the motion for reconsideration of the
latter.
The antecedent facts as disclosed by the records in these cases are not
disputed.
High Peak Mining Exploration Corporation (hereinafter referred to as High
Peak), through its duly authorized corporate officers Encarnacion C. Tittel and
Juergen Tittel, borrowed various sums of money from the private respondent
Land Bank of the Philippines (LBP), the latter acting as trustee of Trust Account
No. 01-139. The loans are evidenced by the following Promissory Notes
executed on different dates, signed by the said officers and made payable to
the Trust Account:
(1) On 23 June 1980, the sum of Five Million Pesos (P5,000.000.00) for a term
of 360 days, with interest at 16% per annum and with a maturity value of
P5,800,000.00, under Promissory Note (SER No. 0001);
(2) On 14 August 1980, the sum to Three Million Pesos (P3,000,000.00) for a
term of 360 days, with interest at 17%per annum and with a maturity value of
P3,510,000.00, under Promissory Note (SER No. 0002); and
(3) On 9 September 1980, the sum of Three Million Pesos (P3,000,000.00) for
a term of 360 days, with interest at 17% per annum and with a maturity value
of P3,510,000.00, under Promissory Note (SER No. 0003).
No security being required, none was put up by High Peak for the faithful
performance of its obligations under the Promissory Notes.
These three (3) Promissory Notes expressly provide that demand and dishonor
are waived by High Peak and its officers.
High Peak failed to pay the said loans. Despite the waiver of notice of demand,
the LBP nevertheless sent demand letters to the former which ignored the
same. The LBP was thus constrained to take legal action based on the three (3)
Promissory Notes.
The first note become the subject matter of a complaint for the recovery of a
sum of money with an application for a writ of preliminary attachment filed
solely against High Peak. The complaint was filed on 14 July 1981 with the then
Court of First Instance (now Regional Trial Court) of Manila. It was docketed
therein as Civil Case No. 82-6235 and was assigned to Branch 26 thereof. The
case was later renumbered as Civil Case No. 142400 when Branch 26 became
Branch 53 of the Regional Trial Court of Manila. The complaint was thereafter
amended to implead as additional defendants the petitioner herein, in his
personal capacity and as Chairman of High Peak's Board of Directors, and the
abovenamed signatories to the promissory notes. The amended complaint
was admitted by the court in its Order of 16 September 1982. This is the case
involved in G.R. No. 79374.
The second and third Promissory Notes, on the other hand, became the
subject matter of a complaint for the recovery of a sum of money filed against
High Peak, the herein petitioner in his personal capacity and as Chairman of
High Peak's Board of Directors and the aforementioned signatories to the
three (3) Promissory Notes. This complaint was likewise filed on 29 October
1982 with the Court of First Instance of Manila. It was docketed as Civil Case
No. 82-13465 and was assigned to Branch 10 thereof. This is the case involved
in G.R. No. 82986.
The amended complaint in Civil Case No. 142400 and the complaint in Civil
Case No. 82-13465 both allege that the defendants could be served with
summons at the Second Floor, First Midland Condominium Bldg., Gamboa St.,
Legaspi Village Makati, Metro Manila.
The subsequent procedural antecedents in each case are hereunder
summarized.
G.R. No. 79374
(re Civil Case No. 142400)
On 2 December 1982, Deputy Sheriff Romulo A. Flores of the Office of the
Provincial Sheriff filed a return of service of summons in Civil Case No. 142400,
reading as follows:
SHERIFF'S RETURN
THIS IS TO CERTIFY that on the 10th day of November, 1982 I have served
copies of herein summons with complaint and annexes attached thereto
issued by the Court in the above entitled case upon the defendants High Peak
Mining Exploration Corporation, Tomas G. Mapa, Encarnacion C. Tittel and
Juergen Tittel, thru SUSAN O. DELA TORRE, a person of suitable age and
discretion working therein, who claims to be the person authorized to received
processess (sic) of this nature and who acknowledged the receipt thereof at
second (sic) floor, First Midland Condominium Bldg., Gamboa Street, Legaspi
Village, Makati, Metro-Manila.
WHEREFORE, said summons is hereby returned to the Honorable Court of
origin DULY SERVED, for its record and information.
Pasig, Metro-Manila, November 15, 1982. 4
No answer having been filed by the defendants, the trial court, upon motion
of the LBP, issued an order on 15 April 1983 declaring the defendants in default
and ordering the LBP to present its evidence ex-parte. On 20 September 1983,
said court, per Judge Maximo Savellano, Jr., rendered a decision against the
defendants; the latter's liability for the amount adjudged was made joint and
several. Herein petitioner, as one of the defendants below, received a copy of
the decision in his residence at No. 625 N.S. Amoranto Ave., Sta. Mesa Heights,
Quezon City on 10 December 1984.
On 21 December 1984, petitioner filed a Motion to Dismiss and Set Aside
Judgment 5 on the ground that service of summons upon him and High Peak
34
was fatally defective because it was not made in accordance with law. As to
him, the sheriff's return did not show that the sheriff exerted efforts to
personally serve the summons; thus, substituted service pursuant to Section 7
and 8, Rule 14 of the Rules of Court was not warranted. Petitioner additionally
postulates that even granting that the substituted service was proper, the
actual service upon Susan O. dela Torre cannot be considered valid because
"(a) it was left not at defendant Mapa's residence and dela Torre was not
residing therein, and (b) that he (Mapa) was not holding office or regular place
of business at the second floor, First Midland Condominium Bldg., Gamboa St.,
Legaspi Village, Makati, Metro Manila;" he holds office in his residence. The
motion was denied by the trial court in its Order of 10 May 1985. A motion to
reconsider the same was likewise denied in the Order of 31 January 1986.
Petitioner then sought redress from the respondent Court of Appeals through
a petition for certiorari against Judge Savellano and the LBP. The case was
docketed as C.A. G.R. SP No. 08535. In its decision promulgated on 3 June
1987, 6 respondent Court of Appeals denied the petition on the ground that
". . . respondent Court was right in assuming jurisdiction over the defendants
Tomas G. Mapa, Encarnacion C. Tittel and Juergen Tittel who were being sued
in their personal capacities, on the basis of its finding that the substituted
service of summons pursuant to Section 8, Rule 14 of the Rules of Court was
properly affected (sic) by Deputy Sheriff Romulo A. Flores." Respondent Court
further ruled that the service of summons upon Susan O. dela Torre, an
employee of the corporation, may be regarded as service upon an agent of a
corporation within the meaning of Section 13 of Rule 14. Finally, it took note
of the trial court's observation in the latter's Order of 10 May 1985 that since
petitioner Mapa has not even assailed the merits of the court's 30 September
1983 decision, justice and equity demanded that "the same should be left
undisturbed."
His motion to reconsider the adverse decision having been denied in the
respondent Court's resolution of 29 July 1987, petitioner filed the instant
petition on 16 September 1987.
G.R. No. 82986
(re Civil Case No. 82-13465)
The duty to serve the summons in Civil Case No. 82-13465 also fell on the
shoulders of Deputy Sheriff Romulo A. Flores. On 15 November 1982, he filed
his return of service which reads:
SHERIFF'S RETURN
THIS IS TO CERTIFY that on the 10th day of November, 1982, I have served
copies of herein summons with complaint and annexes attached thereto
issued by the Court in the above-entitled case upon defendants High Peak
Mining Exploration Corporation, Tomas G. Mapa, Encarnacion C. Tittel and
Juegen (sic) Tittel, thru SUSAN O. DELA TORRE, a person of suitable age and
discretion working with said defendants, who claims to be the person
authorized (sic) to receive process (sic) of this nature and who acknowledged
the receipt thereof at 2nd Floor, First Midland Condominium Bldg., Gamboa
St., Legaspi Vill., Makati, Metro-Manila.
WHEREFORE, said summons is hereby returned to the Honorable Court of
origin DULY SERVED, for its record and information.
Pasig, Metro-Manila, November 15, 1982. 7
No answer having been filed by the defendants therein, the LBP a motion to
declare them in default, which the trial court granted. On 18 September 1983,
said court, per then Judge Eduardo R. Bengzon, handed down a decision
against the defendants. The latter were adjudged joint and severally liable for
the amounts to be paid. 8
On 14 October 1986, petitioner filed a Motion to Dismiss and Set Aside
Judgment 9 on the ground that service of summons to him and the corporation
was fatally defective; he reiterated the same arguments he raised in the similar
motion he filed in Civil Case No. 142400. Over the LBP's opposition, the trial
court, this time per Judge Josefina Cruz Rodil, issued an Order on 4 May
1987 10 partly granting the said motion by setting aside the decision because
no jurisdiction was acquired over both the petitioner and High Peak. The court
held that there is no showing that efforts were exerted by the sheriff to serve
the summons personally upon the petitioner; the former immediately
resorted to substituted service upon Susan O. dela Torre who cannot be
considered a competent person in charge of the office. With respect to High
Peak, Miss dela Torre, a mere employee thereof, is not one of those explicitly
authorized to receive summons in behalf of a corporation under Section 13,
Rule 14 of the Rules of Court. It denied, however, the motion to dismiss;
instead, it allowed the petitioner "to file his answer or responsive pleading
within fifteen (15) days from receipt of this Order," and directed the issuance
of summons on the other defendants. 11 On 15 June 1987, the LBP filed a
motion to reconsider this
Order 12 alleging therein that there was substantial compliance with the rule
on service of summons. The LBP further invited the trial court's attention to
the 3 June 1987 decision of the Court of Appeals in the aforementioned C.A.-
G.R. SP No. 08535. Petitioner consequently filed his opposition 13 thereto; he
reiterates the arguments raised in his motion to dismiss and, with respect to
the aforesaid decision of the Court of Appeals, contends that since the same
is not final, it does not yet control. The trial court denied the motion in its
Order of 16 October 1987. 14
Unable to accept the above orders of the trial court, the LBP filed with the
Court of Appeals a special civil action for certiorari, prohibition
and mandamus which was docketed therein as C.A.-G.R. SP No. 13252.
On 20 January 1988, the Court of Appeals promulgated its decision in said C.A.-
G.R. SP No. 13252 15 finding the trial court to have committed grave abuse of
discretion amounting to lack of jurisdiction in issuing the challenged orders,
and resolving as follows:
WHEREFORE, the petition for certiorari is hereby GRANTED and the
decision 16 of the respondent court dated May 4, 1987 and October 16, 1987
are hereby set aside for being contrary to law. The restraining order issued on
November 16, 1987 is likewise made permanent. . . . 17
His motion to reconsider the said decision having been denied on 13 April
1988, 18 the petitioner filed the instant petition.
On 20 May 1988, this Court gave due course to G.R. No. 79374. 19 After the
petitioner filed his reply to the private respondent's comment in G.R. No.
82986, this Court, in the Resolution of 6 March 1989, ordered the latter's
consolidation with the former. 20
The parties in these cases, particularly the private respondent, as plaintiff
below, should have striven to consolidate Civil Case No. 142400 and Civil Case
No. 82-13465 while they were still pending before the trial court. Both involve
identical parties, similar transactions made one after the other and the same
trust account of the LBP. As a matter of fact, if the filing of Civil Case No.
142400 had only been delayed by just three (3) months, there would have
been no need to file more than one (1) case. Moreover, summonses upon
defendants in both cases were served on the same occasion. Valuable time of
the parties, the two (2) branches of the trial court and eventually even of the
Court of Appeals would have been saved had the said cases been consolidated
pursuant to Section 1, Rule 31 of the Rules of Court. Parties should avail of this
rule both for their own and the court's advantage and benefit. The purpose or
object of consolidation is precisely to avoid multiplicity of suits, guard against
oppression or abuse, prevent delay, declog congested dockets, simplify the
work of the trial court and save unnecessary costs or expenses; in short, the
aim is to attain justice with the least expense and vexation to the parties
litigants. 21
As stated in the exordium of this ponencia, the basic issue raised in these
petitions is whether or not there was a valid substituted service of summons
in both Civil Case No. 142400 and Civil Case No. 82-13465. Both cases are
unquestionably actions in personam. Jurisdiction over the petitioner, as
35
defendant therein, can therefore be acquired either by his voluntary
submission to such jurisdiction, as when he appears in court, or by service of
summons upon him. Voluntary appearance is equivalent to service of
summons; 22 in fact, it even cures the defect of summons. 23Since petitioner
did not voluntarily submit to the jurisdiction of the trial court in both cases,
personal service became imperative.
Section 7, Rule 14 of the Rules of Court explicitly requires personal service of
summons which is accomplished "by handing a copy thereof to the defendant
in person, or, if he refuses to receive it, by tendering it to him." However, if
personal service cannot be effected within a reasonable time, substituted
service, as provided for in Section 8 of the abovementioned Rule 14, may
suffice:
Sec. 8 Substituted service. — If 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 dwelling house or
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.
This provision is a reproduction of Section 8, Rule 7 of the 1940 Rules of Court
except that, inter alia, the work "promptly" in the latter was changed to
"within a reasonable time" in the former. Of course, "within a reasonable
time" contemplates a period of time longer than that demarcated by the word
"prompt", and presupposes that a prior attempt at personal service, within a
justifiable time frame as would be necessary to bring the defendant within the
jurisdiction of the court, had failed.
It is not shown when the summonses in Civil Cases Nos. 142400 and 82-13465
were actually issued; what is clear to this Court is that the amended complaint
in the first case was admitted by the trial court on 16 September 1982, while
the complaint in Civil Case No. 82-13465 was filed on 29 October 1982. While
the separate Sheriff's returns indicate that the summonses in both cases were
served on 10 November 1982, these returns do not show that prior attempts
at personal service were made by the Sheriff and that such attempts had failed,
prompting the latter to resort to substituted service.
In Keister vs. Navarro, 24 this Court described how the impossibility of personal
service should be shown:
Impossibility of prompt service should be shown by stating the efforts made
to find the defendant personally and the fact that such efforts failed. This
statement should be made in the proof of service (I Moran, Comments on the
Rules of Court, 1970 Ed., p. 444). This is necessary because substituted service
is in derogation of the usual method of service. It has been held that this
method of service is "in derogation of the common law"; it is a method
extraordinary in character, and hence may be "used only as prescribed and in
the circumstances authorized by statute." . . . (72 C.J.S. 1053).
The proof of service alluded to is the return required by Section 6 of Rule 14
which reads:
Sec. 6. Return. — When the service has been completed, the server shall give
notice thereof, by registered mail, to the plaintiff or his counsel, and shall
return the summons to the clerk who issued it, accompanied with the proof of
service.
In Busuego vs. Court of Appeals, 25 this Court also succinctly expressed how
such impossibility is to be shown. Thus:
. . . Perusal, however, of the sheriff's return reveals that the sheriff failed to
specify therein what prior efforts, if any, had been exerted to serve summons
upon the other defendants personally within a reasonable period of time, and
the lack of success of such efforts, before proceeding to substituted service. . . .
As earlier adverted to, the sheriff's returns in Civil Cases Nos. 142400 and 82-
13465 are patently wanting it particulars that would justify the substituted
service. Accordingly, it is fatally flawed and defective; on that basis alone,
therefore, the trial court acquired no jurisdiction over the person of the
petitioner.
It must nevertheless be emphasized that the absence in the sheriff's return of
a statement about the impossibility of personal service does not conclusively
prove that the service is invalid. Proof of prior attempts at personal service
may be submitted by the plaintiff during the hearing of any incident assailing
the validity of the substituted service. While the sheriff's return carries with it
the presumption, albeit disputable, of regularity in the sense that inter alia,the
entries therein are deemed correct, it does not necessarily follow that an act
done in relation of the official duty for which the return is made was not done
simply because it is not disclosed therein. Besides, the sheriff's neglect in
making such a disclosure should not unduly prejudice the plaintiff if what was
undisclosed was in fact done. Unfortunately in these instant cases, the private
respondent failed to present evidence during the hearings of the petitioner's
separate motions to dismiss and set aside judgment to prove that substituted
service of summons was indeed effected in strict compliance with Section 8,
Rule 14 of the Rules of Court. During such hearings, the private respondent
could also have presented evidence to show that the petitioner did in fact
receive from Susan O. dela Torre the summonses, together with copies of the
complaints, in both cases. If indeed the petitioner received the same, the
requirement of due process would have been complied with. Thus, in Boticano
vs. Chu, 26 this Court had the occasion to state:
In the case at bar, there 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
vs. 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."
Indeed, such construction is but fair, and in accord with substantial justice. The
burden on a plaintiff is not to be enlarged with a restrictive construction
desired by the defendant. (Ibid., p. 1078).
On the same matter, Moran 27 has this to say:
Irregularities of this kind may, however, be cured by proof that the copies have
actually been delivered to the defendant, which is equivalent to personal
service.
While in his separate motions to dismiss and set aside judgment in the two (2)
cases filed before the trial court and annexed to his pleadings in these
petitions, petitioner never alleged that he did not in fact receive the
summonses, such circumstance by itself cannot warrant the conclusion that
he actually received from Susan dela Torre the said summonses and copies of
the complaints. In the absence of a categorical admission similar to that made
in Boticano vs. Chu, no such inference to the contrary could be drawn. It was
thus incumbent upon the private respondent to prove that Susan dela Torre
delivered to the petitioner copies of both the summonses and the complaints.
The conclusion then is inevitable that neither a valid personal nor substituted
service of summons in Civil Cases Nos. 142400 and 82-13465 had been
effected on the petitioner.
However, Branch 10 of the RTC of Manila gravely erred when, in its Order of 4
May 1987, it set aside the decision of 18 September 1983 because it was also
of the opinion that there was no valid service of summons on High Peak and
the other defendants. It entirely forgot that it was only the petitioner herein
who filed a motion to dismiss and set aside the judgment. For reasons which
remain undisclosed, petitioner did not include his co-defendants in the said
36
motion. In any event, the validity of the service of summonses on Encarnacion it sustains the ruling of the trial court in Civil Case No. 142400 that the
Tittel and Juergen Tittel has not been raised in issue; moreover, based on the petitioner was validly served with summons in said case; that Decision of 20
sheriff's return of service in said case, this Court is satisfied that there was a September 1983 of Branch 53 of the Regional Trial Court of Manila in Civil Case
valid service of summons on High Peak. Section 13, Rule 14 of the Rules of No. 142400 (formerly R-82-6235) stands as to the other defendants but is
Court provides for the manner in which service of summons upon a private hereby SET ASIDE as against the petitioner, and its Orders of 10 May 1985 and
domestic corporation shall be made. It reads: 31 January 1986 are accordingly MODIFIED. Said court shall cause alias
summons to be served on the petitioner.
Sec. 13. Service upon private domestic corporation or partnership. — If the
defendant is a corporation organized under the laws of the Philippines or a The Decision of respondent Court of Appeals of 20 January 1988 in C.A.-G.R.
partnership duly registered, services may be made on the president, manager, SP No. 13252, subject of G.R. No. 82986, is AFFIRMED in all respects except
secretary, cashier, agent, or any of its directors. insofar as the petitioner is concerned. The Decision of 18 September 1983 of
Branch 10 of the Regional Trial Court of Manila in said Civil Case No. 82-13465
The rationale for the above rule is to render it reasonably certain that the stands as against the other defendants therein but is hereby SET ASIDE as
corporation will receive prompt and proper notice in an action against it or to against the petitioner, and the Orders therein of 4 May 1987 and 16 October
insure that the summons be served on a representative so integrated with the 1987 are thus MODIFIED accordingly.
corporation that such a person will know what to do with the legal papers
served on him. In other words, the rule is meant to bring home to the A separate trial is hereby ordered against the petitioner in Civil Case No.
corporation notice of the filing of the action. 28 142400 and Civil Case No. 82-13465, for which purpose the latter shall be
consolidated with the former.
The summonses for High Peak in Civil Cases Nos. 142400 and 82-13465 were
received by Susan O. dela Torre who is described in the separate sheriff's No pronouncement as to costs.
returns as "a person of suitable age and discretion working therein, who claims
to be the person authorized to receive processess (sic) of this nature and who SO ORDERED.
acknowledged the receipt thereof of second (sic) floor, First Midland
Bidin, Romero and Melo, JJ., concur.
Condominium Bldg., Gamboa Street, Legaspi Village, Makati, Metro Manila."
In his separate motions to dismiss, while petitioner categorically admits that Gutierrez, Jr., J., is on leave.
this Susan O. dela Torre is an employee of the corporation, he does not
disclose her specific duties and responsibilities. He does not even deny the
statement, made in the said returns, that Susan is "authorized to receive
processess (sic) of this nature." Until rebutted by competent evidence, these
returns would have to stand in the meantime for they enjoy the presumption
of regularity. Susan O. dela Torre may thus be deemed an agent of High Peak
for purposes of the aforesaid Section 13 of Rule 14. It is then logical to presume
that she delivered the copies of the summonses and complaints to the
corporation, considering especially the fact that she was working in the office
of the said corporation as indicated in the complaints. This latter presumption
has not likewise been rebutted. Accordingly, even if Miss dela Torre may not
strictly be considered as the proper agent for purposes of the aforecited
Section 13, there was, nonetheless, substantial compliance therewith. In G&G
Trading Corporation vs. Court of Appeals, 29 this Court stated:

Although it may be true that the service of summons was made on a person
not authorized to receive the same in behalf of the petitioner, nevertheless
since it appears that the summons and compliant were in fact received by the
corporation, through its said clerk, the Court finds that there was substantial
compliance with the rule on service of summons. Indeed the purpose of said
rule as above stated to assure service of summons on the corporation had
thereby been attained. The need for speedy justice must prevail over a
technicality.

One final word. As stated earlier, the three (3) promissory notes involving the
original amounts of P5,000,000.00, P3,000,000.00 and P3,000,000.00, or a
total of P11,000,000.00, were to be released as loans from Trust Account of
the LBP unsecured by mortgage or any other security. This Court is unable to
understand how Eleven Million Pesos — an enormous amount — can be so
easily released without any form of security. Unless allowed by the Trust
Account itself or the rules and regulations of the LBP, the transactions appear
to be highly questionable. In this regard, since private respondent LBP is a
government-owned institution, an inquiry by appropriate agencies of the
government is in order to determine who were responsible for the approval
of said loans.

WHEREFORE, subject to the modification as above indicated, the instant

petitions are hereby partly GRANTED.

The decision of respondent Court of Appeals of 3 June 1987 in C.A.-G.R. SP No.

08535, subject of G.R. No. 79374, is AFFIRMED in all respects except insofar as

37
[G.R. No. 58027. September 28, 1992.]
THE GOLDEN COUNTRY FARMS, INC., petitioner, vs. SANVAR DEVELOPMENT
CORP., respondent.
B.C. De los Santos & Associates Law Offices for petitioner.
Yolando F. Busmente for respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; SERVICE UPON
PRIVATE CORPORATION; RULE WHEN EFFECTED THROUGH A CLERK-TYPIST. —
In G & G Trading Corp. vs. Court of Appeals, (158 SCRA 466, 469), we had
occasion to rule: "Although it may be true that the service of summons was
made on a person not authorized to receive the same in behalf of the
petitioner, nevertheless since it appears that the summons and complaint
were in fact received by the corporation through its said clerk, the Court finds
that there was substantial compliance with the rule on service of summons.
Indeed the purpose of said rule as above stated to assure service of summons
on the corporation had thereby been attained. The need for speedy justice
must prevail over a technicality." There was, substantial compliance with the
rules on service of summons since it appears that the summons and complaint
were actually received by the petitioner corporation through its clerk, thereby
satisfying the purpose of notice (Rebollido vs. Court of Appeals, 170 SCRA 800,
811).
2. ID.; ID.; DEFAULTS; MAY BE ORDERED FOR FAILURE TO FILE AN
ANSWER WITHIN THE REGLEMENTARY PERIOD. — We do not agree with
petitioner's claim that it cannot be declared in default for not filing an answer
while resolution of its joint motion for reconsideration of the order denying its
motion to dismiss was held in abeyance by the lower court. Petitioner received
the denial order of its motion to dismiss on May 15, 1980; hence, by
mathematical computation, the 15-day period to file an answer provided in
Section 1, Rule 77 of the Revised Rules of Court expired on May 30, 1980.
However, on May 30, 1980, which was the last day to file its answer, petitioner
filed a joint motion for reconsideration, instead of filing an answer. In this
regard, we share the opinion of the lower court that petitioner's joint motion
for reconsideration which merely reiterated the grounds in its motion to
dismiss was pro forma and did not toll the running of the period to file an
answer. In the case of PCIB vs. Escolin (67 SCRA 202) this Court rule that a
motion for reconsideration which does not make out a new matter sufficiently
persuasive to induce modification of judgment will be denied and that a
repetition of arguments or grounds already discussed in prior incidents may
properly be categorized as merely for purposes of delay.
3. ID.; ID.; ID.; RELIEF FROM ORDER OF DEFAULT; RULE. — As we have
ruled in the case of Philippine Bank of Commerce vs. Jose M. Aruego (102 SCRA
530, 537): "It has been held that to entitle a party to relief from a judgment
taken against him through his mistake, inadvertence, surprise or excusable
neglect, he must show to the court that he has a meritorious defense. In other
words, in order to set aside the order of default, the defendant must not only
show that his failure to answer was due to fraud, accident, mistake or
excusable negligence but also that he has a meritorious defense." In the case
of Development Insurance Corp. vs. Intermediate Appellate Court (143 SCRA
62), this Court also ruled that a default judgment will not be lifted if defendant
has no valid defense.
DECISION
MELO, J p:
Before us is an appeal by certiorari from the decision of the then Court of First
Instance of Rizal, Branch XX, Pasig, Metro Manila, at that time Presided over
by the Honorable Celso L. Magsino, and the order dated February 16, 1981
denying petitioner's and its co-defendant's joint motion for reconsideration
wherein petitioner Golden Country Farm, Inc. (GCFI, for short) was declared in
default.
The factual background of this case may be stated as follows:
On February 28, 1980, respondent Sanvar Development Corporation (Sanvar,
for short) sued petitioner GCFI and its President, Armando T. Romualdez, for a
sum of money representing the unpaid balance of construction materials
purchased by petitioner from respondent.
Per return of the sheriff, summons and copy of the complaint were served on
March 5, 1980 upon petitioner at its principal office through a certain Miss I.E.
Lagrimas, clerk-typist of petitioner. On March 20, 1980, petitioner filed a
motion to dismiss on the ground that summons was not properly served in
accordance with Section 13, Rule 14 of the Revised Rules of Court. Petitioner's
motion to dismiss was denied by the lower court on May 2, 1980 and copy of
the denial order was received by petitioner on May 15, 1980. On May 30, 1980,
petitioner, together with its president, filed a joint motion for reconsideration,
the resolution of which was held in abeyance by the lower court. Subsequently,
respondent filed an omnibus motion praying that the joint motion for
reconsideration be denied and that petitioner be declared in default. On
February 16, 1981, the lower court issued an omnibus order denying the joint
motion for reconsideration and declaring petitioner in default for failure to file
an answer within the reglementary period.
Pursuant to the order of default, respondent Sanvar presented its evidence ex-
parte and based on said evidence, the lower court adjudged petitioner GCFI
liable to respondent Sanvar in the principal sum of P105,362.50. The complaint
against petitioner's president was, however, dismissed because he was sued
in his capacity as president of petitioner. A copy of the decision was received
by petitioner on August 14, 1981.
Hence, the instant appeal wherein petitioner raises the following issues:
1) Whether or not summons directed to petitioner corporation which
was served through Miss Lagrimas, clerk-typist of the petitioner, is sufficient
service for the trial court to acquire jurisdiction over said corporation.
2) Whether or not petitioner can be declared in default for not filing
an answer to the complaint while its joint motion for reconsideration of the
order denying its motion to dismiss remained pending for the court's
consideration.
Service of process on a corporation is controlled by Sec. 13, Rule 14 of the
Revised Rules of Court, thus —
"SECTION 13. Service upon private domestic corporation or
partnership. — If the defendant is a corporation organized under the laws of
the Philippines or a partnership duly registered, service may be made on the
president, manager, secretary, cashier, agent, or any of its directors."
Petitioner claims that the foregoing enumeration is exclusive and service of
summons is without force and effect unless made upon any one of those
enumerated. So in the case at bar, it is argued, the lower court did not acquire
jurisdiction over petitioner-corporation since service of summons was
effected through a mere clerk, a person who is not one of those authorized
officers mentioned in the aforequoted Section 13 upon whom valid service of
summons can be made. LibLex
We cannot accept the strict and literal interpretation of petitioner. Thus, in G
& G Trading Corp. vs. Court of Appeals (158 SCRA 466, 469), we had occasion
to rule:
"Although it may be true that the service of summons was made on a person
not authorized to receive the same in behalf of the petitioner, nevertheless
since it appears that the summons and complaint were in fact received by the
corporation through its said clerk, the Court finds that there was substantial
compliance with the rule on service of summons. Indeed the purpose of said
rule as above stated to assure service of summons on the corporation had
thereby been attained. The need for speedy justice must prevail over a
technicality."
38
In the case at bar, the fact that summons was received by petitioner through
Miss Lagrimas, is not disputed; rather, petitioner admits that on March 18,
1980, the corporation and its legal counsel were informed by Miss Lagrimas of
the summons she received (pp. 8 and 9, Rollo). And indeed, by virtue of the
receipt of the summons, petitioner even filed a motion to dismiss.
We, therefore, agree with the lower court's findings that:
". . . The actual receipt by the clerk-typist of the correct address of the
corporation must be construed as receipt on behalf of the officer of the
corporation holding office at that address. Mr. Romualdez, the general
manager was holding office at that address, he received the summons, and
that summons must be binding on him personally and on the corporation of
which he is the general manager. It is to be observed that the law firm of Avila,
de los Santos and Associates is the same counsel for both defendants, and it is
simply absurd to split the personality of defendant Romualdez between
himself as general manager of defendant corporation and the defendant
corporation of which he is the general manager for purposes of service of
summons." (Annex H, pp. 38-39, Rollo)
The court a quo thereupon concluded:
As we have ruled in the case of Philippine Bank of Commerce vs. Jose M.
Aruego (102 SCRA 530, 537): prLL
"It has been held that to entitle a party to relief from a judgment taken against
him through his mistake, inadvertence, surprise or excusable neglect, he must
show to the court that he has a meritorious defense. In other words, in order
to set aside the order of default, the defendant must not only show that his
failure to answer was due to fraud, accident, mistake or excusable negligence
but also that he has a meritorious defense."
In the case of Development Insurance Corp. vs. Intermediate Appellate Court
(143 SCRA 62), this Court also ruled that a default judgment will not be lifted
if defendant has no valid defense.
It is to be noted in this regard that not even once, not in its motion to dismiss
and not now in its appeal has there been the least intimation on petitioner's
part that the claim of respondent has been paid. All that petitioner can harp
at is the alleged defective service of summons.
WHEREFORE, the decision and order appealed from are hereby affirmed, with
costs against petitioner.

". . . inasmuch as the spirit and purpose of the rule is 'to bring home to the SO ORDERED.
corporation notice of the filing of the action' . . . and it appearing that said
Bidin, Davide, Jr. and Romero, JJ ., concur.
defendant had actually received the summons and a copy of the complaint
albeit thru its clerk-typist Miss Iluminada E. Lagrimas, and in fact has filed this Gutierrez, Jr., J ., is on leave.
instant motion, the Court hereby considers the same as substantial
compliance with the rules and therefore denies the aforesaid motion." (Annex
B, p. 22, Rollo).

There was, therefore, substantial compliance with the rules on service of

summons since it appears that the summons and complaint were actually
received by the petitioner corporation through its clerk, thereby satisfying the
purpose of notice (Rebollido vs. Court of Appeals, 170 SCRA 800, 811).

We do not agree with petitioner's claim that it cannot be declared in default

for not filing an answer while resolution of its joint motion for reconsideration
of the order denying its motion to dismiss was held in abeyance by the lower
court. cdrep

Petitioner received the denial order of its motion to dismiss on May 15, 1980;
hence, by mathematical computation, the 15-day period to file an answer
provided in Section 1, Rule 77 of the Revised Rules of Court expired on May
30, 1980. However, on May 30, 1980, which was the last day to file its answer,
petitioner filed a joint motion for reconsideration, instead of filing an answer.
In this regard, we share the opinion of the lower court that petitioner's joint
motion for reconsideration which merely reiterated the grounds in its motion
to dismiss was pro forma and did not toll the running of the period to file an
answer.

In the case of PCIB vs. Escolin (67 SCRA 2023 this Court ruled that a motion for
reconsideration which does not make out a new matter sufficiently persuasive
to induce modification of judgment will be denied and that a repetition of
arguments or grounds already discussed in prior incidents may properly be
categorized as merely for purposes of delay.

An answer, not a motion for reconsideration of the order denying its motion
to dismiss, should have been filed within the reglementary period. The record
does not disclose that the proper answer was in fact filed. Withal, there can
be no serious challenge to the reception of evidence for the plaintiff thereafter.

Moreover, notwithstanding its receipt of the order of default on March 6, 1981,

petitioner did not even bother to take any steps to lift said order of default,
but it simply folded its arms for five months until the decision was handed
down on July 15, 1981. Further weakening the position of the petitioner is the
absence of a viable defense against the documented claims of respondent for
unpaid construction materials purchased by petitioner.

39
[G.R. No. 136426. August 6, 1999.]
E.B. VILLAROSA & PARTNER CO., LTD., petitioner, vs. HON. HERMINIO I.
BENITO, in his capacity as Presiding Judge, RTC, Branch 132, Makati City and
IMPERIAL DEVELOPMENT CORPORATION, respondent.
Capuyan Quimpo & Salazar for petitioner.
Ermitaño Sangco Manzano & Associates for private respondent.
SYNOPSIS
In this instant petition, E.B. Villarosa and Partner Co., Ltd. contended that the
trial court did not acquire jurisdiction over its person because the summons
intended for it was improperly served on its Branch Manager. cDTSHE
The Court agreed with petitioner. Designation of persons or officers who are
authorized to accept summons for a domestic corporation or partnership is
now limited and more clearly specified in the 1997 Rules of Civil Procedure.
The rule must be strictly observed, service must be made to one named in the
statute.
Petitioner's filing of a motion to dismiss, precisely objecting to the jurisdiction
of the court over the person of the defendant, can by no means be deemed a
submission to the jurisdiction of the court.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; "AGENTS" NO
LONGER AUTHORIZED TO RECEIVE SUMMONS FOR CORPORATION. — Earlier
cases have uphold service of summons upon a construction project manager;
a corporation's assistant manager; ordinary clerk of a corporation; private
secretary of corporate executives; retained counsel; officials who had charge
or control of the operations of the corporation, like the assistant general
manager; or the corporations Chief Finance and Administrative Officer. In
these cases, these persons were considered as "agent" within the
contemplation of the old rule. Notably, under the new Rules, service of
summons upon an agent of the corporation is no longer authorized.
2. ID.; ID.; ID.; DESIGNATION OF PERSONS OR OFFICERS AUTHORIZED
TO RECEIVE SUMMONS FOR DOMESTIC CORPORATIONS, LIMITED. — The
designation of persons or officers who are authorized to accept summons for
a domestic corporation or partnership is now limited and more clearly
specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule
now states "general manager" instead of only "manager"; "corporate
secretary" instead of "secretary"; and "treasurer" instead of "cashier." The
phrase "agent, or any of its directors" is conspicuously deleted in the new
rule, . . . It should be noted that even prior to the effectivity of the 1997 Rules
of Civil Procedure, strict compliance with the rules has been enjoined. (Delta
Motor Sales Corporation vs. Mangosing, 70 SCRA 598 [1976])
3. ID.. ID.; ID.; JURISDICTION NOT ACQUIRED WHERE SERVICE OF
SUMMONS WAS MADE ON BRANCH MANAGER. — Accordingly, we rule that
the service of summons upon the branch manager of petitioner at its branch
office at Cagayan de Oro, instead of upon the general manager at its principal
office at Davao City is improper. Consequently, the trial court did not acquire
jurisdiction over the person of the petitioner.
4. ID.; ID.; ID.; INEFFECTIVE SERVICE OF SUMMONS; FILING OF
MOTION TO DISMISS DOES NOT CONSTITUTE VOLUNTARY APPEARANCE. —
The fact that defendant filed a belated motion to dismiss did not operate to
confer jurisdiction upon its person. There is no question that the defendant's
voluntary appearance in the action is equivalent to service of summons.
Before, the rule was that a party may challenge the jurisdiction of the court
over his person by making a special appearance through a motion to dismiss
and if in the same motion, the movant raised other grounds or invoked
affirmative relief which necessarily involves the exercise of the jurisdiction of
the court, the party is deemed to have submitted himself to the jurisdiction of
the court. This doctrine has been abandoned in the case of La Naval Drug
Corporation vs. Court of Appeals, et al.; which became the basis of the
adoption of a new provision in the former Section 23, which is now Section 20
of Rule 14 of the 1997 Rules, Section 20 now provides that "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." The
emplacement of this rule clearly underscores the purpose to enforce strict
enforcement of the rules on summons. Accordingly, the filing of a motion to
dismiss, whether or not belatedly filed by the defendant, his authorized agent
or attorney, precisely objecting to the jurisdiction of the court over the person
of the defendant can by no means be deemed a submission to the jurisdiction
of the court. There being no proper service of summons, the trial court cannot
take cognizance of a case for lack of jurisdiction over the person of the
defendant. Any proceeding undertaken by the trial court will consequently be
null and void. cDCaHA
DECISION
GONZAGA-REYES, J p:
Before this Court is a petition for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction
seeking to annul and set aside the Orders dated August 5, 1998 and November
20, 1998 of the public respondent Judge Herminio I. Benito of the Regional
Trial Court of Makati City, Branch 132 and praying that the public respondent
court be ordered to desist from further proceeding with Civil Case No. 98-824.
LLjur
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with
principal office address at 102 Juan Luna St., Davao City and with branch
offices at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and
Kolambog, Lapasan, Cagayan de Oro City. Petitioner and private respondent
executed a Deed of Sale with Development Agreement wherein the former
agreed to develop certain parcels of land located at Barrio Carmen, Cagayan
de Oro belonging to the latter into a housing subdivision for the construction
of low cost housing units. They further agreed that in case of litigation
regarding any dispute arising therefrom, the venue shall be in the proper
courts of Makati.
On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach
of Contract and Damages against petitioner, as defendant, before the Regional
Trial Court of Makati allegedly for failure of the latter to comply with its
contractual obligation in that, other than a few unfinished low cost houses,
there were no substantial developments therein. 1
Summons, together with the complaint, were served upon the defendant,
through its Branch Manager Engr. Wendell Sabulbero at the stated address at
Kolambog, Lapasan, Cagayan de Oro City 2 but the Sheriff's Return of Service
3 stated that the summons was duly served "upon defendant E.B. Villarosa &
Partner Co., Ltd. thru its Branch Manager Engr. WENDELL SABULBERO on May
5, 1998 at their new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and
evidenced by the signature on the face of the original copy of the summons."
On June 9, 1998, defendant filed a Special Appearance with Motion to Dismiss
4 alleging that on May 6, 1998, "summons intended for defendant" was served
upon Engr. Wendell Sabulbero, an employee of defendant at its branch office
at Cagayan de Oro City. Defendant prayed for the dismissal of the complaint
on the ground of improper service of summons and for lack of jurisdiction over
the person of the defendant. Defendant contends that the trial court did not
acquire jurisdiction over its person since the summons was improperly served
upon its employee in its branch office at Cagayan de Oro City who is not one
of those persons named in Section 11, Rule 14 of the 1997 Rules of Civil
Procedure upon whom service of summons may be made.
Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in
Default 5 alleging that defendant has failed to file an Answer despite its receipt
40
allegedly on May 5, 1998 of the summons and the complaint, as shown in the
Sheriff's Return.
On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to
Dismiss 6 alleging that the records show that defendant, through its branch
manager, Engr. Wendell Sabulbero actually received the summons and the
complaint on May 8, 1998 as evidenced by the signature appearing on the
copy of the summons and not on May 5, 1998 as stated in the Sheriff's Return
nor on May 6, 1998 as stated in the motion to dismiss; that defendant has
transferred its office from Kolambog, Lapasan, Cagayan de Oro to its new
office address at Villa Gonzalo, Nazareth, Cagayan de Oro; and that the
purpose of the rule is to bring home to the corporation notice of the filing of
the action.
On August 5, 1998, the trial court issued an Order 7 denying defendant's
Motion to Dismiss as well as plaintiff's Motion to Declare Defendant in Default.
Defendant was given ten (10) days within which to file a responsive pleading.
The trial court stated that since the summons and copy of the complaint were
in fact received by the corporation through its branch manager Wendell
Sabulbero, there was substantial compliance with the rule on service of
summons and consequently, it validly acquired jurisdiction over the person of
the defendant. cdasia
On August 19, 1998, defendant, by Special Appearance, filed a Motion for
Reconsideration 8 alleging that Section 11, Rule 14 of the new Rules did not
liberalize but, on the contrary, restricted the service of summons on persons
enumerated therein; and that the new provision is very specific and clear in
that the word "manager" was changed to "general manager", "secretary" to
"corporate secretary", and excluding therefrom agent and director.
On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for
Reconsideration 9 alleging that defendant's branch manager "did bring home"
to the defendant-corporation the notice of the filing of the action and by virtue
of which a motion to dismiss was filed; and that it was one (1) month after
receipt of the summons and the complaint that defendant chose to file a
motion to dismiss.
On September 4, 1998, defendant, by Special Appearance, filed a Reply 10
contending that the changes in the new rules are substantial and not just
general semantics.
Defendant's Motion for Reconsideration was denied in the Order dated
November 20, 1998. 11
Hence, the present petition alleging that respondent court gravely abused its
discretion tantamount to lack or in excess of jurisdiction in denying petitioner's
motions to dismiss and for reconsideration, despite the fact that the trial court
did not acquire jurisdiction over the person of petitioner because the
summons intended for it was improperly served. Petitioner invokes Section 11
of Rule 14 of the 1997 Rules of Civil Procedure.
Private respondent filed its Comment to the petition citing the cases of
Kanlaon Construction Enterprises Co., Inc. vs. NLRC 12 wherein it was held that
service upon a construction project manager is valid and in Gesulgon vs. NLRC
13 which held that a corporation is bound by the service of summons upon its
assistant manager.
The only issue for resolution is whether or not the trial court acquired
jurisdiction over the person of petitioner upon service of summons on its
Branch Manager.
When the complaint was filed by Petitioner on April 3, 1998, the 1997 Rules of
Civil Procedure was already in force. 14
Section 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:
"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." (underscoring supplied).
This provision revised the former Section 13, Rule 14 of the Rules of Court
which provided that:
"SECTION 13. Service upon private domestic corporation or
partnership. — If the defendant is a corporation organized under the laws of
the Philippines or a partnership duly registered, service may be made on the
president, manager, secretary, cashier, agent, or any of its directors."
(underscoring supplied).
Petitioner contends that the enumeration of persons to whom summons may
be served is "restricted, limited and exclusive" following the rule on statutory
construction expressio unios est exclusio alterius and argues that if the Rules
of Court Revision Committee intended to liberalize the rule on service of
summons, it could have easily done so by clear and concise language.
We agree with petitioner.
Earlier cases have uphold service of summons upon a construction project
manager 15 ; a corporation's assistant manager 16; ordinary clerk of a
corporation 17; private secretary of corporate executives 18; retained counsel
19; officials who had charge or control of the operations of the corporation,
like the assistant general manager 20; or the corporation's Chief Finance and
Administrative Officer 21. In these cases, these persons were considered as
"agent" within the contemplation of the old rule. 22 Notably, under the new
Rules, service of summons upon an agent of the corporation is no longer
authorized. cdrep
The cases cited by private respondent are therefore not in point.
In the Kanlaon case, this Court ruled that under the NLRC Rules of Procedure,
summons on the respondent shall be served personally or by registered mail
on the party himself; if the party is represented by counsel or any other
authorized representative or agent, summons shall be served on such person.
In said case, summons was served on one Engr. Estacio who managed and
supervised the construction project in Iligan City (although the principal
address of the corporation is in Quezon City) and supervised the work of the
employees. It was held that as manager, he had sufficient responsibility and
discretion to realize the importance of the legal papers served on him and to
relay the same to the president or other responsible officer of petitioner such
that summons for petitioner was validly served on him as agent and authorized
representative of petitioner. Also in the Gesulgon case cited by private
respondent, the summons was received by the clerk in the office of the
Assistant Manager (at principal office address) and under Section 13 of Rule
14 (old rule), summons may be made upon the clerk who is regarded as agent
within the contemplation of the rule.
The designation of persons or officers who are authorized to accept summons
for a domestic corporation or partnership is now limited and more clearly
specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule
now states "general manager" instead of only "manager"; "corporate
secretary" instead of "secretary"; and "treasurer" instead of "cashier." The
phrase "agent, or any of its directors" is conspicuously deleted in the new rule.
The particular revision under Section 11 of Rule 14 was explained by retired
Supreme Court Justice Florenz Regalado, thus: 23
". . . the then Sec. 13 of this Rule allowed service upon a defendant corporation
to 'be made on the president, manager, secretary, cashier, agent or any of its
directors.' The aforesaid terms were obviously ambiguous and susceptible of
broad and sometimes illogical interpretations, especially the word 'agent' of
the corporation. The Filoil case, involving the litigation lawyer of the
corporation who precisely appeared to challenge the validity of service of
summons but whose very appearance for that purpose was seized upon to
validate the defective service is an illustration of the need for this revised
section with limited scope and specific terminology. Thus the absurd result in
41
the Filoil case necessitated the amendment permitting service only on the in-
house counsel of the corporation who is in effect an employee of the
corporation, as distinguished from an independent practitioner."
(underscoring supplied)
Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court
Revision Committee, stated that "(T)he rule must be strictly observed. Service
must be made to one named in (the) statute . . .". 24
It should be noted that even prior to the effectivity of the 1997 Rules of Civil
Procedure, strict compliance with the rules has been enjoined. In the case of
Delta Motor Sales Corporation vs. Mangosing, 25 the Court held:
"A strict compliance with the mode of service is necessary to confer
jurisdiction of the court over a corporation. The officer upon whom service is
made must be one who is named in the statute; otherwise the service is
insufficient. . . . .
of the defendant can by no means be deemed a submission to the jurisdiction
of the court. There being no proper service of summons, the trial court cannot
take cognizance of a case for lack of jurisdiction over the person of the
defendant. Any proceeding undertaken by the trial court will consequently be
null and void. 32
WHEREFORE, the petition is hereby GRANTED. The assailed Orders of the
public respondent trial court are ANNULLED and SET ASIDE. The public
respondent Regional Trial Court of Makati, Branch 132 is declared without
jurisdiction to take cognizance of Civil Case No. 98-824, and all its orders and
issuances in connection therewith are hereby ANNULLED and SET ASIDE.
SO ORDERED.
Melo, Vitug, Panganiban and Purisima, JJ., concur.

The purpose is to render it reasonably certain that the corporation will receive
prompt and proper notice in an action against it or to insure that the summons
be served on a representative so integrated with the corporation that such
person will know what to do with the legal papers served on him. In other
words, 'to bring home to the corporation notice of the filing of the action.' . . . .

The liberal construction rule cannot be invoked and utilized as a substitute for
the plain legal requirements as to the manner in which summons should be
served on a domestic corporation. . . . ." (underscoring supplied).

Service of summons upon persons other than those mentioned in Section 13

of Rule 14 (old rule) has been held as improper. 26 Even under the old rule,
service upon a general manager of a firm's branch office has been held as
improper as summons should have been served at the firm's principal office.
In First Integrated Bonding & Ins. Co., Inc. vs. Dizon, 27 it was held that the
service of summons on the general manager of the insurance firm's Cebu
branch was improper; default order could have been obviated had the
summons been served at the firm's principal office.

And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista
Ricafort, et al. 28 the Court succinctly clarified that, for the guidance of the
Bench and Bar, "strictest" compliance with Section 11 of Rule 13 of the 1997
Rules of Civil Procedure (on Priorities in modes of service and filing) is
mandated and the Court cannot rule otherwise, lest we allow circumvention
of the innovation by the 1997 Rules in order to obviate delay in the
administration of justice. cdtai

Accordingly, we rule that the service of summons upon the branch manager
of petitioner at its branch office at Cagayan de Oro, instead of upon the
general manager at its principal office at Davao City is improper. Consequently,
the trial court did not acquire jurisdiction over the person of the petitioner.

The fact that defendant filed a belated motion to dismiss did not operate to
confer jurisdiction upon its person. There is no question that the defendant's
voluntary appearance in the action is equivalent to service of summons. 29
Before, the rule was that a party may challenge the jurisdiction of the court
over his person by making a special appearance through a motion to dismiss
and if in the same motion, the movant raised other grounds or invoked
affirmative relief which necessarily involves the exercise of the jurisdiction of
the court, the party is deemed to have submitted himself to the jurisdiction of
the court. 30 This doctrine has been abandoned in the case of La Naval Drug
Corporation vs. Court of Appeals, et al., 31 which became the basis of the
adoption of a new provision in the former Section 23, which is now Section 20
of Rule 14 of the 1997 Rules. Section 20 now provides that "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." The
emplacement of this rule clearly underscores the purpose to enforce strict
enforcement of the rules on summons. Accordingly, the filing of a motion to
dismiss, whether or not belatedly filed by the defendant, his authorized agent
or attorney, precisely objecting to the jurisdiction of the court over the person
42
[G.R. No. L-32170. March 31, 1971.]
CITIZENS' SURETY & INSURANCE COMPANY, INC., petitioner, vs. HON. JUDGE
A. MELENCIO-HERRERA, SANTIAGO DACANAY, and JOSEFINA DACANAY,
respondents.
Dayos, Tesoro & Gloria, Jr. for petitioner.
Respondent Judge for and in his own behalf.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; ACTION IN PERSONAM; PERSONAL
SERVICE OF SUMMONS REQUIRED. — We agree with respondent Judge that
the action of plaintiff petitioner, being in personam, the Court could not validly
acquire jurisdiction on a non-appearing defendant, absent a personal service
of summons within the forum. We have explicitly so ruled in Pantaleon vs.
Asuncion, 105 Phil. 765, pointing out without such personal service, any
judgment on a non-appearing defendant would be violative of due process. In
the aforecited case this Court, through Justice Roberto Concepcion, now Chief
Justice, ruled as follows: . . . "It is a well-settled principle of Constitutional Law
that, in an action strictly in personam, like the one at bar, personal service of
summons, within the forum, is essential to the acquisition of jurisdiction over
the person of the defendant, who does not voluntary submit himself to the
authority of the court. In other words, summons by publication cannot —
consistently with the due process clause in the Bill of Rights — confer upon the
court jurisdiction over said defendants. 'Due process of law requires personal
service to support a personal judgment, and, when the proceeding is strictly
in personam brought to determine the personal rights and obligations of the
parties, personal service within the state or a voluntary appearance in the case
is essential to the acquisition of jurisdiction so as to constitute compliance with
the constitutional requirement of due process. . . . 'Although a state legislature
has more control over the form of service on its own residents than
nonresidents, it has been held that in actions in personam . . . service by
publication on resident defendants who are personally within the state and
can be found therein is not "due process of law," and statute allowing it is
unconstitutional.' (16A C.J.S., pp. 786, 789; Emphasis our)"
2. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CREDITORS; REMEDY
AGAINST ABSCONDING DEBTORS. — The proper recourse for a creditor in the
same situation as petitioner is to locate properties, real or personal, of the
resident defendant debtor with unknown address and cause them to be
attached under Rule 57, Sec. l(f), in which case, the enactment converts the
action into a proceeding in rem or quasi in rem and the summons by
publication may then accordingly be deemed valid and effective But because
debtors who abscond and conceal themselves are also quite adept at
concealing their properties, the dismissal of the case below by respondent
Judge should be set aside and the case held pending in the court's archives,
until petitioner as plaintiff succeed in determining the whereabouts of the
defendants' person or properties and causes valid summons to be served
personally or by publication as the case may be. In this manner, the tolling of
the period of prescription for as long as the debtor remains in hiding would
properly be a matter of court record, and he can not emerge after a sufficient
lapse of time from the dismissal of the case to profit from his own misdeed
and claim prescription of his just debt.
DECISION
REYES, J.B.L., J p:
Petitioner Citizens' Surety & Insurance Company, Inc. seeks review of an order
of respondent Judge in Civil Case No. 77134 of the Court of First Instance of
Manila, Branch XVII, entitled "Citizens' Surety & Insurance Co., Inc. vs. Santiago
Dacanay and Josefina Dacanay," dismissing the complaint for lack of proper
service of summons upon defendants.
The record is to the effect that petitioner had filed its complaint in the Court
below, alleging that at request of defendant Santiago Dacanay, the plaintiff
Surety Company had issued its Surety Bonds Nos. 4942 and 4944, the first, in
favor of Gregorio Fajardo to guarantee payment of a P5,000-promissory note
executed by said Dacanay, and the second, in favor of Manufacturers Bank &
Trust Co., to guarantee payment of another promissory note in like amount;
that in consideration of said bonds, Santiago and Josefina Dacanay executed
Indemnity Agreements, binding themselves jointly and severally to indemnify
plaintiff for any losses, costs and expenses which it might sustain in connection
with the issuance of the bonds aforesaid, with interest at 12% per annum; that
as additional security, the Dacanays mortgaged to plaintiff a parcel of land in
Baguio City, covered by Certificate of Title No. T-8116, the mortgage having
been duly recorded; that the promissory notes were not paid .and as a result,
plaintiff Surety was compelled to pay P5,000.00 to Gregorio Fajardo and
P4,081.69 to the Manufacturers' Bank; that the Dacanays failed to reimburse
the Surety for such payments, whereupon the Surety caused the extrajudicial
foreclosure of the mortgage to pay its claim of P12,941.69 representing its
payments, interest and stipulated liquidated damages: that at the foreclosure
sale, the land mortgaged was sold to plaintiff, as highest bidder, for the sum
of P2,000.00 — leaving an unsatisfied balance of P10,491.69, that plaintiff
sought to recover from defendants Dacanay, plus 10% thereof as attorneys'
fees, and the costs.
At petitioner's request, respondent Judge caused summons to be made by
publication in the newspaper Philippines Herald. But despite the publication
and deposit of a prepaid copy of the complaint at the Manila post office,
defendants did not appear within the period of 60 days from last publication,
as required by the summons.
Plaintiff then asked that defendants be declared in default; but :instead, the
Judge, by order of May 16, 1970, asked it to show cause why the action should
not be dismissed, the suit being in personam and defendants not having
appeared. Then, on May 29, 1970, respondent Judge dismissed the case,
despite plaintiff Surety's argument that the summons by publication was
sufficient and valid under section 16 of Rule 14 of the Revised Rules of Court.
We agree with respondent Judge that the action of plaintiff petitioner, being
in personam, the Court could not validly acquire jurisdiction on a non-
appearing defendant, absent a personal service of summons within the forum.
We have explicitly so ruled in Pantaleon vs. Asunción, 105 Phil. 765, pointing
out without such personal service, any judgment on a non-appearing
defendant would be violative of due process. In the aforecited case this Court,
through Justice Roberto Concepción, now Chief Justice, ruled as follows:
"Apart from the foregoing, it is well-settled principle of Constitutional Law that,
in an action strictly in personam, like the one at bar, personal service of
summons, within the forum. is essential to the acquisition of jurisdiction over
the person of the defendant, who does not voluntarily submit himself to the
authority of the court. In other words, summons by publication cannot —
consistently with the due process clause in the Bill of Rights — confer upon the
court jurisdiction over said defendants.
'Due process of law requires personal service to support a personal judgment,
and. when the proceeding is strictly in personam brought to determine the
personal rights and obligations of the parties, personal service within the state
or a voluntary appearance in the case is essential to the acquisition of
jurisdiction so as to constitute compliance with the constitutional requirement
of due process. . . .
'Although a state legislature has more control over the form of service on its
own residents than nonresidents, it has been held that in actions in
personam . . . service by publication on resident defendants, who are
personally within the state and can be found therein is not "due process of
law," and a statute allowing it is unconstitutional.' (16A C.J.S., pp. 786, 789;
Emphasis ours.)"
The proper recourse for a creditor in the same situation as petitioner is to
locate properties, real or personal, of the resident defendant debtor with
unknown address and cause them to be attached under Rule 57, section 1(f),
43
in which case, the attachment converts the action into a proceeding in rem or
quasi in rem and the summons by publication may then accordingly be
deemed valid and effective.

But because debtors who abscond and conceal themselves are also quite
adept at concealing their properties, the dismissal of the case below by
respondent Judge should be set aside and the case held pending in the court's
archives, until petitioner as plaintiff succeeds in determining the whereabouts
of the defendants' person or properties and causes valid summons to be
served personally or by publication as the case may be. In this manner, the
tolling of the period of prescription for as long as the debtor remains in hiding
would properly be a matter of court records and he can not emerge after a
sufficient lapse of time from the dismissal of the case to profit from his own
misdeed and claim prescription of his just debt.

WHEREFORE, the order of dismissal of the case issued by the Court below is
hereby set aside, and in the interest of justice, the proceedings are ordered
suspended, to be held pending until the plaintiff petitioner succeeds in
ascertaining the whereabouts of the defendants and/or locating properties of
the same, to enable proper summons to be issued conformably to this Opinion.
No costs.

Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo,

Villamor and Makasiar, JJ., concur.

Dizon and Castro, JJ., reserve their votes.

44
[G.R. No. L-54242. November 25, 1983.]
MAGDALENA ESTATE, INC., plaintiff-appellee, vs. RENE NIETO and HELEN
GARCIA, defendants-appellants.
Abraham F. Sarmiento for plaintiff-appellee.
Guevara Law Office for defendants-appellants.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; SERVICE BY
PUBLICATION; FORMER RULE. — It is true that in Fontanilla vs. Dominguez, 73
Phil. 579, it was held that service of summons by publication is proper in all
actions without distinction, provided the defendant is residing in the
Philippines but his identity is unknown or his address cannot he ascertained.
2. ID.; ID.; ID.; ID.; THE PRESENT RULE. — However, in a later case,
Pantaleon vs. Asuncion, 105 Phil. 765, the Court ruled that it is a well-settled
principle of Constitutional Law that, in an action strictly in personam, like the
one at bar, personal service of summons, within the forum, is essential to the
acquisition of jurisdiction over the person of the defendant, who does not
voluntarily submit himself to the authority of the court. And, the latest
expression of such a doctrine comes from Justice J.B.L. Reyes in the case of
Citizens' Surety and Insurance Company, Inc. vs. Melencio-Herrera, 38 SCRA
369.
3. ID.; ID.; ACTION IN PERSONAM; SUMMONS; PERSONAL SERVICE
WITHIN THE FORUM OR VOLUNTARY APPEARANCE; ESSENTIAL TO SATISFY
THE DUE PROCESS CLAUSE. — Summons by publication cannot — consistently
with the due process clause in the Bill of Rights — confer upon the court
jurisdiction over said defendant. Due process of law requires personal service
to support a personal judgment and, when the proceeding is strictly in
personam brought to determine the personal rights and obligations of the
parties, personal service within the state or a voluntary appearance in the case
is essential to the acquisition of jurisdiction so as to constitute compliance with
the constitutional requirement of due process. . . . Although a state legislature
has more control over the form of service on its own residents than non-
residents, it has been held that in actions in personam . . . service by
publication on resident defendants, who are personally within the state and
can be found therein is not 'due process of law,' and a statute allowing it is
unconstitutional. (16A C.J.S., pp. 786, 789)
4. ID.; ID.; ID.; ATTACHMENT OF PROPERTIES, REAL OR PERSONAL,
BELONGING TO A RESIDENT DEFENDANT DEBTOR WITH UNKNOWN ADDRESS;
PROPER RECOURSE OF CREDITOR IN THE CASE AT BAR. — The proper recourse
for a creditor in the same situation as petitioner is to locate properties, real or
personal, of the resident defendant debtor with unknown address and cause
them to be attached under Rule 57, Section 1( f ), in which case, the
attachment converts the action into a proceeding in rem or quasi in rem and
the summons by publication may then accordingly be deemed valid and
effective.
DECISION
RELOVA, J p:
Appeal from the judgment of the then Court of First Instance of Rizal in Quezon
City, ordering defendants-appellants Rene Nieto and Helen Garcia to pay
plaintiff-appellee:
"1) the sum of P11,999.00, with interest thereon at the rate of 7% per
annum, beginning April 21, 1970, the date of the letter of demand, until the
same shall have been fully paid;
"2) the sum of P2,000.00 as and for attorney's fees; and
"3) the cost of the suit." (p. 41, Record on Appeal).
The facts which led to the above judgment are summarized by the trial court
as follows:
"The evidence shows that the defendants herein bought from the plaintiff a
parcel of land located at New Manila Subdivision, Quezon City. Even if
defendants had not fully paid the consideration for the said lot, by special
arrangement with the plaintiff, the former were able to have the title to said
lot transferred in their names. They had made partial payments only and the
balance of their account in the amount of P12,000.00 was secured by a
promissory note which they executed on November 3, 1960, under the
following terms and conditions to wit: (a) the defendants shall pay plaintiff the
sum of P12,000.00, with interest thereon at the rate of 7% per annum, said
amount to be payable without demand in consecutive monthly Installments of
not less than P500.00 per month, beginning December 3, 1960, and on the
third day of each month thereafter, until fully paid; (b) in case of failure to pay
any monthly installment due, the total obligation, or the balance thereof, shall
automatically become due and immediately payable; (c) that the plaintiff shall
have the right to enforce payment of the obligation, together with the
corresponding interest, including attorney's fees and the costs of suit in case
of litigation to enforce collection of the said obligation (Exhibit `C'). Out of the
aforesaid amount of P12,000.00, defendants paid only P100.00 in two
installments of P50.00 each. The first payment was made on January 29, 1963
and the second payment was made on March 14, 1968, leaving a balance of
P11,999.90, exclusive of interests. Plaintiff wrote defendants a letter of
demand calling the attention of the latter about the installments in arrears
under the terms and conditions of the promissory notes; but in spite of the
said letter, defendants did not comply with their obligation. Plaintiff referred
the matter to its legal counsel, who, in turn, sent defendants a letter of
demand dated April 21, 1970 which letter was received by the defendants
(Exhibits `D', `D-1' & `D-2'). Despite receipt of said letter, defendants did not
comply and even failed to make a reply. Plaintiff presented further a statement
of account stating therein that the amount still owing to it, inclusive of interest
up to September 19, 1972 is P21,876.44; P11,999.00, the amount of the
principal and P9,976.44 the amount of interest from November 3, 1960 up to
September 19, 1972 (Exhibit `E')," (pp. 33-34, Rollo)
There was an ex-parte reception of evidence because the defendants-
appellants had been declared in default, plaintiff having complied with the
court's order allowing service of summons and copy of the complaint upon the
defendants-appellants through publication of the same in a newspaper of
general circulation (Daily Mirror), pursuant to Section 16, Rule 14 of the Rules
of Court.
Plaintiff claims that summons could not be served personally upon the
defendants because they concealed themselves to avoid service upon them;
and, that when the sheriff went to the Jai-Alai Corporation of the Philippines
at Cebu City where defendant-appellant Rene Nieto holds office, as manager,
he could not be found thereat but, when the decision was served at the same
address, the defendants-appellants were able to receive it. LibLex
In this appeal, defendants-appellants contend that the lower court erred: (1)
in allowing service of summons by publication, and consequently, the trial
court did not acquire jurisdiction over the defendants-appellants, and the
decision is therefore void; (2) in granting relief to plaintiff-appellee when its
cause of action is barred by laches; (3) in lifting its orders dismissing the
complaint for failure to prosecute; and (4) in granting interests from
November 3, 1960.
There is merit in this appeal. It is true that in Fontanilla vs. Dominguez, 73 Phil.
579, it was held that service of summons by publication is proper in all actions
without distinction, provided the defendant is residing in the Philippines but
his identity is unknown or his address cannot be ascertained. However, in a
later case, Pantaleon vs. Asuncion, 105 Phil, 765, the Court, speaking through
then Justice Roberto Concepcion, ruled that "it is a well-settled principle of
Constitutional Law that, in an action strictly in personam, like the one at bar,
personal service of summons, within the forum, is essential to the acquisition
of jurisdiction over the person of the defendant, who does not voluntarily
45
submit himself to the authority of the court. In other words, summons by
publication cannot — consistently with the due process clause in the Bill of
Rights — confer upon the court jurisdiction over said defendant." And, quoting
16A C.J.S., pp. 786, 789, as follows: "Due process of law requires personal
service to support a personal judgment, and, when the proceeding is strictly
in personam brought to determine the personal rights and obligations of the
parties, personal service within the state or a voluntary appearance in the case
is essential to the acquisition of jurisdiction so as to constitute compliance with
the constitutional requirement of due process . . . Although a state legislature
has more control over the form of service on its own residents than
nonresidents, it has been held that in actions in personam . . . service by
publication on resident defendants, who are personally within the state and
can be found therein is not `due process of law', and a statute allowing it is
unconstitutional."

The action of herein plaintiff-appellee, being in personam, the doctrine laid

down in Pantaleon vs. Asuncion (supra) finds application. And, the latest
expression of such a doctrine comes from Justice J. B. L. Reyes in the case of
Citizens' Surety and Insurance Company. Inc. vs. Melencio-Herrera, 38 SCRA
369, in these words: ". . . the Court could not validly acquire jurisdiction on a
non-appearing defendant, absent a personal service of summons within the
forum . . . The proper recourse for a creditor in the same situation as petitioner
is to locate properties, real or personal, of the resident defendant debtor with
unknown address and cause them to be attached under Rule 57, Section 1 (f),
in which case, the attachment converts the action into a proceeding in rem or
quasi in rem and the summons by publication may then accordingly be
deemed valid and effective."

Inasmuch as in the case at bar the lower court did not acquire jurisdiction over
the person of the defendants-appellants, We find it unnecessary to discuss the
other assigned errors raised by them.

WHEREFORE, the decision, dated October 5, 1972 of the court a quo, is hereby
SET ASIDE and the case is remanded to the trial court for proper service of
summons and trial.

SO ORDERED.

Teehankee (Chairman) Melencio-Herrera, Plana and Gutierrez, Jr., JJ., concur.

46
FIRST DIVISION
[G.R. No. 82330. May 31, 1988.]
THE DIAL CORPORATION, C & T REFINERY INC., NALIN Sdn. Bhb. BERISFORD
COMMODITIES, LTD., and PACIFIC MOLASSES COMPANY, petitioners, vs. THE
HON. CLEMENTE M. SORIANO, Presiding Judge, Regional Trial Court, Branch
3, MANILA PUBLIC RESPONDENT and IMPERIAL VEGETABLE OIL COMPANY,
INC., respondents.
Guerrero & Torres Law Office for petitioners.
Abad & Associates for respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; EXTRA-
TERRITORIAL SERVICE THEREOF; INSTANCES. — Only in four (4) instances is
extraterritorial service of summons proper, namely: "(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
has or claims a lien or 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"
(De Midgely vs. Ferandos, 64 SCRA 23).
2. ID.; ID.; ID.; IN PERSONAL ACTIONS, EXTRA-TERRITORIAL SERVICE
DOES NOT CONFER JURISDICTION. — The action is purely an action for
injunction to restrain the defendants from enforcing against Imperial
Vegetable Oil company, Inc. ("abusing and harassing") its contracts for the
delivery of coconut oil to the defendants, and to recover from the defendants
P21 million in damages for such "harassment." It is clearly a personal action as
well as an action in personam, not an action in rem or quasi in rem. As Civil
Case No. 87-40166 is a personal action, personal or substituted service of
summons on the defendants, not extraterritorial service, is necessary to
confer jurisdiction on the court.
3. ID.; ID.; ACTION IN PERSONAM AND PERSONAL ACTION, BOTH
DEFINED. — An action in personam is an action against a person on the basis
of his personal liability, while an action in rem is an action against the thing
itself, instead of against the person. (Hernandez vs. Rural Bank of Lucena, Inc.
76 SCRA 85). A personal action is one brought for the recovery of personal
property, for the enforcement of some contract or recovery of damages for its
breach, or for the recovery of damages for the commission of an injury to the
person or property (Hernandez vs. Development Bank of the Philippines, 71
SCRA 292).
4. ID.; PROVISIONAL REMEDIES; INJUNCTION. — In an action for
injunction, extraterritorial service of summons and complaint upon the non-
resident defendants cannot subject them to the processes of the regional trial
courts which are powerless to reach them outside the region over which they
exercise their authority (Sec. 3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P.
Blg. 129). Extraterritorial service of summons will not confer on the court
jurisdiction or power to compel them to obey its orders.
DECISION
GRIÑO-AQUINO, J p:
The petitioners are foreign corporations organized and existing under the laws
of the United States, the United Kingdom, and Malaysia, are not domiciled in
the Philippines, nor do they have officers or agents, place of business, or
property in the Philippines; they are not licensed to engage, and are not
engaged, in business here. The respondent Imperial Vegetable Oil Company,
Inc. (or "IVO" for brevity) is a Philippine corporation which through its
president, Dominador Monteverde, had entered into several contracts for the
delivery of coconut oil to the petitioners. Those contracts stipulate that any
dispute between the parties will be settled through arbitration under the rules
of either the Federation of Oils Seeds and Fats Association (FOSFA) or the
National Institute of Oil Seed Products (NIOP). Because IVO defaulted under
the contracts, the petitioners and 15 others, initiated arbitration proceedings
abroad, and some have already obtained arbitration awards against IVO.
On April 8, 1987, IVO filed a complaint for injunction and damages against
nineteen (19) foreign coconut oil buyers including the petitioners, with whom
its president, Dominador Monteverde, had entered into contracts for the
delivery of coconut oil (Civil Case No. 87-40166, RTC Manila entitled "Imperial
Vegetable Oil Co., Inc. vs. Dial Corporation et al."). IVO repudiated
Monteverde's contracts on the grounds that they were mere "paper trading in
futures" as no actual delivery of the coconut oil was allegedly intended by the
parties; that the Board of Directors of IVO convened in a special meeting on
March 21, 1987 and removed Dominador Monteverde from his position as
president of the corporation, named in his place, Rodrigo Monteverde, and
disowned Dominador Monteverde's allegedly illegal and unauthorized acts;
that the defendants have allegedly "harassed" IVO to comply with
Dominador's contracts and to come to a settlement with them. IVO prayed for
the issuance of a temporary restraining order or writ of preliminary injunction
to stop the defendants from harassing IVO with their insistent demands to
recognize the contracts entered into by Dominador Monteverde and from
portraying the IVO as one that defaults on its contracts and obligations and
has fallen into bad times and from interfering with IVO's normal conduct of
business. IVO also prayed that the defendants pay it moral damages of P5
million, actual damages of P10 million, exemplary damages of P5 million,
attorney's fees of P1 million, P3,000 per appearance of counsel, and litigation
expenses. cdphil
On motion of IVO, respondent Judge authorized it to effect extraterritorial
service of summons to all the defendants through DHL Philippines corporation
(Annex B). Pursuant to that order, the petitioners were served with summons
and copy of the complaint by DHL courier service.
On April 25, 1987, without submitting to the court's jurisdiction and only for
the purpose of objecting to said jurisdiction over their persons, the petitioners
filed motions to dismiss the complaint against them on the ground that the
extraterritorial service of summons to them was improper and that hence the
court did not acquire jurisdiction over them. On December 15, 1987, the court
denied their motions to dismiss and upheld the validity of the extraterritorial
service of summons to them on the ground that "the present action relates to
property rights which lie in contracts within the Philippines, or which
defendants claim liens or interests, actual or inchoate, legal or equitable (par.
2, complaint). And one of the reliefs demanded consists, wholly or in part, in
excluding the defendants from any interest in such property for the reason
that their transactions with plaintiff's former president are ultra vires."
Furthermore, "as foreign corporations doing business in the Philippines
without a license, they opened themselves to suit before Philippine courts,
pursuant to Sec. 133 of the Corporation Code of the Philippines." (Annex H)
The petitioners' motions for reconsideration of that order were also denied by
the court (Annex M), hence this petition for certiorari with a prayer for the
issuance of a temporary retraining order which We granted.
The petition is meritorious.
Section 17, Rule 14 of the Rules of Court provides:
Section 17.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 7; 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
47
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."
Only in four (4) instances is extraterritorial service of summons proper,
namely: "(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 has or claims a lien or 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" (De Midgely vs. Ferandos, 64 SCRA 23).
The complaint in this case does not involve the personal status of the plaintiff,
nor any property in the Philippines in which the defendants have or claim an
interest, or which the plaintiff has attached. The action is purely an action for
injunction to restrain the defendants from enforcing against IVO ("abusing and
harassing") its contracts for the delivery of coconut oil to the defendants, and
to recover from the defendants P21 million in damages for such "harassment."
It is clearly a personal action as well as an action in personam, not an action in
rem or quasi in rem. "An action in personam is an action against a person on
the basis of his personal liability, while an action in rem is an action against the
thing itself, instead of against the person." (Hernandez vs. Rural Bank of
Lucena, Inc., 76 SCRA 85). A personal action is one brought for the recovery of
personal property, for the enforcement of some contract or recovery of
damages for its breach, or for the recovery of damages for the commission of
an injury to the person or property (Hernandez vs. Development Bank of the
Philippines, 71 SCRA 292).
As Civil Case No. 87-40166 is a personal action, personal or substituted service
of summons on the defendants, not extraterritorial service, is necessary to
confer jurisdiction on the court. The rule is explained in Moran's Comments on
the Rules of Court thus:
the local courts to enforce said rights. They have not submitted to the
jurisdiction of our courts.
The lower court invoked Section 33 of the Corporation Code which provides
that a "foreign corporation transacting business in the Philippines without a
license may be sued or proceeded against before Philippine courts or
administrative tribunal on any valid cause of action recognized under
Philippine laws." It assumed that the defendants (herein petitioners) are doing
business in the Philippines, which allegation the latter denied. Even if they can
be considered as such, the Corporation Code did not repeal the rules requiring
proper service of summons to such corporations as provided in Rule 14 of the
Rules of Court and Section 128 of the Corporation Code.
The respondent court's finding that, by filing motions to dismiss, the
petitioners hypothetically admitted the allegations of the complaint that they
are doing business in the Philippines without any license, and that they may
be served with summons and other court processes through their agents or
representatives enumerated in paragraph 2 of the complaint, is contradicted
by its order authorizing IVO to summon them by extraterritorial service, a
mode of service which is resorted to when the defendant is not found in the
Philippines, does not transact business here, and has no resident agent on
whom the summons may be served. Cdpr
WHEREFORE, We hold that the extraterritorial service of summons on the
petitioners was improper, hence null and void.
The petition for certiorari is granted. The orders dated April 24, 1987 (Annex
B) and December 15, 1987 (Annex II) of the respondent Judge are hereby set
aside. The complaint in Civil Case No. 87-40166 is hereby dismissed as against
the petitioners for failure of the court to acquire jurisdiction over them.
SO ORDERED.
Narvasa, Cruz and Gancayco, JJ., concur.

"As a general rule, when the defendant is not residing and is not found in the
Philippines, the Philippine courts cannot try any case against him because of
the impossibility of acquiring jurisdiction over his person unless he voluntarily
appears in court. But, when the action affects the personal status of the
plaintiff residing in the Philippines, or is intended to seize or dispose of any
property, real or personal, of the defendant located in the Philippines, it may
be validly tried by the Philippines courts, for then, they have jurisdiction over
the res, i.e., the personal status of the plaintiff or the property of the
defendant and their jurisdiction over the person of the non-resident
defendant is not essential. Venue in such cases may be laid in the province
where the property of the defendant or a part thereof involved in the litigation
is located." (5 Moran's Comments on the Rules of Court, 2nd Ed., p. 105.)

In an action for injunction, extraterritorial service of summons and complaint

upon the non-resident defendants cannot subject them to the processes of
the regional trial courts which are powerless to reach them outside the region
over which they exercise their authority (Sec. 3-a, Interim Rules of Court; Sec.
21, subpar. 1, B.P. Blg. 129). Extraterritorial service of summons will not confer
on the court jurisdiction or power to compel them to obey its orders: LLphil

Neither may the court by extraterritorial service of summons acquire

jurisdiction to render and enforce a money judgment against a non-resident
defendant who has no property in the Philippines for "the fundamental rule is
that jurisdiction in personam over non-residents, so as to sustain a money
judgment, must be based upon personal service within the state which renders
the judgment" (Boudard vs. Tait, 67 Phil. 170, 174).

Respondents' contention that "the action below is related to property within

the Philippines, specifically contractual rights that petitioners are enforcing
against IVO" is specious for the "contractual rights" of the petitioners are not
property found in the Philippines for the petitioners have not filed an action in

48
SECOND DIVISION
[G.R. Nos. 121576-78. June 16, 2000.]
BANCO DO BRASIL, petitioner, vs. THE COURT OF APPEALS, HON. ARSENIO
M. GONONG, and CESAR S. URBINO, SR., respondents.
Sycip Salazar Hernandez & Gatmaitan for petitioner.
Pedro I. Rodriguez for private respondent.
Manuel R. Bustamante collaborating counsel for private respondent.
SYNOPSIS
On April 10, 1991, petitioner Banco Do Brasil filed, by special appearance, an
urgent motion to vacate judgment and to dismiss case on the ground that the
February 18, 1991 decision of the trial court ordering herein petitioner to pay
private respondent the amount of $300,000.00 in damages was void with
respect to it for having been rendered without validly acquiring jurisdiction
over the person of petitioner. Petitioner subsequently amended its petition to
specifically aver that its special appearance was solely for the purpose of
questioning the court's exercise of personal jurisdiction. On May 20, 1991, the
trial court issued an order acting favorably on petitioner's motion and set aside
as against petitioner the decision for having been rendered without
jurisdiction over Banco do Brasil's person. Private respondent sought
reconsideration of the order, but the trial court denied said motion.
Meanwhile, a certiorari petition was filed by private respondent before the
Court of Appeals seeking to nullify the cease and desist order dated April 5,
1991 issued by Judge Arsenio M. Gonong. Two more separate petitions for
certiorari were subsequently filed by private respondent. The second petition
sought to nullify the order setting aside the deputy sheriff's return as well as
the certificate of sale issued by deputy sheriff Camangon. The third petition
sought to nullify the order of the Court of Tax Appeals directing the
Commissioner of Customs to place the Bureau of Customs and PNP officers
and guards to secure the M/V Star Ace and its cargoes, make inventory of the
goods stored in the premises as indicated to belong to the private respondent.
These three petitions were consolidated, and on July 19, 1993, the appellate
court rendered its decision granting private respondent's petitions, thereby
nullifying the disputed orders and effectively giving away to the entire decision
of the RTC of Manila. Petitioner sought reconsideration, insofar as its liability
for damages was concerned. The appellate court denied the motion for
reconsideration. Hence, this petition. ATcaID
The Court found the petition meritorious. Private respondent's suit against
petitioner was premised on petitioner's being one of the claimants of the
subject vessel, M/V Star Ace. Thus, it can be said that private respondent
initially sought only to exclude petitioner from claiming interest over the
subject vessel. While the action is in rem, by claiming damages, the relief
demanded went beyond the res and sought a relief totally alien to the action.
Any relief granted in rem or quasi in rem actions must be confined to the res
and the court cannot lawfully render a personal judgment against the
defendant. Clearly, the publication of summons effected by private
respondent was invalid and ineffective for the trial court to acquire jurisdiction
over the person of petitioner, since by seeking to recover damages from
petitioner for their alleged commission of an injury to his person or property
cause by petitioner's being a nuisance defendant, private respondent's action
became in personam. Bearing in mind that in personam nature of the action,
personal, or if not possible, substituted service of summons on petitioner and
not extraterritorial service, is necessary to confer jurisdiction over the person
of petitioner and validly hold it liable to private respondent for damages. Thus,
the trial court had no jurisdiction to award damages amounting to
$300,000.00 in favor of private respondent and as against herein petitioner.
Accordingly, the petition was granted and the decision and resolution of the
Court of Appeals were reversed and set aside insofar as they affect petitioner
Banco do Brasil.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SERVICE OF SUMMONS;
INSTANCES WHEN EXTRATERRITORIAL SERVICE OF SUMMONS IS PROPER. —
When the defendant is a non-resident and he is not found in the country,
summons may be served extraterritorially in accordance with Rule 14, Section
17 of the Rules of Court. Under this provision, there are only four (4) instances
when extraterritorial service of summons is proper, namely: "(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 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 affected 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.
2. ID.; ID.; ID.; EXTRAJUDICIAL SERVICE OF SUMMONS APPLY ONLY
WHERE THE ACTION IS IN REM. — Clear from the foregoing, extrajudicial
service of summons apply only where the action is in rem, an action against
the thing itself instead of against the person, or in an action quasi in rem,
where an individual is named as defendant and the purpose of the proceeding
is to subject his interest therein to the obligation or loan burdening the
property. This is so inasmuch as, in in rem and quasi in rem actions, 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.
3. ID.; ID.; ID.; ACTION IN PERSONAM; WHEN THE DEFENDANT IS A
NON-RESIDENT, PERSONAL SERVICE OF SUMMONS WITHIN THE STATE IS
ESSENTIAL TO THE ACQUISITION OF JURISDICTION OVER THE PERSON. —
Where the action is in personam, one brought against a person on the basis of
his personal liability, jurisdiction over the person of the defendant is necessary
for the court to validly try and decide the case. When the defendant is a non-
resident, personal service of summons within the state is essential to the
acquisition of jurisdiction over the person. This cannot be done, however, if
the defendant is not physically present in the country, and thus, the court
cannot acquire jurisdiction over his person and therefore cannot validly try
and decide the case against him. In the instant case, private respondent's suit
against petitioner is premised on petitioner's being one of the claimants of the
subject vessel M/V Star Ace. Thus, it can be said that private respondent
initially sought only to exclude petitioner from claiming interest over the
subject vessel M/V Star Ace. However, private respondent testified during the
presentation of evidence that, for being a nuisance defendant, petitioner
caused irreparable damage to private respondent in the amount of
$300,000.00. Therefore, while the action is in rem, by claiming damages, the
relief demanded went beyond the res and sought a relief totally alien to the
action. CaDATc
4. ID.; ID.; ID.; ANY RELIEF GRANTED IN REM OR QUASI IN REM
ACTIONS MUST BE CONFINED TO THE RES AND THE COURT CANNOT
LAWFULLY RENDER A PERSONAL JUDGMENT AGAINST THE DEFENDANT. — It
must be stressed that any relief granted in rem or quasi in rem actions must
be confined to the res, and the court cannot lawfully render a personal
judgment against the defendant. Clearly, the publication of summons effected
by private respondent is invalid and ineffective for the trial court to acquire
jurisdiction over the person of petitioner, since by seeking to recover damages
from petitioner for the alleged commission of an injury to his person or
property caused by petitioner's being a nuisance defendant, private
respondent's action became in personam. Bearing in mind the in personam
nature of the action, personal or, if not possible, substituted service of
summons on petitioner, and not extraterritorial service, is necessary to confer
jurisdiction over the person of petitioner and validly hold it liable to private
respondent for damages. Thus, the trial court had no jurisdiction to award
damages amounting to $300,000.00 in favor of private respondent and as
against herein petitioner.
49
5. ID.; ID.; JUDGMENT; ONLY UPON THE LAPSE OF THE
REGLEMENTARY PERIOD TO APPEAL, WITH NO APPEAL PERFECTED WITHIN
SUCH PERIOD, DOES THE DECISION BECOME FINAL AND EXECUTORY. — We
settled the issue of finality of the trial court's decision dated February 18, 1991
in the Vlason case, wherein we stated that, considering the admiralty case
involved multiple defendants, "each defendant had a different period within
which to appeal, depending on the date of receipt of decision." Only upon the
lapse of the reglementary period to appeal, with no appeal perfected within
such period, does the decision become final and executory. In the case of
petitioner, its Motion to Vacate Judgment and to Dismiss Case was filed on
April 10, 1991, only six (6) days after it learned of the existence of the case
upon being informed by the Embassy of the Federative Republic of Brazil in
the Philippines, on April 4, 1991, of the February 18, 1991 decision. Thus, in
the absence of any evidence on the date of receipt of decision, other than the
alleged April 4, 1991 date when petitioner learned of the decision, the
February 18, 1991 decision of the trial court cannot be said to have attained
finality as regards the petitioner.
DECISION
DE LEON, JR., J p:
Before us is a petition for review on certiorari of the Decision 1 and the
Resolution 2 of the Court of Appeals 3 dated July 19, 1993 and August 15, 1995,
respectively, which reinstated the entire Decision 4 dated February 18, 1991
of the Regional Trial Court of Manila, Branch 8, holding, among others,
petitioner Banco do Brasil liable to private respondent Cesar Urbino, Sr. for
damages amounting to $300,000.00. 5
At the outset, let us state that this case should have been consolidated with
the recently decided case of Vlason Enterprises Corporation v. Court of
Appeals and Duraproof Services, represented by its General Manager, Cesar
Urbino Sr.6 , for these two (2) cases involved the same material antecedents,
though the main issue proffered in the present petition vary with the Vlason
case.
The material antecedents, as quoted from the Vlason 7 case, are:
Poro Point Shipping Services, then acting as the local agent of Omega Sea
Transport Company of Honduras & Panama, a Panamanian Company
(hereafter referred to as Omega), requested permission for its vessel M/V Star
Ace, which had engine trouble, to unload its cargo and to store it at the
Philippine Ports Authority (PPA) compound in San Fernando, La Union while
awaiting transshipment to Hongkong. The request was approved by the
Bureau of Customs. 8 Despite the approval, the customs personnel boarded
the vessel when it docked on January 7, 1989, on suspicion that it was the
hijacked M/V Silver Med owned by Med Line Philippines Co., and that its cargo
would be smuggled into the country. 9 The district customs collector seized
said vessel and its cargo pursuant to Section 2301, Tariff and Customs Code. A
notice of hearing of SFLU Seizure Identification No. 3-89 was served on its
consignee, Singkong Trading Co. of Hongkong, and its shipper, Dusit
International Co., Ltd. of Thailand.
While seizure proceedings were ongoing, La Union was hit by three typhoons,
and the vessel ran aground and was abandoned. On June 8, 1989, its
authorized representative, Frank Cadacio, entered into salvage agreement
with private respondent to secure and repair the vessel at the agreed
consideration of $1 million and "fifty percent (50%) [of] the cargo after all
expenses, cost and taxes." 10
Finding that no fraud was committed, the District Collector of Customs, Aurelio
M. Quiray, lifted the warrant of seizure on July 1989. 11 However, in a Second
Indorsement dated November 11, 1989, then Customs Commissioner Salvador
M. Mison declined to issue a clearance for Quiray’s Decision; instead, he
forfeited the vessel and its cargo in accordance with Section 2530 of the Tariff
and Customs Code. 12 Accordingly, acting District Collector of Customs John S.
Sy issued a Decision decreeing the forfeiture and the sale of the cargo in favor
of the government. 13
To enforce its preferred salvor’s lien, herein Private Respondent Duraproof
Services filed with the Regional Trial Court of Manila a Petition for Certiorari,
Prohibition and Mandamus 14 assailing the actions of Commissioner Mison
and District Collector Sy. Also impleaded as respondents were PPA
Representative Silverio Mangaoang and Med Line Philippines, Inc.
On January 10, 1989, private respondent amended its Petition 15 to include
former District Collector Quiray; PPA Port Manager Adolfo Ll. Amor, Jr.; . . .
Vlason Enterprises as represented by its president, Vicente Angliongto;
Singkong Trading Company as represented by Atty. Eddie Tamondong; Banco
Do Brasil; Dusit International Co.; Thai-Nan Enterprises Ltd., and Thai-United
Trading Co., Ltd. 16 . . .
Summonses for the amended Petition were served on Atty. Joseph Capuyan
for Med Line Philippines: Anglionto (through his secretary, Betty Bebero), Atty.
Tamondong and Commissioner Mison. 17 Upon motion of the private
respondent, the trial court allowed summons by publication to be served upon
defendants who were not residents and had no direct representative in the
country. 18
On January 29, 1990, private respondent moved to declare respondents in
default, but the trial court denied the motion in its February 23, 1990 Order
19 , because Mangaoang and Amor had jointly filed a Motion to Dismiss, while
Mison and Med Line had moved separately for an extension to file a similar
motion. 20 Later it rendered an Order dated July 2, 1990, giving due course to
the motions to dismiss filed by Mangaoang and Amor on the ground of litis
pendentia, and by the commissioner and district collector of customs on the
ground of lack of jurisdiction. 21 In another Order, the trial court dismissed the
action against Med Line Philippines on the ground of litis pendentia. 22
On two other occasions, private respondent again moved to declare the
following in default: [Vlason], Quiray, Sy and Mison on March 26, 1990; 23 and
Banco [do] Bra[s]il, Dusit International Co., Inc., Thai-Nan Enterprises Ltd. and
Thai-United Trading Co., Ltd. on August 24, 1990. 24 There is no record,
however, that the trial court acted upon the motions. On September 18, 1990,
[private respondent] filed another Motion for leave to amend the petition, 25
alleging that its counsel failed to include "necessary and/or indispensable
parties": Omega represented by Cadacio; and M/V Star Ace represented by
Capt. Nahon Rada, relief captain. Aside from impleading these additional
respondents, private respondent also alleged in the Second (actually, third)
Amended Petition 26 that the owners of the vessel intended to transfer and
alienate their rights and interest over the vessel and its cargo, to the detriment
of the private respondent.
The trial court granted leave to private respondent to amend its Petition, but
only to exclude the customs commissioner and the district collector. 27
Instead, private respondent filed the "Second Amended Petition with
Supplemental Petition" against Singkong Trading Company; and Omega and
M/V Star Ace, 28 to which Cadacio and Rada filed a Joint Answer. 29
Declared in default in an Order issued by the trial court on January 23, 1991,
were the following: Singkong Trading Co., Commissioner Mison, M/V Star Ace
and Omega. 30 Private respondent filed, and the trial court granted, an ex
parte Motion to present evidence against the defaulting respondents. 31 Only
private respondent, Atty. Tamondong, Commissioner Mison, Omega and M/V
Star Ace appeared in the next pretrial hearing; thus, the trial court declared
the other respondents in default and allowed private respondent to present
evidence against them. 32 Cesar Urbino, general manager of private
respondent, testified and adduced evidence against the other
respondents, . . . .33
On December 29, 1990, private respondent and Rada, representing Omega,
entered into a Memorandum of Agreement stipulating that Rada would write
and notify Omega regarding the demand for salvage fees of private
50
respondent; and that if Rada did not receive any instruction from his principal,
he would assign the vessel in favor of the salvor. 34
On February 18, 1991, the trial court disposed as follows:
"WHEREFORE, IN VIEW OF THE FOREGOING, based on the allegations, prayer
and evidence adduced, both testimonial and documentary, the Court is
convinced, that, indeed, defendants/respondents are liable to [private
respondent] in the amount as prayed for in the petition for which it renders
judgment as follows:
1. Respondent M/V Star Ace, represented by Capt. Nahum Rada,
[r]elief [c]aptain of the vessel and Omega Sea Transport Company, Inc.,
represented by Frank Cadacio[,] is ordered to refrain from alienating or
[transferring] the vessel M/V Star Ace to any third parties;
2. Singkong Trading Company to pay the following:
a. Taxes due the government;
b. Salvage fees on the vessel in the amount of $1,000,000.00 based
on . . . Lloyd’s Standard Form of Salvage Agreement;
c. Preservation, securing and guarding fees on the vessel in the
amount of $225,000.00;
d. Maintenance fees in the amount of P2,685,000.00;
e. Salaries of the crew from August 16, 1989 to December 1989 in the
amount of $43,000.00 and unpaid salaries from January 1990 up to the
present;
f. Attorney’s fees in the amount of P656,000.00;
3. [Vlason] Enterprises to pay [private respondent] in the amount of
P3,000,000.00 for damages;
4. Banco [Du] Brasil to pay [private respondent] in the amount of
$300,000.00 in damages; 35 and finally,
5. Costs of [s]uit."
Subsequently, upon the motion of Omega, Singkong Trading Co., and private
respondent, the trial court approved a Compromise Agreement 36 among the
movants, reducing by 20 percent the amounts adjudged. For their part,
respondents-movants agreed not to appeal the Decision. 37 On March 8, 1991,
private respondent moved for the execution of judgment, claiming that the
trial court Decision had already become final and executory. The Motion was
granted and a Writ of Execution was issued. To satisfy the Decision, Sheriffs
Jorge Victorino, Amado Sevilla and Dionisio Camañgon were deputized on
March 13, 1991 to levy and to sell on execution the defendants vessel and
personal property.
xxx xxx xxx
On March 18, 1991, the Bureau of Customs also filed an ex parte Motion to
recall the execution, and to quash the notice of levy and the sale on execution.
Despite this Motion, the auction sale was conducted on March 21, 1991 by
Sheriff Camañgon, with private respondent submitting the winning bid. The
trial court ordered the deputy sheriffs to cease and desist from implementing
the Writ of Execution and from levying on the personal property of the
defendants. Nevertheless, Sheriff Camañgon issued the corresponding
Certificate of Sale on March 27, 1991.
On April 10, 1991, petitioner Banco do Brasil filed, by special appearance, an
Urgent Motion to Vacate Judgment and to Dismiss Case 38 on the ground that
the February 18, 1991 Decision of the trial court is void with respect to it for
having been rendered without validly acquiring jurisdiction over the person of
Banco do Brasil. Petitioner subsequently amended its petition 39 to specifically
aver that its special appearance is solely for the purpose of questioning the
Court’s exercise of personal jurisdiction.
On May 20, 1991, the trial court issued an Order 40 acting favorably on
petitioner’s motion and set aside as against petitioner the decision dated
February 18, 1991 for having been rendered without jurisdiction over Banco
do Brasil’s person. Private respondent sought reconsideration 41 of the Order
dated May 20, 1991. However, the trial court in an Order 42 dated June 21,
1991 denied said motion.
Meanwhile, a certiorari petition 43 was filed by private respondent before
public respondent Court of Appeals seeking to nullify the cease and desist
Order dated April 5, 1991 issued by Judge Arsenio M. Gonong. Two (2) more
separate petitions for certiorari were subsequently filed by private respondent.
The second petition 44 sought to nullify the Order 45 dated June 26, 1992
setting aside the Deputy Sheriff’s return dated April 1, 1991 as well as the
certificate of sale issued by Deputy Sheriff Camañgon. The third petition 46
sought to nullify the Order dated October 5, 1992 of the Court of Tax Appeals
directing the Commissioner of Customs to place Bureau of Customs and PNP
officers and guards to secure the M/V Star Ace and its cargoes, make inventory
of the goods stored in the premises as indicated to belong to the private
respondent. Likewise challenged was the Order dated August 17, 1992
authorizing the sale of M/V Star Ace and its cargoes.
These three (3) petitions were consolidated and on July 19, 1993, the appellate
court rendered its Decision 47 granting private respondent’s petitions, thereby
nullifying and setting aside the disputed orders and effectively "giving way to
the entire decision dated February 18, 1991 of the . . . Regional Trial Court of
Manila, Branch 8, in Civil Case No. 89-51451 which remains valid, final and
executory, if not yet wholly executed." 48
Private respondent Urbino, Vlason Enterprises and petitioner Banco do Brasil
filed separate motions for reconsideration. For its part, petitioner Banco do
Brasil sought reconsideration, insofar as its liability for damages, on the ground
that there was no valid service of summons as service was on the wrong party
– the ambassador of Brazil. Hence, it argued, the trial court did not acquire
jurisdiction over petitioner Banco do Brasil. 49 Nonetheless, the appellate
court denied the motions for reconsideration in its Resolution 50 dated August
15, 1995.
Hence, the instant petition.
Petitioner Banco do Brasil takes exception to the appellate court’s declaration
that the suit below is in rem, not in personam, 51 thus, service of summons by
publication was sufficient for the court to acquire jurisdiction over the person
of petitioner Banco do Brasil, and thereby liable to private respondent Cesar
Urbino for damages claimed, amounting to $300,000.00. Petitioner further
challenges the finding that the February 18, 1991 decision of the trial court
was already final and thus, cannot be modified or assailed. 52
Petitioner avers that the action filed against it is an action for damages, as such
it is an action in personam which requires personal service of summons be
made upon it for the court to acquire jurisdiction over it. However, inasmuch
as petitioner Banco do Brasil is a non-resident foreign corporation, not
engaged in business in the Philippines, unless it has property located in the
Philippines which may be attached to convert the action into an action in rem,
the court cannot acquire jurisdiction over it in respect of an action in personam.
The petition bears merit, thus the same should be as it is hereby granted.
First. When the defendant is a nonresident and he is not found in the country,
summons may be served extraterritorially in accordance with Rule 14, Section
17 53 of the Rules of Court. Under this provision, there are only four (4)
instances when extraterritorial service of summons is proper, namely: "(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 interest, actual or contingent; (3) when
the relief demanded in such action consists, wholly or in part, in excluding the
51
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." 54 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. 55
Clear from the foregoing, extrajudicial service of summons apply only where
the action is in rem, an action against the thing itself instead of against the
person, or in an action quasi in rem, where an individual is named as defendant
and the purpose of the proceeding is to subject his interest therein to the
obligation or loan burdening the property. This is so inasmuch as, in in rem and
quasi in rem actions, 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. 56
However, where the action is in personam, one brought against a person on
the basis of his personal liability, jurisdiction over the person of the defendant
is necessary for the court to validly try and decide the case. When the
defendant is a non-resident, personal service of summons within the state is
essential to the acquisition of jurisdiction over the person. 57 This cannot be
done, however, if the defendant is not physically present in the country, and
thus, the court cannot acquire jurisdiction over his person and therefore
cannot validly try and decide the case against him. 58
In the instant case, private respondent’s suit against petitioner is premised on
petitioner’s being one of the claimants of the subject vessel M/V Star Ace. 59
Thus, it can be said that private respondent initially sought only to exclude
petitioner from claiming interest over the subject vessel M/V Star Ace.
However, private respondent testified during the presentation of evidence
that, for being a nuisance defendant, petitioner caused irreparable damage to
private respondent in the amount of $300,000.00. 60 Therefore, while the
action is in rem, by claiming damages, the relief demanded went beyond the
res and sought a relief totally alien to the action.
It must be stressed that any relief granted in rem or quasi in rem actions must
be confined to the res, and the court cannot lawfully render a personal
judgment against the defendant. 61 Clearly, the publication of summons
effected by private respondent is invalid and ineffective for the trial court to
acquire jurisdiction over the person of petitioner, since by seeking to recover
damages from petitioner for the alleged commission of an injury to his person
or property 62 caused by petitioner’s being a nuisance defendant, private
respondent’s action became in personam. Bearing in mind the in personam
nature of the action, personal or, if not possible, substituted service of
summons on petitioner, and not extraterritorial service, is necessary to confer
jurisdiction over the person of petitioner and validly hold it liable to private
respondent for damages. Thus, the trial court had no jurisdiction to award
damages amounting to $300,000.00 in favor of private respondent and as
against herein petitioner.
Second. We settled the issue of finality of the trial court’s decision dated
February 18, 1991 in the Vlason case, wherein we stated that, considering the
admiralty case involved multiple defendants, "each defendant had a different
period within which to appeal, depending on the date of receipt of decision."
63 Only upon the lapse of the reglementary period to appeal, with no appeal
perfected within such period, does the decision become final and executory.
64
In the case of petitioner, its Motion to Vacate Judgment and to Dismiss Case
was filed on April 10, 1991, only six (6) days after it learned of the existence of
the case upon being informed by the Embassy of the Federative Republic of
Brazil in the Philippines, on April 4, 1991, of the February 18, 1991 decision. 65
Thus, in the absence of any evidence on the date of receipt of decision, other
than the alleged April 4, 1991 date when petitioner learned of the decision,
the February 18, 1991 decision of the trial court cannot be said to have
attained finality as regards the petitioner.
WHEREFORE, the subject petition is hereby GRANTED. The Decision and the
Resolution of the Court of Appeals dated July 19, 1993 and August 15, 1995,
respectively, in CA-G.R. SP Nos. 24669, 28387 and 29317 are hereby REVERSED
and SET ASIDE insofar as they affect petitioner Banco do Brasil. The Order
dated May 20, 1991 of the Regional Trial Court of Manila, Branch 8 in Civil Case
No. 89-51451 is REINSTATED.
[G.R. No. L-48375. August 13, 1986.]
JOSE C. CARIAGA, JR. AND MARIETA CARIAGA, petitioners, vs. THE HON.
ANTONIO Q. MALAYA, CAROLINA ALMONTE CARIAGA-SOON AND ANA
ALMONTE CARIAGA, respondents.
Antonio M. Baez for petitioners.
Oscar A. Inocentes & Associates Law Office for private respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; EXTRA-
TERRITORIAL SERVICE OF SUMMONS; WHEN AVAILABLE. — Under Section 17,
Rule 14, of the Rules of Court extraterritorial service of summons is proper: (1)
when the action affects the personal status of the plaintiff; (2) when the action
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; (3) when
the relief demanded in such an action consists, wholly or in part, in excluding
the defendant from any interest in property located in the Philippines; and (4)
when defendant nonresident's property has been attached within the
Philippines.
2. ID.; ID.; ID.; ID.; MANNERS IN EFFECTING THEREOF. — In any of such
four cases provided in Sec. 17, Rule 14 of the Rules of Court the service of
summons may, with leave of court, be effected out of the Philippines in three
ways: (1) by personal service; (2) 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 should be sent by
registered mail to the last known address of the defendant; and (3) in any
other manner which the court may deem sufficient. The third mode of
extraterritorial service of summons was substantially complied with in this
case. (De Midgely v. Ferandos, 64 SCRA 23, 33, 34).
3. CONSTITUTIONAL LAW; BILL OF RIGHTS; JUDICIAL DUE PROCESS;
OBSERVED IN CASE AT BAR. — There is no question that the requirement of
due process has been met as shown by the fact that defendants actually
received the summonses and copies of the complaint and as evidenced by the
Registry Return Cards marked as Annex A-1 and Annex B-1. Whatever defect
there may have been in the service of summons was aptly corrected by the
court a quo in its assailed order dated January 16, 1978, which gave said
defendants ninety (90) days from receipt of order within which to file their
responsive pleadings. Defendants have no reason to complain that they were
unaware of the action filed against them or claim that they were denied due
process.
DECISION
PARAS, J p:
This is a petition for certiorari to review and to set aside two orders of the
respondent Judge dated January 16, 1978 and April 11, 1978 giving validity to
the service of summons by registered mail upon the defendants Jose C. Cariaga,
Jr. and Marieta Cariaga-Celis (petitioners herein), who are residing abroad.
Petitioners aver that the issuance of said orders by the respondent Judge is
tantamount to grave abuse of discretion.
The antecedent facts of the case at bar are briefly summarized as follows:
On October 6, 1976, plaintiffs (private respondents herein) Ana Almonte
Cariaga Soon filed in her behalf and in behalf of her minor daughter Carolina,
52
an action for (1) Annulment of a Deed of Extra-Judicial Partition of Real
Property, (2) Cancellation of Transfer Certificate of Title (TCT), (3) Recovery of
Real Property with damages, in the Court of First Instance (CFI) of Laguna,
Branch IV, now known as the Regional Trial Court (RTC), docketed as Civil Case
No. SC-1474. All defendants in said action filed their answer with counterclaim
with the exception of defendants (petitioners herein) Jose C. Cariaga Jr. and
Marieta Cariaga-Celis who were both residing abroad and were not served
with summons. The lower court upon motion of plaintiffs granted them leave
to effect extra-territorial service of summons upon said defendants pursuant
to Secs. 7, 17 and 18 of Rule 14 of the New Rules of Court. (Annex "A", p. 9,
Record). Accordingly, summonses with copies of the complaint were served to
the defendants by registered mail abroad (Guam and U.S.A.) by the Clerk of
Court at the instance of plaintiffs (Annex "B" and "C").
On August 30, 1977, defendants, who are residents of the Philippines filed a
motion to set aside the said summons and to declare the service of summons
abroad by registered mail as null and void, it being allegedly irregular and
unauthorized under the provisions of Rule 14 of the Rules of Court (Annex "D")
to which motion plaintiffs filed their opposition.
Acting on the issue the lower court ruled in this wise:
"ORDER
"It appearing that but for the short period of fifteen (15) days from date of
receipt of summons within which to answer given defendants Jose C. Cariaga,
Jr. and Marietta C. Cariaga, who reside abroad, there was substantial
compliance with Section 17 as related to Section 7 both of Rule 14 of the New
Rules of Court in the service of said summons on said defendants, for LACK OF
MERIT, the defendants' MOTION TO SET ASIDE SUMMONSES is, as it is, hereby
DENIED.
"Defendants Jose C. Cariaga, Jr., and Marietta C. Cariaga, having already
received copies of plaintiffs' Complaint with the service of summons on them,
said defendants are given NINETY (90) days from receipt of this Order within
which to file responsive pleadings.
"Let copies of this Order be served on the said defendants by registered mail
with return cards at the instance of the plaintiffs.
"IT IS SO ORDERED.
Santa Cruz, Laguna, January 16, 1978.
Sgd. ANTONIO Q. MALAYA
ANTONIO Q. MALAYA
J u d g e"
(Annex F, p. 21, Record).
On March 31, 1978, defendants (petitioner herein), residing abroad, by special
appearance and thru counsel filed their motion to consider the service of
summons upon them by registered mail as null and void. On April 11, 1978,
the lower court issued another order reading as follows:
"ORDER
"Finding on merit to defendants' motion filed on March 31, 1978, through
counsel, to consider the service of summons to them by registered mail, to be
null and void because they are residing abroad, considering the findings of this
Court as expounded in its January 16, 1978 Order, said motion is, as it is,
hereby DENIED.
"IT IS SO ORDERED.
Santa Cruz, Laguna, April 11, 1978.
(SGD.) IRINEO V. MENDOZA
T/IRINEO V. MENDOZA
J u d g e"
(Annex "H", p. 25 Record).
The main issue on appeal is whether the service of summons by registered
mail upon defendants in the case at bar is one which is contemplated within
the principles laid down in the provisions of Secs. 17, 7 and 22, Rule 14 of the
New Rules of Court to Wit:
"Section 17. 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
7; 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."
Sec. 7. Personal service of summons. — The summons shall be served by
handing a copy thereof to the defendant in person, or if he refuses to receive
it, by tendering it to him."
Sec. 22. Proof of service by registered mail. — Service by registered mail
under this rule may be proved by a certificate of the sheriff or affidavit of the
person especially authorized by the court, showing that a copy of the
summons and papers attached thereto, inclosed in an envelope and addressed
to the defendant, with postage prepaid, has been mailed, to which certificate
or affidavit the registry receipt and return card shall be attached."
Questioning the validity of the aforequoted orders dated January 16, 1978 and
April 11, 1978, petitioners aver that the lower court committed an error in
allowing service of summons by registered mail, arguing that such mode must
be coupled with publication in a newspaper of general circulation which was
lacking in the case at bar. Petitioners' contention holds no water.
Under Section 17, extraterritorial service of summons is proper: (1) when the
action affects the personal status of the plaintiff; (2) when the action 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; (3) when the
relief demanded in such an action consists, wholly or in part, in excluding the
defendant from any interest in property located in the Philippines; and (4)
when defendant nonresident's property has been attached within the
Philippines (Sec. 17, Rule 14, Rules of Court).
In any of such four cases, the service of summons may, with leave of court, be
effected out of the Philippines in three ways: (1) by personal service; (2) 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 should be sent by registered mail to the last known address of the
defendant; and (3) in any other manner which the court may deem sufficient.
The third mode of extraterritorial service of summons was substantially
complied with in this case. (De Midgely v. Ferandos, 64 SCRA 23, 33, 34).
There is no question that the requirement of due process has been met as
shown by the fact that defendants actually received the summonses and
copies of the complaint and as evidenced by the Registry Return Cards marked
as Annex A-1 (page 56-Record) and Annex B-1. Whatever defect there may
have been in the service of summons was aptly corrected by the court a quo
in its assailed order dated January 16, 1978, which gave said defendants ninety
53
(90) days from receipt of order within which to file their responsive pleadings.
Defendants have no reason to complain that they were unaware of the action
filed against them or claim that they were denied due process.

The case of Habana v. Vamenta et al., L-27091, June 30, 1970, or 33 SCRA 569,
cited by the petitioners in support of their claim has no bearing in the case at
bar since in said case service of summons was never made, even if defendant
knew of the case against him, while in the case under consideration, service of
summons was made upon them (although claimed erroneously by them as
defective).

WHEREFORE, premises considered, the petition for certiorari is hereby

DISMISSED with costs against the petitioners.

SO ORDERED.

Feria (Chairman), Fernan, Alampay and Gutierrez, Jr. JJ., concur.

54
[G.R. No. 108538. January 22, 1996.]
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs. THE
HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA,
respondents. cdasia
Alfredo D. Valmonte and Cirilo E. Doronia, for petitioners.
Balgos & Perez, for private respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUMMONS; SERVICE
REQUIRED IN ACTION IN PERSONAM. — In an action in personam, personal
service of summons or, if this is not possible and he cannot be personally
served, substituted service, as provided in Rule 14, § 7-8 is essential for the
acquisition by the court of jurisdiction over the person of a defendant who
does not voluntarily submit himself to the authority of the court. If defendant
cannot be served with summons because he is temporarily abroad, but
otherwise he is a Philippine resident, service of summons may, by leave of
court, be made by publication. Otherwise stated, a resident defendant in an
action in personam, who cannot be personally served with summons, may be
summoned either by means of substituted service in accordance with Rule 14,
§ 8 or by publication as provided in § 17 and 18 of the same Rule.
2. ID.; ID.; ID.; ID.; DEFENDANT MUST BE RESIDENT OF PHILIPPINES.
— In all of these cases, it should be noted, defendant must be a resident of the
Philippines, otherwise an action in personam cannot be brought because
jurisdiction over his person is essential to make a binding decision.
3. ID.; ID.; ACTION IN REM; NON-RESIDENT DEFENDANT MAY BE
SERVED WITH SUMMONS EXTERRITORIALLY. — On the other hand, if the
action is in rem or quasi in rem, jurisdiction over the person of the defendant
is not essential for giving the court jurisdiction so long as the court acquires
jurisdiction over the res. If the defendant is a nonresident and he is not found
in the country, summons may be served exterritorially in accordance with Rule
14, § 17. In such cases, what gives the court jurisdiction in an action in rem or
quasi in rem is that it has jurisdiction over the res, i.e. the personal status of
the plaintiff who is domiciled in the Philippines or the property litigated or
attached.
4. ID.; ID.; ID.; ID.; PURPOSE. — Service of summons in the manner
provided in § 17 is not for the purpose of vesting it with jurisdiction but for
complying with the requirements of fair play or due process, so that he will be
informed of the pendency of the action against him and the possibility that
property in the Philippines belonging to him or in which he has an interest may
be subjected to a judgment in favor of the plaintiff and he can thereby take
steps to protect his interest if he is so minded.
5. ID.; ID.; ID.; ID.; MODES. — As petitioner Lourdes A. Valmonte is a
nonresident who is not found in the Philippines, service of summons on her
must be in accordance with Rule 14, § 17. Such service, to be effective outside
the Philippines, must be made either (1) by personal service; (2) 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
should be sent by registered mail to the last known address of the defendant;
or (3) in any other manner which the court may deem sufficient.
6. ID.; ID.; ID.; ID.; ID.; SERVICE OF SUMMONS ON DEFENDANT'S
HUSBAND AND COUNSEL IN PHILIPPINES, NOT VALID. — Since in the case at
bar, the service of summons upon petitioner Lourdes A. Valmonte was not
done by means of any of the first two modes, the question is whether the
service on her attorney, petitioner Alfredo D. Valmonte, can be justified under
the third mode, namely, "in any . . . manner the court may deem sufficient."
We hold it cannot. This mode of service, like the first two, must be made
outside the Philippines, such as through the Philippine Embassy in the foreign
country where the defendant resides. Moreover, there are several reasons
why the service of summons on Atty. Alfredo A. Valmonte cannot be
considered a valid service of summons on petitioner Lourdes A. Valmonte. In
the first place, service of summons on petitioner Alfredo D. Valmonte was not
made upon the order of the court as required by Rule 14, § 17 and certainly
was not a mode deemed sufficient by the court which in fact refused to
consider the service to be valid and on that basis declare petitioner Lourdes A.
Valmonte in default for her failure to file an answer. In the second place,
service in the attempted manner on petitioner was not made upon prior leave
of the trial court as required also in Rule 14, § 17. As provided in § 19, such
leave must be applied for by motion in writing, supported by affidavit of the
plaintiff or some person on his behalf and setting forth the grounds for the
application.
DECISION
MENDOZA, J p:
Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether
in an action for partition filed against her and her husband, who is also her
attorney, summons intended for her may be served on her husband, who has
a law office in the Philippines. The Regional Trial Court of Manila, Branch 48,
said no and refused to declare Lourdes A. Valmonte in default, but the Court
of Appeals said yes. Hence this petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and
wife. They are both residents of 90222 Carkeek Drive South Seattle,
Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the
Philippine bar, however, practices his profession in the Philippines, commuting
for this purpose between his residence in the state of Washington and Manila,
where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.
cdasia
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of
petitioner Lourdes A. Valmonte, filed a complaint for partition of real property
and accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo
D. Valmonte before the Regional Trial Court of Manila, Branch 48. The subject
of the action is a three-door apartment located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident of 14823
Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses,
of legal age and at present residents of 90222 Carkeek Drive, South Seattle,
Washington, U.S.A., but, for purposes of this complaint may be served with
summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila
where defendant Alfredo D. Valmonte as defendant Lourdes Arreola
Valmonte's spouse holds office and where he can be found. cdtai
Apparently, the foregoing averments were made on the basis of a letter
previously sent by petitioner Lourdes A. Valmonte to private respondent's
counsel in which, in regard to the partition of the property in question, she
referred private respondent's counsel to her husband as the party to whom all
communications intended for her should be sent. The letter reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I received on 3
July 1991. Please address all communications to my lawyer, Atty. Alfredo D.
Valmonte, whose address, telephone and fax numbers appear below. cdasia
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
55
Metro Manila
Telephone: 521-1736
Fax: 521-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who
at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte
accepted the summons, insofar as he was concerned, but refused to accept
the summons for his wife, Lourdes A. Valmonte, on the ground that he was
not authorized to accept the process on her behalf. Accordingly the process
server left without leaving a copy of the summons and complaint for petitioner
Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim.
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this
reason private respondent moved to declare her in default. Petitioner Alfredo
D. Valmonte entered a special appearance in behalf of his wife and opposed
the private respondent's motion. cdtai
In its Order dated July 3, 1992, the trial court, denied private respondent's
motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992. Whereupon,
private respondent filed a petition for certiorari, prohibition and mandamus
with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the
petition and declaring Lourdes A. Valmonte in default. A copy of the appellate
court's decision was received by petitioner Alfredo D. Valmonte on January 15,
1993 at his Manila office and on January 21, 1993 in Seattle, Washington.
Hence, this petition.
The issue at bar is whether in light of the facts set forth above, petitioner
Lourdes A. Valmonte was validly served with summons. In holding that she had
been, the Court of Appeals stated: 1 cdt
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed
the aforementioned counsel of Dimalanta to address all communications
(evidently referring to her controversy with her sister Mrs. Dimalanta over the
Paco property, now the subject of the instant case) to her lawyer who happens
also to be her husband. Such directive was made without any qualification just
as was her choice/designation of her husband Atty. Valmonte as her lawyer
likewise made without any qualification or reservation. Any disclaimer
therefore on the part of Atty. Valmonte as to his being his wife's attorney (at
least with regard to the dispute vis-a-vis (sic) the Paco property) would appear
to be feeble or trifling, if not incredible.
This view is bolstered by Atty. Valmonte's subsequent alleged special
appearance made on behalf of his wife. Whereas Mrs. Valmonte had
manifestly authorized her husband to serve as her lawyer relative to her
dispute with her sister over the Paco property and to receive all
communications regarding the same and subsequently to appear on her
behalf by way of a so-called special appearance, she would nonetheless now
insist that the same husband would nonetheless had absolutely no authority
to receive summons on her behalf. In effect, she is asserting that
representation by her lawyer (who is also her husband) as far as the Paco
property controversy is concerned, should only be made by him when such
representation would be favorable to her but not otherwise. It would
obviously be inequitable for this Court to allow private respondent Lourdes A.
Valmonte to hold that her husband has the authority to represent her when
an advantage is to be obtained by her and to deny such authority when it
would turn out to be her disadvantage. If this be allowed, Our Rules of Court,
instead of being an instrument to promote justice would be made use of to
thwart or frustrate the same.
xxx xxx xxx
Turning to another point, it would not do for Us to overlook the fact that the
disputed summons was served not upon just an ordinary lawyer of private
respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is
not all, the same lawyer/husband happens to be also her co-defendant in the
instant case which involves real property which, according to her
lawyer/husband/co-defendant, belongs to the conjugal partnership of the
defendants (the spouses Valmonte). It is highly inconceivable and certainly it
would be contrary to human nature for the lawyer/husband/co-defendant to
keep to himself the fact that they (the spouses Valmonte) had been sued with
regard to a property which he claims to be conjugal. Parenthetically, there is
nothing in the records of the case before Us regarding any manifestation by
private respondent Lourdes A. Valmonte about her lack of knowledge about
the case instituted against her and her lawyer/husband/co-defendant by her
sister Rosita. . . . aisadc
PREMISES CONSIDERED, the instant petition for certiorari, prohibition and
mandamus is given due course. This Court hereby Resolves to nullify the
orders of the court a quo dated July 3, 1992 and September 23, 1992 and
further declares private respondent Lourdes Arreola Valmonte as having been
properly served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of Appeals
erred (1) in refusing to apply the provisions of Rule 14, § 17 of the Revised
Rules of Court and applying instead Rule 14, § 8 when the fact is that petitioner
Lourdes A. Valmonte is a nonresident defendant; and (2) because even if Rule
14, § 8 is the applicable provision, there was no valid substituted service as
there was no strict compliance with the requirement by leaving a copy of the
summons and complaint with petitioner Alfredo D. Valmonte. Private
respondent, upon the other hand, asserts that petitioners are invoking a
technicality and that strict adherence to the rules would only result in a useless
ceremony.
We hold that there was no valid service of process on Lourdes A. Valmonte.
To provide perspective, it will be helpful to determine first the nature of the
action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte
by private respondent, whether it is an action in personam, in rem or quasi in
rem. This is because the rules on service of summons embodied in Rule 14
apply according to whether an action is one or the other of these actions. cdta
In an action in personam, personal service of summons or, if this is not possible
and he cannot be personally served, substituted service, as provided in Rule
14, § 7-8 2 is essential for the acquisition by the court of jurisdiction over the
person of a defendant who does not voluntarily submit himself to the
authority of the court. 3 If defendant cannot be served with summons because
he is temporarily abroad, but otherwise he is a Philippine resident, service of
summons may, by leave of court, be made by publication. 4 Otherwise stated,
a resident defendant in an action in personam, who cannot be personally
served with summons, may be summoned either by means of substituted
service in accordance with Rule 14, § 8 or by publication as provided in § 17
and 18 of the same Rule. 5
In all of these cases, it should be noted, defendant must be a resident of the
Philippines, otherwise an action in personam cannot be brought because
jurisdiction over his person is essential to make a binding decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over the
person of the defendant is not essential for giving the court jurisdiction so long
as the court acquires jurisdiction over the res. If the defendant is a nonresident
and he is not found in the country, summons may be served extraterritorially
in accordance with Rule 14, § 17, which provides: cdasia
§ 17. 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
56
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 7; 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.
In such cases, what gives the court jurisdiction in an action in rem or quasi in
rem is that it has jurisdiction over the res, i.e. the personal status of the
plaintiff who is domiciled in the Philippines or the property litigated or
attached.
Service of summons in the manner provided in § 17 is not for the purpose of
vesting it with jurisdiction but for complying with the requirements of fair play
or due process, so that he will be informed of the pendency of the action
against him and the possibility that property in the Philippines belonging to
him or in which he has an interest may be subjected to a judgment in favor of
the plaintiff and he can thereby take steps to protect his interest if he is so
minded. 6 cdtai
Applying the foregoing rules to the case at bar, private respondent's action,
which is for partition and accounting under Rule 69, is in the nature of an
action quasi in rem. Such an action is essentially for the purpose of affecting
the defendant's interest in a specific property and not to render a judgment
against him. As explained in the leading case of Banco Español Filipino v.
Palanca: 7
[An action quasi in rem is] an action which while not strictly speaking an action
in rem partakes of that nature and is substantially such. . . . The action quasi in
rem differs from the true action in rem in the circumstance that in the former
an individual is named as defendant and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property.
All proceedings having for their sole object the sale or other disposition of the
property of the defendant, whether by attachment, foreclosure, or other form
of remedy, are in a general way thus designated. The judgment entered in
these proceedings is conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in the
Philippines, service of summons on her must be in accordance with Rule 14,
§17. Such service, to be effective outside the Philippines, must be made either
(1) by personal service; (2) 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 should be sent by registered mail to
the last known address of the defendant; or (3) in any other manner which the
court may deem sufficient. cdtai
Since in the case at bar, the service of summons upon petitioner Lourdes A.
Valmonte was not done by means of any of the first two modes, the question
is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be
justified under the third mode, namely, "in any . . . manner the court may
deem sufficient."
We hold it cannot. This mode of service, like the first two, must be made
outside the Philippines, such as through the Philippine Embassy in the foreign
country where the defendant resides. 8 Moreover, there are several reasons
why the service of summons on Atty. Alfredo D. Valmonte cannot be
considered a valid service of summons on petitioner Lourdes A. Valmonte. In
the first place, service of summons on petitioner Alfredo D. Valmonte was not
made upon the order of the court as required by Rule 14, § 17 and certainly
was not a mode deemed sufficient by the court which in fact refused to
consider the service to be valid and on that basis declare petitioner Lourdes A.
Valmonte in default for her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not
made upon prior leave of the trial court as required also in Rule 14, § 17. As
provided in § 19, such leave must be applied for by motion in writing,
supported by affidavit of the plaintiff or some person on his behalf and setting
forth the grounds for the application. cdt
Finally, and most importantly, because there was no order granting such leave,
petitioner Lourdes A. Valmonte was not given ample time to file her Answer
which, according to the rules, shall be not less than sixty (60) days after notice.
It must be noted that the period to file an Answer in an action against a
resident defendant differs from the period given in an action filed against a
nonresident defendant who is not found in the Philippines. In the former, the
period is fifteen (15) days from service of summons, while in the latter, it is at
least sixty (60) days from notice.
Strict compliance with these requirements alone can assure observance of due
process. That is why in one case, 9 although the Court considered publication
in the Philippines of the summons (against the contention that it should be
made in the foreign state where defendant was residing) sufficient,
nonetheless the service was considered insufficient because no copy of the
summons was sent to the last known correct address in the Philippines.
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,
462-463 (1975), in which it was held that service of summons upon the
defendant's husband was binding on her. But the ruling in that case is justified
because summons were served upon defendant's husband in their conjugal
home in Cebu City and the wife was only temporarily absent, having gone to
Dumaguete City for a vacation. The action was for collection of a sum of money.
In accordance with Rule 14, § 8, substituted service could be made on any
person of sufficient discretion in the dwelling place of the defendant, and
certainly defendant's husband, who was there, was competent to receive the
summons on her behalf. In any event, it appears that defendant in that case
submitted to the jurisdiction of the court by instructing her husband to move
for the dissolution of the writ of attachment issued in that case. aisadc
On the other hand, in the case of Gemperle v. Schenker, 10 it was held that
service on the wife of a nonresident defendant was found sufficient because
the defendant had appointed his wife as his attorney-in-fact. It was held that
although defendant Paul Schenker was a Swiss citizen and resident of
Switzerland, service of summons upon his wife Helen Schenker who was in the
Philippines was sufficient because she was her husband's representative and
attorney-in-fact in a civil case, which he had earlier filed against William
Gemperle. In fact Gemperle's action was for damages arising from allegedly
derogatory statements contained in the complaint filed in the first case. As this
Court said, "[i]n other words, Mrs. Schenker had authority to sue, and had
actually sued, on behalf of her husband, so that she was, also, empowered to
represent him in suits filed against him, particularly in a case, like the one at
bar, which is a consequence of the action brought by her on his behalf." 11
Indeed, if instead of filing an independent action Gemperle filed a
counterclaim in the action brought by Mr. Schenker against him, there would
have been no doubt that the trial court could have acquired jurisdiction over
Mr. Schenker through his agent and attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint
her husband as her attorney-in-fact. Although she wrote private respondent's
attorney that "all communications" intended for her should be addressed to
her husband who is also her lawyer at the latter's address in Manila, no power
of attorney to receive summons for her can be inferred therefrom. In fact the
letter was written seven months before the filing of this case below, and it
appears that it was written in connection with the negotiations between her
and her sister, respondent Rosita Dimalanta, concerning the partition of the
property in question. As is usual in negotiations of this kind, the exchange of
correspondence was carried on by counsel for the parties. But the authority
given to petitioner's husband in these negotiations certainly cannot be
construed as also including an authority to represent her in any litigation.
57
For the foregoing reasons, we hold that there was no valid service on
petitioner Lourdes A. Valmonte in this case. cdta

WHEREFORE, the decision appealed from is REVERSED and the orders dated
July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila,
Branch 48 are REINSTATED.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

58
[G.R. No. 150656. April 29, 2003.]
MARGARITA ROMUALDEZ-LICAROS, Petitioner, v. ABELARDO B.
LICAROS, Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari 1 to annul the Decision 2 dated 9
August 2001 of the Court of Appeals in CA-G.R. SP No. 58487, as well as the
Resolution dated 23 October 2001 denying the motion for reconsideration.
The Court of Appeals dismissed the petition to annul the following decisions
3 rendered by Branch 143 of the Regional Trial Court of Makati:
(1) The Decision dated 27 December 1990 4 granting the
dissolution of the conjugal partnership of gains of the spouses
Abelardo B. Licaros and Margarita Romualdez-Licaros;
(2) The Decision dated 8 November 1991 5 declaring the marriage
between the same spouses null and void.
The Facts
The antecedent facts as found by the Court of Appeals are as follows:
. . . Abelardo Licaros (Abelardo, for short) and Margarita
Romualdez-Licaros. (Margarita, hereafter) were lawfully married
on December 15, 1968. Out of this marital union were born Maria
Concepcion and Abelardo, Jr. Ironically, marital differences,
squabbles and irreconcilable conflicts transpired between the
spouses, such that sometime in 1979, they agreed to separate from
bed and board.
In 1982, Margarita left for the United States and there, to settle
down with her two (2) children. In the United States, on April 26,
1989, Margarita applied for divorce before the Superior Court of
California, County of San Mateo (Annex "I", Rejoinder, pp. 164-165)
where she manifested that she does not desire counseling at that
time (Quotation, p. 166, Rollo). On August 6, 1990, Margarita was
granted the decree of divorce (Annex 2, Answer, p. 108, Rollo)
together with a distribution of properties between her and
Abelardo (pp. 167-168, Rollo),
Not long after, on August 17, 1990, Abelardo and Margarita
executed an "Agreement of Separation of Properties" (pp. 60-64,
Rollo). This was followed-up by a petition filed on August 21, 1990
before the Regional Trial Court of Makati for the dissolution of the
conjugal partnership of gains of the spouses and for the approval
of the agreement of separation of their properties. This was
docketed as Special Proceeding No. 2551. On December 27, 1990,
a decision was issued granting the petition and approving the
separation of property agreement.
For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757,
for the declaration of nullity of his marriage with Margarita, based on
psychological incapacity under the New Family Code. As Margarita was then
residing at 96 Mulberry Lane, Atherton, California, U.S.A., Abelardo initially
moved that summons be served through the International Express Courier
Service. The court a quo denied the motion. Instead, it ordered that summons
be served by publication in a newspaper of general circulation once a week for
three (3) consecutive weeks, at the same time furnishing respondent a copy
of the order, as well as the corresponding summons and a copy of the petition
at the given address in the United States through the Department of Foreign
Affairs, all at the expense of Abelardo. Respondent was given sixty (60) days
after publication to file a responsive pleading.
On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his Officer’s
Return quoted hereunder:
"OFFICER’S RETURN
THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of
summons and complaint with annexes together with order dated
June 28, 1991 issued by the Court in the above-entitled case upon
defendant Margarita Romualdez-Licaros c/o DFA. (sent by Mail)
thru Pat G. Martines receiving Clerk of Department of Foreign
Affairs a person authorized to receive this kind of process who
acknowledged the receipt thereof at ADB Bldg., Roxas Blvd., Pasay
City, Metro Manila." (p. 40, Rollo)
As required by law, the case was referred to Trial Prosecutor Bruselas, Jr. to
find out any possible collusion between the parties in the case. Thereafter,
with the negative report on collusion, Abelardo was allowed to present his
evidence ex-parte. On November 8, 1991, the Decision (Annex "A", Petition)
was handed down in Civil Case No. 91-1757 declaring the marriage between
Abelardo and Margarita null and void.
Almost nine (9) years later, on April 28, 2000, the petition at bench was
commenced when Margarita received a letter dated November 18, 1991 from
a certain Atty. Angelo Q. Valencia informing her that she no longer has the
right to use the family name "Licaros" inasmuch as her marriage to Abelardo
had already been judicially dissolved by the Regional Trial Court of Makati on
November 8, 1991. Asseverating to have immediately made some verifications
and finding the information given to be true, petitioner commenced the
instant petition on the following grounds:
(A) THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND
FILING BY ABELARDO OF THE PETITION FOR DISSOLUTION OF
THE CONJUGAL PARTNERSHIP OF GAINS AND ITS ANNEX, THE
AGREEMENT OF SEPARATION OF PROPERTIES.
(B) THE TRIAL COURT LACKED JURISDICTION TO HEAR AND
DECIDE THE PETITION FOR DECLARATION OF NULLITY OF
MARRIAGE. 6
The Ruling of the Court of Appeals
The Court of Appeals debunked the claim of Margarita that there was extrinsic
fraud in the preparation and filing by Abelardo of the Petition for Dissolution
of Conjugal Partnership of Gains and its annex, the Agreement of Separation
of Properties. The Court of Appeals stated:
. . ., the extrinsic fraud alluded to consists of Abelardo coercing Margarita into
signing the petition to dissolve their conjugal partnership of gains together
with the agreement of separation of properties, by threatening to cut-off all
financial and material support of their children then still studying in the United
States; that petitioner had no hand directly or indirectly in the preparation of
the petition and agreement of separation of properties; that petitioner never
met the counsel for the petitioner, nor the notary public who notarized the
deed; and, petitioner never received any notice of the pendency of the
petition nor a copy of the decision.
Antithetically, a meticulous perusal of the controversal petition (Annex "B-1")
and the agreement of separation of properties (pp. 60–64, Rollo) readily shows
that the same were signed by the petitioner on the proper space after the
prayer and on the portion for the verification of the petition. The same is true
with the agreement of separation of properties. What is striking to note is that
on August 6, 1990, Margarita appeared before Amado P. Cortez, Consul of the
Republic of the Philippines at the San Francisco, California, United States
Consulate Office, to affirm and acknowledge before said official that she
executed the agreement of separation of properties of her own free will and
deed, after being informed of the contents thereof. And yet, there is no
showing that Abelardo was with her at the Philippines Consulate Office in
59
confirming the separation of property agreement. Moreover, on page 2 of the
same agreement it is specifically stated that such property separation
document shall be "subject to approval later on by the proper court of
competent jurisdiction." The clear import of this is that the agreement must
have to be submitted before the proper court for approval, which explains and
confirms petitioner’s signature on the petition filed in court.
In main, We see no indication nor showing of coercion or fraud from these
facts, which could very well be considered as extrinsic or collateral fraud to
justify a petition under Rule 47. From all indications, the pretended coerced
documents were rather freely and voluntarily executed by the parties therein
knowing fully well the imports thereof. This conclusion finds more weight if
We consider the fact that the separation of property was fully implemented
and enforced, when apparently both parties correspondingly received the
properties respectively assigned to each of them under the said document. 7
The Court of Appeals also rejected Margarita’s claim that the trial court lacked
jurisdiction to hear and decide the Petition for Declaration of Nullity of
Marriage for improper service of summons on her. The case involves the
marital status of the parties, which is an action in rem or quasi in rem. The
Court of Appeals ruled that in such an action the purpose of service of
summons is not to vest the trial court with jurisdiction over the person of the
defendant, but "only" to comply with due process. The Court of Appeals
concluded that any irregularity in the service of summons involves due process
which does not destroy the trial court’s jurisdiction over the res which is the
parties’ marital status. Neither does such irregularity invalidate the judgment
rendered in the case. Thus, the Court of Appeals dismissed the petition for
annulment of judgment, stating that:chanrob1es virtual 1aw library
At bar, the case involves the personal (marital) status of the plaintiff and the
defendant. This status is the res over which the Philippine court has acquired
jurisdiction. This is also the kind of action which the Supreme Court had ruled
that service or summons may be served extraterritorially under Section 15
(formerly Section 17) of Rule 14 and where such service of summons is not for
the purpose of vesting the trial court with jurisdiction over the person of the
defendant but only for the purpose of complying with the requirements of fair
play and due process. A fortiori, the court a quo had properly acquired
jurisdiction over the person of herein petitioner-defendant when summons
was served by publication and a copy of the summons, the complaint with
annexes, together with the Order of June 28, 1991, was served to the
defendant through the Department of Foreign Affairs by registered mail and
duly received by said office to top it all. Such mode was upon instruction and
lawful order of the court and could even be treated as ‘any other manner the
court may deem sufficient’. 8
Hence, the instant petition.
The Issues
The issues raised by Margarita are restated as follows:
I. Whether Margarita was validly served with summons in the
case for declaration of nullity of her marriage with Abelardo;
II. II. Whether there was extrinsic fraud in the preparation and
filing by Abelardo of the Petition for Dissolution of the
Conjugal Partnership of Gains and its annex, the Agreement
of Separation of Properties.
The Court’s Ruling
The petition is bereft of merit.
First Issue: Validity of the Service of Summons on Margarita
Margarita insists that the trial court never acquired jurisdiction over her
person in the petition for declaration of nullity of marriage since she was never
validly served with summons. Neither did she appear in court to submit
voluntarily to its jurisdiction.
On the other hand, Abelardo argues that jurisdiction over the person of a non-
resident defendant in an action in rem or quasi in rem is not necessary. The
trial and appellate courts made a clear factual finding that there was proper
summons by publication effected through the Department of Foreign Affairs
as directed by the trial court. Thus, the trial court acquired jurisdiction to
render the decision declaring the marriage a nullity.
Summons is a writ by which the defendant is notified of the action brought
against him. Service of such writ is the means by which the court acquires
jurisdiction over his person. 9
As a rule, when the defendant does not reside and is not found in the
Philippines, Philippine courts cannot try any case against him because of the
impossibility of acquiring jurisdiction over his person unless he voluntarily
appears in court. But when the case is one of actions in rem or quasi in rem
enumerated in Section 15, 10 Rule 14 of the Rules of Court, Philippine courts
have jurisdiction to hear and decide the case. In such instances, Philippine
courts have jurisdiction over the res, and jurisdiction over the person of the
non-resident defendant is not essential. 11
Actions in personam 12 and actions in rem or quasi in rem differ in that actions
in personam are directed against specific persons and seek personal
judgments. On the other hand, actions in rem or quasi in rem are directed
against the thing or property or status of a person and seek judgments with
respect thereto as against the whole world.
At the time Abelardo filed the petition for nullity of the marriage in 1991,
Margarita was residing in the United States. She left the Philippines in 1982
together with her two children. The trial court considered Margarita a non-
resident defendant who is not found in the Philippines. Since the petition
affects the personal status of the plaintiff, the trial court authorized
extraterritorial service of summons under Section 15, Rule 14 of the Rules of
Court. The term "personal status" includes family relations, particularly the
relations between husband and wife. 14
Under Section 15 of Rule 14, a defendant who is a non-resident and is not
found in the country may be served with summons by extraterritorial service
in four instances: (1) when the action affects the personal status of the
plaintiff; (2) when the action 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; (3) when the relief demanded consists, wholly or in part,
in excluding the defendant from any interest in property located in the
Philippines; or (4) when the property of the defendant has been attached
within the Philippines.
In these instances, extraterritorial service of summons may be effected under
any of three modes: (1) by personal service out of the country, with leave of
court; (2) by publication and sending a copy of the summons and order of the
court by registered mail to the defendant’s last known address, also with leave
of court; or (3) by any other means the judge may consider sufficient.
Applying the foregoing rule, the trial court required extraterritorial service of
summons to be effected on Margarita in the following manner:chanrob1es
virtual 1aw library
. . ., service of Summons by way of publication in a newspaper of general
60
circulation once a week for three (3) consecutive weeks, at the same time, Agreement. Margarita has failed to rebut this prima facie presumption with
furnishing respondent copy of this Order as well as the corresponding clear and convincing proof of coercion on the part of Abelardo.
Summons and copy of the petition at her given address at No. 96 Mulberry
Lane, Atherton, California, U.S.A., thru the Department of Foreign Affairs, all A document acknowledge before a notary public is prima facie evidence of the
at the expense of petitioner. 15 (Emphasis ours) due and regular execution of the document. 20 A notarized document has in
its favor the presumption of regularity in its execution, and to contradict the
The trial court’s prescribed mode of extraterritorial service does not fall under same, there must be evidence that is clear, convincing and more than merely
the first or second mode specified in Section 15 of Rule 14, but under the third preponderant. 21
mode. This refers to" any other means that the judge may consider
sufficient."cralaw virtua1aw library WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 58487
dismissing the petition to annul judgment is AFFIRMED.cralaw : red
The Process Server’s Return of 15 July 1991 shows that the summons
addressed to Margarita together with the complaint and its annexes were sent SO ORDERED.
by mail to the Department of Foreign Affairs with acknowledgment of receipt.
The Process Server’s certificate of service of summons is prima facie evidence Davide, Jr., C.J., Vitug, Ynares-Santiago and Azcuna, JJ., concur.
of the facts as set out in the certificate. 16 Before proceeding to declare the
marriage between Margarita and Abelardo null and void, the trial court stated
in its Decision dated 8 November 1991 that "compliance with the jurisdictional
requirements hav(e) (sic) been duly established." We hold that delivery to the
Department of Foreign Affairs was sufficient compliance with the rule. After
all, this is exactly what the trial court required and considered as sufficient to
effect service of summons under the third mode of extraterritorial service
pursuant to Section 15 of Rule 14.

Second Issue: Validity of the Judgment Dissolving the Conjugal Partnership

of Gains

Margarita claims that Abelardo coerced her into signing the Petition for
Dissolution of the Conjugal Partnership of Gains ("Petition") and its annex, the
Agreement of Separation of Properties ("Agreement"). Abelardo allegedly
threatened to cut off all financial and material support to their children if
Margarita did not sign the documents.

The trial court did not find anything amiss in the Petition and Agreement that
Abelardo filed, and thus the trial court approved the same. The Court of
Appeals noted that a meticulous perusal of the Petition and Agreement readily
shows that Margarita signed the same on the proper space after the prayer
and on the portion for the verification of the petition. The Court of Appeals
observed further that on 6 August 1990, Margarita appeared before Consul
Amado Cortez in the Philippine Consulate Office in San Francisco, California,
to affirm that she executed the Agreement of her own free will. There was no
showing that Abelardo was at that time with her at the Philippine Consulate
Office. Abelardo secured judicial approval of the Agreement as specifically
required in the Agreement.

The Court is bound by the factual findings of the trial and appellate courts that
the parties freely and voluntarily executed the documents and that there is no
showing of coercion or fraud. As a rule, in an appeal by certiorari under Rule
45, the Court does not pass upon questions of fact as the factual findings of
the trial and appellate courts are binding on the Court. The Court is not a trier
of facts. The Court will not examine the evidence introduced by the parties
below to determine if the trial and appellate courts correctly assessed and
evaluated the evidence on record. 17

The due and regular execution of an instrument acknowledged before an

officer authorized to administer oaths cannot be overthrown by bare
allegations of coercion but only by clear and convincing proof. 18 A person
acknowledging an instrument before an officer authorized to administer oaths
acknowledges that he freely and voluntarily executed the instrument, giving
rise to a prima facie presumption of such fact.

In the instant case, Margarita acknowledged the Agreement before Consul

Cortez. The certificate of acknowledgment signed by Consul Cortez states that
Margarita personally appeared before him and "acknowledged before me that
SHE executed the same of her own free will and deed." 19 Thus, there is a
prima facie presumption that Margarita freely and voluntarily executed the
61
[G.R. No. L-22997. March 15, 1968.]
PABLO C. MONTALBAN, ET AL., plaintiffs-appellees, vs. GERARDO MAXIMO,
defendant-appellant.
Jose W. Diokno for plaintiffs-appellees.
Norberto Quisumbing for defendant-appellant.
SYLLABUS
1. COURTS; JURISDICTION; SUITS IN PERSONAM; JURISDICTION OVER
TEMPORARILY ABSENT RESIDENTS. — In suits in personam, courts have
jurisdiction over residents temporarily out of the country.
2. ID.; ID.; ID.; SUMMONS; SUBSTITUTED SERVICE UNDER SECTION 8,
RULE 14, APPLIES TO TEMPORARILY ABSENT RESIDENTS. — In a suit in
personam against a resident of the Philippines temporarily absent therefrom,
substituted service may be validly effected under Section 8, Rule 14, Rules of
Court, "(a) by leaving copies of the summons at the defendant's dwelling
house or 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." Said
Section 8 is to be applied to all resident defendants - without distinction as to
whether the resident is physically present in this country or not.
3. ID.; ID.; ID.; ID.; JUDGMENT ON SUBSTITUTED SERVICE UNDER
SECTION 8, RULE 14, VALID; REASON. — A resident defendant may be charged
by a judgment in personam as a result of legal proceedings upon a method of
service which is not personal, which in fact may not become actual notice to
him and which may be accomplished in his lawful absence from the country.
The rules do not require that papers be served on defendant personally or a
showing that the papers were delivered to defendant by the person with
whom they were left. A resident, temporarily absent, usually leaves his affairs
in the hands of a person who may communicate with him. If the absent
resident does not do so, he cannot protest.
4. SUMMONS; SERVICE; EFFECTIVE WHEN MADE UPON ANOTHER
PRIEST OF SAME CONVENT. — Where summons upon a parish priest, who is a
temporarily absent defendant, was served upon mother priest, presumably a
responsible person who lives in the same convent where defendant resides,
the service is effective.
5. ID.; ID.; SECTIONS 8 AND 18, RULE 14, COMPARED; MODES OF
SERVICE; SECTION 18 IS NOT SOLE MODE OF SERVICE ON TEMPORARILY
ABSENT RESIDENT. — The statement in Section 18, Rule 14, Rules of Court that
"service may, by leave of court, be effected out of the Philippines" as under
Section 17 referring to extraterritorial service, does not mean that Section 18
is the sole provision that governs summons upon a defendant temporarily
absent in an action in personam. Said statement in fact recognizes that Section
17 is but one of the modes of service. The normal method of summoning one
temporarily absent is by substituted service under Section 8, for personal
service outside the country and service by publication are not ordinary means
of summoning defendants.
6. ID.; ID.; SUITS IN PERSONAM; SECTIONS 17 AND 18, RULE 14, WHEN
RESORTED TO. — Service of summons in suits in personam under Sections 17
and 18, Rule 14, is more circuitous and is resorted to if defendant's dwelling
house or residence or place of business in this country is not known, or, if
known, service cannot be had under Section 8.
7. JUDGMENTS; PRESUMPTION OF REGULARITY; NON QUIETA
MOVERE. — A judgment, long final, enjoys the presumption of regularity, and
unless stricken down is entitled to respect. Non quieta movere. Public policy
and sound practice demand that, at the risk of occasional errors, judgments of
courts should become final at some definite date fixed by law. (Dy Cay vs.
Crossfield & O'Brien, 38 Phil. 521, 526.)
8. ID.; JUDGMENT BY DEFAULT; ANNULMENT OF; LACHES BARS
ANNULMENT. — When defendant, after his return to this country, did not
move to set aside the default order, the default judgment for a big amount,
and execution thereof until after, by his own admission, two years and two
months from his knowledge of the judgment when levy and execution were
made on his house, laches has set in to prevent him from annulling the
proceedings.
9. ID.; ID.; ID.; PREJUDICE TO PLAINTIFFS. — Where defendant
delayed in annulling the court decision against him, plaintiffs may not be
compelled to file a fresh suit because prejudice, which could have been
avoided by defendant, will be caused the plaintiffs. The latter may have to
search for their witnesses who, if found, may no longer be able to present a
narrative as accurate as before; other evidence may have dissipated. The
march of time is truth in flight. These give life to the salutary policy on which
laches is founded.
DECISION
SANCHEZ, J p:
Chronologically, following are the events that spawned the present case:
August 15, 1958. Plaintiffs commenced suit 1 against Fr. Gerardo Maximo who,
according to the complaint, was residing at the parish church at Concepcion,
Malabon, Rizal. Plaintiffs' cause of action for damages sprang from a motor
vehicle accident which occurred at Padre Faura St., Manila, on December 16,
1957. Paul Hershell Montalban, son of plaintiffs, suffered injuries.
August 15, 1958. On this same day that the complaint was filed, summons was
served on defendant Fr. Gerardo Maximo at the parish church of Concepcion,
Malabon, Rizal, through Fr. Arsenio Bautista — a priest in the same parish
church.
August 23, 1958. Fr. Arsenio Bautista sent a letter (dated August 21) to
Macario M. Ofilada, Clerk of Court of the Court of First Instance of Manila,
informing him that defendant Fr. Gerardo Maximo left for Europe on August
7, and "will be back on the first week of November." Actually, Fr. Maximo
returned from abroad "about the second week of October, 1958." 2
September 20, 1958. The lower court declared defendant in default, on
plaintiffs' motion of September 13, 1958.
June 8, 1959. Upon plaintiffs' evidence, the court rendered judgment
sentencing defendant to:
"1. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00 as
actual damages for loss of his spleen;
2. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00 for
loss or impairment of earning capacity, talents and physical strength;
3. Pay plaintiff Paul Hershell Montalban the amount of P5,000.00 as
moral damages;
4. Pay plaintiffs Pablo C. Montalban and Regina Barretto the amount
of P5,000.00 as moral damages;
5. Pay plaintiffs the amount of P1,000.00 as exemplary damages; and
6. Pay plaintiffs attorney's fees [in] the amount of P3,000.00 and the
cost of litigation."
December 16, 1959. Plaintiffs themselves wrote defendant Fr. Gerardo
Maximo, at the Malabon Catholic Church, informing the latter of the lower
court's decision, giving the data: "Re Civil Case No. 37202 (in which the
foregoing judgment was rendered) Montalban vs. Maximo," quoting therein
the dispositive part of the decision just transcribed, requesting prompt
compliance therewith and suggesting that he communicate with or personally
62
see their lawyer, Jose W. Diokno, at the latter's address, 332 Regina Building,
Escolta, Manila.
December 20, 1959. Defendant, through his legal counsel, Dr. Nicanor T.
Santos, answered the foregoing letter expressing regret that he could not
comply with plaintiffs' request, because he (defendant) was not aware of the
said civil case, and that, in the criminal action arising out of the same incident,
said defendant was acquitted by the Municipal Court of Manila. 3
January 14, 1960. Deputy Sheriff Liberato C. Manalo of Rizal notified
defendant of the issuance of the writ of execution dated January 7, 1960, and
demanded payment of the amount set forth therein. The Sheriff's return to
the writ shows that in response to such demand, defendant alleged that he
was then "financially hard up," 4 and that the Sheriff found no property that
could be subject to execution.
January 30, 1962. An alias writ of execution was issued. Copy thereof was
received by defendant on February 9, 1962.
February 1, 1962. The Deputy Sheriff attached and levied on a residential
house located in Caloocan City and purportedly belonging to defendant.
February 20, 1962. Two years and two months after defendant admittedly
learned of the lower court's decision from counsel for plaintiffs herein, said
defendant, by counsel, filed a verified motion in the same case praying for the
annulment of the entire proceedings. His ground is this: Summons was not
duly served upon him "as provided under Sec. 7, Rule 7 of the Rules of Court";
5 accordingly, the lower court "did not acquire jurisdiction over his person",
and "the trial and decision by default" are "null and void," 6
March 3, 1962. The court denied this motion.
March 24, 1962. Defendant's move to reconsider was rejected by the court.
Hence, this appeal from the orders of March 3 and March 24, 1962, duly
certified to this Court by the Court of Appeals.
September 2, 1965. After the case was submitted for decision, defendant's
lawyer informed this Court of the death of defendant on August 1, 1965.
October 18, 1967. Following extensive efforts to have the deceased defendant
substituted by any of his heirs or the executor or administrator of his estate,
which were to no avail, this Court appointed the Clerk of Court of the Court of
First Instance of Manila, representative of the deceased defendant.
1. A question of transcendental importance which necessarily
involves an inquiry into procedural due process is whether summons in a suit
in personam against a resident of the Philippines temporarily absent
therefrom may be validly effected by substituted service under Section 8, Rule
14 (formerly Section 8, Rule 7) of the Rules of Court. A head on collision of
views becomes inevitable considering the diametrically opposing positions
taken by plaintiffs, on the one hand, and defendant, on the other. For,
plaintiffs make the point that even with defendant temporarily abroad,
substituted service is valid under Section 8 by leaving a copy of the summons
"at the defendant's dwelling house or residence with some person of suitable
age and discretion then residing therein."
Plaintiffs argue that if the ordinary method prescribed by the rules, that is,
personal service under Section 7, Rule 14, is not feasible, then the substituted
service in Section 8 aforesaid comes into play. Section 8 says:
"SEC. 8. Substituted service. — If 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 dwelling house or
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."
Upon the other hand, defendant advances the theory that in a situation like
the present, where defendant was temporarily abroad, the sole and exclusive
method of service of summons in a case in personam is that set forth in Section
18, Rule 14 of the Rules (formerly Section 18, Rule 7), which reads:
"SEC. 18. 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 effected out
of the Philippines, as under the preceding section." 7
Section 17 referred to in Section 18 (Section 17, Rule 7 in the old Rules) in turn
states:
"SEC. 17. 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 7; 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."
Historically, in its common-law origin, the jurisdiction of courts to render
judgments in personam was grounded on their de facto power over
defendant's person. Jurisdiction was based on the power to seize and imprison
defendant. 8 If a defendant was absent from the territory, the fact that he was
a citizen would not enable the court's officers to seize him and service could
not represent this power. 9 Hence, his presence within the territorial
jurisdiction was a pre- requisite to the rendition of a judgment personally
binding against him. Anglo-American law then emphasized the power concept
of jurisdiction. 10
Continental law, however, was somewhat different. It had two fundamental
principles of Roman origin: (1) in suits in personam and those relating to
movables, courts of the domicile of the defendant have general jurisdiction —
actor rei forum sequitur; and (2) in actions concerning immovables, the courts
of the situs have exclusive jurisdiction. 11
In the development of the law, the variance between Anglo- American law and
continental law became "less and less clear-cut" because "American law has
had to yield to the increasing necessity of enlarging more and more the
catalogue of forums available to the plaintiff." 12
Thus it is, that American cases forged the doctrine, now long recognized, that
domiciliaries of a state, though temporarily out of its territorial jurisdiction,
are always amenable to suits in personam therein. 13 And this precept is the
foundation for the American rule that declares substituted service binding on
absent residents. The leading case of Milliken vs. Meyer, 14 furnishes the
rationale:
" . . . the authority of a state over one of its citizens is not terminated by the
mere fact of his absence from the state. The state which accords him privileges
and affords protection to him and his property by virtue of his domicile may
also exact reciprocal duties. 'Enjoyment of the privileges of residence within
the state and the attendant right to invoke the protection of its laws, are
inseparable' from the various incidences of state citizenship . . . The
responsibilities of that citizenship arise out of the relationship to the state
which domicile creates. That relationship is not dissolved by mere absence
from the state. The attendant duties, like the rights and privileges incident to
domicile, are not dependent on continuous presence in the state. One such
incident of domicile is amenability to suit within the state even during sojourns
63
without the state, where the state has provided and employed e reasonable
method for apprising such an absent party of the proceedings against him."
There should be no doubt, therefore, that in suits in personam, courts have
jurisdiction over residents temporarily out of the country.
This brings us to the question of procedural due process. Substituted service
such as one contemplated in Section 8 upon a temporarily absent resident, it
has been held, is wholly adequate to meet the requirements of due process.
15 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.
In American jurisprudence, whether a defendant be in another state under the
federal system or is abroad in Europe, 16 substituted service is still considered
to be valid. 17 The language in Milliken vs. Meyer, supra, is expressive: "Its
adequacy so far as due process is concerned is dependent on whether or not
the form of substituted service provided for such cases and employed is
reasonably calculated to give him actual notice of the proceedings and an
opportunity to be heard. If it is, then traditional notions of fair play and
substantial justice (McDonald vs. Mabee, supra) implicit in due process are
satisfied." 18
When the framers of our Rules adapted Section 8, it is to be implied that they
intended to give the provision the same meaning shaped out by the
jurisprudence of the jurisdiction from whence it was patterned. Section 8 is to
be viewed in the same context it is understood in the American legal system.
The word "defendant" in that provision is to be construed as including any
resident of this country. By comparative construction, Section 8 is to be
applied to all resident defendants — without distinction as to whether he is
physically present in this country or not.
Chief Justice Moran shares this view. Commenting on Section 18, Rule 14, he
states: "Since the defendant is residing in the Philippines, jurisdiction over his
person may be acquired by Philippine courts by substituted service of
summons under section 8. But extraterritorial service is allowed also by leave
of court according to the above provision [Section 18]." 19 Justice Martin
regards the word "residence" in Section 8 as "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 state at the time." 20
This construction is but fair. It is in accord with substantial justice. The burden
on a plaintiff is not to be enlarged with a restrictive construction as desired by
defendant here. Under the rules, a plaintiff, in the initial stage of suit, is merely
required to know the defendant's "dwelling house or residence" or his "office
or regular place of business" — and no more. He is not asked to investigate
where a resident defendant actually is, at the precise moment of filing suit.
Once defendant's dwelling house or residence or office or regular place of
business is known, he can expect valid service of summons to be made on
"some person of suitable age and discretion then residing" in defendant's
dwelling house or residence, or on "some competent person in charge" of his
office or regular place of business. By the terms of the law, plaintiff is not even
duty-bound to see to it that the person upon whom service was actually made
delivers the summons to defendant or informs him about it. The law presumes
that for him.
It is immaterial then that defendant does not in fact receive actual notice. This
will not affect the validity of the service. 21 Accordingly, the defendant may
be charged by a judgment in personam as a result of legal proceedings upon a
method of service which is not personal, "which in fact may not become actual
notice to him," and which may be accomplished in his lawful absence from the
country. 22 For, the rules do not require that papers be served on defendant
personally or a showing that the papers were delivered to defendant by the
person with whom they were left. 23
Reasons for the views just expressed are not wanting. 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 in justice 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.
In the light of the foregoing, we find ourselves unwilling to concede that
substituted service provided in Section 8 may be down- graded as an
ineffective means to bring temporarily absent residents within the reach of
our courts.
As we go back to the case at hand, there is the temporarily absent defendant
who was a parish priest. Summons upon him was served upon Fr. Bautista who
lived in the same convent where defendant resided. Fr. Bautista, we must
assume, is a responsible person. Service upon him is effective.
2. The view we take of this case sweeps away defendant's argument
that Section 18 is the sole provision that governs summons upon a defendant
temporarily absent in an action in personam, as here. Indeed, defendant's
posture strikes at the very language employed by this reglementary provision
cited by him. The word "may" — in the statement in Section 18 that "service
may, by leave of court, be effected out of the Philippines," as under Section 17
— will not support the deduction, without more, that Section 18 is the only
provision controlling in this case. On the contrary, the phraseology of the rule
is a recognition of the fact that substituted service — out of the Philippines —
under Section 17 is but one of the modes of effective service to bring a
defendant in court. And upon the basic concepts under which our rules
governing processes operate, the normal method of service of summons on
one temporarily absent is by substituted service set forth in Section 8. And this,
because personal service outside the country and service by publication are
not ordinary means of summoning defendants.
In practical terms, we perceive that — in suits in personam — the more
circuitous procedure delineated in Sections 17 and 18 is resorted to by a
plaintiff if defendant's dwelling house or residence or place of business in this
country is not known; or, if known, service upon him cannot be had thereat
upon the terms of Section 8. Here, since personal service is impossible, resort
to substituted service becomes a necessity. A comparison between the service
in Section 8 and that in Sections 17 and 18 is beside the point. They both
provide for substituted service. Anyway, as Goodrich observed: "[I]f a
substitute is to be made where an actual personal service is impossible, 'the
best is none too good.'" 24
3. The judgment has long since become final. It enjoys the
presumption of regularity. It is, unless stricken down, entitled to respect. Non
quieta movere. Because "[p]ublic policy and sound practice demand that, at
the risk of occasional errors, judgments of courts should become final at some
definite date fixed by law." 25
The norm of conduct observed by defendant would not, we believe, tilt the
scales of justice in his favor. We go to the background facts. Logic and common
sense tell us that Fr. Bautista who received the summons and who took
64
interest in the case must have informed defendant one way or another of the
suit, at the latest upon his return in October, 1958. By then there was still time
for him to move to set aside the default order of September 20, 1958.
Defendant did not move. It is well to remember also that judgment by default
was not rendered against defendant until June 8, 1959, or almost nine (9)
months after the default order was issued. Again, defendant did nothing.
According to defendant, he learned of that judgment on December 20, 1959.
The full impact of the judgment totalling P34,000 must have by then left an
indelible mark in his mind. A judgment of a court of justice is no piddling
matter. It should not be trifled with. Especially so when the amount is big, as
it is here. That same day — December 20 — his attorney took a hand on the
matter, wrote back plaintiffs refusing payment of the claim. The first writ of
execution was served on defendant on January 14, 1960. That time he did not
pay, because according to the Sheriff's return, defendant then stated that he
was "financially hard up."

Defendant did not bestir himself until February 20, 1962, i.e., not less than two
years and two months after he learned-by his own admission-of the judgment.
And, that was shortly after levy was made on his house in Caloocan. It is in this
factual environment that then CFI Judge Magno Gatmaitan, in his order of
March 24, 1962, correctly observed that 'the Court once again believes that
this solution (denial of the motion to reconsider the appealed order) is just
because of the apparent intentional inaction of defendant since 20 December,
1959."

Indeed, it was not right that defendant should have supinely sat on the
decision, and deliberately disregarded the import thereof. Neither was it
correct for him to have waited so long, slept on his rights, and only put
plaintiffs to task when his own property was threatened because of the levy
and execution thereon.

The decision below may not thus be annulled. Plaintiffs may not be compelled
to file a fresh suit. Because, prejudice to plaintiffs, which could have been
avoided by defendant, will become a reality. The additional expense, trouble
and anxiety need not be essayed. The accident took place on December 16,
1957. The lower court's decision made mention of two eyewitnesses and two
doctors of medicine who testified as to injuries. To bring back those witnesses
to court becomes a serious problem. Plaintiffs will have to search for them and
if found, they may not be able to present to the court a narrative as accurately
as they had done before. Time has an unfortunate tendency of obliterating
occurrences from a witness' memory. Recollections are apt to be blurred.
Human memory can even be treacherous. Lapse of time may also carry with it
dissipation of other evidence. Surely, there is great validity to the statement
that the march of time is truth in flight. 26 These, in broad outlines, give life to
the salutary policy on which laches is founded.

WHEREFORE, the orders appealed from dated March 3, 1962 and March 24,
1962 are hereby affirmed.

Costs against defendant-appellant. So Ordered.

Reyes, J.B.L., Actg. C.J., Dizon, Bengzon, J.P., Zaldivar, Castro and Angeles, JJ.,
concur.

Makalintal, J., concurs in the result.

Concepcion, C.J., is on leave.

Fernando, J., did not take part.

65
SECOND DIVISION
[G.R. No. 159590. October 18, 2004.]
HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, petitioner,
vs. CECILIA DIEZ CATALAN, respondent.
[G.R. No. 159591. October 18, 2004.]
HSBC INTERNATIONAL TRUSTEE LIMITED, petitioner, vs. CECILIA DIEZ
CATALAN, respondent.
Romulo Mabanta Buenaventura Sayoc & Delos Angeles for petitioner.
The Law Firm of Mirano and Mirano for respondent.
SYNOPSIS
Respondent filed a complaint for sum of money with damages against
petitioner Hongkong and Shanghai Banking Corporation Limited (HSBANK) due
to its alleged wanton refusal to pay her the value of five HSBANK checks issued
by Frederick Arthur Thomson. HSBANK filed a Motion for Extension of Time to
File Answer or Motion to Dismiss. Subsequently, it filed a Motion to Dismiss.
Respondent filed an Amended Complaint impleading petitioner HSBC TRUSTEE,
a foreign corporation, as co-defendant for the baseless rejection of
respondent's claim. HSBANK filed a Motion to Dismiss Amended Complaint.
Meanwhile, summons for HSBC TRUSTEE was tendered to the In-House
Counsel of HSBANK, Makati Branch. Without submitting itself to the
jurisdiction of the trial court, HSBC TRUSTEE filed a Special Appearance for
Motion to Dismiss Amended Complaint questioning its jurisdiction over it. The
trial court denied the two motions. HSBANK and HSBC TRUSTEE filed separate
motions for reconsideration, but both were denied. HSBANK and HSBC
TRUSTEE filed separate petitions for certiorari and/or prohibition with the
Court of Appeals (CA). Subsequently, HSBANK and HSBC TRUSTEE filed before
the trial court separate Answers ad cautelam, as a precaution against being
declared in default and without prejudice to the separate petitions for
certiorari and/or prohibition then pending with the CA. In a consolidated
decision, the CA dismissed the two petitions for certiorari. Hence, these
present petitions. IcDHaT
The Supreme Court ruled that the gross inaction of HSBANK and its failure to
inform respondent of the reason for its continued inaction and non-payment
of the checks were sufficient statements of clear abuse of right for which it
may be held liable to respondent for any damages she incurred resulting
therefrom. Likewise, HSBC TRUSTEE's act of summarily disapproving
respondent's claim without any valid reason was in violation of the
prescription for human conduct enshrined in Article 19 of the Civil Code. As to
the issue on forum-shopping, the Court held that the requisites were not duly
established in case at bar.
The Court also ruled that HSBANK effectively submitted voluntarily to the
jurisdiction of the trial court by filing motions seeking affirmative relief.
However, the filing by HSBC TRUSTEE of a motion to dismiss cannot be
considered a voluntary submission to the jurisdiction of the trial court. It was
a conditional appearance, entered precisely to question the regularity of the
service of summons. There was no allegation in the amended complaint that
HSBANK is a domestic agent of HSBC TRUSTEE to warrant service of summons
upon it. Thus, the summons tendered to the In House Counsel of HSBANK
(Makati Branch) for HSBC TRUSTEE was clearly improper. There being no
proper service of summons, the trial court cannot take cognizance of the case
against HSBC TRUSTEE for lack of jurisdiction over it. AHacIS
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; CAUSE OF ACTION;
FAILURE TO STATE A CAUSE OF ACTION, HOW DETERMINED. — The
elementary test for failure to state a cause of action is whether the complaint
alleges facts which if true would justify the relief demanded. Stated otherwise,
may the court render a valid judgment upon the facts alleged therein? The
inquiry is into the sufficiency, not the veracity of the material allegations. If the
allegations in the complaint furnish sufficient basis on which it can be
maintained, it should not be dismissed regardless of the defense that may be
presented by the defendants.
2. CIVIL LAW; ABUSE OF RIGHTS PRINCIPLE; ELEMENTS; CASE AT BAR.
— Catalan anchors her complaint for damages on Article 19 of the Civil Code.
It speaks of the fundamental principle of law and human conduct that a person
"must, in the exercise of his rights and in the performance of his duties, act
with justice, give every one his due, and observe honesty and good faith." It
sets the standards which may be observed not only in the exercise of one's
rights but also in the performance of one's duties. 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 held responsible. But a right, though by itself legal
because recognized or granted by law as such, may nevertheless become the
source of some illegality. A person should be protected only when he acts in
the legitimate exercise of his right, that is, when he acts with prudence and in
good faith; but not when he acts with negligence or abuse. There is an abuse
of right when it is exercised for the only purpose of prejudicing or injuring
another. The exercise of a right must be in accordance with the purpose for
which it was established, and must not be excessive or unduly harsh; there
must be no intention to injure another. Thus, in order to be liable under the
abuse of rights principle, three elements must concur, to wit: (a) that there is
a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole
intent of prejudicing or injuring another. aTHCSE
3. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; FORUM-SHOPPING;
ELEMENTS. — It has been held that forum-shopping exists where a litigant
sues the same party against whom another action or actions for the alleged
violation of the same right and the enforcement of the same relief is/are still
pending, the defense of litis pendentia in one case is a bar to the others; and,
a final judgment in one would constitute res judicata and thus would cause the
dismissal of the rest. Thus, there is forum-shopping when there exist: a)
identity of parties, or at least such parties as represent the same interests in
both actions, b) identity of rights asserted and relief prayed for, the relief being
founded on the same facts, and c) the identity of the two preceding particulars
is such that any judgment rendered in the pending case, regardless of which
party is successful would amount to res judicata in the other.
4. ID.; ID.; ID.; JURISDICTION OVER A PERSON; HOW ACQUIRED. —
The Rules of Court provides that a court generally acquires jurisdiction over a
person through either a valid service of summons in the manner required by
law or the person's voluntary appearance in court. CEDScA
5. ID.; ID.; ID.; ID.; FILING OF MOTIONS SEEKING AFFIRMATIVE RELIEF,
CONSIDERED VOLUNTARY SUBMISSION TO THE JURISDICTION OF THE COURT;
CASE AT BAR. — It must be noted that HSBANK initially filed a Motion for
Extension of Time to File Answer or Motion to Dismiss. HSBANK already
invoked the RTC's jurisdiction over it by praying that its motion for extension
of time to file answer or a motion to dismiss be granted. The Court has 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. Consequently, HSBANK's
expressed reservation in its Answer ad cautelam that it filed the same "as a
mere precaution against being declared in default, and without prejudice to
the Petition for Certiorari and/or Prohibition . . . now pending before the Court
of Appeals" to assail the jurisdiction of the RTC over it is of no moment. Having
earlier invoked the jurisdiction of the RTC to secure affirmative relief in its
motion for additional time to file answer or motion to dismiss, HSBANK,
effectively submitted voluntarily to the jurisdiction of the RTC and is thereby
estopped from asserting otherwise, even before this Court.
6. ID.; ID.; ID.; ID.; A PARTY WHO MAKES SPECIAL APPEARANCE IN
COURT CHALLENGING ITS JURISDICTION CANNOT BE CONSIDERED TO HAVE
66
SUBMITTED HIMSELF TO THE JURISDICTION OF THE COURT; CASE AT BAR. —
It is settled that a party who makes a special appearance in court challenging
the jurisdiction of said court, e.g., invalidity of the service of summons, cannot
be considered to have submitted himself to the jurisdiction of the court. HSBC
TRUSTEE has been consistent in all its pleadings in assailing the service of
summons and the jurisdiction of the RTC over it. Thus, HSBC TRUSTEE cannot
be declared in estoppel when it filed an Answer ad cautelam before the RTC
while its petition for certiorari was pending before the CA. Such answer did
not render the petition for certiorari before the CA moot and academic. The
Answer of HSBC TRUSTEE was only filed to prevent any declaration that it had
by its inaction waived the right to file responsive pleadings. caDTSE
DECISION
AUSTRIA-MARTINEZ, J p:
Before us are two petitions for review on certiorari under Rule 45 of the Rules
of Court separately filed by the Hongkong and Shanghai Banking Corporation
Limited (HSBANK) and HSBC International Trustee Limited (HSBC TRUSTEE).
They seek the reversal of the consolidated Decision, 1 dated August 14, 2003,
of the Court of Appeals (CA) in CA-G.R. SP Nos. 75756 and 75757, which
dismissed the petitions for certiorari of herein petitioners assailing the Order,
dated May 15, 2002, of the Regional Trial Court, Branch 44, Bacolod City (RTC)
in Civil Case No. 01-11372 that denied their respective motions to dismiss the
amended complaint of respondent Cecilia Diez Catalan. CITcSH
The factual antecedents are as follows:
On January 29, 2001, respondent filed before the RTC, a complaint for a sum
of money with damages against petitioner HSBANK, docketed as Civil Case No.
01-11372, due to HSBANK's alleged wanton refusal to pay her the value of five
HSBANK checks issued by Frederick Arthur Thomson (Thomson) amounting to
HK$3,200,000.00. 2
On February 7, 2001, summons was served on HSBANK at the Enterprise
Center, Tower I, Ayala Avenue corner Paseo de Roxas St., Makati City. 3
HSBANK filed a Motion for Extension of Time to File Answer or Motion to
Dismiss dated February 21, 2001. 4 Then, it filed a Motion to Dismiss, dated
March 8, 2001, on the grounds that (a) the RTC has no jurisdiction over the
subject matter of the complaint; (b) the RTC has not acquired jurisdiction for
failure of the plaintiff to pay the correct filing or docket fees; (c) the RTC has
no jurisdiction over the person of HSBANK; (d) the complaint does not state a
cause of action against HSBANK; and (e) plaintiff engages in forum-shopping.
5 explanation whatsoever was made why her claim was disapproved, neither
On September 10, 2001, Catalan filed an Amended Complaint impleading
petitioner HSBC TRUSTEE as co-defendant and invoking Article 19 of the Civil
Code as basis for her cause of action. 6
The Amended Complaint alleges:
Defendants HSBANK and HSBC TRUSTEE, doing business in the Philippines, are
corporations duly organized under the laws of the British Virgin Islands with
head office at 1 Grenville Street, St. Helier Jersey, Channel Islands and with
branch offices at Level 12, 1 Queen's Road Central, Hongkong and may be
served with summons and other court processes through their main office in
Manila with address at HSBC, the Enterprise Center, Tower 1, Ayala Avenue
corner Paseo de Roxas Street, Makati City. TECcHA
Sometime in March 1997, Thomson issued five HSBANK checks payable to
Catalan, to wit:
CHECK NO.DATE AMOUNT
807852 Mar. 15, 1997 $600,000.00
807853 Mar. 17, 1997 800,000.00
807854 Mar. 17, 1997 600,000.00
807855 Mar. 22, 1997 600,000.00
807856 Mar. 23, 1997 600,000.00
–––––––––––
TOTAL $3,200,000.00
==========
The checks when deposited were returned by HSBANK purportedly for reason
of "payment stopped" pending confirmation, despite the fact that the checks
were duly funded. On March 18, 1997, Thomson wrote a letter to a certain
Ricky Sousa 7 of HSBANK confirming the checks he issued to Catalan and
requesting that all his checks be cleared. On March 20, 1997, Thomson wrote
another letter to Sousa of HSBANK requesting an advice in writing to be sent
to the Philippine National Bank, through the fastest means, that the checks he
previously issued to Catalan were already cleared. Thereafter, Catalan
demanded that HSBANK make good the checks issued by Thomson. On May
16, 1997, Marilou A. Lozada, personal secretary and attorney-in-fact of
Thomson, wrote a letter to Sousa of HSBANK informing him that HSBANK's
failure to clear all the checks had saddened Thomson and requesting that the
clearing of the checks be facilitated. Subsequently, Thomson died and Catalan
forwarded her demand to HSBC TRUSTEE. Catalan sent photocopies of the
returned checks to HSBC TRUSTEE. Not satisfied, HSBC TRUSTEE through
deceit and trickery, required Catalan, as a condition for the acceptance of the
checks, to submit the original copies of the returned checks, purportedly, to
hasten payment of her claim. HSBC TRUSTEE succeeded in its calculated
deception because on April 21, 1999, Catalan and her former counsel went to
Hongkong at their own expense to personally deliver the originals of the
returned checks to the officers of HSBC TRUSTEE, anxious of receiving the
money value of the checks but HSBC TRUSTEE despite receipt of the original
checks, refused to pay Catalan's claim. Having seen and received the original
of the checks, upon its request, HSBC TRUSTEE is deemed to have impliedly
accepted the checks. Moreover, the refusal of HSBANK and HSBC TRUSTEE to
pay the checks is equivalent to illegal freezing of one's deposit. On the
assurance of HSBC TRUSTEE that her claim will soon be paid, as she was made
to believe that payments of the checks shall be made by HSBC TRUSTEE "upon
sight," the unsuspecting Catalan left the originals of the checks with HSBC
TRUSTEE and was given only an acknowledgment receipt. Catalan made
several demands and after several more follow ups, on August 16, 1999,
Phoenix Lam, Senior Vice President of HSBC TRUSTEE, in obvious disregard of
her valid claim, informed Catalan that her claim is disapproved. No reason or
were the checks returned to her. Catalan appealed for fairness and
understanding, in the hope that HSBC TRUSTEE would act fairly and justly on
her claim but these demands were met by a stonewall of silence. On June 9,
2000, Catalan through counsel sent a last and final demand to HSBC TRUSTEE
to remit the amount covered by the checks but despite receipt of said letter,
no payment was made. Clearly, the act of the HSBANK and HSBC TRUSTEE in
refusing to honor and pay the checks validly issued by Thomson violates the
abuse of rights principle under Article 19 of the Civil Code which requires that
everyone must act with justice, give everyone his due and observe honesty
and good faith. The refusal of HSBANK and HSBC TRUSTEE to pay the checks
without any valid reason is intended solely to prejudice and injure Catalan.
When they declined payment of the checks despite instructions of the drawer,
Thomson, to honor them, coupled with the fact that the checks were duly
funded, they acted in bad faith, thus causing damage to Catalan. A person may
not exercise his right unjustly or in a manner that is not in keeping with
honesty or good faith, otherwise he opens himself to liability for abuse of right.
8
Catalan prays that HSBANK and HSBC TRUSTEE be ordered to pay
P20,864,000.00 representing the value of the five checks at the rate of P6.52
per HK$1 as of January 29, 2001 for the acts of HSBANK and HSBC TRUSTEE in
refusing to pay the amount justly due her, in addition to moral and exemplary
damages, attorney's fees and litigation expenses. 9
67
On October 2, 2001, HSBANK filed a Motion to Dismiss Amended Complaint
on the grounds that: (a) the RTC has no jurisdiction over the subject matter of
the complaint since the action is a money claim for a debt contracted by
Thomson before his death which should have been filed in the estate or
intestate proceedings of Thomson; (b) Catalan engages in forum shopping by
filing the suit and at the same time filing a claim in the probate proceeding
filed with another branch of the RTC; (c) the amended complaint states no
cause of action against HSBANK since it has no obligation to pay the checks as
it has not accepted the checks and Catalan did not re-deposit the checks or
make a formal protest; (d) the RTC has not acquired jurisdiction over the
person of HSBANK for improper service of summons; and, (e) it did not submit
to the jurisdiction of the RTC by filing a motion for extension of time to file a
motion to dismiss. 10
Meanwhile, on October 17, 2001, summons for HSBC TRUSTEE was tendered
to the In House Counsel of HSBANK (Makati Branch) at the Enterprise Center,
Tower 1, Ayala Avenue corner Paseo de Roxas, Makati. Without submitting
itself to the jurisdiction of the RTC, HSBC TRUSTEE filed a Special Appearance
for Motion to Dismiss Amended Complaint, dated October 29, 2001,
questioning the jurisdiction of the RTC over it. 11 HSBC TRUSTEE alleges that
tender of summons through HSBANK Makati did not confer upon the RTC
jurisdiction over it because: (a) it is a corporation separate and distinct from
HSBANK; (b) it does not hold office at the HSBANK Makati or in any other place
in the Philippines; (c) it has not authorized HSBANK Makati to receive
summons for it; and, (d) it has no resident agent upon whom summons may
be served because it does not transact business in the Philippines. HTCDcS
Subsequently, HSBC TRUSTEE filed a Submission, dated November 15, 2001,
attaching the Affidavit executed in Hongkong by Phoenix Lam, Senior Vice-
President of HSBC TRUSTEE, attesting to the fact that: 1) HSBC TRUSTEE has
not done nor is it doing business in the Philippines; 2) it does not maintain any
office in Makati or anywhere in the Philippines; 3) it has not appointed any
agent in Philippines; and 4) HSBANK Makati has no authority to receive any
summons or court processes for HSBC TRUSTEE. 12
On May 15, 2002, the RTC issued an Order denying the two motions to dismiss.
13 The RTC held that it has jurisdiction over the subject matter of the action
because it is an action for damages under Article 19 of the Civil Code for the
acts of unjustly refusing to honor the checks issued by Thomson and not a
money claim against the estate of Thomson; that Catalan did not engage in
forum-shopping because the elements thereof are not attendant in the case;
that the question of cause of action should be threshed out or ventilated
during the proceedings in the main action and after the plaintiff and
defendants have adduced evidence in their favor; that it acquired jurisdiction
over the person of defendants because the question of whether a foreign
corporation is doing business or not in the Philippines cannot be a subject of a
Motion to Dismiss but should be ventilated in the trial on the merits; and
defendants voluntarily submitted to the jurisdiction of the RTC setting up in
their Motions to Dismiss other grounds aside from lack of jurisdiction. TIaCcD
HSBANK and HSBC TRUSTEE filed separate motions for reconsideration 14 but
both proved futile as they were denied by the RTC in an Order dated December
20, 2002. 15
On February 21, 2003, Catalan moved to declare HSBANK and HSBC TRUSTEE
in default for failure to file their answer to the amended complaint.
On March 5, 2003, HSBANK and, HSBC TRUSTEE filed separate petitions for
certiorari and/or prohibition with the CA, docketed as CA-G.R. SP Nos. 75756
16 and 75757, 17 respectively.
Subsequently, HSBANK and HSBC TRUSTEE filed before the RTC separate
Answers ad cautelam, both dated March 18, 2003, as a "precaution against
being declared in default and without prejudice to the separate petitions for
certiorari and/or prohibition then pending with the CA." 18
Meanwhile, the two petitions for certiorari before the CA were consolidated
and after responsive pleadings were filed, the cases were deemed submitted
for decision. DEcTIS
In a consolidated Decision dated August 14, 2003, the CA dismissed the two
petitions for certiorari. 19 The CA held that the filing of petitioners' answers
before the RTC rendered moot and academic the issue of the RTC's lack of
jurisdiction over the person of the petitioners; that the RTC has jurisdiction
over the subject matter since it is one for damages under Article 19 of the Civil
Code for the alleged unjust acts of petitioners and not a money claim against
the estate of Thomson; and, that the amended complaint states a cause of
action under Article 19 of the Civil Code which could merit a favorable
judgment if found to be true. The CA noted that Catalan may have prayed for
payment of the value of the checks but ratiocinated that she merely used the
value as basis for the computation of the damages.
Hence, the present petitions.
In G.R. No. 159590, HSBANK submits the following assigned errors:
I.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE
COURT A QUO, ACTING AS AN (SIC) REGULAR COURT, HAS JURISDICTION OVER
THE AMENDED COMPLAINT SEEKING TO ORDER HSBC TRUSTEE, THE
EXECUTOR OF THE DECEASED FREDERICK ARTHUR THOMSON, TO PAY
SUBJECT CHECKS ISSUED BY THE LATE FREDERICK ARTHUR THOMSON,
ADMITTEDLY IN PAYMENT OF HIS INDEBTEDNESS TO CATALAN. CTAIDE
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE
AMENDED COMPLAINT DOES NOT SEEK TO ORDER HSBANK AND HSBC
INTERNATIONAL TRUSTEE LIMITED TO PAY THE OBLIGATION OF THE (SIC)
FREDERICK ARTHUR THOMSON AS EVIDENCED BY THE CHECKS, BUT PRAYS
FOR DAMAGES EQUIVALENT OR COMPUTED ON THE BASIS OF THE VALUE OF
THE CHECKS BECAUSE THE DEFENDANTS FAILED TO COMPLY WITH THE
MANDATES OF ARTICLE 19 OF THE NEW CIVIL CODE.
III.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT
ALLEGATIONS IN THE AMENDED COMPLAINT MAKE OUT A CAUSE OF ACTION
WHICH COULD MERIT A FAVORABLE JUDGMENT IF FOUND TO BE TRUE, OR IN
NOT HOLDING THAT THE AMENDED COMPLAINT STATES NO CAUSE OF
ACTION AGAINST HSBANK, AS DRAWEE BANK.
IV.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN DISREGARDING THE
FACT THAT CATALAN ENGAGED IN FORUM SHOPPING BY FILING THE
AMENDED COMPLAINT WHILE HER PETITION FOR THE PROBATE OF THE
SUPPOSED WILL OF THE DECEASED FREDERICK ARTHUR THOMSON IS
PENDING WITH ANOTHER BRANCH OF THE COURT A QUO. aCTHDA
V.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT
HSBANK HAD SUBMITTED TO THE JURISDICTION OF THE COURT A QUO BY
SUBMITTING AN ANSWER TO THE AMENDED COMPLAINT. 20
In G.R. No. 159591, HSBC TRUSTEE also assigns the foregoing first, second and
fifth errors as its own. 21 In addition, it claims that:
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT ORDERING THE
DISMISSAL OF THE AMENDED COMPLAINT AGAINST HSBC TRUSTEE DESPITE
THE FACT IT HAS NOT BEEN DULY SERVED WITH SUMMONS. 22
68
HSBANK and HSBC TRUSTEE contend in common that Catalan has no cause of
action for abuse of rights under Article 19 of the Civil Code; that her complaint,
under the guise of a claim for damages, is actually a money claim against the
estate of Thomson arising from checks issued by the latter in her favor in
payment of indebtedness. aSTHDc
HSBANK claims that the money claim should be dismissed on the ground of
forum-shopping since Catalan also filed a petition for probate of the alleged
last will of Thomson before RTC, Branch 48, Bacolod City, docketed as Spec.
Proc No. 00-892. In addition, HSBANK imputes error upon the CA in holding
that by filing an answer to the amended complaint, petitioners are estopped
from questioning the jurisdiction of the RTC.
HSBC TRUSTEE maintains that the RTC did not acquire jurisdiction over it for
improper service of summons.
In her Comment, Catalan insists that her complaint is one for damages under
Article 19 of the Civil Code for the wanton refusal to honor and pay the value
of five checks issued by the Thomson amounting to HK$3,200,000.00. She
argues that the issue of jurisdiction has been rendered moot by petitioners'
participation in the proceedings before the RTC.
Succinctly, the issues boil down to the following:
1) Does the complaint state a cause of action? CHcESa
2) Did Catalan engage in forum-shopping by filing the complaint for
damages when she also filed a petition for probate of the alleged last will of
Thomson with another branch of the RTC? and,
3) Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?
Corollary thereto, did the filing of the answer before the RTC render the issue
of lack of jurisdiction moot and academic?
We shall resolve the issue in seriatim.
Does the complaint state a cause of action against HSBANK and HSBC
TRUSTEE?
The elementary test for failure to state .a cause of action is whether the
complaint alleges facts which if true would justify the relief demanded. Stated
otherwise, may the court render a valid judgment upon the facts alleged
therein? 23 The inquiry is into the sufficiency, not the veracity of the material
allegations. 24 If the allegations in the complaint furnish sufficient basis on
which it can be maintained, it should not be dismissed regardless of the
defense that may be presented by the defendants. 25
Catalan anchors her complaint for damages on Article 19 of the Civil Code. It
speaks of the fundamental principle of law and human conduct that a person
"must, in the exercise of his rights and in the performance of his duties, act
with justice, give every one his due, and observe honesty and good faith." It
sets the standards which may be observed not only in the exercise of one's
rights but also in the performance of one's duties. 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 held responsible. 26 But a right, though by itself legal
because recognized or granted by law as such, may nevertheless become the
source of some illegality. A person should be protected only when he acts in
the legitimate exercise of his right, that is, when he acts with prudence and in
good faith; but not when he acts with negligence or abuse. 27 There is an
abuse of right when it is exercised for the only purpose of prejudicing or
injuring another. The exercise of a right must be in accordance with the
purpose for which it was established, and must not be excessive or unduly
harsh; there must be no intention to injure another. 28
Thus, in order to be liable under the abuse of rights principle, three elements
must concur, to wit: (a) that there is a legal right or duty; (b) which is exercised
in bad faith; and (c) for the sole intent of prejudicing or injuring another. 29
In this instance, after carefully examining the amended complaint, we are
convinced that the allegations therein are in the nature of an action based on
tort under Article 19 of the Civil Code. It is evident that Catalan is suing
HSBANK and HSBC TRUSTEE for unjustified and willful refusal to pay the value
of the checks. DASCIc
HSBANK is being sued for unwarranted failure to pay the checks
notwithstanding the repeated assurance of the drawer Thomson as to the
authenticity of the checks and frequent directives to pay the value thereof to
Catalan. Her allegations in the complaint that the gross inaction of HSBANK on
Thomson's instructions, as well as its evident failure to inform Catalan of the
reason for its continued inaction and non-payment of the checks, smack of
insouciance on its part, are sufficient statements of clear abuse of right for
which it may be held liable to Catalan for any damages she incurred resulting
therefrom. HSBANK's actions, or lack thereof, prevented Catalan from seeking
further redress with Thomson for the recovery of her claim while the latter
was alive.
HSBANK claims that Catalan has no cause of action because under Section 189
of the Negotiable Instruments Law, "a check of itself does not operate as an
assignment of any part of the funds to the credit of the drawer with the bank,
and the bank is not liable to the holder unless and until it accepts or certifies
it." However, HSBANK is not being sued on the value of the check itself but for
how it acted in relation to Catalan's claim for payment despite the repeated
directives of the drawer Thomson to recognize the check the latter issued.
Catalan may have prayed that she be paid the value of the checks but it is
axiomatic that what determines the nature of an action, as well as which court
has jurisdiction over it, are the allegations of the complaint, irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein. 30
Anent HSBC TRUSTEE, it is being sued for the baseless rejection of Catalan's
claim. When Catalan parted with the checks as a requirement for the
processing of her claim, even going to the extent of traveling to Hongkong to
deliver personally the checks, HSBC TRUSTEE summarily disapproved her claim
with nary a reason. HSBC TRUSTEE gave no heed to Catalan's incessant appeals
for an explanation. Her pleas fell on deaf and uncaring corporate ears. Clearly,
HSBC TRUSTEE's acts are anathema to the prescription for human conduct
enshrined in Article 19 of the Civil Code. TIaCHA
Did Catalan engage in forum-shopping?
It has been held that forum-shopping exists where a litigant sues the same
party against whom another action or actions for the alleged violation of the
same right and the enforcement of the same relief is/are still pending, the
defense of litis pendentia in one case is a bar to the others; and, a final
judgment in one would constitute res judicata and thus would cause the
dismissal of the rest. 31
Thus, there is forum-shopping when there exist: a) identity of parties, or at
least such parties as represent the same interests in both actions, b) identity
of rights asserted and relief prayed for, the relief being founded on the same
facts, and c) the identity of the two preceding particulars is such that any
judgment rendered in the pending case, regardless of which party is successful
would amount to res judicata in the other. 32
Applying the foregoing requisites to the case before us in relation to Spec. Proc
No. 00-892, the probate proceeding brought by Catalan before RTC, Branch 48,
Bacolod City, it is obvious that forum-shopping does not exist.
There is no identity of parties. HSBANK is not a party in the probate proceeding.
HSBC TRUSTEE is only a party in the probate proceeding because it is the
executor and trustee named in the Hongkong will of Thomson. HSBC TRUSTEE
69
is representing the interest of the estate of Thomson and not its own
corporate interest. CcTIDH
With respect to the second and third requisites, a scrutiny of the entirety of
the allegations of the amended complaint in this case reveals that the rights
asserted and reliefs prayed for therein are different from those pleaded in the
probate proceeding, such that a judgment in one case would not bar the
prosecution of the other case. Verily, there can be no forum-shopping where
in one proceeding a party raises a claim for damages based on tort and, in
another proceeding a party seeks the allowance of an alleged last will based
on one's claim as an heir. After all, the merits of the action for damages is not
to be determined in the probate proceeding and vice versa. Undeniably, the
facts or evidence as would support and establish the two causes of action are
not the same. 33 Consequently, HSBANK's reliance on the principle of forum-
shopping is clearly misplaced.
Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?
The Rules of Court provides that a court generally acquires jurisdiction over a
person through either a valid service of summons in the manner required by
law or the person's voluntary appearance in court. 34
In holding that it acquired jurisdiction over HSBANK and HSBC TRUSTEE, the
RTC held that both voluntarily submitted to the jurisdiction of the court by
setting up in their Motions to Dismiss other grounds aside from lack of
jurisdiction. On the other hand, the CA ruled that HSBANK and HSBC TRUSTEE
are estopped from challenging the jurisdiction of the RTC because they filed
their respective answers before the RTC. HEDCAS
We find that both lower courts overlooked Section 20 of Rule 14 of the 1997
Rules of Civil Procedure which provides that "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." Nonetheless, such
omission does not aid HSBANK's case.
It must be noted that HSBANK initially filed a Motion for Extension of Time to
File Answer or Motion to Dismiss. 35 HSBANK already invoked the RTC's
jurisdiction over it by praying that its motion for extension of time to file
answer or a motion to dismiss be granted. The Court has 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. 36 Consequently, HSBANK's
expressed reservation in its Answer ad cautelam that it filed the same "as a
mere precaution against being declared in default, and without prejudice to
the Petition for Certiorari and/or Prohibition . . . now pending before the Court
of Appeals" 37 to assail the jurisdiction of the RTC over it is of no moment.
Having earlier invoked the jurisdiction of the RTC to secure affirmative relief in
its motion for additional time to file answer or motion to dismiss, HSBANK,
effectively submitted voluntarily to the jurisdiction of the RTC and is thereby
estopped from asserting otherwise, even before this Court. ECSHID
In contrast, the filing by HSBC TRUSTEE of a motion to dismiss cannot be
considered a voluntary submission to the jurisdiction of the RTC. It was a
conditional appearance, entered precisely to question the regularity of the
service of summons. It is settled that a party who makes a special appearance
in court challenging the jurisdiction of said court, e.g., invalidity of the service
of summons, cannot be considered to have submitted himself to the
jurisdiction of the court. 38 HSBC TRUSTEE has been consistent in all its
pleadings in assailing the service of summons and the jurisdiction of the RTC
over it. Thus, HSBC TRUSTEE cannot be declared in estoppel when it filed an
Answer ad cautelam before the RTC while its petition for certiorari was
pending before the CA. Such answer did not render the petition for certiorari
before the CA moot and academic. The Answer of HSBC TRUSTEE was only filed
to prevent any declaration that it had by its inaction waived the right to file
responsive pleadings.
Admittedly, HSBC TRUSTEE is a foreign corporation, organized and existing
under the laws of the British Virgin Islands. For proper service of summons on
foreign corporations, Section 12 of Rule 14 of the Revised Rules of Court
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. SACEca
In French Oil Mill Machinery Co., Inc. vs. Court of Appeals, 39 we had occasion
to rule that it is not enough to merely allege in the complaint that a defendant
foreign corporation is doing business. For purposes of the rule on summons,
the fact of doing business must first be "established by appropriate allegations
in the complaint" and the court in determining such fact need not go beyond
the allegations therein. 40
The allegations in the amended complaint subject of the present cases did not
sufficiently show the fact of HSBC TRUSTEE's doing business in the Philippines.
It does not appear at all that HSBC TRUSTEE had performed any act which
would give the general public the impression that it had been engaging, or
intends to engage in its ordinary and usual business undertakings in the
country. Absent from the amended complaint is an allegation that HSBC
TRUSTEE had performed any act in the country that would place it within the
sphere of the court's jurisdiction.
We have held that a general allegation, standing alone, that a party is doing
business in the Philippines does not make it so; a conclusion of fact or law
cannot be derived from the unsubstantiated assertions of parties
notwithstanding the demands of convenience or dispatch in legal actions,
otherwise, the Court would be guilty of sorcery; extracting substance out of
nothingness. 41
Besides, there is no allegation in the amended complaint that HSBANK is the
domestic agent of HSBC TRUSTEE to warrant service of summons upon it. Thus,
the summons tendered to the In House Counsel of HSBANK (Makati Branch)
for HSBC TRUSTEE was clearly improper. DcIHSa
There being no proper service of summons, the RTC cannot take cognizance of
the case against HSBC TRUSTEE for lack of jurisdiction over it. Any proceeding
undertaken by the RTC is therefore null and void. 42 Accordingly, the
complaint against HSBC TRUSTEE should have been dismissed for lack of
jurisdiction over it.
WHEREFORE, the petition in G.R. No. 159590 is DENIED. The Decision of the
Court of Appeals, dated August 14, 2003, in CA-G.R. SP No. 75757 dismissing
the petition for certiorari of the Hongkong and Shanghai Banking Corporation
Limited is AFFIRMED.
The petition in G.R. No. 159591 is GRANTED. The Decision of the Court of
Appeals, dated August 14, 2003, in CA-G.R. SP No. 75756 dismissing the
petition for certiorari of the HSBC International Trustee Limited is REVERSED
and SET ASIDE. The Regional Trial Court, Branch 44, Bacolod City is declared
without jurisdiction to take cognizance of Civil Case No. 01-11372 against the
HSBC International Trustee Limited, and all its orders and issuances with
respect to the latter are hereby ANNULLED and SET ASIDE. The said Regional
Trial Court is hereby ORDERED to DESIST from maintaining further proceedings
against the HSBC International Trustee Limited in the case aforestated.
SHaATC
[G.R. No. 97765. September 24, 1992.]
KHOSROW MINUCHER, petitioner, vs. THE HONORABLE COURT OF APPEALS
and ARTHUR W. SCALZO, JR., respondents.
De Leon, De Leon, Casanova Associates for petitioner.
70
Luna, Sison, & Manas for private respondent.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; DISMISSAL OF
ACTION BASED ON ERRONEOUS ASSUMPTION, A GRAVE ABUSE OF
DISCRETION. — While the trial court correctly denied the motion to dismiss,
the public respondent gravely abused its discretion in dismissing Civil Case No.
88-45691 on the basis of an erroneous assumption that simply because of the
Diplomatic Note, the private respondent is clothed with diplomatic immunity,
thereby divesting the trial court of jurisdiction over his person. Private
respondent himself, in his Pre-trial Brief filed on 13 June 1990, unequivocally
states that he would present documentary evidence consisting of DEA records
on his investigation and surveillance of plaintiff and on his position and duties
as DEA special agent in Manila. Having thus reserved his right to present
evidence in support of his position, which is the basis for the alleged diplomatic
immunity, the barren self-serving claim in the belated motion to dismiss
cannot be relied upon for a reasonable, intelligent and fair resolution of the
issue of diplomatic immunity. The public respondent then should have
sustained the trial court's denial of the motion to dismiss. Verily, such should
have been the most proper and appropriate recourse. It should not have been
overwhelmed by the self-serving Diplomatic Note whose belated issuance is
even suspect and whose authenticity has not yet been proved. The undue
haste with which respondent Court yielded to the private respondent's claim
is arbitrary.
2. ID.; ACTIONS; MOTION TO DISMISS; GROUNDS; LACK OF CAUSE OF
ACTION WHERE DEFENDANT IS A DIPLOMAT. — It may at once be stated that
even if the private respondent enjoys diplomatic immunity, a dismissal of the
case cannot be ordered on the ground of lack of jurisdiction over his person,
but rather for lack of a cause of action because even if he committed the
imputed act and could have been otherwise made liable therefor, his
immunity would bar any suit against him in connection therewith and would
prevent recovery of damages arising therefrom.
3. ID.; ID.; JURISDICTION OVER THE PERSON, HOW ACQUIRED; CASE
AT BAR. — Jurisdiction over the person of the defendant is acquired either by
his voluntary appearance or by the service of summons upon him. While in the
instant case, private respondent's counsel filed, on 26 October 1988, a motion
to quash summons because being outside the Philippines and being a non-
resident alien, he is beyond the processes of the court, which was properly
denied by the trial court, he had in effect already waived any defect in the
service of the summons by earlier asking, on two (2) occasions, for an
extension of time to file an answer, and by ultimately filing an Answer with
Counterclaim. There is no question that the trial court acquired jurisdiction
over the person of the private respondent.
4. ID.; ID.; MOTION TO DISMISS; CASE SHOULD NOT BE DISMISSED
WHERE THERE IS SUFFICIENT ALLEGATION OF PERSONAL LIABILITY OF
DEFENDANT; CASE AT BAR. — And now to the core issue — the alleged
diplomatic immunity of the private respondent. Setting aside for the moment
the issue of authenticity raised by the petitioner and the doubts that surround
such a claim, in view of the fact that it took private respondent one (1) year,
eight (8) months and seventeen (17) days from the time his counsel filed on
12 September 1988 a Special Appearance and Motion asking for a first
extension of time to file the Answer because the Departments of State and
Justice of the United States of America were studying the case for the purpose
of determining his defenses, before he could secure the Diplomatic Note from
the U.S. Embassy in Manila, and even granting for the sake of argument that
such note is authentic, the complaint for damages filed by the petitioner still
cannot be peremptorily dismissed. Said complaint contains sufficient
allegations which indicate that the private respondent committed the imputed
acts in his personal capacity and outside the scope of his official duties and
functions. As described in the complaint, he committed criminal acts for which
he is also civilly liable. In the Special Appearance to Quash Summons earlier
alluded to, on the other hand, private respondent maintains that the claim for
damages arose "from an alleged tort." Whether such claim arises from criminal
acts or from tort, there can be no question that private respondent was sued
in his personal capacity for acts committed outside his official functions and
duties. In the decision acquitting the petitioner in the criminal case involving
the violation of the Dangerous Drugs Act, copy of which is attached to his
complaint for damages and which must be deemed as an integral part thereof,
the trial court gave full credit to petitioner's theory that he was a victim of a
frame-up instigated by the private respondent. Thus, there is a prima facie
showing in the complaint that indeed private respondent could be held
personally liable for the acts committed beyond his official functions or duties.
DECISION
DAVIDE, JR., J p:
May a complaint for damages be dismissed on the sole basis of a statement
contained in a Diplomatic Note, belatedly issued after an answer to the said
complaint had already been filed, that the defendant was a member of the
diplomatic staff of the United States Diplomatic Mission in the Philippines at
the time the cause of action accrued?
This is the issue in the instant petition.
On 3 August 1988, petitioner filed with the Regional Trial Court (RTC) of Manila
a complaint for damages against private respondent Arthur Scalzo, Jr. The case
was docketed as Civil Case No. 88-45691 and was raffled off to Branch 19 of
said court. 1 Petitioner alleges therein that he was the Labor Attache of the
Embassy of Iran in the Philippines "prior to the Ayatollah Khomeini regime."
On 13 May 1986, private respondent, then connected with the American
Embassy in Manila, was introduced to him by a certain Jose Iñigo, an informer
belonging to the military intelligence community, with whom petitioner had
several business transactions involving Iranian products like carpets, caviar
and others. Iñigo had previously sought petitioner's assistance in connection
with charges of illegal recruitment. According to Iñigo, private respondent was
purportedly interested in buying Iranian products, namely caviar and carpets.
On this same occasion, petitioner complained to the private respondent about
the problems the former was then encountering with the American Embassy
regarding the expired visas of his wife and fellow Iranian, Abbas Torabian.
Offering his help, private respondent gave the petitioner a calling card showing
that the former is an agent of the Drug Enforcement Administration (DEA),
Department of Justice, of the United States of America assigned to the
American Embassy in Manila with official contacts with a certain Col. Dumlao;
head of the Anti-Narcotics Command, Philippine Constabulary. Private
respondent also expressed his intent to purchase two (2) kilos of caviar worth
P10,000.00 and informed the petitioner that he might have prospective buyers
for these goods; he further promised to arrange for the renewal of the
aforesaid visas for a $2,000.00 fee. On 19 May 1986, private respondent
invited petitioner to dinner at Mario's Restaurant in Makati, Metro Manila; the
petitioner accepted. During the said dinner held the very next day, both
discussed politics and business. Specifically, private respondent told petitioner
that he wanted to purchase an additional two hundred (200) grams of caviar
and inquired about his commission for selling petitioner's carpets; petitioner
promised a 10% commission based on profits. prLL
In the evening of 26 May 1986, private respondent came to petitioner's
residence and asked to be entrusted with a pair of Persian silk carpets with a
floor price of $24,000.00 each, for which he had a buyer. The following day,
private respondent returned to petitioner's residence, took the carpets and
gave the latter $24,000.00; after about an hour, private respondent returned,
claimed that he had already made arrangements with his contacts at the
American Embassy concerning the visas and asked for $2,000.00. He was given
this amount. It turned out, however, that private respondent had prepared an
elaborate plan to frame-up the petitioner and Abbas Torabian for alleged
heroin trafficking; both were falsely arrested by private respondent and some
American and Filipino police officers, and were taken to Camp Crame in their
underwear. Private respondent and his companions took petitioner's three (3)
suitcases containing various documents, his wallet containing money and the
keys to his house and car, as well as the $24,000.00 which private respondent
71
had earlier delivered to him. Petitioner and Torabian were handcuffed
together for three (3) days and were not given food and water; they were
asked to confess to the possession of heroin or else they would be jailed or
even executed by Iranian terrorists. Consequently, the two were charged for
the violation of Section 4 of R.A. No. 6425 (Dangerous Drugs Act of 1972)
before the Regional Trial Court of Pasig. They were, however, acquitted by the
said court on 8 January 1988. Private respondent testified for the prosecution
in the said case.
Petitioner further alleges in his complaint that private respondent falsely
testified against him in the criminal case. The former also avers that charges
of unlawful arrest, robbery and estafa or swindling have already been filed
against the private respondent.
He therefore prays for actual and compensatory damages of not less than
P480,000,00 ($24,000.00) representing the fair market value of the Persian silk
carpet and $2,000.00 representing the refund of the amount he had given for
the visas; moral damages in the amount of P5 million; exemplary damages in
the sum of P100,000.00 and attorney's fees of at least P200,000.00 to answer
for litigation expenses incurred for his defense in the criminal case and for the
prosecution of the civil case. LLphil
On 14 September 1988, private respondent's counsel, the law firm LUNA,
SISON AND MANAS, filed a Special Appearance and Motion alleging therein
that since the private respondent is an agent of the Drug Enforcement
Administration of the United States of America, and the acts and omissions
complained of were performed by him in the performance of official functions,
the case is now under study by the Departments of State and Justice in
Washington, D.C. for the purpose of determining what defenses would be
appropriate; said counsel also prayed that the period to answer be extended
to 13 October 1988. 2 This prayer was granted in the 16 September 1988 order
of the court.
On 12 October 1988, private respondent's aforesaid counsel filed another
Special Appearance and Motion seeking a further extension of the period to
answer to 28 October 1988 because the law firm had not yet received the
decision of the Departments of State and Justice. 3
On 27 October 1988, private respondent's counsel filed a Special Appearance
to Quash Summons 4 alleging therein that: "The action being a personal action
for damages arising from an alleged tort, the defendant being outside the
Philippines and not being a resident of the Philippines, Defendant is beyond
the processes of this court," and praying that the summons issued be quashed.
The trial court denied the motion in its Order of 13 December 1988. 5
Unsatisfied with the said order, private respondent filed a petition for
certiorari with the Court of Appeals which was docketed as C.A.-G R. SP No
17023. In its Decision promulgated on 6 October 1989, the Court of Appeals
dismissed the petition for lack of merit. 6 Respondent thus sought a review of
the said decision by filing a petition with this Court which was docketed as G.R.
No. 91173. Said petition was however, dismissed by this Court in the
Resolution of 20 December 1989 for non-compliance with paragraph 2 of
Circular No. 1-88; moreover, respondent failed to show that the Court of
Appeals had committed any reversible error in the questioned judgment. 7
On 9 March 1990, private respondent filed with the trial court his Answer in
Civil Case No. 88-46591 8 wherein he denies the material allegations in the
complaint, sets forth the following Affirmative Defenses:
"The Complaint fails to state a cause of action: in having plaintiff and Abbas
Torabian arrested on May 27, 1986 and detained at Camp Crame; a quantity
of heroin, seized from plaintiff by Philippine police authorities and in seizing
the money used in the drug transaction, defendant acted in the discharge of
his official duties or otherwise in the performance of his official functions as
agent of the Drug Enforcement Administration, U.S. Department of Justice." 9
and interposes a counterclaim for P100,000.00 to answer for attorney's fees
and the expenses of litigation. LLpr
On 13 June 1990, private respondent filed with the trial court the Defendant's
Pre-Trial Brief, 10 the pertinent portions of which read:s
xxx xxx xxx
"DEFENSES
1. Plaintiff's complaint is false and malicious;
2. In having a quantity of heroin and the money used in the drug
transaction between him and plaintiff seized from plaintiff by P.C. NARCOM,
plaintiff (sic) was acting in the discharge of his official functions as special
agent of the Drug Enforcement Administration, U.S. Department of Justice and
was then a member of the U.S. diplomatic mission in the Philippines.
DEFENDANT'S EVIDENCE
Defendant will present:
1. His testimony by deposition upon written interrogatories because
defendant lives and works outside the Philippines and is not a resident of the
Philippines.
2. Documentary evidence, consisting of DEA records on his
investigation and surveillance of plaintiff and on his position and duties as DEA
special agent in May 1980 in Manila; these will be identified by defendant and
possibly by another DEA official." 11
On 14 June 1990, private respondent filed a Motion to Dismiss 12 the case on
the ground that as per the copy of Diplomatic Note No. 414 issued by the
Embassy of the United States of America, 13 dated 29 May 1990 and certified
to be a true and faithful copy of the original by one Donald K. Woodward, Vice-
Consul of the United States of America on 11 June 1990,14 the Embassy
advised the Department of Foreign Affairs of the Republic of the Philippines
that:
". . . Arthur W. Scalzo, was a member of the diplomatic staff of the United
States diplomatic mission from his arrival in the Philippines on October 14,
1985 until his departure on August 10, 1988. . . .
. . . in May 1986, with the cooperation of Philippine law enforcement officials
and in the exercise of his functions as a member of the mission, Mr. Scalzo
investigated Mr. Khosrow Minucher, the plaintiff in the aforementioned case
for allegedly trafficking in a prohibited drug. It is this investigation which has
given rise to the plaintiff's complaint. The Embassy takes note of the provisions
of Article 39(2) of the Vienna Convention on Diplomatic Relations, which
provides that Mr. Scalzo retains immunity from civil suit for acts performed in
the exercise of his functions, as is the case here, even though he has departed
(sic) the country." cdrep
Petitioner opposed the motion.
On 25 June 1990, the trial court issued an order denying the motion for being
"devoid of merit." 15
Private respondent then filed with the public respondent Court of Appeals a
petition for certiorari, docketed therein as C.A.-G.R. SP No. 22505, to nullify
the aforesaid Order of 25 June 1990.
On 31 October 1990, public respondent promulgated a Decision 16 ordering
the dismissal of Civil Case No. 88-45691 due to the trial court's lack of
jurisdiction over the person of the defendant because the latter possessed
diplomatic immunity.
Petitioner's motion to reconsider the decision was denied in the public
respondent's Resolution of 8 March 1991 because:
"When therefore Mr. Scalzo testified in the Criminal Case against Khosrow
Minucher it was in connection with his official functions as an agent of the
72
Drug Enforcement Administration of the United States and member (sic) of the
American Mission charged with cooperating with the Philippine law
enforcement agency. He therefore, enjoys immunity from criminal and civil
jurisdiction of the receiving State under Article 31 of the Vienna Convention
on Diplomatic Relations." 17
Hence, this petition for review under Rule 45 of the Rules of Court. Petitioner
declares that the public respondent erred:
"I. . . . IN NOT DISMISSING THE PETITION FOR CERTIORARI FILED BY
SCALZO.
II. . . . IN RULING THAT PRIVATE RESPONDENT SCALZO IS A DIPLOMAT
IMMUNE FROM CIVIL SUIT CONFORMABLY WITH THE VIENNA CONVENTION
ON DIPLOMATIC RELATIONS.
III. . . . IN NOT FINDING THAT SCALZO'S PARTICIPATION IN THE BUY-
BUST OPERATION IS OUTSIDE OF HIS OFFICIAL FUNCTIONS, HENCE, THAT HE
IS NOT IMMUNE FROM SUIT UNDER THE VIENNA CONVENTION ON
DIPLOMATIC RELATIONS." 18
After private respondent filed his Comment to the petition and the petitioner
submitted his Reply thereto, this Court gave due course to the same and
required the parties to submit their respective Memoranda, which they
subsequently did.
We find merit in the petition.
While the trial court correctly denied the motion to dismiss, the public
respondent gravely abused its discretion in dismissing Civil Case No 88-45691
on the basis of an erroneous assumption that simply because of the Diplomatic
Note, the private respondent is clothed with diplomatic immunity, thereby
divesting the trial court of jurisdiction over his person. It may at once be stated
that even if the private respondent enjoys diplomatic immunity, a dismissal of
the case cannot be ordered on the ground of lack of jurisdiction over his
person, but rather for lack of a cause of action because even if he committed
the imputed act and could have been otherwise made liable therefor, his
immunity would bar any suit against him in connection therewith and would
prevent recovery of damages arising therefrom. Jurisdiction over the person
of the defendant is acquired either by his voluntary appearance or by the
service of summons upon him. While in the instant case, private respondent's
counsel filed, on 26 October 1988, a motion to quash summons because being
outside the Philippines and being a non-resident alien, he is beyond the
processes of the court, which was properly denied by the trial court, he had in
effect already waived any defect in the service of the summons by earlier
asking, on two (2) occasions, for an extension of time to file an answer, and by
ultimately filing an Answer with Counterclaim. There is no question that the
trial court acquired jurisdiction over the person of the private respondent.
LexLib
And now to the core issue — the alleged diplomatic immunity of the private
respondent. Setting aside for the moment the issue of authenticity raised by
the petitioner and the doubts that surround such a claim, in view of the fact
that it took private respondent one (1) year, eight (8) months and seventeen
(17) days from the time his counsel filed on 12 September 1988 a Special
Appearance and Motion asking for a first extension of time to file the Answer
because the Departments of State and Justice of the United States of America
were studying the case for the purpose of determining his defenses, before he
could secure the Diplomatic Note from the U.S. Embassy in Manila, and even
granting for the sake of argument that such note is authentic, the complaint
for damages filed by the petitioner still cannot be peremptorily dismissed. Said
complaint contains sufficient allegations which indicate that the private
respondent committed the imputed acts in his personal capacity and outside
the scope of his official duties and functions. As described in the complaint, he
committed criminal acts for which he is also civilly liable. In the Special
Appearance to Quash Summons earlier alluded to, on the other hand, private
respondent maintains that the claim for damages arose "from an alleged tort."
Whether such claim arises from criminal acts or from tort, there can be no
question that private respondent was sued in his personal capacity for acts
committed outside his official functions and duties. In the decision acquitting
the petitioner in the criminal case involving the violation of the Dangerous
Drugs Act, copy of which is attached to his complaint for damages and which
must be deemed as an integral part thereof, the trial court gave full credit to
petitioner's theory that he was a victim of a frame-up instigated by the private
respondent. Thus, there is a prima facie showing in the complaint that indeed
private respondent could be held personally liable for the acts committed
beyond his official functions or duties.
In Shauf vs. Court of Appeals, 19 after citing pertinent authorities, 20 this Court
ruled: llcd
"The aforecited authorities are clear on the matter. They state that the
doctrine of immunity from suit will not apply and may not be involved where
the public official is being sued in his private and personal capacity as an
ordinary citizen. The cloak of protection afforded the officers and agents of
the government is removed the moment they are sued in their individual
capacity. This situation usually arises where the public official acts without
authority or in excess of the powers vested in him. It is a well-settled principle
of law that a public official may be liable in his personal private capacity for
whatever damage he may have caused by his act done with malice and in bad
faith, or beyond the scope of his authority or jurisdiction (Dumlao vs. Court of
Appeals, et al., 114 SCRA 247 [1982])."
Even Article 31 of the Vienna Convention on Diplomatic Relations admits of
exceptions. It reads:
"1. A diplomatic agent shall enjoy immunity from the criminal
jurisdiction of the receiving State. He shall also enjoy immunity from its civil
and administrative jurisdiction except in the case of:
xxx xxx xxx
(c) an action relating to any professional or commercial activity
exercised by the diplomatic agent in the receiving State outside his official
functions. (Emphasis supplied).
There is of course the claim of private respondent that the acts imputed to him
were done in his official capacity. Nothing supports this self-serving claim
other than the so-called Diplomatic Note. In short, insofar as the records are
concerned, private respondent did not come forward with evidence to prove
that indeed, he had acted in his official capacity. It does not appear that an
actual hearing on the motion to dismiss was conducted and that private
respondent offered evidence in support thereof. Thus, it is apropos to quote
what this Court stated in United States of America vs. Guinto: 21
"But even as we are certain that the individual petitioners in G.R. No. 80018
were acting in the discharge of their official functions, we hesitate to make the
same conclusion in G.R. No. 80258. The contradictory factual allegations in this
case deserve in our view a closer study of what actually happened to the
plaintiffs. The record is too meager to indicate if the defendants were really
discharging their official duties or had actually exceeded their authority when
the incident in question occurred. Lacking this information, this Court cannot
directly decide this case. The needed inquiry must first be made by the lower
court so it may assess and resolve the conflicting claims of the parties on the
basis of the evidence that has yet to be presented at the trial. Only after it shall
have determined in what capacity the petitioners were acting at the time of
the incident in question will this Court determine, if still necessary, if the
doctrine of state immunity is applicable."
It may be mentioned in this regard that private respondent himself, in his Pre-
trial Brief filed on 13 June 1990, unequivocally states that he would present
documentary evidence consisting of DEA records on his investigation and
surveillance of plaintiff and on his position and duties as DEA special agent in
Manila. Having thus reserved his right to present evidence in support of his
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position, which is the basis for the alleged diplomatic immunity, the barren
self-serving claim in the belated motion to dismiss cannot be relied upon for a
reasonable, intelligent and fair resolution of the issue of diplomatic immunity.

The public respondent then should have sustained the trial court's denial of
the motion to dismiss. Verily, such should have been the most proper and
appropriate recourse. It should not have been overwhelmed by the self-
serving Diplomatic Note whose belated issuance is even suspect and whose
authenticity has not yet been proved. The undue haste with which respondent
Court yielded to the private respondent's claim is arbitrary.

WHEREFORE, the challenged decision of public respondent of 31 October 1990

in C.A.-G.R. SP No. 22505 is SET ASIDE and the Order of 25 June 1990 of Branch
19 of the Regional Trial Court of Manila in Civil Case No. 88-45691 denying
private respondent's Motion to Dismiss is hereby REINSTATED.

Costs against private respondent.

SO ORDERED.

Bidin, Romero and Melo, JJ ., concur.

Gutierrez, Jr., J ., is on official leave.

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