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[G.R. No. 143264 : April 23, 2012]


LISAM ENTERPRISES, INC. REPRESENTED BY LOLITA A. SORIANO, AND
LOLITA A. SORIANO, PETITIONERS, VS. BANCO DE ORO UNIBANK, INC.
(FORMERLY PHILIPPINE COMMERCIAL INTERNATIONAL BANK),[*] LILIAN S.
SORIANO, ESTATE OF LEANDRO A. SORIANO, JR., REGISTER OF DEEDS
OF LEGASPI CITY, AND JESUS L. SARTE, RESPONDENTS.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of
Court, praying that the Resolution[1] of the Regional Trial Court of Legaspi City
(RTC), dated November 11, 1999, dismissing petitioners complaint, and its
Order[2] dated May 15, 2000, denying herein petitioners Motion for Reconsideration
and Motion to Admit Amended Complaint, be reversed and set aside.cralaw
The records reveal the following antecedent facts.
On August 13, 1999, petitioners filed a Complaint against respondents for
Annulment of Mortgage with Prayer for Temporary Restraining Order & Preliminary
Injunction with Damages with the RTC of Legaspi City. Petitioner Lolita A. Soriano
alleged that she is a stockholder of petitioner Lisam Enterprises, Inc. (LEI) and a
member of its Board of Directors, designated as its Corporate Secretary. The
Complaint also alleged the following:
4.
Sometime in 1993, plaintiff LEI, in the course of its business operation,
acquired by purchase a parcel of residential land with improvement situated at
Legaspi City, covered by Transfer Certificate of Title No. 37866, copy attached as
Annex A, which property is more particularly described as follows:
xxxx
5.
On or about 28 March 1996, defendant Lilian S. Soriano and the late Leandro
A. Soriano, Jr., as husband and wife (hereafter Spouses Soriano), in their
personal capacity and for their own use and benefit, obtained a loan from
defendant PCIB (Legaspi Branch) (now known as Banco de Oro Unibank, Inc.) in
the total amount of P20 Million;
6.

That as security for the payment of the aforesaid credit accommodation, the

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THIRD DIVISION

late Leandro A. Soriano, Jr. and defendant Lilian S. Soriano, as president and
treasurer, respectively of plaintiff LEI, but without authority and consent of the
board of said plaintiff and with the use of a falsified board resolution, executed a
real estate mortgage on 28 March 1996, over the above-described property of
plaintiff LEI in favor of defendant PCIB, and had the same registered with the
Office of the Registry of Deeds, Legaspi City, copy of the Real Estate Mortgage is
hereto attached and marked as Annex B, and made part hereof, to the prejudice
of plaintiffs;
7.
That specifically, the Spouses Soriano, with intent to defraud and prejudice
plaintiff LEI and its stockholders, falsified the signatures of plaintiff Lolita A. Soriano
as corporate secretary and director of plaintiff LEI, in a document denominated as
board resolution purportedly issued by the board of plaintiff LEI on 6 November
1995, making it appear that plaintiff LEI's Board met and passed a board resolution
on said date authorizing the Spouses Soriano to mortgage or encumber all or
substantially all of the properties of plaintiff LEI, when in fact and in truth, no
resolution of that nature was ever issued by the board of plaintiff LEI, nor a
meeting was called to that effect, copy of the resolution in question is hereto
attached and marked as Annex C, and made part hereof;
8.
That plaintiff Lolita A. Soriano as Corporate Secretary of plaintiff LEI, had
never signed a board resolution nor issued a Secretary's Certificate to the effect
that on 6 November 1995 a resolution was passed and approved by plaintiff LEI
authorizing the Spouses Soriano as president and treasurer, respectively, to
mortgage the above-described property of plaintiff LEI, neither did she appear
personally before a notary public on 28 March 1996 to acknowledge or attest to the
issuance of a supposed board resolution issued by plaintiff LEI on 6 November
1995;
9.
That defendant PCIB, knowing fully well that the property being mortgaged
by the Spouses Soriano belongs to plaintiff LEI, a corporation, negligently and
miserably failed to exercise due care and prudence required of a banking
institution. Specifically, defendant PCIB failed to investigate and to delve into the
propriety of the issuance of or due execution of subject board resolution, which is
the very foundation of the validity of subject real estate mortgage. Further, it failed
to verify the genuineness of the signatures appearing in said board resolution nor
to confirm the fact of its issuance with plaintiff Lolita A. Soriano, as the corporate
secretary of plaintiff LEI. Furthermore, the height of its negligence was displayed
when it disregarded or failed to notice that the questioned board resolution with a
Secretary's Certificate was notarized only on 28 March 1996 or after the lapse of
more than four (4) months from its purported date of issue on 6 November 1995.
That these circumstances should have put defendant PCIB on notice of the flaws
and infirmities of the questioned board resolution. Unfortunately, it negligently

10. That having been executed without authority of the board of plaintiff LEI said
real estate mortgage dated 28 March 1996 executed by the Spouses Soriano, as
officers of plaintiff LEI in favor of defendant PCIB, is the null and void and has no
legal effect upon said plaintiff. Consequently, said mortgage deed cannot be used
nor resorted to by defendant PCIB against subject property of plaintiff LEI as no
right or rights whatsoever were created nor granted thereunder by reason of its
nullity;
11. Worst, sometime in August 1998, in order to remedy the defects in the
mortgage transaction entered by the Spouses Soriano and defendant PCIB, the
former, with the unlawful instigation of the latter, signed a document denominated
as Deed of Assumption of Loans and Mortgage Obligations and Amendment of
Mortgage; wherein in said document, plaintiff LEI was made to assume the P20
Million personal indebtedness of the Spouses Soriano with defendant PCIB, when
in fact and in truth it never so assumed the same as no board resolution duly
certified to by plaintiff Lolita A. Soriano as corporate secretary was ever issued to
that effect, copy of said Deed is hereto attached and marked as Annex D, and
made part hereof;
12. Moreover, to make it appear that plaintiff LEI had consented to the execution
of said deed of assumption of mortgage, the Spouses Soriano again, through the
unlawful instigation and connivance of defendant PCIB, falsified the signature of
plaintiff Lolita A. Soriano as corporate secretary of plaintiff LEI in a document
denominated as Corporate Resolution to Borrow, to make it appear that plaintiff
LEI so authorized the Spouses Soriano to perform said acts for the corporation,
when in fact and in truth no such authority or resolution was ever issued nor
granted by plaintiff LEI, nor a meeting called and held for said purpose in
accordance with its By-laws; copy of which is hereto attached and marked as
Annex E and made part hereof;
13. That said irregular transactions of defendant Lilian S. Soriano and her
husband Leandro A. Soriano, Jr., on one hand, and defendant PCIB, on the other,
were discovered by plaintiff Lolita A. Soriano sometime in April 1999. That
immediately upon discovery, said plaintiff, for herself and on behalf and for the
benefit of plaintiff LEI, made demands upon defendants Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr., to free subject property of plaintiff LEI from such
mortgage lien, by paying in full their personal indebtedness to defendant PCIB in
the principal sum of P20 Million. However, said defendants, for reason only known
to them, continued and still continue to ignore said demands, to the damage and
prejudice of plaintiffs;

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failed to exercise due care and prudence expected of a banking institution;

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14. Hence, on 25 June 1999, plaintiffs commenced a derivative suit against
defendants Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr., before the
Securities and Exchange Commission, docketed as SEC Case No. 06-99-6339 for
Fraudulent Scheme and Unlawful Machination with Damages in order to protect
and preserve the rights of plaintiffs, copy of said complaint is hereto attached as
AnnexF;
15. That plaintiffs, in order to seek complete relief from the unauthorized mortgage
transaction between the Spouses Soriano and defendant PCIB, were further
compelled to institute this instant case to seek the nullification of the real estate
mortgage dated 28 March 1999. Consequently, plaintiffs were forced to retain the
services of a lawyer with whom they contracted to pay P100,000.00 as and for
attorney's fee;
16. That unfortunately, the plaintiffs learned that on 30 July 1999, defendant Sarte,
in his capacity as Notary Public of Daraga, Albay and upon application of
defendant PCIB, issued a notice of Auction/Foreclosure Sale of the property
subject of the mortgage in question and has set the auction sale on 7 September
1999 x x x;
17. That by reason of the fraudulent and surreptitious schemes perpetrated by
defendant Lilian S. Soriano and her husband, the late Leandro A. Soriano, Jr., in
unlawful connivance and through the gross negligence of defendant PCIB, plaintiff
Lolita A. Soriano, as stockholder, suffered sleepless nights, moral shock, wounded
feeling, hurt pride and similar injuries, hence, should be awarded moral damages
in the amount of P200,000.00.
After service of summons on all defendants, the RTC issued a temporary
restraining order on August 25, 1990 and, after hearing, went on to issue a writ of
preliminary injunction enjoining respondent PCIB (now known as Banco de Oro
Unibank, Inc.) from proceeding with the auction sale of the subject property.
Respondents Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr. filed an
Answer dated September 25, 1999, stating that the Spouses Lilian and Leandro
Soriano, Jr. were duly authorized by LEI to mortgage the subject property; that
proceeds of the loan from respondent PCIB were for the use and benefit of LEI;
that all notarized documents submitted to PCIB by the Spouses Soriano bore the
genuine signature of Lolita Soriano; and that although the Spouses Soriano indeed
received demands from petitioner Lolita Soriano for them to pay the loan, they
gave satisfactory explanations to the latter why her demands could not be
honored. It was, likewise, alleged in said Answer that it was respondent Lilian
Soriano who should be entitled to moral damages and attorney's fees.

On November 11, 1999, the RTC issued the first assailed Resolution dismissing
petitioners' Complaint. Petitioners then filed a Motion for Reconsideration of said
Resolution. While awaiting resolution of the motion for reconsideration, petitioners
also filed, on January 4, 2000, a Motion to Admit Amended Complaint, amending
paragraph 13 of the original complaint to read as follows:
13. That said irregular transactions of defendant Lilian S. Soriano and her
husband Leandro A. Soriano, Jr., on one hand, and defendant PCIB, on the other,
were discovered by plaintiff Lolita A. Soriano sometime in April 1999. That
immediately upon discovery, said plaintiff, for herself and on behalf and for the
benefit of plaintiff LEI, made demands upon defendant Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr., to free subject property of plaintiff LEI from such
mortgage lien, by paying in full their personal indebtedness to defendant PCIB in
the principal sum of P20 Million. However, said defendants, for reason only known
to them, continued and still continue to ignore said demands, to the damage and
prejudice of plaintiffs; that plaintiff Lolita A. Soriano likewise made demands upon
the Board of Directors of Lisam Enterprises, Inc., to make legal steps to protect the
interest of the corporation from said fraudulent transaction, but unfortunately, until
now, no such legal step was ever taken by the Board, hence, this action for the
benefit and in behalf of the corporation;
On May 15, 2000, the trial court issued the questioned Order denying both the
Motion for Reconsideration and the Motion to Admit Amended Complaint. The trial
court held that no new argument had been raised by petitioners in their motion for
reconsideration to address the fact of plaintiffs' failure to allege in the complaint
that petitioner Lolita A. Soriano made demands upon the Board of Directors of
Lisam Enterprises, Inc. to take steps to protect the interest of the corporation
against the fraudulent acts of the Spouses Soriano and PCIB. The trial court
further ruled that the Amended Complaint can no longer be admitted, because the
same absolutely changed petitioners' cause of action.
Petitioners filed the present petition with this Court, alleging that what are involved
are pure questions of law, to wit:
FIRST, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR
WHEN IT DISMISSED THE ACTION ON THE GROUND THAT PETITIONER
LOLITA A. SORIANO HAS NO LEGAL CAPACITY TO SUE AS SHE IS NOT A
REAL PARTY-IN-INTEREST;

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On September 28, 1999, respondent PCIB filed a Motion to Dismiss the Complaint
on grounds of lack of legal capacity to sue, failure to state cause of action, and litis
pendencia. Petitioners filed an Opposition thereto, while PCIB's co-defendants
filed a Motion to Suspend Action.

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SECOND, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE


ERROR WHEN IT DISMISSED THE ACTION ON THE GROUND THAT THERE IS
ANOTHER ACTION PENDING BETWEEN THE SAME PARTIES FOR THE SAME
CAUSE;
THIRD, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR
WHEN IT DISMISSED THE ACTION ON THE GROUND THAT THE COMPLAINT
STATES NO CAUSE OF ACTION;
FOURTH, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE
ERROR WHEN IT DENIED THE ADMISSION OF PETITIONERS' AMENDED
COMPLAINT FILED AS A MATTER OF RIGHT, AFTER THE ORDER OF
DISMISSAL WAS ISSUED BUT BEFORE ITS FINALITY.
FIFTH, WHETHER OR NOT THE COURT ERRED IN DISMISSING THE ACTION,
INSTEAD OF MERELY SUSPENDING THE SAME FOLLOWING THE DOCTRINE
LAID DOWN IN UNION GLASS. [3]
The petition is impressed with merit.
The Court shall first delve into the matter of the propriety of the denial of the motion
to admit amended complaint. Pertinent provisions of Rule 10 of the Rules of Court
provide as follows:
Sec. 2. Amendments as a matter of right. - A party may amend his pleadings once
as a matter of right at any time before a responsive pleading is served x x x.
Sec. 3. Amendments by leave of court. - Except as provided in the next preceding
section, substantial amendments may be made only upon leave of court. But such
leave may be refused if it appears to the court that the motion was made with
intent to delay. x x x
It should be noted that respondents Lilian S. Soriano and the Estate of Leandro A.
Soriano, Jr. already filed their Answer, to petitioners' complaint, and the claims
being asserted were made against said parties. A responsive pleading having
been filed, amendments to the complaint may, therefore, be made only by leave of
court and no longer as a matter of right. However, in Tiu v. Philippine Bank of
Communications,[4] the Court discussed this rule at length, to wit:
x x x [A]fter petitioners have filed their answer, Section 3, Rule 10 of the Rules of
Court specifically allows amendment by leave of court. The said Section states:

This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of
Civil Procedure in Valenzuela v. Court of Appeals, thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the
former rule in such manner that the phrase "or that the cause of action or defense
is substantially altered" was stricken-off and not retained in the new rules. The
clear import of such amendment in Section 3, Rule 10 is that under the new rules,
"the amendment may (now) substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change or alteration in
the cause of action or defense, the amendments sought to be made shall serve the
higher interests of substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding.
The granting of leave to file amended pleading is a matter particularly addressed to
the sound discretion of the trial court; and that discretion is broad, subject only to
the limitations that the amendments should not substantially change the cause of
action or alter the theory of the case, or that it was not made to delay the action.
Nevertheless, as enunciated in Valenzuela, even if the amendment substantially
alters the cause of action or defense, such amendment could still be allowed when
it is sought to serve the higher interest of substantial justice, prevent delay, and
secure a just, speedy and inexpensive disposition of actions and proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a
multiplicity of suits and in order that the real controversies between the
parties are presented, their rights determined, and the case decided on the
merits without unnecessary delay. This liberality is greatest in the early
stages of a lawsuit, especially in this case where the amendment was made
before the trial of the case, thereby giving the petitioners all the time allowed
by law to answer and to prepare for trial.
Furthermore, amendments to pleadings are generally favored and should be
liberally allowed in furtherance of justice in order that every case, may so far as
possible, be determined on its real facts and in order to speed up the trial of the
case or prevent the circuitry of action and unnecessary expense. That is, unless

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SECTION 3. Amendments by leave of court. - Except as provided in the next


preceding section, substantial amendments may be made only upon leave of court.
But such leave may be refused if it appears to the court that the motion was made
with intent to delay. Orders of the court upon the matters provided in this section
shall be made upon motion filed in court, and after notice to the adverse party, and
an opportunity to be heard.

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there are circumstances such as inexcusable delay or the taking of the adverse
party by surprise or the like, which might justify a refusal of permission to amend.[5]
Since, as explained above, amendments are generally favored, it would have been
more fitting for the trial court to extend such liberality towards petitioners by
admitting the amended complaint which was filed before the order dismissing the
original complaint became final and executory. It is quite apparent that since trial
proper had not yet even begun, allowing the amendment would not have caused
any delay. Moreover, doing
so would have served the higher interest of justice as this would provide the best
opportunity for the issues among all parties to be thoroughly threshed out and the
rights of all parties finally determined. Hence, the Court overrules the trial court's
denial of the motion to admit the amended complaint, and orders the admission of
the same.
With the amendment stating that plaintiff Lolita A. Soriano likewise made demands
upon the Board of Directors of Lisam Enterprises, Inc., to make legal steps to
protect the interest of the corporation from said fraudulent transaction, but
unfortunately, until now, no such legal step was ever taken by the Board, hence,
this action for the benefit and in behalf of the corporation, does the amended
complaint now sufficiently state a cause of action? In Hi-Yield Realty,
Incorporated v. Court of Appeals,[6] the Court enumerated the requisites for filing a
derivative suit, as follows:
a) the party bringing the suit should be a shareholder as of the time of the act or
transaction complained of, the number of his shares not being material;
b) he has tried to exhaust intra-corporate remedies, i.e., has made a demand on
the board of directors for the appropriate relief but the latter has failed or refused to
heed his plea; and
c) the cause of action actually devolves on the corporation, the wrongdoing or
harm having been, or being caused to the corporation and not to the particular
stockholder bringing the suit.[7]
A reading of the amended complaint will reveal that all the foregoing requisites had
been alleged therein. Hence, the amended complaint remedied the defect in the
original complaint and now sufficiently states a cause of action.
Respondent PCIB should not complain that admitting the amended complaint after
they pointed out a defect in the original complaint would be unfair to them. They
should have been well aware that due to the changes made by the 1997 Rules of

The next question then is, upon admission of the amended complaint, would it still
be proper for the trial court to dismiss the complaint? The Court answers in the
negative.
Saura v. Saura, Jr.[8] is closely analogous to the present case. In Saura,[9] the
petitioners therein, stockholders of a corporation, sold a disputed real property
owned by the corporation, despite the existence of a case in the Securities and
Exchange Commission (SEC) between stockholders for annulment of subscription,
recovery of corporate assets and funds, etc. The sale was done without the
knowledge of the other stockholders, thus, said stockholders filed a separate case
for annulment of sale, declaration of nullity of deed of exchange, recovery of
possession, etc., against the stockholders who took part in the sale, and the buyer
of the property, filing said case with the regular court (RTC). Petitioners therein
also filed a motion to dismiss the complaint for annulment of sale filed with the
RTC, on the ground of forum shopping, lack of jurisdiction, lack of cause of action,
and litis pendentia among others. The Court held that the complaint for annulment
of sale was properly filed with the regular court, because the buyer of the property
had no intra-corporate relationship with the stockholders, hence, the buyer could
not be joined as party-defendant in the SEC case. To include said buyer as a
party-defendant in the case pending with the SEC would violate the then existing
rule on jurisdiction over intra-corporate disputes. The Court also struck down the
argument that there was forum shopping, ruling that the issue of recovery of
corporate assets and funds pending with the SEC is a totally different issue from
the issue of the validity of the sale, so a decision in the SEC case would not
amount to res judicata in the case before the regular court. Thus, the Court merely
ordered the suspension of the proceedings before the RTC until the final outcome
of the SEC case.
The foregoing pronouncements of the Court are exactly in point with the issues in
the present case. Here, the complaint is for annulment of mortgage with the
mortgagee bank as one of the defendants, thus, as held in Saura,[10] jurisdiction
over said complaint is lodged with the regular courts because the mortgagee bank
has no intra-corporate relationship with the stockholders. There can also be no
forum shopping, because there is no identity of issues. The issue being threshed
out in the SEC case is the due execution, authenticity or validity of board
resolutions and other documents used to facilitate the execution of the mortgage,
while the issue in the case filed by petitioners with the RTC is the validity of the
mortgage itself executed between the bank and the corporation, purportedly

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Civil Procedure, amendments may now substantially alter the cause of action or
defense. It should not have been a surprise to them that petitioners would redress
the defect in the original complaint by substantially amending the same, which
course of action is now allowed under the new rules.

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represented by the spouses Leandro and Lilian Soriano, the President and
Treasurer of petitioner LEI, respectively. Thus, there is no reason to dismiss the
complaint in this case.
IN VIEW OF THE FOREGOING, the Resolution of the Regional Trial Court of
Legaspi City, Branch 4, dated November 11, 1999, dismissing petitioners
complaint in Civil Case No. 9729, and its Order dated May 15, 2000, denying
herein petitioners Motion for Reconsideration and Motion to Admit Amended
Complaint, are hereby REVERSED and SET ASIDE. The Regional Trial Court of
Legaspi City, Branch 4, is hereby DIRECTED to ADMIT the Amended Complaint.
Considering further, that this case has been pending for some time and, under R.A.
No. 8799, it is now the regular courts which have jurisdiction over intra-corporate
disputes, the Regional Trial Court of Legaspi City, Branch 4 is hereby DIRECTED
to PROCEED with dispatch in trying Civil Case No. 9729.cralaw
SO ORDERED.

THIRD DIVISION

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HENRY CHING TIU, CHRISTOPHER HALIN GO, and GEORGE


CO, Petitioners, v. PHILIPPINE BANK OF COMMUNICATIONS, Respondent.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court,
seeking to annul and set aside the Decision1 dated September 28, 2001, rendered
by the Court of Appeals (CA) in CA-G.R. SP No. 57732, dismissing the petition and
affirming the assailed Orders of the Regional Trial Court (RTC) of Cagayan de Oro
City, Branch 21 in Civil Case No. 99-352, dated December 14, 1999 and January
11, 2000.
The factual and procedural antecedents are as follows:
In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein
petitioners, applied for a real estate loan with the Philippine Bank of
Communications (PBCOM) to fund its purified water distribution business. In
support of the loan application, petitioners submitted a Board Resolution2dated
June 7, 1993. The loan was guaranteed by collateral over the property covered by
Transfer Certificate of Title No. T-13020.3 The loan was eventually approved.4
In August 1996, AWRI applied for a bigger loan from PBCOM for additional
capitalization using the same Board Resolution, but without any additional real
estate collateral. Considering that the proposed additional loan was unsecured,
PBCOM required all the members of the Board of Directors of AWRI to become
sureties. Thus, on August 16, 1996, a Surety Agreement5 was executed by its
Directors and acknowledged by a notary public on the same date. All copies of the
Surety Agreement, except two, were kept by PBCOM. Of the two copies kept by
the notary public, one copy was retained for his notarial file and the other was sent
to the Records Management and Archives Office, through the Office of the RTC
Clerk of Court.6

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[G.R. NO. 151932 : August 19, 2009]

Thereafter, on December 16, 1998, AWRI informed the bank of its desire to
surrender and/or assign in its favor, all the present properties of the former to apply
as dacion en pago for AWRI's existing loan obligation to the bank.7 On January 11,
1999, PBCOM sent a reply denying the request. On May 12, 1999, PBCOM sent a
letter to petitioners demanding full payment of its obligation to the bank.8
Its demands having remained unheeded, PBCOM instructed its counsel to file a
complaint for collection against petitioners. The case was docketed as Civil Case
No. 99-352.
On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that
they were not personally liable on the promissory notes, because they signed the
Surety Agreement in their capacities as officers of AWRI. They claimed that the
Surety Agreement attached to the complaint as Annexes "A" to "A-2"9 were
falsified, considering that when they signed the same, the words "In his personal
capacity" did not yet appear in the document and were merely intercalated thereon
without their knowledge and consent.10
In support of their allegations, petitioners attached to their Answer a certified
photocopy of the Surety Agreement issued on March 25, 1999 by the Records
Management and Archives Office in Davao City,11 showing that the words "In his
personal capacity" were not found at the foot of page two of the document where
their signatures appeared.12
Because of this development, PBCOM's counsel searched for and retrieved the file
copy of the Surety Agreement. The notarial copy showed that the words "In his
personal capacity" did not appear on page two of the Surety Agreement.13
Petitioners' counsel then asked PBCOM to explain the alteration appearing on the
agreement. PBCOM subsequently discovered that the insertion was ordered by the
bank auditor. It alleged that when the Surety Agreement was inspected by the bank
auditor, he called the attention of the loans clerk, Kenneth Cabahug, as to why the
words "In his personal capacity" were not indicated under the signature of each
surety, in accordance with bank standard operating procedures. The auditor then
ordered Mr. Cabahug to type the words "In his personal capacity" below the
second signatures of petitioners. However, the notary public was never informed of

PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave of
Court to Substitute Annex "A" of the Complaint,16 wherein it attached the duplicate
original copy retrieved from the file of the notary public. PBCOM also admitted its
mistake in making the insertion and explained that it was made without the
knowledge and consent of the notary public. PBCOM maintained that the insertion
was not a falsification, but was made only to speak the truth of the parties'
intentions. PBCOM also contended that petitioners were already primarily liable on
the Surety Agreement whether or not the insertion was made, having admitted in
their pleadings that they voluntarily executed and signed the Surety Agreement in
the original form. PBCOM, invoking a liberal application of the Rules, emphasized
that the motion incorporated in the pleading can be treated as a motion for leave of
court to amend and admit the amended complaint pursuant to Section 3, Rule 10
of the Rules of Court.
On December 14, 1999, the RTC issued an Order17 allowing the substitution of the
altered document with the original Surety Agreement, the pertinent portion of which
reads:
August 16, 1996 attached as Annexes "A" to "A-2" of the reply and answer
Resolving the Motion to Substitute Annexes "A" to "A-2" of the complaint and the
opposition thereto by the defendant, this Court, in the interest of justice, hereby
allows the substitution of said Annexes "A" to "A-2" of the complaint with the
duplicate original of notarial copy of the Agreement dated to counter-claim.
SO ORDERED.
Petitioners filed a motion for reconsideration,18 but it was denied in the
Order19 dated January 11, 2000, to wit:
Resolving the motion for reconsideration and the opposition thereto, the Court
finds the motion substantially a reiteration of the opposition to plaintiff's motion.

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the insertion.14 Mr. Cabahug subsequently executed an affidavit15 attesting to the


circumstances why the insertion was made.

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Additionally, the instant motion for reconsideration treats on evidentiary matter
which can be properly ventilated in the trial proper, hence, there is no cogent
reason to disturb the Court's order of December 14, 1999.
SO ORDERED.
Aggrieved, petitioners sought recourse before the CA via a petition
for certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No.
57732.
Petitioners claimed that the RTC acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction in denying
their motion for reconsideration and in allowing PBCOM to substitute the altered
copy of the Surety Agreement with the duplicate original notarial copy thereof
considering that the latter's cause of action was solely and principally founded on
the falsified document marked as Annexes "A" to "A-2."20
On September 28, 2001, the CA rendered a Decision dismissing the petition for
lack of merit, the decretal portion of which reads:
WHEREFORE, foregoing considered, the instant petition is hereby DENIED DUE
COURSE and, accordingly, DISMISSED for lack of merit. The assailed Orders
dated December 14, 1999 and January 11, 2000 of the Regional Trial Court of
Cagayan de Oro City, Branch 21, are hereby AFFIRMED in toto.
SO ORDERED.21
Hence, the petition assigning the following errors:
I
The COURT committed a reversible error in affirming in toto the order of the lower
court allowing the substitution of the falsified document by relying on the provision
of section 3, rule 10 of the rules of Court.
II

III
The court erred in giving credence to the allegation of respondent bank that from
August 15 to December 9, 1997 asian water resources inc. obtained several
availments of new bigger and additional loans totalLing p2,030,000.00 evidenced
by 4 promissory notes marked as annexes "B," "B-1," "B-2" and "B-3."
IV
The court failed to consider the misapplication of the principle of equity committed
by the lower court in ordering the substitution of the falsified document.22
Petitioners argue that the CA committed a reversible error in affirming the Order of
the RTC allowing the substitution of the document by relying on Section 3, Rule 10
of the Rules of Court. Petitioners assert that the Rules do not allow the withdrawal
and substitution of a "falsified document" once discovered by the opposing party.
Petitioners maintain that PBCOM's cause of action was solely and principally
founded on the alleged "falsified document" originally marked as
Annexes "A" to "A-2." Thus, the "withdrawal" of the document results in the
automatic withdrawal of the whole complaint on the ground that there is no more
cause of action to be maintained or enforced by plaintiff against petitioners. Also,
petitioners argue that if the substitution will be allowed, their defenses that were
anchored on Annexes "A" to "A-2" would be gravely affected. Moreover,
considering that the said document was already removed, withdrawn, and
disregarded by the RTC, the withdrawal and substitution of the document would
prevent petitioners from introducing the falsified documents during the trial as part
of their evidence.23
Petitioners submit that the RTC misapplied the principle of equity when it allowed
PBCOM to substitute the document with the original agreement. Petitioners also

Page

Acting as the court on the petition for certiorari, the court committed a reversible
error having no jurisdiction to rule on the obligation of the petitioners based on the
falsified document

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claim that the remedy of appeal after the termination of the case in the RTC would
become ineffective and inadequate if the Order of the RTC allowing the
"withdrawal" and "substitution" of the document would not be nullified, because the
falsified document would no longer be found in the records of the case during the
appeal.24
Petitioners contend that the CA went beyond the issue raised before it when it
interpreted the provisions of the Surety Agreement, particularly paragraph 4
thereof, and then ruled on the obligations of the parties based on
the document. Petitioners posit that the CA prematurely ruled on petitioners'
obligations, considering that their obligations should be determined during trial on
the merits, after the parties have been given the opportunity to present their
evidence in support of their respective claims. Petitioners stress that the CA went
into the merit of the case when it gave credence to the statement of fact of PBCOM
that "From August 15 to December 9, 1997, Asian Water Resources, Inc. obtained
several availments on its additional loans totalling P2,030,000.00 as evidenced by
4 promissory notes marked as Annexes B, B-1, B-2, and B-3. Thus, the conclusion
of the CA in declaring the petitioners liable as sureties violated their right to due
process.25
For its part, PBCOM argues that since the complaint is based on an actionable
document, i.e., the surety agreement, the original or a copy thereof should be
attached to the pleading as an exhibit, which shall be deemed part of the pleading.
Considering that the surety agreement is annexed to the complaint, it is an integral
part thereof and its substitution with another copy is in the nature of a substantial
amendment, which is allowed by the Rules, but with prior leave of court.
Moreover, PBCOM alleges that since the Rules provides that substantial
amendments may be made upon leave of court, the authority of the RTC to allow
the amendment is discretionary. Thus, the CA correctly held that the act of granting
the said substitution was within the clear and proper discretion of the RTC.
The petition is without merit.

The pertinent rule on actionable documents is found in Section 7, Rule 8 of the


Rules of Court, which provides that when the cause of action is anchored on a
document, its substance must be set forth, and the original or a copy thereof "shall"
be attached to the pleading as an exhibit and deemed a part thereof, to wit:
Section 7. Action or defense based on document. - Whenever an action or defense
is based upon a written instrument or document, the substance of such instrument
or document shall be set forth in the pleading, and the original or a copy thereof
shall be attached to the pleading as an exhibit, which shall be deemed to be a part
of the pleading, or said copy may with like effect be set forth in the pleading.
With respect to PBCOM's right to amend its complaint, including the documents
annexed thereto, after petitioners have filed their answer, Section 3, Rule 10 of the
Rules of Court specifically allows amendment by leave of court. The said Section
states:
SECTION 3. Amendments by leave of court. Except as provided in the next
preceding section, substantial amendments may be made only upon leave of court.
But such leave may be refused if it appears to the court that the motion was made
with intent to delay. Orders of the court upon the matters provided in this section
shall be made upon motion filed in court, and after notice to the adverse party, and
an opportunity to be heard.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of
Civil Procedure inValenzuela v. Court of Appeals,26 thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the
former rule in such manner that the phrase "or that the cause of action or defense
is substantially altered" was stricken-off and not retained in the new rules. The
clear import of such amendment in Section 3, Rule 10 is that under the new rules,
"the amendment may (now) substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change or alteration in

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As to the substitution of the earlier surety agreement that was annexed to the
complaint with the original thereof, this Court finds that the RTC did not err in
allowing the substitution.

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the cause of action or defense, the amendments sought to be made shall serve the
higher interests of substantial justice, and prevent delay and equally promote the
laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding."27
The granting of leave to file amended pleading is a matter particularly addressed to
the sound discretion of the trial court; and that discretion is broad, subject only to
the limitations that the amendments should not substantially change the cause of
action or alter the theory of the case, or that it was not made to delay the
action.28 Nevertheless, as enunciated in Valenzuela, even if the amendment
substantially alters the cause of action or defense, such amendment could still be
allowed when it is sought to serve the higher interest of substantial justice; prevent
delay; and secure a just, speedy and inexpensive disposition of actions and
proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a
multiplicity of suits and in order that the real controversies between the parties are
presented, their rights determined, and the case decided on the merits without
unnecessary delay. This liberality is greatest in the early stages of a lawsuit,
especially in this case where the amendment was made before the trial of the
case, thereby giving the petitioners all the time allowed by law to answer and to
prepare for trial.29
Furthermore, amendments to pleadings are generally favored and should be
liberally allowed in furtherance of justice in order that every case, may so far as
possible, be determined on its real facts and in order to speed up the trial of the
case or prevent the circuity of action and unnecessary expense. That is, unless
there are circumstances such as inexcusable delay or the taking of the adverse
party by surprise or the like, which might justify a refusal of permission to amend.30
In the present case, there was no fraudulent intent on the part of PBCOM in
submitting the altered surety agreement. In fact, the bank admitted that it was a
mistake on their part to have submitted it in the first place instead of the original
agreement. It also admitted that, through inadvertence, the copy that was attached
to the complaint was the copy wherein the words "IN HIS PERSONAL CAPACITY"
were inserted to conform to the bank's standard practice. This alteration was made
without the knowledge of the notary public. PBCOM's counsel had no idea that

Verily, it is a cardinal rule of evidence, not just one of technicality but of substance,
that the written document is the best evidence of its own contents. It is also a
matter of both principle and policy that when the written contract is established as
the repository of the parties' stipulations, any other evidence is excluded, and the
same cannot be used to substitute for such contract, or even to alter or contradict
the latter.31 The original surety agreement is the best evidence that could establish
the parties' respective rights and obligations. In effect, the RTC merely allowed the
amendment of the complaint, which consequently included the substitution of the
altered surety agreement with a copy of the original.
It is well to remember at this point that rules of procedure are but mere tools
designed to facilitate the attainment of justice. Their strict and rigid application that
would result in technicalities that tend to frustrate rather than promote substantial
justice must always be avoided.32 Applied to the instant case, this not only assures
that it would be resolved based on real facts, but would also aid in the speedy
disposition of the case by utilizing the best evidence possible to determine the
rights and obligations of the party - litigants.
Moreover, contrary to petitioners' contention, they could not be prejudiced by the
substitution since they can still present the substituted documents, Annexes "A" to
A-2," as part of the evidence of their affirmative defenses. The substitution did not
prejudice petitioners or delay the action. On the contrary, it tended to expedite the
determination of the controversy. Besides, the petitioners are not precluded from
filing the appropriate criminal action against PBCOM for attaching the altered copy
of the surety agreement to the complaint. The substitution of the documents would
not, in any way, erase the existence of falsification, if any. The case before the
RTC is civil in nature, while the alleged falsification is criminal, which is separate
and distinct from another. Thus, the RTC committed no reversible error when it
allowed the substitution of the altered surety agreement with that of the original.
A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the
correction of errors of jurisdiction only or grave abuse of discretion amounting to
lack or excess of jurisdiction. Its principal office is only to keep the inferior court

Page

what it submitted was the altered document, thereby necessitating the substitution
of the surety agreement with the original thereof, in order that the case would be
judiciously resolved.

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within the parameters of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction.33
For a Petition for Certiorari to prosper, the essential requisites that have to concur
are: (1) the writ is directed against a tribunal, a board or any officer exercising
judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and
adequate remedy in the ordinary course of law.34 rbl r l
l lbrr
The phrase without jurisdiction means that the court acted with absolute lack of
authority or want of legal power, right or authority to hear and determine a cause or
causes, considered either in general or with reference to a particular matter. It
means lack of power to exercise authority. Excess of jurisdiction occurs when the
court transcends its power or acts without any statutory authority; or results when
an act, though within the general power of a tribunal, board or officer (to do) is not
authorized, and is invalid with respect to the particular proceeding, because the
conditions which alone authorize the exercise of the general power in respect of it
are wanting. Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply
put, power is exercised in an arbitrary or despotic manner by reason of passion,
prejudice, or personal hostility; and such exercise is so patent or so gross as to
amount to an evasion of a positive duty or to a virtual refusal either to perform the
duty enjoined or to act at all in contemplation of law.35
The present case failed to comply with the above-stated requisites. In the instant
case, the soundness of the RTC's Order allowing the substitution of the document
involves a matter of judgment and discretion, which cannot be the proper subject of
a petition for certiorari under Rule 65. This rule is only intended to correct defects
of jurisdiction and not to correct errors of procedure or matters in the trial court's
findings or conclusions.
However, this Court agrees with the petitioners' contention that the CA should not
have made determinations as regards the parties' respective rights based on the
surety agreement. The CA went beyond the issues brought before it and effectively
preempted the RTC in making its own determinations. It is to be noted that the

WHEREFORE, premises considered, the petition is DENIED. Subject to the above


disquisitions, the Decision of the Court of Appeals in CA-G.R. SP No. 57732, dated
September 28, 2001, and the Orders of the Regional Trial Court of Cagayan de
Oro City, Branch 21, in Civil Case No. 99-352, dated December 14, 1999 and
January 11, 2000, are AFFIRMED.
SO ORDERED.

Page

present case is still pending determination by the RTC. The CA should have been
more cautious and not have gone beyond the issues submitted before it in the
petition for certiorari; instead, it should have squarely addressed whether or not
there was grave abuse of discretion on the part of the RTC in issuing the Orders
dated December 14, 1999 and January 11, 2000.

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FIRST DIVISION
[G.R. No. 133657. May 29, 2002.]
REMINGTON INDUSTRIAL SALES CORPORATION, Petitioner, v. THE COURT
OF APPEALS and BRITISH STEEL (ASIA), LTD., Respondents.
DECISION

YNARES-SANTIAGO, J.:

Before us is a petition for review under Rule 45 of the Rules of Court assailing the
decision of the Court of Appeals in CA-G.R. SP No. 44529 dated February 24,
1998, 1 which granted the petition forcertiorari filed by respondent British Steel
Asia Ltd. (British Steel) and ordered the dismissal of petitioner Remington
Industrial Sales Corporations (Remington) complaint for sum of money and
damages. Also assailed in this petition is the resolution 2 of the Court of Appeals
denying petitioners motion for reconsideration.
The facts of the case, as culled from the records, are as follows:chanrob1es virtual
1aw library
On August 21, 1996, petitioner filed a complaint 3 for sum of money and damages
arising from breach of contract, docketed as Civil Case No. 96-79674, before the
sala of Judge Marino M. De la Cruz of the Regional Trial Court of Manila, Branch
22. Impleaded as principal defendant therein was Industrial Steels, Ltd. (ISL), with
Ferro Trading GMBH (Ferro) and respondent British Steel as alternative
defendants.chanrobles virtual lawlibrary
ISL and respondent British Steel separately moved for the dismissal of the
complaint on the ground that it failed to state a cause of action against them. On
April 7, 1997, the RTC denied the motions to dismiss, 4 as well as the ensuing
motion for reconsideration. 5 ISL then filed its answer to the complaint.
On the other hand, respondent British Steel filed a petition for certiorari and
prohibition before the Court of Appeals, 6 docketed as CA-G.R. SP No. 44529.
Respondent claimed therein that the complaint did not contain a single averment
that respondent committed any act or is guilty of any omission in violation of
petitioners legal rights. Apart from the allegation in the complaints "Jurisdictional
Facts" that:chanrob1es virtual 1aw library

no other reference was made to respondent that would constitute a valid cause of
action against it. Since petitioner failed to plead any cause of action against
respondent as alternative defendant under Section 13, Rule 3, 8 the trial court
should have ordered the dismissal of the complaint insofar as respondent was
concerned.
Meanwhile, petitioner sought to amend its complaint by incorporating therein
additional factual allegations constitutive of its cause of action against Respondent.
Pursuant to Section 2, Rule 10 9 of the Rules of Court, petitioner maintained that it
can amend the complaint as a matter of right because respondent has not yet filed
a responsive pleading thereto. 10
Subsequently, petitioner filed a Manifestation and Motion 11 in CA-G.R. SP No.
44529 stating that it had filed a Motion to Admit Amended Complaint together with
said Amended Complaint before the trial court. Hence, petitioner prayed that the
proceedings in the special civil action be suspended.
On January 29, 1998, the trial court ruled on petitioners Motion to Admit Amended
Complaint thus:chanrob1es virtual 1aw library
WHEREFORE, the Amended Complaint is NOTED and further proceedings
thereon and action on the other incidents as aforementioned are hereby held in
abeyance until final resolution by the Honorable Court of Appeals (Special 6th
Division) of the petition for certiorari and prohibition of petitioner (defendant British)
and/or Manifestations and Motions of therein private respondent, herein plaintiff.
SO ORDERED. 12
Thereafter, on February 24, 1998, the Court of Appeals rendered the assailed
decision in CA-G.R. SP No. 44529 as follows:chanrob1es virtua1 1aw 1ibrary
WHEREFORE, this Court grants the writ of certiorari and orders the respondent
judge to dismiss without prejudice the Complaint in Civil Case No. 96-79674
against petitioner British Steel (Asia) Ltd. Costs against private Respondent.
SO ORDERED. 13
In the same decision, the Court of Appeals addressed petitioners prayer for

Page

1.05. Defendants British Steel (Asia) Ltd. and Ferro Trading Gmbh, while
understood by the plaintiff as mere suppliers of goods for defendant ISL, are
impleaded as party defendants pursuant to Section 13, Rule 3 of the Revised
Rules of Court. 7

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suspension of proceedings in this wise:chanrob1es virtual 1aw library
The incident which transpired after the filing of the instant petition for certiorari and
prohibition are immaterial in the resolution of this petition. What this Court is called
upon to resolve is whether the lower court committed grave abuse of discretion
when it denied petitioners motion to dismiss the complaint against it. The
admission or rejection by the lower court of said amended complaint will not,
insofar as this Court is concerned, impinge upon the issue of whether or not said
court gravely abused its discretion in denying petitioners motion to dismiss. 14
Petitioner filed a motion for reconsideration of the appellate courts decision, which
was denied in a resolution dated April 28, 1998. Hence, this petition, anchored on
the following grounds:chanrob1es virtual 1aw library
I
THE HON. COURT OF APPEALS ERRED IN ORDERING THE DISMISSAL OF
THE COMPLAINT AGAINST THE PRIVATE RESPONDENT FOR LACK OF
CAUSE OF ACTION UNDER THE ORIGINAL COMPLAINT EVEN AS SAID
COMPLAINT WAS ALREADY AMENDED AS A MATTER OF RIGHT AND
SUFFICIENT CAUSES OF ACTION ARE AVERRED IN THE AMENDED
COMPLAINT, IN GROSS VIOLATION OF SEC. 2, RULE 10 OF THE 1997 RULES
OF CIVIL PROCEDURE.
II
THE HON. COURT OF APPEALS ERRED IN HOLDING THAT IF THE
PETITIONER WANTS TO PURSUE ITS CASE AGAINST THE PRIVATE
RESPONDENT, IT HAS TO REFILE THE COMPLAINT, THUS PRE-EMPTING
THE RIGHT OF THE LOWER COURT TO RULE ON THE AMENDED
COMPLAINT AND COMPELLING THE PETITIONER TO LITIGATE ITS CAUSES
OF ACTION AGAINST THE PRIVATE RESPONDENT AS AN ALTERNATIVE
DEFENDANT IN A SEPARATE ACTION, THEREBY ABETTING MULTIPLICITY OF
SUITS. 15
The basic issue in this case is whether or not the Court of Appeals, by granting the
extraordinary writ of certiorari, correctly ordered the dismissal of the complaint for
failure to state a cause of action, despite the fact that petitioner exercised its right
to amend the defective complaint under Section 2, Rule 10 of the Rules of Court.
Stated differently, the query posed before us is: can a complaint still be amended
as a matter of right before an answer has been filed, even if there was a pending

Section 2, Rule 10 16 of the Revised Rules of Court explicitly states that a pleading
may be amended as a matter of right before a responsive pleading is served. This
only means that prior to the filing of an answer, the plaintiff has the absolute right to
amend the complaint whether a new cause of action or change in theory is
introduced. 17 The reason for this rule is implied in the subsequent Section 3 of
Rule 10. 18 Under this provision, substantial amendment of the complaint is not
allowed without leave of court after an answer has been served, because any
material change in the allegations contained in the complaint could prejudice the
rights of the defendant who has already set up his defense in the
answer.chanrob1es virtua1 1aw 1ibrary
Conversely, it cannot be said that the defendants rights have been violated by
changes made in the complaint if he has yet to file an answer thereto. In such an
event, the defendant has not presented any defense that can be altered 19 or
affected by the amendment of the complaint in accordance with Section 2 of Rule
10. The defendant still retains the unqualified opportunity to address the
allegations against him by properly setting up his defense in the answer.
Considerable leeway is thus given to the plaintiff to amend his complaint once, as
a matter of right, prior to the filing of an answer by the defendant.
The right granted to the plaintiff under procedural law to amend the complaint
before an answer has been served is not precluded by the filing of a motion to
dismiss 20 or any other proceeding contesting its sufficiency. Were we to conclude
otherwise, the right to amend a pleading under Section 2, Rule 10 will be rendered
nugatory and ineffectual, since all that a defendant has to do to foreclose this
remedial right is to challenge the adequacy of the complaint before he files an
answer.
Moreover, amendment of pleadings is favored and should be liberally allowed in
the furtherance of justice in order to determine every case as far as possible on its
merits without regard to technicalities. This principle is generally recognized to
speed up trial and save party litigants from incurring unnecessary expense, so that
a full hearing on the merits of every case may be had and multiplicity of suits
avoided. 21
In this case, the remedy espoused by the appellate court in its assailed judgment
will precisely result in multiple suits, involving the same set of facts and to which
the defendants would likely raise the same or, at least, related defenses. Plainly
stated, we find no practical advantage in ordering the dismissal of the complaint
against respondent and for petitioner to re-file the same, when the latter can still
clearly amend the complaint as a matter of right. The amendment of the complaint

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proceeding for its dismissal before the higher court?

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would not prejudice respondents or delay the action, as this would, in fact, simplify
the case and expedite it disposition.
The fact that the other defendants below has filed their answers to the complaint
does not bar petitioners right to amend the complaint as against Respondent.
Indeed, where some but not all the defendants have answered, the plaintiff may
still amend its complaint once, as a matter of right, in respect to claims asserted
solely against the non-answering defendant, but not as to claims asserted against
the other defendants. 22
Furthermore, we do not agree with respondents claim that it will be prejudiced by
the admission of the Amended Complaint because it had spent time, money and
effort to file its petition before the appellate court. 23 We cannot see how the result
could be any different for respondent, if petitioner merely re-filed the complaint
instead of being allowed to amend it. As adverted to earlier, amendment would
even work to respondents advantage since it will undoubtedly speed up the
proceedings before the trial court. Consequently, the amendment should be
allowed in the case at bar as a matter of right in accordance with the
rules.chanrob1es virtua1 1aw 1ibrary
WHEREFORE, the petition is GRANTED. The assailed decision and resolution of
the Court of Appeals in CA-G.R. SP No. 44529 dated February 24, 1998 and April
28, 1998, respectively, are REVERSED and SET ASIDE. The Regional Trial Court
of Manila, Branch 22 is further ordered to ADMIT petitioners Amended Complaint
in Civil Case No. 96-79674 and to conduct further proceedings in said case.
SO ORDERED.

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[G.R. No. 108538. January 22, 1996.]
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, Petitioners, v. THE
HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA
DIMALANTA, Respondents.chanroblesvirtuallawlibrary
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

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 DEFENDANTS 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.

Page

17 is not for the purpose of vesting it with jurisdiction but for complying with the
requirements of fair play or due process, so that he will be informed of the
pendency of the action against him and the possibility that property in the
Philippines belonging to him or in which he has an interest may be subjected to a
judgment in favor of the plaintiff and he can thereby take steps to protect his
interest if he is so minded.

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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:chanrob1es virtual 1aw library
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.chanroblesvirtuallawlibrary
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:chanrob1es virtual 1aw library
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 Valmontes spouse holds office
and where he can be found.chanroblesvirtual|awlibrary
Apparently, the foregoing averments were made on the basis of a letter previously
sent by petitioner Lourdes A. Valmonte to private respondents counsel in which, in
regard to the partition of the property in question, she referred private respondents
counsel to her husband as the party to whom all communications intended for her
should be sent. The letter reads:chanrob1es virtual 1aw library

DECISION

MENDOZA, J.:

July 4, 1991

This is in response to your letter, dated 20 June 1991, which I received on 3 July
1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte,
whose address, telephone and fax numbers appear
below.chanroblesvirtuallawlibrary
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita

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Dear Atty. Balgos:chanrob1es virtual 1aw library

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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: 1chanroblesvirtuallawlibrary
[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 wifes attorney (at least with regard to the dispute visa-vis (sic) the Paco property) would appear to be feeble or trifling, if not incredible.

Metro Manila
Telephone: 521-1736
Fax: 521-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte, who at
the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the
summons, insofar as he was concerned, but refused to accept the summons for
his wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept
the process on her behalf. Accordingly the process server left without leaving a
copy of the summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim.
Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason
private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte
entered a special appearance in behalf of his wife and opposed the private
respondents motion.chanroblesvirtual|awlibrary
In its Order dated July 3, 1992, the trial court, denied private respondents motion
to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration
was similarly denied on September 23, 1992. Whereupon, private respondent filed
a petition for certiorari, prohibition and mandamus with the Court of Appeals.
On December 29, 1992, the Court of Appeals rendered a decision granting the
petition and declaring Lourdes A. Valmonte in default. A copy of the appellate
courts decision was received by petitioner Alfredo D. Valmonte on January 15,
1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence,
this petition.

This view is bolstered by Atty. Valmontes 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.
x

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

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.

Page

manifestation by private respondent Lourdes A. Valmonte about her lack of


knowledge about the case instituted against her and her lawyer/husband/codefendant by her sister Rosita. . . .chanrobles.com : virtual lawlibrary

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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, which provides:chanroblesvirtuallawlibrary
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.

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.
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 persona cannot be brought because jurisdiction
over his person is essential to make a binding decision.

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem
is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is
domiciled in the Philippines or the property litigated or attached.
Service of summons in the manner provided in 17 is not for the purpose of vesting
it with jurisdiction but for complying with the requirements of fair play or due
process, so that he will be informed of the pendency of the action against him and
the possibility that property in the Philippines belonging to him or in which he has
an interest may be subjected to a judgment in favor of the plaintiff and he can
thereby take steps to protect his interest if he is so minded. 6chanroblesvirtual|
awlibrary
Applying the foregoing rules to the case at bar, private respondents action, which
is for partition and accounting under Rule 69, is in the nature of an action quasi in
rem. Such an action is essentially for the purpose of affecting the defendants
interest in a specific property and not to render a judgment against him. As
explained in the leading case of Banco Espaol Filipino v. Palanca: 7
[An action quasi in rem is] an action which while not strictly speaking an action in
rem partakes of that nature and is substantially such. . . . The action quasi in rem
differs from the true action in rem in the circumstance that in the former an
individual is named as defendant and the purpose of the proceeding is to subject

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.chanroblesvirtual|awlibrary
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."cralaw virtua1aw library
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.chanroblesvirtuallawlibrary
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

Page

his interest therein to the obligation or lien burdening the property. All proceedings
having for their sole object the sale or other disposition of the property of the
defendant, whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these proceedings is
conclusive only between the parties.

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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, 462463 (1975), in which it was held that service of summons upon the defendants
husband was binding on her. But the ruling in that case is justified because
summons were served upon defendants 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 defendants
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.chanrobles.com : virtual lawlibrary
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 husbands representative and attorney-in-fact in a civil case,
which he had earlier filed against William Gemperle. In fact Gemperles 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 respondents attorney
that "all communications" intended for her should be addressed to her husband

For the foregoing reasons, we hold that there was no valid service on petitioner
Lourdes A. Valmonte in this case.
WHEREFORE, the decision appealed from is REVERSED and the orders dated
July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch
48 are REINSTATED.
SO ORDERED.

Page

who is also her lawyer at the latters address in Manila, no power of attorney to
receive summons for her can be inferred therefrom. In fact the letter was written
seven months before the filing of this case below, and it appears that it was written
in connection with the negotiations between her and her sister, respondent Rosita
Dimalanta, concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was carried on by
counsel for the parties. But the authority given to petitioners husband in these
negotiations certainly cannot be construed as also including an authority to
represent her in any litigation.

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SECOND DIVISION
[G.R. No. 131724. February 28, 2000.]
MILLENIUM INDUSTRIAL COMMERCIAL CORPORATION, Petitioner, v.
JACKSON TAN,Respondent.
DECISION

MENDOZA, J.:

In December 1994, Millennium Industrial Commercial Corporation, petitioner


herein, executed a Deed of Real Estate Mortgage 1 over its real property covered
by TCT No. 24069 in favor of respondent Jackson Tan. The mortgage was
executed to secure payment of petitioners indebtedness to respondent in the
amount of P2 million, without monthly interest, but which, at maturity date on June
10, 1995, was payable in the amount of P 4 million.chanrobles.com :
chanrobles.com.ph
On November 9, 1995, respondent filed against petitioner a complaint for
foreclosure of mortgage in the Regional Trial Court, Branch 6, Cebu City. On
November 21, 1995, summons and a copy of the complaint were served upon
petitioner trough a certain Lynverd Cinches, described in the Sheriffs return, dated
November 23, 1995, as "a Draftsman, a person of sufficient age and (discretion)
working therein, he is the highest ranking officer or Officer-in-Charge of
defendants Corporation, to receive processes of the Court." 2
Petitioner moved for the dismissal of the complaint on the ground that there was no
valid service of summons upon it, as a result of which the trial court did not acquire
jurisdiction over it. Petitioner invoked Rule 14, 13 of the 1964 Rules of Court and
contended that service on Lynverd Cinches, as alleged in the sheriffs return, was
invalid as he is not one of the authorized persons on whom summons may be
served and that, in fact, he was not even its employee. 3
Petitioner also sought the dismissal of the complaint against it on the ground that it
had satisfied its obligation to respondent when the latter opted to be paid in shares
of stock under the following stipulation in the mortgage contract:chanrobles.com :
law library

Petitioner further prayed for "other reliefs just and equitable under the premises." 5
On December 15,1995, the trial court denied petitioners Motion to Dismiss. Its
order stated:chanrob1es virtual 1aw library
This refers to the Motion to Dismiss, dated December 4, 1995, by defendant
anchored on the following grounds:chanrob1es virtual 1aw library
1. That the Court had not acquired jurisdiction over the person of the defendant
corporation because summons was served upon a person who is not known to or
an employee of the defendant corporation.
2. That the obligation sought to be collected was already paid and extinguished.
By interposing the second ground, the defendant has availed of an affirmative
defense on the basis of which the Court has to hear and receive evidence. For the
Court to validly decide the said plea of the defendant. Thus, defendant is
considered to have then abandoned its first ground and is deemed to have
voluntarily submitted itself to the jurisdiction of the Court. It is a legal truism that
voluntary appearance cures the defect of the summons, if any. The defendants
filing of the motion to dismiss by pleading therein the second ground amounts to
voluntary appearance and it indeed cured the defect.chanrobles.com : law library
Wherefore, Motion to Dismiss is hereby denied for lack of merit. 6
Petitioner moved for reconsideration, but its notion was denied by the trial court in
its order, dated January 16, 1996, for failure of petitioner to raise any new ground.
Petitioner then filed a petition forcertiorari in the Court of Appeals, assailing the
aforesaid orders of the trial court.
On September 18, 1997, the Court of Appeals dismissed the petition. 7 The
appellate court ruled that although petitioner denied Lynverd Cinches authority to
receive summons for it, its actual receipt of the summons could be inferred from its
filing of a motion to dismiss, hence, the purpose for issuing summons had been
substantially achieved. Moreover, it was held, by including the affirmative defense
that it had already paid its obligation and praying for other reliefs in its Motion to
Dismiss, petitioner voluntarily submitted to the jurisdiction of the court. 8

Page

That in the remote possibility of failure on the part of the mortgagor to pay the
mortgage obligation and interest in cash, the MORTGAGEE at his option may
demand that payment be made in the form of shares of stock of Millennium
Industrial Commercial Corporation totaling at least 4,000,000 shares. 4

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Hence, this petition for review. Petitioner raises the following issues:chanrob1es
virtual 1aw library
I. WHETHER OR NOT SERVICE OF SUMMONS UPON A MERE DRAFTSMAN
WHO IS NOT OF THOSE UPON WHOM SUMMONS MAY BE SERVED IN CASE
OF A DEFENDANT CORPORATION AS MENTIONED IN THE RULES IS VALID.
II. WHETHER OR NOT THE INCLUSION OF ANOTHER AFFIRMATIVE RELIEF
IN A MOTION TO DISMISS ABANDONS AND WAIVES THE GROUND OF LACK
OF JURISDICTION OVER THE PERSON OF THE DEFENDANT THEREIN ALSO
PLEADED UNDER PREVAILING LAW AND
JURISPRUDENCE.chanrobles.com.ph:red
III. WHETHER OR NOT THERE IS A LEGAL GROUND TO GRANT
PETITIONERS MOTION TO DISMISS THE COMPLAINT BELOW.
First. Petitioner objects to the application of the doctrine of substantial compliance
in the service of summons for two reasons: (1) the enumeration of persons on
whom service of summons on a corporation may be effected in Rule 14, 13, is
exclusive and mandatory; and (2) even assuming that substantial compliance is
based on an unfounded speculation because there is nothing in the records to
show that Lynverd Cinches actually turned over the summons to any of the officers
of the corporation. 9 Petitioner contends that it was able to file a motion to dismiss
only because of its timely discovery of the foreclosure suit against it when it
checked the records of the case in the trial court.
The contention is meritorious.
Summons is the means by which the defendant in a case is notified of the
existence of an action against him and, thereby, the court is conferred jurisdiction
over the person of the defendant. 10 If the defendant is a corporation, Rule 14, 13
require that service of summons be made upon the corporations president,
manager, secretary, cashier, agent, or any of its directors. 11 The rationale of the
rule is that service must be made on a representative so integrated with the
corporation sued as to make it a priori presumable that he will realize his
responsibilities and know what he should do with any legal papers received by him.
12
Petitioner contends that the enumeration in Rule 14, 13 is exclusive and that
service of summons upon one who is not enumerated therein is invalid. This is the
general rule. 13 However, it is settled that substantial compliance by serving
summons on persons other than those mentioned in the above rule may be
justified. In G & G Trading Corporation v. Court of Appeals, 14 we ruled that

In Porac Trucking, Inc. v. Court of Appeals, 15 this Court enumerated the requisites
for the application of the doctrine of substantial compliance, to wit: (a) there must
be actual receipt of the summons by the person served, i.e., transferring
possession of the copy of the summons from the sheriff to the person served;(b)
the person served must sign a receipt or the sheriffs return; and (c) there must be
actual receipt of the summons by the corporation through the person on whom the
summons was actually served. 16 The third requisite is the most important for it is
through such receipt that the purpose of the rule on service of summons is
attained.
In this case, there is no dispute that the first and second requisites were fulfilled.
With respect to the third, the appellate court held that petitioners filing of a motion
to dismiss the foreclosure suit is proof that it received the copy of the summons
and the complaint. There is, however, no direct proof of this or that Lynverd
Cinches actually turned over the summons to any of the officers of the corporation.
In contrast, in our cases applying the substantial compliance rule, 17 there was
direct evidence, such as the admission of the corporations officers, of receipt of
summons by the corporation through the person upon whom it was actually
served. The question is whether it is allowable to merely infer actual receipt of
summons by the corporation through the person on whom summons was served.
We hold that it can not be allowed, For there to be substantial compliance, actual
receipt of summons by the corporation through the person served must be shown.
Where a corporation only learns of the service of summons and the filing of the
complaint against it through some person or means other than the person actually
served, the service of summons becomes meaningless. This is particularly true in
the present case where there is serious doubt if Lynverd Cinches, the person on
whom service of summons was effected, is in fact an employee of the corporation.
Except for the sheriffs return, there is nothing to show that Lynverd Cinches was
really a draftsman employed by the corporation.chanroblesvirtuallawlibrary

Page

although the service of summons was made on a person not enumerated in Rule
14, 13, if it appears that the summons and complaint were in fact received by the
corporation, there is substantial compliance with the rule as its purpose has been
attained.chanrobles.com : virtuallawlibrary

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lawlibrary
Second. We now turn to the issue of jurisdiction by estoppel. Both the trial court
and the Court of Appeals held that by raising the affirmative defense of payment
and by praying for other reliefs in its Motion to Dismiss, petitioner in effect waived
its objection to the trial courts jurisdiction over it. We think this is error.
Our decision in La Naval Drug Corporation v. Court of Appeals 18 settled this
question. The rule prior to La Naval was that if a defendant, in a motion to dismiss,
alleges grounds for dismissing the action other than lack of jurisdiction, he would
be deemed to have submitted himself to the jurisdiction of the court. 19 This rule
no longer holds true. Noting that the doctrine of estoppel by jurisdiction must be
unequivocal and intentional, we ruled in La Naval:chanrobles virtual lawlibrary
Jurisdiction over the person must be seasonably raised, i.e., that it is pleaded in a
motion to dismiss or by way of an affirmative defense. Voluntary appearance shall
be deemed a waiver of this defense. The assertion, however, of affirmative
defenses shall not be construed as an estoppel or as a waiver of such defense. 20
Third. Finally, we turn to the effect of petitioners prayer for "other reliefs" in its
Motion to Dismiss. In De Midgely v. Fernandos, 21 it was held that, in a motion to
dismiss, the allegation of grounds other than lack of jurisdiction over the person of
the defendant, including a prayer "for such other reliefs as" may be deemed
"appropriate and proper" amounted to voluntary appearance. This, however, must
be deemed superseded by the ruling in La Naval that estoppel by jurisdiction must
be unequivocal and intentional. It would be absurd to hold that petitioner
unequivocally and intentionally submitted itself to the jurisdiction of the court by
seeking other reliefs to which it might be entitled when the only relief that it can
properly ask from the trial court is the dismissal of the complaint against
it.chanrobles virtual lawlibrary
WHEREFORE, the decision of the Court of Appeals is REVERSED and the
complaint against petitioner is DISMISSED.
SO ORDERED.
Respondent casts doubt on petitioners claim that it came to know about the
summons and the complaint against it only after it learned that there was a
pending foreclosure of its mortgage. There is nothing improbable about this claim.
Petitioner was in default in the payment of its loan. It had received demand letters
from Respondent. Thus, it had reason to believe that a foreclosure suit would be
filed against it. The appellate court was, therefore, in error in giving weight to
respondents claims. Receipt by petitioner of the summons and complaint cannot
be inferred from the fact that it filed a Motion to Dismiss the case.chanrobles virtual

Page

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THIRD DIVISION
[G.R. No. 136426. August 6, 1999.]
E.B. VILLAROSA & PARTNER CO., LTD., Petitioner, v. HON. HERMINIO I.
BENITO, in his capacity as Presiding Judge, RTC, Branch 132, Makati City
and IMPERIAL DEVELOPMENT CORPORATION, Respondent.
DECISION

GONZAGA-REYES, J.:

Before this Court is a petition for certiorari and prohibition with prayer for the
issuance of a temporary restraining order and/or writ of preliminary injunction
seeking to annul and set aside the Orders dated August 5, 1998 and November 20,
1998 of the public respondent Judge Herminio I. Benito of the Regional Trial Court
of Makati City, Branch 132 and praying that the public respondent court be ordered
to desist from further proceeding with Civil Case No. 98-824.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with principal
office address at 102 Juan Luna St., Davao City and with branch offices at 2492
Bay View Drive, Tambo, Paraaque, Metro Manila and Kolambog, Lapasan,
Cagayan de Oro City. Petitioner and private respondent executed a Deed of Sale
with Development Agreement wherein the former agreed to develop certain parcels
of land located at Barrio Carmen, Cagayan de Oro belonging to the latter into a
housing subdivision for the construction of low cost housing units. They further
agreed that in case of litigation regarding any dispute arising therefrom, the venue
shall be in the proper courts of Makati.
On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach of
Contract and Damages against petitioner, as defendant, before the Regional Trial
Court of Makati allegedly for failure of the latter to comply with its contractual
obligation in that, other than a few unfinished low cost houses, there were no
substantial developments therein. 1
Summons, together with the complaint, were served upon the defendant, through
its Branch Manager Engr. Wendell Sabulbero at the stated address at Kolambog,
Lapasan, Cagayan de Oro City 2 but the Sheriffs Return of Service 3 stated that

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
allegedly on May 5, 1998 of the summons and the complaint, as shown in the
Sheriffs Return.
On June 22, 1998, plaintiff filed an Opposition to Defendants 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 Sheriffs 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 defendants Motion to
Dismiss as well as plaintiffs 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.chanroblesvirtuallawlibrary
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

Page

the summons was duly served "upon defendant E.B. Villarosa & Partner Co., Ltd.
thru its Branch Manager Engr. WENDELL SABULBERO on May 5, 1998 at their
new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the
signature on the face of the original copy of the summons."cralaw virtua1aw library

23

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Atty DP
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 defendants Motion for
Reconsideration 9 alleging that defendants 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.
Defendants 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 petitioners
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. v. NLRC 12 wherein it was held that service
upon a construction project manager is valid and in Gesulgon v. 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:jgc:chanrobles.com.ph
"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." (Emphasis supplied).

"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." (Emphasis 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 corporations 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 corporations 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.chanrobles
virtual lawlibrary
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.

Page

This provision revised the former Section 13, Rule 14 of the Rules of Court which
provided that:jgc:chanrobles.com.ph

24

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Atty DP

The designation of persons or officers who are authorized to accept summons for a
domestic corporation or partnership is now limited and more clearly specified in
Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states
"general manager" instead of only "manager" ; "corporate secretary" instead of
"secretary" ; and "treasurer" instead of "cashier." The phrase "agent, or any of its
directors" is conspicuously deleted in the new rule.
The particular revision under Section 11 of Rule 14 was explained by retired
Supreme Court Justice Florenz Regalado, thus: 23
". . . the then Sec. 13 of this Rule allowed service upon a defendant corporation to
be made on the president, manager, secretary, cashier, agent or any of its
directors. The aforesaid terms were obviously ambiguous and susceptible of broad
and sometimes illogical interpretations, especially the word agent of the
corporation. The Filoil case, involving the litigation lawyer of the corporation who
precisely appeared to challenge the validity of service of summons but whose very
appearance for that purpose was seized upon to validate the defective service is
an illustration of the need for this revised section with limited scope and specific
terminology. Thus the absurd result in the Filoil case necessitated the amendment
permitting service only on the in-house counsel of the corporation who is in effect
an employee of the corporation, as distinguished from an independent
practitioner." (Emphasis supplied)
Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court
Revision Committee, stated that" (T)he rule must be strictly observed. Service
must be made to one named in (the) statute . . ." 24
It should be noted that even prior to the effectivity of the 1997 Rules of Civil
Procedure, strict compliance with the rules has been enjoined. In the case of Delta
Motor Sales Corporation v. Mangosing, 25 the Court held:jgc:chanrobles.com.ph
"A strict compliance with the mode of service is necessary to confer jurisdiction of
the court over a corporation. The officer upon whom service is made must be one
who is named in the statute; otherwise the service is insufficient. . .
The purpose is to render it reasonably certain that the corporation will receive
prompt and proper notice in an action against it or to insure that the summons be
served on a representative so integrated with the corporation that such person will
know what to do with the legal papers served on him. In other words, to bring
home to the corporation notice of the filing of the action. . . .
The liberal construction rule cannot be invoked and utilized as a substitute for the

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 firms branch office has been held as improper as
summons should have been served at the firms principal office. In First Integrated
Bonding & Ins. Co., Inc. v. Dizon, 27 it was held that the service of summons on
the general manager of the insurance firms Cebu branch was improper; default
order could have been obviated had the summons been served at the firms
principal office.
And in the case of Solar Team Entertainment, Inc. v. 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.chanroblesvirtual|
awlibrary
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 defendants 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 v. 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
of the defendant can by no means be deemed a submission to the jurisdiction of

Page

plain legal requirements as to the manner in which summons should be served on


a domestic corporation. . ." (Emphasis supplied).

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Atty DP
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.

Page

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THIRD DIVISION
[G.R. No. 144294. March 11, 2003.]
SOLEDAD CHANLIONGCO RAMOS, FRANCISCO D. CHANLIONGCO,
ADELBERTO D. CHANLIONGCO, ARMANDO D. CHANLIONGCO and
FLORENCIO D. CHANLIONGCO, Petitioners, v. TERESITA D. RAMOS,
Spouses TERESITA and EDMUNDO S. MUYOT, Spouses VEDASTA and
FLORENCIO M. DATO, LORETO MUYOT, Spouses TERESITA and ELMER
SOLIS, LICERIA TORRES, Spouses CORAZON and VICENTE MACATUNGAL,
Spouses PRECILLA and CRISOSTOMO MUYOT, and Spouses CARIDAD and
SALVADOR PINGOL, Respondents.
DECISION

PANGANIBAN, J.:

Well-settled is the rule that a final judgment is immutable and unalterable. The only
exemptions to this rule are (1) the correction of clerical errors, (2) the so-called
nunc pro tunc entries which cause no prejudice to any party, and (3) void
judgments.
The Case
Before us is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of
Court, seeking to set aside the July 31, 2000 Resolution 2 of the Court of Appeals
(CA) in CA-GR CV No. 29507 which denied petitioners Motion to Set Aside the CA
Decision 3 dated September 28, 1995. The assailed Resolution disposed as
follows:chanrob1es virtua1 1aw 1ibrary
"Finding the opposition of [respondents] to be well-taken, the [Court hereby
DENIES the Motion]" 4
The Facts
Petitioners are children of the late Paulino V. Chanliongco Jr., who was the co-

The RTC upheld the sale insofar as the share of Narcisa was concerned. It ruled
that Adoracion had no authority to sell the shares of the other co-owners, because
the Special Power of Attorney had been executed in favor only of her mother,
Narcisa.
On appeal, the CA modified the ruling of the RTC. It held that while there was no
Special Power of Attorney in favor of Adoracion, the sale was nonetheless valid,
because she had been authorized by her mother to be the latters sub-agent.
There was thus no need to execute another special power of attorney in her favor
as sub-agent. This CA Decision was not appealed, became final and was entered
in favor of respondents on August 8, 1996. 7
On April 10, 1999, petitioner filed with the CA a Motion to Set Aside the Decision.
They contended that they had not been served a copy of either the Complaint or
the summons. Neither had they been impleaded as parties to the case in the RTC.
As it was, they argued, the CA Decision should be set aside because it adversely
affected their respective shares in the property without due process.
In denying the Motion of petitioners, the CA cited the grounds raised in
respondents Opposition: (a) the Motion was not allowed as a remedy under the
1997 Rules of Civil Procedure; (b) the Decision sought to be set aside had long
become final and executory; (c) the movants did not have any legal standing; and
(d) the Motion was purely dilatory and without merit. 8
Hence, this Petition. 9
The Issue
In their Memorandum, petitioners raise this sole issue for the Courts
consideration:jgc:chanrobles.com.ph
". . . [W]hether the Court of Appeals erred in denying petitioners Motion and
allowing its Decision dated September 25, 1995 to take its course, inspite of its

knowledge that the lower court did not acquire jurisdiction over the person of
petitioners and passing petitioners property in favor of respondent, hence without
due process of law." 10

Page

owner of a parcel of land known as Lot No. 2-G of Subdivision Plan SWO No.
7308. Situated in Tondo, Manila, it was co-owned by him, his sister Narcisa, and
his brothers Mario and Antonio. By virtue of a Special Power of Attorney executed
by the co-owners in favor of Narcisa, her daughter Adoracion C. Mendoza had sold
the lot to herein respondents on different days in September 1986. Because of
conflict among the heirs of the co-owners as to the validity of the sale, respondents
filed with the Regional Trial Court (RTC) 5 a Complaint 6 for interpleader to resolve
the various ownership claims.

27

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The Courts Ruling


The Petition is unmeritorious.
Main Issue:chanrob1es virtual 1aw library
Entitlement to Summons
It is well settled that a decision that has acquired finality becomes immutable and
unalterable. A final judgment may no longer be modified in any respect, even if the
modification is meant to correct erroneous conclusions of fact or law; 11 and
whether it will be made by the court that rendered it or by the highest court in the
land. 12 The only exceptions to this rule are the correction of (1) clerical errors, (2)
the so-called nunc pro tunc entries which cause no prejudice to any party, and (3)
void judgments. 13 To determine whether the CA Decision of September 28, 1995
is void, the failure to implead and to serve summons upon petitioners will now be
addressed. 14
To be able to rule on this point, the Court needs to determine whether the action is
in personam, in rem or quasi rem. The rules on the service of summons differ
depending on the nature of the action.
An action in personam is lodged against a person based on personal liability; an
action in rem is directed against the thing itself instead of the person; 15 while an
action quasi in rem names a person as defendant, but its object is to subject that
persons interest in a property to a corresponding lien or obligation. 16
The Complaint filed by respondents with the RTC called for an interpleader to
determine the ownership of the real property in question. 17 Specifically, it forced
person claiming an interest in the land to settle the dispute among themselves as
to which of them owned the property. Essentially, it sought to resolve the ownership
of the land and was not directed against the personal liability of any particular
person. It was therefore a real action, because it affected title to or possession of
real property. 18 As such, the Complaint was brought against the deceased
registered co-owners: Narcisa, Mario, Paulino and Antonio Chanliangco, as
represented by their respective estates.chanrob1es virtua1 1aw 1ibrary
Clearly, petitioners were not the registered owners of the land, but represented

Furthermore, at the time the complaint was filed, the 1964 Rules of Court were still
in effect. Under the old Rules, specifically Section 3 of Rule 3, 20 an executor or
administrator may sue or be sued without joining the party for whose benefit the
action is prosecuted or defended. 21 The present rule, 22 however, requires the
joinder of the beneficiary or the party for whose benefit the action is brought. Under
the former Rules, an executor or administrator is allowed to either sue or be sued
alone in that capacity. In the present case, it was the estate of petitioners father
Paulino Chanliongco, as represented by Sebrio Tan Quiming and Associates, that
was included as defendant 23 and served summons. 24 As it was, there was no
need to include petitioners as defendants. Not being parties, they were not entitled
to be served summons.
Petitioner Florencio D. Chanliongco, on the other hand, was impleaded in the
Complaint, but not served summons. However, the service of summons upon the
estate of his deceased father was sufficient, as the estate appeared for and on
behalf of all the beneficiaries and the heirs of Paulino Chanliongco, including
Florencio.
We also note that the counsel of petitioners, Atty. Felino V. Quiming Jr., is a partner
of the law firm that represented the estate of the deceased father. Hence, it can
reasonably be expected that the service upon the law firm was sufficient notice to
all the beneficiaries of the estate, including Petitioner Florencio D.
Chanliongco.chanrobles.com : law library
WHEREFORE, the Petition is hereby DENIED and the assailed Resolution
AFFIRMED. Costs against petitioners.
SO ORDERED.

THIRD DIVISION
G.R. No. 169116

March 28, 2007

Page

merely an inchoate interest thereto as heirs of Paulino. They had not standing in
court with respect to actions over a property of the estate, because the latter was
represented by an executor or administrator. 19 Thus, there was not need to
implead them as defendants in the case, inasmuch as the estates of the deceased
co-owners had already been made parties.

28

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BANK OF THE PHILIPPINE ISLANDS, Petitioner,
vs.
SPS. IRENEO M. SANTIAGO and LIWANAG P. SANTIAGO, CENTROGEN,
INC., REPRSENTED BY EDWIN SANTIAGO, Respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari filed by petitioner Bank of
the Philippine Islands (BPI) seeking to reverse and set aside the Decision1 of the
Court of Appeals dated 3 March 2005 and its Resolution2dated 28 July 2005
affirming the Order3 of the Regional Trial Court (RTC) of Santa Cruz, Laguna,
Branch 91, dated 20 March 2003 enjoining the extrajudicial foreclosure sale of a
parcel of land covered by Transfer Certificate of Title (TCT) No. T-131382
registered under the name of Spouses Ireneo and Liwanag Santiago. The
dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, premises considered, the petition is DISMISSED. The assailed
orders dated March 20, 2003 and August 25, 2003 of the respondent court in Civil
Case No. SC-4259 are hereby AFFIRMED.
Petitioner BPI is a banking institution duly organized and existing as such under
the Philippine laws.
Private respondent Centrogen, Inc. (Centrogen) is a domestic corporation engaged
in pharmaceutical business, duly organized and existing as such under the
Philippine laws and represented in this act by its President, Edwin Santiago, son of
private respondents Spouses Ireneo M. Santiago and Liwanag P. Santiago.
On several occasions, private respondent Centrogen obtained loans from Far East
Bank and Trust Company (FEBTC) in different amounts, the total of which reached
the sum P4,650,000.00, as evidenced by promissory notes executed by Edwin
Santiago.

Page

As a security for a fraction of the loan obligation, Ireneo M. Santiago executed a


Real Estate Mortgage over a parcel of land covered by TCT No. T-131382
registered under his name and located at Sta Cruz, Laguna, with an area of 2,166
square meters (subject property).4 The mortgage secured the principal loan in the
amount ofP490,000.00. Later on, the same property secured another loan
obligation in the amount of P1,504,280.00.5

29

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Atty DP
funding the erection of the structural details of the project, FEBTC, in gross
violation of the agreement, did not release the balance of Three Million Pesos that
will supposedly finance the purchase of machineries and equipment necessary for
the operation. As a result, the squalene project failed and the company groped for
funds to pay its loan obligations.

Subsequently, however, Centrogen incurred default and therefore the loan


obligation became due and demandable.

On 27 February 2003, BPI was summoned to file and serve its Answer to the
Complaint filed by Spouses Santiago and Centrogen. On the same day, the Sheriff
served a copy of the summons to the Branch Manager of BPI Sta. Cruz, Laguna
Branch, as evidenced by the Sheriffs Return,7 which reads:

Meanwhile, FEBTC merged with the BPI with the latter as the surviving
corporation. As a result, BPI assumed all the rights, privileges and obligations of
FEBTC.

SHERIFFS RETURN

On 13 December 2002, BPI filed an Extra-Judicial Foreclosure of Real Estate


Mortgage6 over the subject property before the RTC of Sta. Cruz, Laguna. In order
to validly effect the foreclosure, a Notice of Sale was issued by the Provincial
Sheriff on 21 January 2003. On the same day, the Spouses Santiago were served
with the copy of the Notice of Sale.
Upon receipt of the Notice of Sale, the Spouses Santiago and Centrogen filed a
Complaint seeking the issuance of a Temporary Restraining Order and Preliminary
and Final Injunction and in the alternative, for the annulment of the Real Estate
Mortgage with BPI.
The complaint alleged that the initial loan obligation in the amount of P490,000.00,
including interest thereon was fully paid as evidenced by Union Bank Check No.
0363020895 dated 20 December 2001 in the amount ofP648,521.51 with BPI as
payee. Such payment notwithstanding, the amount was still included in the amount
of computation of the arrears as shown by the document of Extra-Judicial
Foreclosure of Real Estate Mortgage filed by the latter.
In addition, the Spouses Santiago and Centrogen asseverated that the original
loan agreement was for the amount of Five Million Pesos. Such amount will be
supposedly utilized to finance the squalene project of the company. However, after
the amount of Two Million Pesos was released and was accordingly used in

Respectfully returned the original summons and order dated February 2003 with
the information that on February 27, 2003 the undersigned served the copy of
summons together with the corresponding copy of complaint and its Annexes and
order dated February 27, 2003, to defendants (sic) Bank of the Philippine Islands
(BPI) thru the manager Ms. Glona Ramos at Sta. Cruz Laguna Branch, at Sta.
Cruz, Laguna, to defendant Sheriff Marcial Opinion at the Office of the Provincial
Sheriff of Laguna, R.T.C. (sic) Sta. Cruz, Laguna as shown by their signatures on
the original summons and order.
Instead of filing an Answer, BPI filed a Motion to Dismiss8 the complaint on the
ground of lack of jurisdiction over the person of the defendant and other procedural
infirmities attendant to the filing of the complaint. In its Motion to Dismiss, BPI
claimed that the Branch Manager of its Sta. Cruz, Laguna Branch, was not one of
those authorized by Section 11, Rule 14 of the Revised Rules of Court9 to receive
summons on behalf of the corporation. The summons served upon its Branch
Manager, therefore, did not bind the corporation. In addition, it was alleged that the
complaint filed by the Spouses Santiago and Centrogen lacked a Certificate of
Non-Forum Shopping10 and was therefore dismissible. Finally, BPI underscored
that the person who verified the complaint was not duly authorized by Centrogens
Board of Directors to institute the present action as required by Section 23 of the
Corporation Code.11
In an Order12 dated 28 February 2003, the RTC denied the Motion to Dismiss and
emphasized that the nature of the case merited its removal from the purview of

Page

Section 11, Rule 14 of the Revised Rules of Court. Based on the provisions of
Section 5, Rule 58 of the Revised Rules of Court,13 the RTC declared that the
instant Order is still valid and binding despite non-compliance with the provisions of
Section 11, Rule 14 of the same Rules. The dispositive portion of the Order reads:

30

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Atty DP
To avoid further argument as regards the proper service of summons to Defendant
Bank, the Branch Clerk of Court is hereby directed to issue another summons and
serve copy of the same together with the complaint and its annexes to any of the
officers of the Defendant Bank as provided by the rules of civil procedure.15

WHEREFORE, premises considered, the motion to dismiss is hereby denied


because of the presence of extreme urgency wherein the Court has jurisdiction to
act on the TRO despite lack of proper service of summons. Let the instant case be
called for summary hearing on plaintiffs application for temporary restraining order.

In compliance with the aforesaid Order, the Branch Clerk of Court caused the
issuance of a new summons on 7 March 2003, a copy of which was served upon
the Office of the Corporate Secretary of the BPI on 11 March 2003, as evidenced
by the Sheriffs Return,16 which reads:

After summary hearing on the Spouses Santiago and Centrogens application for
Temporary Restraining Order, the RTC, on 28 February 2003, issued an
Order14 enjoining the Provincial Sheriff from proceeding with the extra-judicial
foreclosure sale of the subject property until the propriety of granting a preliminary
injunction is ascertained. The decretal portion of the said Order reads:

Sheriffs Return

Wherefore, premises considered, the Court orders that pending the resolution of
the plaintiffs prayer for preliminary injunction:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents
are enjoined from proceeding with the threatened extra-judicial
foreclosure sale (to be conducted today) of the parcel of land owned by
plaintiffs Spouses Ireneo M. Santiago and Liwanag P. Santiago located in
(sic) Brgy. Sto. Angel Norte, Sta. Cruz, Laguna.
2. The application for a preliminary injunction is hereby set for hearing on
March 10, 2003 at 1:30 pm. Further, the plaintiffs are hereby ordered to
immediately file a bond amounting to One Hundred Thousand Pesos
(P100,000.00) to answer for damages that Defendant Bank may sustain if
the court should finally decide that the plaintiffs are not entitled thereto.
On 6 March 2003, the RTC ordered the service of new summons to BPI in
accordance with the provisions of the Revised Rules of Court. The aforesaid Order
reads:

This is to Certify that on March 11, 2003 the undersigned caused the service of
summons together with the copy of complaint and its annexes to defendant Bank
of the Philippine Islands (BPI) and receive (sic) by the Office of the Corporate
Secretary dated March 11, 2003 at the BPI Building Ayala Avenue, Makati City.
On 20 March 2003, the RTC issued an Order granting the application for the
issuance of a Writ of Preliminary Injunction filed by the Spouses Santiago and
Centrogen. It enjoined the extra-judicial foreclosure sale of the subject property
pending resolution of the main action for Annulment of Real Estate Mortgage or
until further orders of the trial court. In issuing the Writ of Preliminary Injunction, it
rationalized that to allow the foreclosure without hearing the main case would work
injustice to the complainant and since Spouses Santiago and Centrogen claimed
that the first loan in the amount of P490,000.00 secured by the property subject of
the extra-judicial sale had long been paid by Centrogen through a Union Bank
Check No. 0363020895 presented as evidence. The dispositive part of the Order
reads:
Wherefore, premises considered, the Court orders that pending the resolution of
the main action for the annulment of the real estate mortgage, etc., and /or order
from this Court:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents
are enjoined from proceeding with the threatened extra-judicial
foreclosure sale of the parcel of land covered by TCT No. T-131382

2. The bond in the amount of One Hundred Thousand (P100,000.00)


Pesos ordered by the Court to be posted by the plaintiffs to answer for
damages that defendant bank may sustain if the court should finally
decide that the plaintiffs are entitled thereto still stands.
The Motion for Reconsideration filed by BPI was denied by the RTC in its
Order17 dated 25 August 2003.
Aggrieved, BPI filed a Petition for Certiorari before the Court of Appeals seeking
the reversal of the adverse Orders of the RTC.
On 3 March 2005, the Court of Appeals rendered a Decision18 affirming the
assailed Orders of the RTC and dismissing the Petition for Certiorari filed by BPI.
The Court of Appeals declared that jurisdiction was acquired upon the service of
new summons. Before the assailed Orders were therefore issued, the RTC
properly acquired jurisdiction over the person of BPI.
Undaunted, BPI filed this instant Petition for Review on Certiorari under Rule 45 of
the Revised Rules of Court. For our resolution are the following issues:
I.
WHETHER OR NOT THE RTC ACQUIRED JURISDICTION OVER THE PERSON
OF BPI WHEN THE ORIGINAL SUMMONS WAS SERVED UPON THE BRANCH
MANAGER OF ITS STA. CRUZ, LAGUNA BRANCH.
II.
WHETHER OR NOT THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION
IN ISSUING THE WRIT OF PRELIMINARY INJUNCTION.

Page

owned by Plaintiffs Spouses Ireneo M. Santiago and Liwanag P. Santiago


located in Brgy. Sto. Angel, Sta. Cruz, Laguna.

31

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Atty DP
BPI vehemently insists that the court a quo did not acquire jurisdiction over its
person and consequently, the Order issued by the RTC, permanently enjoining the
foreclosure sale, was therefore void and does not bind BPI.
We are not persuaded.
The pertinent provision of the Revised Rules of Court provides:
Sec. 11, Rule 14. 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.
Basic is the rule that 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.19 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.
Applying the aforestated principle in the case at bar, we rule that the service of
summons on BPIs Branch Manager did not bind the corporation for the branch
manager is not included in the enumeration of the statute of the persons upon
whom service of summons can be validly made in behalf of the corporation. Such
service is therefore void and ineffectual.
However, upon the issuance and the proper service of new summons on 11
March 2003, before the Writ of Preliminary Injunction was issued on 20 March
2003, whatever defect attended the service of the original summons, was
promptly and accordingly cured.
It bears stressing, that on 7 March 2003, the Branch Clerk of Court issued a new
summons which was properly served upon BPIs Corporate Secretary on 11 March
2003, as evidenced by the Sheriffs Return.

Inarguably, before the Order granting the application for Writ of Preliminary
Injunction was issued, the RTC already acquired jurisdiction over the person of BPI
by virtue of the new summons validly served on the Corporate Secretary. The fact
that the original summons was invalidly served is of no moment since jurisdiction
over BPI was subsequently acquired by the service of a new summons.
In the case of The Philippine American Life and General Insurance Company v.
Brevea,[22] we ruled:
A case should not be dismissed simply because an original summons was
wrongfully served. It should be difficult to conceive, for example, that when a
defendant personally appears before a Court complaining that he had not been
validly summoned, that the case against him should be
dismissed. An alias summons can be actually served on said defendant.
xxxx
x x x It is not pertinent whether the summons is designated as an "original"
or an "alias" summons as long as it has adequately served its purpose. What
is essential is that the summons complies with the requirements under the
Rules of Court and it has been duly served on the defendant together with
the prevailing complaint. x x x Moreover, the second summons was technically
not an alias summons but more of a new summons on the amended complaint. It
was not a continuation of the first summons considering that it particularly referred
to the amended complaint and not to the original complaint. (Emphases supplied.)
BPIs lamentation, at every turn, on the invalidity of the service of summons made
on the Branch Manager and its deliberate neglect to acknowledge the fact that a
new summons was accordingly served on its Corporate Secretary, is an attempt in
futility to mislead this Court into believing that the court a quo never acquired

Page

The subsequent service of summons was neither disputed nor was it mentioned by
BPI except in a fleeting narration of facts and therefore enjoys the presumption that
official duty has been regularly performed.20 The Process Servers Certificate of
Service of Summons is a prima facie evidence of facts set out in that certificate.21

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jurisdiction over the case and thus the issuance of the Writ of Preliminary
Injunction was invalid.
We are not drawn into petitioners sophistry.
In the case of G&G Trading Corporation v. Court of Appeals,23 this Court made the
following pronouncements:
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. x x x The need for speedy justice must prevail
over a technicality.
In explaining the test on the validity of service of summons, Justice Florenz
Regalado24 stressed that substantial justice must take precedence over technicality
and thus stated:
The ultimate test on the validity and sufficiency on service of summons is whether
the same and the attachments thereto where ultimately received by the corporation
under such circumstances that no undue prejudice is sustained by it from the
procedural lapse and it was afforded full opportunity to present its responsive
pleadings. This is but in accord with the entrenched rule that the ends of
substantial justice should not be subordinated to technicalities and, for which
purpose, each case should be examined within the factual milieu peculiar to it.
Prescinding from the above, we deem it best to underscore that there is no hard
and fast rule pertaining to the manner of service of summons. Rather, substantial
justice demands that every case should be viewed in light of the peculiar
circumstances attendant to each.
In any event, as it is glaringly evident from the records of the case that jurisdiction
over the person of the defendant was validly acquired by the court by the valid
service of a new summons before the writ of preliminary injunction was issued and
guided by jurisprudential pronouncements heretofore adverted to, we hold that the

Having settled this issue necessitates us to look into the propriety of the issuance
of the Writ of Preliminary Injunction.
BPI asserts that the RTC gravely abused its discretion in granting the Spouses
Santiago and Centrogens application for the Writ of Preliminary Injunction in the
absence of showing that the latter have a clear legal right sought to be protected.
Again, we do not agree.
An injunction is a preservative remedy for the protection of ones substantive right
or interest; it is not a cause of action by itself but merely a provisional remedy, an
adjunct to the main suit.25 The purpose of injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and educated. Its sole aim is to preserve the status quo until the
merits of the case is heard fully.26
The issuance of the writ of preliminary injunction as an ancillary or preventive
remedy to secure the rights of a party in a pending case is entirely within the
discretion of the court taking cognizance of the case, the only limitation being that
the discretion should be exercised based upon the grounds and in a manner
provided by law. Before a writ of preliminary injunction may be issued, the following
requisites must be complied with: (1) a right inesse or a clear or unmistakable right
to be protected; (2) violation of that right; and (3) that there is an urgent and
permanent act and urgent necessity for the writ to prevent serious damage.27
Verily, the aforestated requisites for the issuance of the Writ of Preliminary
Injunction have been fully complied with. The right of Spouses Santiago over the
property clearly exists since they are the registered owners thereof, and the
existence of a Real Estate Mortgage does not undermine the right of the absolute
owner over the property. The violation of such right is manifest in the threatened
foreclosure proceedings commenced by BPI amidst the claim that the principal
obligation has been fully paid. Finally, to allow the foreclosure of the subject
property without first calibrating the evidence of opposing parties pertaining to the

Page

proceedings attendant to the issuance of the writ of preliminary injunction were


regular.

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action for the annulment of mortgage would cause irreparable damage to the
registered owner.
The right of BPI to foreclose the subject property is under dispute upon the claim
interposed by the Spouses Santiago and Centrogen that payments for the loan
secured by the property subject to the threatened foreclosure proceedings were
already made. To support their assertions, Spouses Santiago and Centrogen
presented as evidence Union Bank Check No. 0363020895 dated 20 December
2001 in the amount of P648,521.51, with BPI as payee. From this, we can deduce
that the right of BPI to foreclose the subject property is questionable. We cannot
therefore allow the foreclosure of the Real Estate Mortgage to proceed without first
setting the main case for hearing so that based on the evidence presented by the
parties, the trial court can determine who between them has the better right over
the subject property. To rule otherwise would cause a grave irreparable damage to
the Spouses Santiago and Centrogen.
Parenthetically, this petition affords us the opportunity to once again reiterate the
rule that the issuance of the writ of preliminary injunction rests entirely within the
discretion of the court and generally not interfered with except in case of manifest
abuse. The assessment and evaluation of evidence in the issuance of the writ of
preliminary injunction involve finding of facts ordinarily left to the trial court for its
conclusive determination.28
In Toyota Motor Phils. Corp. Workers Association v. Court of
Appeals,29 citing Ubanes, Jr. v. Court of Appeals,30we made the following
declaration:
[T]he matter of the issuance of writ of a preliminary injunction is addressed to the
sound discretion of the trial court, unless the court commits a grave abuse of
discretion. Grave abuse of discretion in the issuance of writs of preliminary
injunction implies a capricious and whimsical exercise of judgment that is
equivalent to lack of jurisdiction or whether the power is exercised in an arbitrary or
despotic manner by reason of passion, prejudice or personal aversion amounting
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined, or
to act at all in contemplation of law. x x x.

For purposes of preliminary injunction, between the evidence presented by [the


spouses Santiago and Centrogen] and [BPI], the evidence of the former carries
more weight. The evidence of [the spouses Santiago and Centrogen] established
that to allow extra-judicial foreclosure without hearing the main action for the
annulment of mortgage would probably work injustice to the plaintiffs and would
probably violate their rights over the subject lot.
Furthermore, this case involves complicated issues that must be resolved first
before altering the status quo. The issue of payment and non-payment of the loan
and the issue of breach of the second loan directly affect the rights of the plaintiffs
over the subject lot. Hence, the last actual, peaceable, uncontested status of the
parties before the controversy must be preserved.
The unyielding posture of BPI that its right to foreclose the subject property was
violated since it is permanently barred from proceeding with the auction sale is
patently erroneous. The RTC, in the exercise of its discretion merely intended to
preserve the status quo while the principal action for the annulment of mortgage is
heard with the end view that no irreversible damage may be caused to the
opposing parties. We find nothing whimsical, arbitrary or capricious in the exercise
of the RTC of its discretion.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition
is DENIED. The Decision dated 3 March 2005, and the Resolution dated 28 July
2005, rendered by the Court of Appeals in CA-G.R. SP No. 80643, are
herebyAFFIRMED. Costs against petitioner.
SO ORDERED.

Page

In the case at bar, after summary hearing and evaluation of evidence presented by
both contending parties, the RTC ruled that justice would be better served if status
quo is preserved until the final determination of the merits of the case, to wit:

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Page

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Personal service of summons to petitioner failed because he could not be located


in his last known address despite earnest efforts to do so. Subsequently, on
respondent's motion, the trial court allowed service of summons by publication.
Respondent caused the publication of the summons in Remate, a newspaper of
general circulation in the Philippines, on May 20, 2003. Thereafter, respondent
submitted the affidavit of publication of the advertising manager of Remate5 and an
affidavit of service of respondent's employee6 to the effect that he sent a copy of
the summons by registered mail to petitioner's last known address.
When petitioner failed to file his answer within the prescribed period, respondent
moved that the case be set for the reception of its evidence ex parte. The trial court
granted the motion in an order dated September 11, 2003.
Respondent proceeded with the ex parte presentation and formal offer of its
evidence. Thereafter, the case was deemed submitted for decision on October 15,
2003.
On October 28, 2003, petitioner filed an "Omnibus Motion for Reconsideration and
to Admit Attached Answer." He sought reconsideration of the September 11, 2003
order, alleging that the affidavit of service submitted by respondent failed to comply
with Section 19, Rule 14 of the Rules of Court as it was not executed by the clerk
of court. He also claimed that he was denied due process as he was not notified of
the September 11, 2003 order. He prayed that respondent's evidence ex parte be
stricken off the records and that his answer be admitted.

FIRST DIVISION
[G.R. NO. 170943, September 23, 2008]
PEDRO T. SANTOS, JR., Petitioner, v. PNOC EXPLORATION
CORPORATION, Respondent.
DECISION
CORONA, J.:
This is a petition for review1 of the September 22, 2005 decision2 and December
29, 2005 resolution3of the Court of Appeals in CA-G.R. SP No. 82482.
On December 23, 2002, respondent PNOC Exploration Corporation filed a
complaint for a sum of money against petitioner Pedro T. Santos, Jr. in the
Regional Trial Court of Pasig City, Branch 167. The complaint, docketed as Civil
Case No. 69262, sought to collect the amount of P698,502.10 representing
petitioner's unpaid balance of the car loan4 advanced to him by respondent when
he was still a member of its board of directors.

Respondent naturally opposed the motion. It insisted that it complied with the rules
on service by publication. Moreover, pursuant to the September 11, 2003 order,
petitioner was already deemed in default for failure to file an answer within the
prescribed period.
In an order dated February 6, 2004, the trial court denied petitioner's motion for
reconsideration of the September 11, 2003 order. It held that the rules did not
require the affidavit of complementary service by registered mail to be executed by
the clerk of court. It also ruled that due process was observed as a copy of the
September 11, 2003 order was actually mailed to petitioner at his last known
address. It also denied the motion to admit petitioner's answer because the same
was filed way beyond the reglementary period.
Aggrieved, petitioner assailed the September 11, 2003 and February 6, 2004
orders of the trial court in the Court of Appeals via a petition for certiorari . He
contended that the orders were issued with grave abuse of discretion. He imputed

During the pendency of the petition in the Court of Appeals, the trial court rendered
its decision in Civil Case No. 69262. It ordered petitioner to pay P698,502.10 plus
legal interest and costs of suit.7
Meanwhile, on September 22, 2005, the Court of Appeals rendered its
decision8 sustaining the September 11, 2003 and February 6, 2004 orders of the
trial court and dismissing the petition. It denied reconsideration.9 Thus, this petition.
Petitioner essentially reiterates the grounds he raised in the Court of Appeals,
namely, lack of jurisdiction over his person due to improper service of summons,
failure of the trial court to furnish him with copies of its orders and processes
including the September 11, 2003 order and preference for technicality rather than
justice and equity. In particular, he claims that the rule on service by publication
under Section 14, Rule 14 of the Rules of Court applies only to actions in rem, not
actionsin personam like a complaint for a sum of money. He also contends that the
affidavit of service of a copy of the summons should have been prepared by the
clerk of court, not respondent's messenger.
The petition lacks merit.
Propriety Of
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are unknown. - In
any action where the defendant is designated as an unknown owner, or the like,
orwhenever his whereabouts are unknown and cannot be ascertained by
diligent inquiry, service may, by leave of court, be effected upon him by
publication in a newspaper of general circulation and in such places and for
such times as the court may order. (emphasis supplied)
Since petitioner could not be personally served with summons despite diligent
efforts to locate his whereabouts, respondent sought and was granted leave of
court to effect service of summons upon him by publication in a newspaper of
general circulation. Thus, petitioner was properly served with summons by
publication.
Petitioner invokes the distinction between an action in rem and an action in
personam and claims that substituted service may be availed of only in an

Page

the following errors to the trial court: taking cognizance of the case despite lack of
jurisdiction due to improper service of summons; failing to furnish him with copies
of its orders and processes, particularly the September 11, 2003 order, and
upholding technicality over equity and justice.

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action in rem. Petitioner is wrong. The in rem/in personam distinction was
significant under the old rule because it was silent as to the kind of action to which
the rule was applicable.10 Because of this silence, the Court limited the application
of the old rule to in rem actions only.11
This has been changed. The present rule expressly states that it applies "[i]n any
action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent
inquiry." Thus, it now applies to any action, whetherin personam, in rem or quasi in
rem.12
Regarding the matter of the affidavit of service, the relevant portion of Section
19,13 Rule 14 of the Rules of Court simply speaks of the following:
... an affidavit showing the deposit of a copy of the summons and order for
publication in the post office, postage prepaid, directed to the defendant by
registered mail to his last known address.
Service of summons by publication is proved by the affidavit of the printer, his
foreman or principal clerk, or of the editor, business or advertising manager of the
newspaper which published the summons. The service of summons
by publication is complemented by service of summons byregistered mail to the
defendant's last known address. This complementary service is evidenced by an
affidavit "showing the deposit of a copy of the summons and order for publication in
the post office, postage prepaid, directed to the defendant by registered mail to his
last known address."
The rules, however, do not require that the affidavit of complementary service be
executed by the clerk of court. While the trial court ordinarily does the mailing of
copies of its orders and processes, the duty to make the complementary service by
registered mail is imposed on the party who resorts to service by publication.
Moreover, even assuming that the service of summons was defective, the trial
court acquired jurisdiction over the person of petitioner by his own voluntary
appearance in the actionagainst him. In this connection, Section 20, Rule 14 of
the Rules of Court states:
SEC. 20. Voluntary appearance. - The defendant's voluntary appearance in the
action shall be equivalent to service of summons. The inclusion in a motion to
dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance. (emphasis supplied)
Petitioner voluntarily appeared in the action when he filed the "Omnibus Motion for
Reconsideration and to Admit Attached Answer"14 This was equivalent to service of
summons and vested the trial court with jurisdiction over the person of petitioner.
Entitlement To

The trial court allowed respondent to present its evidence ex parte on account of
petitioner's failure to file his answer within the prescribed period. Petitioner assails
this action on the part of the trial court as well as the said court's failure to furnish
him with copies of orders and processes issued in the course of the proceedings.
The effects of a defendant's failure to file an answer within the time allowed
therefor are governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of
the Rules of Court:
SEC. 3. Default; declaration of. - If the defending party fails to answer within
the time allowed therefor, the court shall, upon motion of the claiming party
with notice to the defending party, and proof of such failure, declare the
defending party in default. Thereupon, the court shall proceed to render
judgment granting the claimant such relief as his pleading may warrant, unless the
court in its discretion requires the claimant to submit evidence. Such reception of
evidence may be delegated to the clerk of court.
SEC. 4. Effect of order of default. - A party in default shall be entitled to notice
of subsequent proceedings but not to take part in the trial. (emphasis supplied)
If the defendant fails to file his answer on time, he may be declared in default upon
motion of the plaintiff with notice to the said defendant. In case he is declared in
default, the court shall proceed to render judgment granting the plaintiff such relief
as his pleading may warrant, unless the court in its discretion requires the plaintiff
to submit evidence. The defaulting defendant may not take part in the trial but shall
be entitled to notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed to file his
answer on time. That was in fact why he had to file an "Omnibus Motion for
Reconsideration and to Admit Attached Answer." But respondent moved only for
the ex parte presentation of evidence, not for the declaration of petitioner in
default. In its February 6, 2004 order, the trial court stated:
The disputed Order of September 11, 2003 allowing the presentation of evidence
ex-parte precisely ordered that "despite and notwithstanding service of summons
by publication, no answer has been filed with the Court within the required period
and/or forthcoming.["] Effectively[,] that was a finding that the defendant [that
is, herein petitioner] was in default for failure to file an answer or any
responsive pleading within the period fixed in the publication as precisely the
defendant [could not] be found and for which reason, service of summons by
publication was ordered. It is simply illogical to notify the defendant of the Order of
September 11, 2003 simply on account of the reality that he was no longer residing
and/or found on his last known address and his whereabouts unknown - thus the
publication of the summons. In other words, it was reasonable to expect that the

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Notice Of Proceedings

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defendant will not receive any notice or order in his last known address. Hence, [it
was] impractical to send any notice or order to him. Nonetheless, the record[s]
will bear out that a copy of the order of September 11, 2003 was mailed to the
defendant at his last known address but it was not claimed. (emphasis supplied)
As is readily apparent, the September 11, 2003 order did not limit itself to
permitting respondent to present its evidence ex parte but in effect issued an order
of default. But the trial court could not validly do that as an order of default can be
made only upon motion of the claiming party.15 Since no motion to declare
petitioner in default was filed, no default order should have been issued.
To pursue the matter to its logical conclusion, if a party declared in default is
entitled to notice of subsequent proceedings, all the more should a party who has
not been declared in default be entitled to such notice. But what happens if the
residence or whereabouts of the defending party is not known or he cannot be
located? In such a case, there is obviously no way notice can be sent to him and
the notice requirement cannot apply to him. The law does not require that the
impossible be done.16Nemo tenetur ad impossibile. The law obliges no one to
perform an impossibility.17 Laws and rules must be interpreted in a way that they
are in accordance with logic, common sense, reason and practicality.18
Hence, even if petitioner was not validly declared in default, he could not
reasonably demand that copies of orders and processes be furnished him. Be that
as it may, a copy of the September 11, 2003 order was nonetheless still mailed to
petitioner at his last known address but it was unclaimed.
CorrectnessOf
Non-Admission Of Answer
Petitioner failed to file his answer within the required period. Indeed, he would not
have moved for the admission of his answer had he filed it on time. Considering
that the answer was belatedly filed, the trial court did not abuse its discretion in
denying its admission.
Petitioner's plea for equity must fail in the face of the clear and express language
of the rules of procedure and of the September 11, 2003 order regarding the period
for filing the answer. Equity is available only in the absence of law, not as its
replacement.19 Equity may be applied only in the absence of rules of procedure,
never in contravention thereof.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.

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Page

SO ORDERED

On August 20, 1998, respondent EIM International Sales, Inc. filed in the Regional
Trial Court (RTC) of Pasig City a Complaint for collection of sum of money with
prayer for issuance of preliminary attachment against Wood Based Panels, Inc.,
Sinrimco, Inc., Manfred Luig and petitioner. The case was docketed as Civil Case
No. 66974 and raffled to Branch 167 of the RTC of Pasig City. Petitioner was
impleaded in the case because he was the President of both Wood Based Panels,
Inc. and Sinrimco, Inc.
Subsequently, summons were served upon the two corporations and Luig
(defendants). The sheriff failed to serve the summons intended for the petitioner
because the former could not locate the petitioners address as indicated in the
complaint. Said address was obtained by the respondent from the General
Information Sheets filed with the Securities and Exchange Commission by the two
corporations. 1
The defendants filed a motion to dismiss, but the same was denied by the trial
court. Thereafter, they filed their respective answers to the complaint. The
respondent then filed a motion to set the case for pre-trial, and the court granted
the same and set the pre-trial on October 19, 1999. A notice of pre-trial was sent
by the RTC to the defendants, including the petitioner. The notice to the latter was
again sent to the address indicated in the complaint.

SECOND DIVISION
[G.R. No. 147038. April 24, 2003.]
RICHARD TEH, Petitioner, v. THE HONORABLE COURT OF APPEALS, HON.
ALFREDO C. FLORES, Presiding Judge, Regional Trial Court of Pasig City,
Branch 167, EIM INTERNATIONAL SALES, INC., Respondents.
DECISION

CALLEJO, SR., J.:

This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure.
Petitioner Richard Teh assails the Resolution of the Court of Appeals dated March
14, 2000 which dismissed his petition forcertiorari for failure to attach the original or
certified true copies of the annexes thereto, as well as the appellate courts
Resolution dated February 9, 2001 dismissing petitioners motion for
reconsideration for lack of merit.chanrob1es virtua1 1aw 1ibrary
The antecedent facts of the case are as follows:chanrob1es virtual 1aw library

On October 19, 1999, the petitioner filed a Motion to Dismiss the complaint on the
ground that the trial court had not acquired jurisdiction over his person because he
had not been served with summons. The trial court ordered the cancellation of the
pre-trial and the resetting thereof on November 19, 1999. It, likewise, ordered the
respondent to submit a reply or opposition to petitioners motion to dismiss within
five days from October 19, 1999.
The next day, October 20, 1999, the respondent filed a Comment explaining that
summons had not been served on the petitioner because, according to the sheriff,
the petitioners address indicated in the complaint, "138 Maria Clara Street, Sta.
Mesa, Manila," could not be located.
The trial court issued an Omnibus Order dated November 17, 1999 denying
petitioners motion to dismiss and directing that an alias summons be issued
against the petitioner to be served upon him at 138 Maria Clara Street, Sta. Mesa,
Manila. The respondent thereafter filed a manifestation and motion, informing the
court that the address of the petitioner as indicated in the complaint was
erroneous, and that summons should instead be served upon him at "138 Maria
Clara Street, Sta. Mesa Heights, Quezon City," which was his correct address.

The trial court issued an Order dated January 25, 2000 denying the petitioners
motion for reconsideration, which order the petitioner received on February 3,
2000.

Page

On December 14, 1999, the petitioner filed a Motion for Reconsideration of the trial
courts omnibus order. He contended therein that the case should be dismissed in
view of the trial courts failure to acquire jurisdiction over his person and the
respondents failure to prosecute the case, considering that more than a year had
passed since the complaint was instituted and yet summons had not yet been
served on him. The respondent opposed the petitioners motion for
reconsideration.

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the petition would later be dismissed for lack of merit because it only stated therein
that the petition was being dismissed on the ground of a technicality.
He, likewise, contends that the Court of Appeals erred in ruling that the trial courts
order denying petitioners motion to dismiss "is an interlocutory order and therefore
beyond the scope of a petition for certiorari." 4 The petitioner asseverates that the
trial court should have dismissed the case because it in fact admitted that
summons had not yet been served on him, and that such failure to serve summons
amounts to a failure on the respondents part to prosecute.chanrob1es virtua1 1aw
1ibrary
There is no merit in the petition.
On February 28, 2000, the petitioner filed with the Court of Appeals a Petition
for Certiorari and Prohibition questioning the trial courts November 17, 1999
Omnibus Order and the January 25, 2000 Order denying his motion for
reconsideration.
On March 14, 2000, the appellate court issued its Resolution dismissing the
petition for failure to attach certified true copies of relevant documents referred to
in the petition. 2
The petitioner filed a motion for reconsideration of the foregoing resolution, but
said motion was denied by the Court of Appeals in a Resolution dated February 9,
2001. The appellate court upheld the petitioners argument that Rule 65 of the
Rules of Civil Procedure requires the originals or certified true copies only of the
orders challenged in the petition and not of the other relevant documents attached
thereto. However, it dismissed the petition on the ground that the order assailed
therein was one denying a motion to dismiss, an interlocutory order which is
beyond the scope of a petition for certiorari. The Court of Appeals further held that
the trial court did not abuse its discretion when it denied the motion to dismiss on
the ground of lack of jurisdiction over the person of the petitioner and ordered the
issuance of an alias summons to the latter. 3
Hence, this petition.
The petitioner claims that the Court of Appeals committed grave abuse of
discretion in denying his motion for reconsideration despite its own finding that
petitioners position that Rule 65 of the Rules of Civil Procedure requires the
originals or certified true copies only of the orders challenged in the petition and
not of the other relevant documents attached thereto is correct. He argues that the
appellate court should not have dismissed the motion for reconsideration on
grounds other than that mentioned in its March 14, 2000 Resolution. He complains
that the appellate court did not give any indication in the aforesaid resolution that

The Court of Appeals was not required to look into the merits of the petition
for certiorari before issuing its March 14, 2000 Resolution because it ruled in good
faith that the petition was defective in form. Under Rule 65, Section 6 of the 1997
Rules of Civil Procedure, a petition for certiorari may be dismissed outright if it is
insufficient in form, that is, it fails to comply with the requirements in Section 1 of
the same Rule.
When the appellate court studied the petitioners motion for reconsideration and
found that the contention therein was correct, it proceeded to look into the merits of
the petition. However, it found that the same should be dismissed for lack of merit
because it found that the trial courts order assailed by the petitioner therein was
an order denying a motion to dismiss. Based on the factual circumstances of the
case, the appellate court ruled that the order sought to be reversed was an
interlocutory order which is beyond the scope of a petition for certiorari, and that
the trial court did not commit abuse of discretion when it denied the motion to
dismiss on the ground of lack of jurisdiction over the person of the petitioner and
ordered the issuance of an alias summons to the latter.
The Court agrees with the appellate courts ruling that there was no abuse of
discretion on the part of the trial court when the latter denied the petitioners motion
to dismiss the complaint and ordered the issuance of an alias summons to be
served upon him. Although the respondent should have resorted to other means to
determine the correct address of the petitioner when it was informed by the sheriff
that he failed to serve the summons on the petitioner, the respondent is not entirely
to blame for such failure because the petitioners address as indicated by Wood
Based Panels, Inc., and Sinrimco, Inc. on their respective General Information
Sheets, was incorrect.
Moreover, the trial court was merely exercising its discretion under Rule 16,
Section 3 of the 1997 Rules of Civil Procedure when it denied the petitioners

WHEREFORE, the petition is hereby DENIED for lack of merit.


SO ORDERED.

Page

motion to dismiss. Under said rule, after hearing the motion, a judge may dismiss
the action, deny the motion to dismiss or order the amendment of the pleading.
The trial court denied the motion to dismiss based on its finding that the issues
alleged by the respondent in its complaint could not be resolved fully in the
absence of the petitioner. In its desire to resolve completely the issues brought
before it, the trial court deemed it fitting to properly acquire jurisdiction over the
person of the petitioner by ordering the issuance of alias summons on the
petitioner. Evidently, the trial court acted well within its discretion. The Court of
Appeals did not, therefore, err in dismissing the petition for certiorari filed before
it.cralaw : red

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The antecedent facts of the case, as found by the Court of Appeals, are as
follows:chanrob1es virtual 1aw library
Petitioners spouses Efren and Digna Mason owned two parcels of land located
along Epifanio delos Santos Avenue in Pasay City. On March 30, 1993, petitioners
and private respondent Columbus Philippines Bus Corporation (hereafter
Columbus) entered into a lease contract, under which Columbus undertook to
construct a building worth ten million pesos (P10,000,000) at the end of the third
year of the lease. Because private respondent failed to comply with this stipulation,
the petitioners on November 13, 1998, filed a complaint for rescission of contract
with damages against private respondent before the Regional Trial Court of Pasay
City, docketed as Civil Case No. 98-1567. Summons was served upon private
respondent through a certain Ayreen Rejalde. While the receiving copy of the
summons described Rejalde as a secretary of Columbus, the sheriffs return
described Rejalde as a secretary to the corporate president, duly authorized to
receive legal processes.
Private respondent failed to file its answer or other responsive pleading, hence
petitioners filed a motion to declare private respondent in default. The motion was
granted and petitioners were allowed to present evidence ex parte. Thereafter, the
case was submitted for decision.

SECOND DIVISION

On April 22, 1999, the trial court rendered its decision whose dispositive portion
reads:chanrob1es virtual 1aw library

[G.R. No. 144662. October 13, 2003.]


SPOUSES EFREN MASON and DIGNA MASON, Petitioners, v. THE
HONORABLE COURT OF APPEALS and COLUMBUS PHILIPPINES BUS
CORPORATION, Respondents.

WHEREFORE, premises considered, judgment is hereby rendered in favor of the


plaintiffs and against defendant declaring the contract of lease rescinded,
terminated and cancelled, and ordering defendant:chanrob1es virtual 1aw library
1. To pay plaintiffs the amount of P10 Million which is the value of the building
which defendant failed to construct on the leased properties, as and by way [of]
actual damages;

DECISION

QUISUMBING, J.:

This petition for review assails the decision, 1 dated May 12, 2000, of the Court of
Appeals and its resolution 2 dated August 25, 2000 in CA-G.R. SP No. 54649
denying petitioners motion for reconsideration. The decision set aside the decision
3 of the Regional Trial Court of Pasay City, Branch 112, in Civil Case No. 98-1567
and directed said court to conduct further proceedings on the complaint for
rescission of lease contract.chanrob1es virtua1 1aw 1ibrary

2. To pay plaintiffs the amount of P63,862.57 beginning November 1998 until


defendant and the sub-lessee vacate the leased property by way of reasonable
compensation for the use of the properties;
3. and all other persons and entities claiming rights under it, to surrender
possession to plaintiffs and to vacate the leased premises;
4. to pay plaintiffs the amount of P300,000.00 as and by way of moral damages;

6. to pay plaintiffs attorneys fees in the amount of P100,000.00; and


7. to pay the cost of suit.
SO ORDERED. 4
That decision became final on May 12, 1999. The following day, private respondent
filed a motion to lift order of default, which was opposed by petitioners. The trial
court ordered the parties to submit their respective memoranda. However, without
waiting for the same, the trial court on May 26, 1999, denied the motion to lift order
of default, thus:chanrob1es virtual 1aw library
It appearing that the decision rendered by this Court on April 27, 1999 became final
and executory on May 12, 1999, defendants Motion to Lift Order of Default is
hereby DENIED. Concomitant thereto, plaintiffs Motion for Execution is hereby
GRANTED.
The Order of this Court on May 21, 1999 allowing the parties to file their respective
memoranda within ten (10) days from May 21, 1999 is hereby revoked and set
aside, since the incidents can be resolved based on the records.
WHEREFORE, let a writ of execution issue to enforce and implement the final and
executory decision rendered by this Court on April 7, 1999.

Page

5. to pay plaintiffs the amount of P100,000.00 as and by way of exemplary


damages;

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SO ORDERED. 6
The Court of Appeals held that the trial court erred when it denied private
respondents motion to lift order of default. The appellate court pointed out that
private respondent was not properly served with summons, thus it cannot be
faulted if it failed to file an Answer. Section 11, 7 Rule 14 of the 1997 Rules of Civil
Procedure requires that service of summons upon domestic private juridical entity
shall be made through its president, managing partner, general manager, corporate
secretary, treasurer or in-house counsel. Since service upon private respondent
was made through a certain Ayreen Rejalde, a mere filing clerk in private
respondents office, as evidenced by the latters employment record, such service
cannot be considered valid. Consequently, the subsequent proceedings, including
the order of default, judgment by default and its execution, were also invalid
because the trial court did not acquire jurisdiction over private Respondent.
Besides judgments by default are not favored, especially so when there is a prima
facie showing that the defaulting party has a meritorious defense, which in this
case was grounded on the contract of lease sued upon, said the Court of Appeals.
Petitioner filed a motion for reconsideration, but to no avail. Hence, this petition for
review averring that the Court of Appeals erred in:chanrob1es virtual 1aw library
I. . . . HOLDING THAT THERE WAS NO VALID SERVICE OF SUMMONS UPON
PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS CORPORATION
II. . . . NOT HOLDING THAT THERE WAS VALID SERVICE OF SUMMONS
CONFORMABLY WITH THE SUBSTANTIAL COMPLIANCE RULE.

SO ORDERED. 5
Private respondent filed a motion for reconsideration, which was denied.
Undaunted, private respondent filed a manifestation and motion to lift the writ of
execution. It suffered the same fate as the motion for reconsideration for being
dilatory. The branch sheriff was directed to proceed with the enforcement of the
decision.
Private respondent appealed to the Court of Appeals, which ruled in its favor,
thus:chanrob1es virtual 1aw library
WHEREFORE, the petition is GRANTED; the decision in Civil Case No. 98-1567
and all the proceedings therein, including the order of default and writ of execution,
are SET ASIDE. The court a quo is ORDERED to require petitioner to file its
answer and thereafter to conduct further appropriate proceedings with reasonable
dispatch.

III. . . . HOLDING THAT WITH THE ADOPTION OF SECTION 11, RULE 14 OF


THE 1997 RULES OF CIVIL PROCEDURE, THE SUBSTANTIAL COMPLIANCE
RULE NO LONGER APPLIES.
IV. . . . NOT HOLDING THAT JURISDICTION WAS ACQUIRED OVER PRIVATE
RESPONDENT COLUMBUS PHILIPPINES BUS CORPORATION AND THAT ITS
MOTION TO LIFT ORDER OF DEFAULT LACKS MERIT. 8
The issues in this case may be succinctly stated as follows:chanrob1es virtual 1aw
library
a. Whether there was valid service of summons on private respondent for the trial
court to acquire jurisdiction, and
b. Whether private respondents motion to lift order of default was in order.

Petitioners stress that even though the summons was received by a mere filing
clerk in private respondents corporation, there was substantial compliance with
Section 11, Rule 14 because the summons actually reached private Respondent.
This can be gleaned from private respondents motion to lift order of default where
private respondent did not question the validity of the service of summons but
explained in paragraph three thereof that its failure to answer the complaint was
due to its impression that the case would not be pursued by petitioners because
the corporation already made payments to them. 11
From said averment, according to petitioners, private respondent in effect admitted
that it received the summons. Notwithstanding this, private respondent did not file
its answer to the complaint, said the petitioners. This is tantamount to negligence
which the court cannot tolerate, petitioners conclude. There being valid service of
summons, the Regional Trial Court acquired jurisdiction over private respondent,
according to petitioners.

Page

On the first issue, petitioners contend that while Section 11, Rule 14 of the 1997
Rules of Civil Procedure clearly specifies the persons authorized to receive
summons on behalf of a private juridical entity, said provision did not abandon or
render inapplicable the substantial compliance rule. Petitioners cite Millenium
Industrial Commercial Corporation v. Tan, 9 and maintain that this Court, by
referring to E.B Villarosa & Partner Co., Ltd. v. Judge Benito, 10 effectively ruled
that said provision is the statement of the general rule on service of summons
upon corporation and the substantial compliance rule is the exception. Petitioners
claim that this Court, in an array of cases, upheld the substantial compliance rule
when it allowed the validity of the service of summons on the corporations
employee other than those mentioned in the Rule where said summons and
complaint were in fact seasonably received by the corporation from said employee.
Petitioners insist that technicality must not defeat speedy justice.

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Rule 14 of the 1997 Rules of Civil Procedure, states the general rule on the service
of summons upon corporations where the substantial compliance rule is the
exception. Private respondent avers that what this Court discussed in the
Millenium case was the rule on service of summons under the old Rules of Court
prior to the promulgation and effectivity of the 1997 Rules of Civil Procedure. The
Millenium case held that as a general rule, service upon one who is not
enumerated in Section 13, 13 Rule 14 of the then Rules of Court is invalid,
according to privateRespondent. An exception is when the summons is actually
received by the corporation, which means that there was substantial compliance
with the rule. Private respondent stresses that since the exception referred to the
old rule, it cannot be made to apply to the new rule, which clearly specifies and
limits the persons authorized to receive the summons in behalf of the corporation.
Neither can petitioners rely on Millenium to justify their theory, adds private
respondent, because at the time the complaint in this case was filed with the trial
court, the 1997 Rules of Civil Procedure were already in effect. The case law
applicable in the instant case, contends private respondent, is Villarosa which
squarely provides for the proper interpretation of the new rule on the service of
summons upon domestic corporation, thus:chanrob1es virtual 1aw library
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. 14
According to private respondent, service through Ayreen Rejalde, a mere filing
clerk of private respondent and not one of those enumerated above, is invalid.
We find private respondents submission on this issue meritorious.
Petitioners further contend that the Court of Appeals reliance on E.B Villarosa &
Partner Co., Ltd. v. Judge Benito, 12 in denying their motion for reconsideration
was misplaced, because the factual milieu in said case was different from that in
the instant case. In Villarosa, according to them, there was no showing of actual
receipt by the defendant corporation of the summons while in this case, private
respondent actually received the summons.
Private respondent counters that nowhere in the Millenium case did this Court
expressly state or remotely imply that we have not abandoned the doctrine of
substantial compliance. Private respondent claims that petitioners misquoted the
portion of the Millenium decision where this Court cited the Villarosa case, to make
it appear that the Villarosa ruling, which provides an interpretation of Section 11,

The question of whether the substantial compliance rule is still applicable under
Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been settled in
Villarosa which applies squarely to the instant case. In the said case, petitioner
E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with principal office address
at 102 Juan Luna St., Davao City and with branches at 2492 Bay View Drive,
Tambo, Paraaque, Metro Manila and Kolambog, Lapasan, Cagayan de Oro City,
entered into a sale with development agreement with private respondent Imperial
Development Corporation. As Villarosa failed to comply with its contractual
obligation, private respondent initiated a suit for breach of contract and damages at
the Regional Trial Court of Makati. Summons, together with the complaint, was
served upon Villarosa through its branch manager at Kolambog, Lapasan,

Neither can herein petitioners invoke our ruling in Millenium to support their
position for said case is not on all fours with the instant case. We must stress that
Millenium was decided when the 1964 Rules of Court were still in force and effect,
unlike the instant case which falls under the new rule. Hence, the cases 15 cited by
petitioners where we upheld the doctrine of substantial compliance must be
deemed overturned by Villarosa, which is the later case.
At this juncture, it is worth emphasizing that notice to enable the other party to be
heard and to present evidence is not a mere technicality or a trivial matter in any
administrative or judicial proceedings. The service of summons is a vital and
indispensable ingredient of due process. 16 We will deprive private respondent of
its right to present its defense in this multi-million peso suit, if we disregard
compliance with the rules on service of summons.
On the second issue, petitioners claim that private respondents motion to lift order
of default was not in order for it was filed late, contrary to the provision in subparagraph (b), Section 3, 17 Rule 9 of the 1997 Rules of Civil Procedure, which
requires filing of the motion after notice but before judgment. Also, the motion was
(a) not under oath; (b) did not show the fraud, accident, mistake or excusable
neglect that caused private respondents failure to answer; and (c) did not show
private respondents meritorious defense.
Private respondent, in turn, argues that since service upon it was invalid, the trial
court did not acquire jurisdiction over it. Hence, all the subsequent proceedings in

Page

Cagayan de Oro City. Villarosa filed a Special Appearance with Motion to Dismiss
on the ground of improper service of summons and lack of jurisdiction. The trial
court denied the motion and ruled that there was substantial compliance with the
rule, thus, it acquired jurisdiction over Villarosa. The latter questioned the denial
before us in its petition for certiorari. We decided in Villarosas favor and declared
the trial court without jurisdiction to take cognizance of the case. We held that there
was no valid service of summons on Villarosa as service was made through a
person not included in the enumeration in Section 11, Rule 14 of the 1997 Rules of
Civil Procedure, which revised the Section 13, Rule 14 of the 1964 Rules of Court.
We discarded the trial courts basis for denying the motion to dismiss, namely,
private respondents substantial compliance with the rule on service of summons,
and fully agreed with petitioners assertions that the enumeration under the new
rule is restricted, limited and exclusive, following the rule in statutory construction
that expressio unios est exclusio alterius. Had the Rules of Court Revision
Committee intended to liberalize the rule on service of summons, we said, it could
have easily done so by clear and concise language. Absent a manifest intent to
liberalize the rule, we stressed strict compliance with Section 11, Rule 14 of the
1997 Rules of Civil Procedure.

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the trial court are null and void, including the order of default. This renders the
second issue now moot and academic.
We find merit in private respondents submissions. Since we have ruled that
service of summons upon private respondent through its filing clerk cannot be
considered valid, it necessarily follows therefore that the Regional Trial Court of
Pasay City did not acquire jurisdiction over privateRespondent. 18 Consequently,
all the subsequent proceedings held before it, including the order of default, are
null and void. 19 As private respondent points out, the second issue has become
moot and academic.
WHEREFORE, the instant petition is DENIED. The questioned decision, as well as
the resolution, of the Court of Appeals in CA-G.R. SP No. 54649 are AFFIRMED.
Costs against petitioners.chanrob1es virtua1 1aw 1ibrary
SO ORDERED.

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The Case
Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules
of Court, assailing the February 26, 2001 Decision 2 of the Court of Appeals (CA)
in CA-GR SP No. 60888. The dispositive portion of the CA Decision is worded as
follows:chanrob1es virtua1 1aw 1ibrary
"WHEREFORE, on the basis of what prescinds, the assailed resolution and orders
issued by the public respondent are perforce ANNULLED and SET ASIDE. This
pronouncement is nonetheless rendered without prejudice to the refiling of the
same case by the private respondents with the court a quo." 3
The Facts
The factual antecedents of the case are narrated by the CA in this
wise:jgc:chanrobles.com.ph

THIRD DIVISION
[G.R. No. 147369. October 23, 2003.]
Spouses PATRICK JOSE and RAFAELA JOSE, Petitioners, v. Spouses
HELEN BOYON and ROMEO BOYON, Respondents.
DECISION

PANGANIBAN, J.:

In general, substituted service can be availed of only after a clear showing that
personal service of summons was not legally possible. Also, service by publication
is applicable in actions in rem and quasi in rem, but not in personal suits such as
the present one which is for specific performance.

"On July 2, 1998, [petitioners] Patrick and Rafaela Jose lodged a complaint for
specific performance against [respondents] Helen and Romeo Boyon to compel
them to facilitate the transfer of ownership of a parcel of land subject of a
controverted sale. The action was lodged before the Regional Trial Court of
Muntinlupa which is presided by herein public respondent Judge N.C. Perello. On
July 21, 1998, respondent judge, through the acting Branch Clerk of Court of
Branch 276 of the RTC of Muntinlupa City, issued summons to the [respondents].
As per return of the summons, substituted service was resorted to by the process
server allegedly because efforts to serve the summons personally to the
[respondents] failed. On December 9, 1998, [petitioners] filed before the trial court
an Ex-parte Motion for Leave of Court to Effect Summons by Publication. On
December 28, 1998, public respondent issued an Order granting the Ex-parte
Motion for Leave of Court to Effect Summons by Publication. On July 30, 1999, the
respondent judge, sans a written motion, issued an Order declaring herein
[respondent] in default for failure to file their respective answers. As a
consequence of the declaration of default, [petitioners] were allowed to submit their
evidence ex-parte. Ultimately, on December 7, 1999, respondent judge issued the
assailed resolution, the dispositive portion of which reads as follows:chanrob1es
virtual 1aw library
. . . Therefore, Spouses Helen and Romeo Boyon are directed to execute the
necessary document with the effect of withdrawing the Affidavit of Loss they filed
and annotated with the Register of Deeds of Makati City so that title to the parcel
of land subject of the Deed of Absolute Sale in favor of the Plaintiffs be transferred

Defendants are also directed to pay Plaintiffs actual expenses in the amount of
P20,000 and attorneys fees of P20,000 including costs of this suit.
x

Hence, this Petition. 5

Page

in their names. Thereafter the Register of Deeds of Makati City or Muntinlupa City
may cancel Transfer of Certificate of Title No. 149635 of the Defendants and issue
another to Plaintiff under the deed of sale, clean and free of any reported
encumbrance.

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Issues
In their Memorandum, petitioners raise the following issues for our
consideration:chanrob1es virtua1 1aw 1ibrary

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

"On January 5, 2000, [respondent] Helen Boyon, who was then residing in the
United States of America, was surprised to learn from her sister Elizabeth Boyon,
of the resolution issued by the respondent court. On January 18, 2000,
[respondents] filed an Ad Cautelam motion questioning, among others, the validity
of the service of summons effected by the court a quo. On March 17, 2000, the
public respondent issued an Order denying the said motion on the basis of the
defaulted [respondents] supposed loss of standing in court. On March 29, 2000,
the [respondents] once again raised the issue of jurisdiction of the trial court via a
motion for reconsideration. On June 22, 2000, however, an Order was issued by
the public respondent denying the said motion. The [petitioners] moved for the
execution of the controverted judgment which the respondent judge ultimately
granted." 4

"B. The Honorable Court of Appeals erred in giving due course to the Petition
for Certiorari of private respondents despite the pendency of an appeal earlier filed
"C. The Honorable Court erred in not holding that the Petition for Certiorari was
time barred
"D. The Honorable Court of Appeals erred in holding that the proceedings in the
lower court are null and void due to invalid and defective service of summons and
the court did not acquire jurisdiction over the person of the respondents." 6
In sum, the main issue revolves around the validity of the service of summons on
respondents.

Thereafter, respondents filed before the CA a Petition for certiorari under Rule 65
of the Revised Rules of Civil Procedure, questioning the jurisdiction of the regional
trial court (RTC).
Ruling of the Court of Appeals

The Courts Ruling


The Petition has no merit.
Main Issue:chanrob1es virtual 1aw library

The CA held that the trial court had no authority to issue the questioned Resolution
and Orders. According to the appellate court, the RTC never acquired jurisdiction
over respondents because of the invalid service of summons upon them. First, the
sheriff failed to comply with the requirements of substituted service of summons,
because he did not specify in the Return of Summons the prior efforts he had
made to locate them and the impossibility of promptly serving the summons upon
them by personal service. Second, the subsequent summons by publication was
equally infirm, because the Complaint was a suit for specific performance and
therefore an action in personam. Consequently, the Resolution and the Orders
were null and void, since the RTC had never acquired jurisdiction over
respondents.

Validity of the Service of Summons


Petitioners aver that the CA erred in ruling that the service of summons on
respondents was invalid. They submit that although the case filed before the trial
court was denominated as an action for specific performance, it was actually an
action quasi in rem, because it involved a piece of real property located in the
Philippines. They further argue that in actions quasi in rem involving ownership of a
parcel of land, it is sufficient that the trial court acquire jurisdiction over the res.
Thus, the summons by publication, which they effected subsequent to the
substituted service of summons, was allegedly sufficient.

Respondents contend that when summons is served by substituted service, the


return must show that it was impossible to serve the summons personally, and that
efforts had been exerted toward that end. They add that noncompliance with the
rule on substituted service renders invalid all proceedings relative thereto.

Page

On the other hand, respondents maintain that the proceedings in the trial court
were null and void because of the invalid and defective service of summons.
According to them, the Return of Summons issued by the process server of the
RTC failed to state that he had exerted earnest efforts to effect the service of
summons. He allegedly tried to serve it personally on them on July 22, 1998 at No.
32 Ariza Drive, Camella Homes, Alabang. He, however, resorted to substituted
service on that same day, supposedly because he could not find respondents in
the above address. They further allege that the person to whom he gave the
summons was not even a resident of that address.

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some competent person in charge thereof."cralaw virtua1aw library
As can be gleaned from the above-quoted Sections, personal service of summons
is preferred to substituted service. Only if the former cannot be made promptly can
the process server resort to the latter. Moreover, the proof of service of summons
must (a) indicate the impossibility of service of summons within a reasonably time;
(b) specify the efforts exerted to locate the defendant; and (c) state that the
summons was served upon a person of sufficient age and discretion who is
residing in the address, or who is in charge of the office or regular place of
business, of the defendant. 7 It is likewise required that the pertinent facts proving
these circumstances be stated in the proof of service or in the officers return. The
failure to comply faithfully, strictly and fully with all the foregoing requirements of
substituted service renders the service of summons ineffective. 8
Defective Personal Service of Summons
As to the summons by publication subsequently effected by petitioners,
respondents argue that the case filed before the trial court was an action for
specific performance and, therefore, an action in personam. As such, the summons
by publication was insufficient to enable the trial court to acquire jurisdiction over
the persons of respondents.
Respondents conclude that even granting that the service of summons by
publication was permissible under the circumstances, it would still be defective and
invalid because of the failure of petitioners to observe the requirements of law, like
an Affidavit attesting that the latter deposited in the post office a copy of the
summons and of the order of publication, paid the postage, and sent the
documents by registered mail to the formers last known address.

In the instant case, it appears that the process server hastily and capriciously
resorted to substituted service of summons without actually exerting any genuine
effort to locate respondents. A review of the records 9 reveals that the only effort
he exerted was to go to No. 32 Ariza Drive, Camella Homes, Alabang on July 22,
1998, to try to serve the summons personally on respondents. While the Return of
Summons states that efforts to do so were ineffectual and unavailing because
Helen Boyon was in the United States and Romeo Boyon was in Bicol, it did not
mention exactly what efforts if any were undertaken to find respondents.
Furthermore, it did not specify where or from whom the process server obtained
the information on their whereabouts. The pertinent portion of the Return of
Summons is reproduced as follows:jgc:chanrobles.com.ph

We agree with respondents. In general, trial courts acquire jurisdiction over the
person of the defendant by the service of summons. Where the action is in
personam and the defendant is in the Philippines, such service may be done by
personal or substituted service, following the procedures laid out in Sections 6 and
7 of Rule 14 of the Revised Rules of Court, which read:jgc:chanrobles.com.ph

"That efforts to serve the said Summons personally upon defendants Sps. Helen
and Romeo Boyon were made but the same were ineffectual and unavailing for the
reason that defendant Helen Boyon is somewhere in the United States of America
and defendant Romeo Boyon is in Bicol thus substituted service was made in
accordance with Section 7, Rule 14, of the Revised Rules of Court." 10

"Section 6. Service in person on defendant. Whenever practicable, the


summons shall be served by handing a copy thereof to the defendant in person, or,
if he refuses to receive and sign for it, by tendering it to him.

The Return of Summons shows that no effort was actually exerted and no positive
step taken by either the process server or petitioners to locate and serve the
summons personally on respondents. At best, the Return merely states the alleged
whereabouts of respondents without indicating that such information was verified
from a person who had knowledge thereof. Certainly, without specifying the details
of the attendant circumstances or of the efforts exerted to serve the summons, a
general statement that such efforts were made will not suffice for purposes of
complying with the rules of substituted service of summons.

"Section 7. Substituted service. If, for justifiable causes, the defendant cannot
be served within a reasonable time as provided in the preceding section, service
may be effected (a) by leaving copies of the summons at the defendants
residence with some person of suitable age and discretion then residing therein, or
(b) by leaving the copies at defendants office or regular place of business with

". . . The pertinent facts and circumstances attendant to the service of summons
must be stated in the proof of service or Officers Return; otherwise, any
substituted service made in lieu of personal service cannot be upheld. This is
necessary because substituted service is in derogation of the usual method of
service. It is a method extraordinary in character and hence may be used only as
prescribed and in the circumstances authorized by statute. Here, no such
explanation was made. Failure to faithfully, strictly, and fully comply with the
requirements of substituted service renders said service ineffective." 12
Moreover, the requirements of substituted service of summons and the effect of
noncompliance with the subsequent proceedings therefor were discussed in
Madrigal v. Court of Appeals 13 as follows:jgc:chanrobles.com.ph
"In a long line of cases, this Court held that the impossibility of personal service
justifying availment of substituted service should be explained in the proof of
service; why efforts exerted towards personal service failed. The pertinent facts
and circumstances attendant to the service of summons must be stated in the
proof of service or Officers Return; otherwise, the substituted service cannot be
upheld. It bears stressing that since service of summons, especially for actions in
personam, is essential for the acquisition of jurisdiction over the person of the
defendant, the resort to a substituted service must be duly justified. Failure to do
so would invalidate all subsequent proceedings on jurisdictional grounds." 14
Summons by Publication Improper
It must be noted that extraterritorial service of summons or summons by
publication applies only when the action is in rem or quasi in rem. The first is an
action against the thing itself instead of against the defendants person; in the
latter, an individual is named as defendant, and the purpose is to subject that
individuals interest in a piece of property to the obligation or loan burdening it. 15
In the instant case, what was filed before the trial court was an action for specific
performance directed against respondents. While the suit incidentally involved a
piece of land, the ownership or possession thereof was not put in issue, since they
did not assert any interest or right over it. Moreover, this Court has consistently
declared that an action for specific performance is an action in personam. 16
Having failed to serve the summons on respondents properly, the RTC did not

Page

The necessity of stating in the process servers Return or Proof of Service the
material facts and circumstances sustaining the validity of substituted service was
explained by this Court in Hamilton v. Levy, 11 from which we
quote:jgc:chanrobles.com.ph

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

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The court's jurisdiction over a defendant is founded on a valid service of summons.
Without a valid service, the court cannot acquire jurisdiction over the defendant,
unless the defendant voluntarily submits to it. The defendant must be properly
apprised of a pending action against him and assured of the opportunity to present
his defenses to the suit. Proper service of summons is used to protect one's right
to due process.
The Case
This Petition for Review on Certiorari 1 under Rule 45 presents the core issue
whether there was a valid substituted service of summons on petitioner for the trial
court to acquire jurisdiction. Petitioner Manotoc claims the court a quo should have
annulled the proceedings in the trial court for want of jurisdiction due to irregular
and ineffective service of summons.
The Facts

THIRD DIVISION
[G.R. NO. 130974 : August 16, 2006]
MA. IMELDA M. MANOTOC, Petitioner, v. HONORABLE COURT OF APPEALS
and AGAPITA TRAJANO on behalf of the Estate of ARCHIMEDES
TRAJANO, Respondents.
DECISION
VELASCO, JR., J.:

Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se,
and on behalf of the Estate of Archimedes Trajano v. Imelda 'Imee' R. MarcosManotoc 2 for Filing, Recognition and/or Enforcement of Foreign Judgment.
Respondent Trajano seeks the enforcement of a foreign court's judgment rendered
on May 1, 1991 by the United States District Court of Honolulu, Hawaii, United
States of America, in a case entitled Agapita Trajano, et al. v. Imee MarcosManotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for wrongful death of
deceased Archimedes Trajano committed by military intelligence officials of the
Philippines allegedly under the command, direction, authority, supervision,
tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the
provisions of Rule 39 of the then Revised Rules of Court.
Based on paragraph two of the Complaint, the trial court issued a Summons 3 on
July 6, 1993 addressed to petitioner at Alexandra Condominium Corporation or
Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.
On July 15, 1993, the Summons and a copy of the Complaint were allegedly
served upon (Mr.) Macky de la Cruz, an alleged caretaker of petitioner at the

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion


to Dismiss 6 on the ground of lack of jurisdiction of the trial court over her person
due to an invalid substituted service of summons. The grounds to support the
motion were: (1) the address of defendant indicated in the Complaint (Alexandra
Homes) was not her dwelling, residence, or regular place of business as provided
in Section 8, Rule 14 of the Rules of Court; (2) the party (de la Cruz), who was
found in the unit, was neither a representative, employee, nor a resident of the
place; (3) the procedure prescribed by the Rules on personal and substituted
service of summons was ignored; (4) defendant was a resident of Singapore; and
(5) whatever judgment rendered in this case would be ineffective and futile.
During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos
Gonzales, who testified that he saw defendant Manotoc as a visitor in Alexandra
Homes only two times. He also identified the Certification of Renato A. de Leon,
which stated that Unit E-2104 was owned by Queens Park Realty, Inc.; and at the
time the Certification was issued, the unit was not being leased by anyone.
Petitioner also presented her Philippine passport and the
Disembarkation/Embarkation Card7 issued by the Immigration Service of
Singapore to show that she was a resident of Singapore. She claimed that the
person referred to in plaintiff's Exhibits "A" to "EEEE" as "Mrs. Manotoc" may not
even be her, but the mother of Tommy Manotoc, and granting that she was the one
referred to in said exhibits, only 27 out of 109 entries referred to Mrs. Manotoc.
Hence, the infrequent number of times she allegedly entered Alexandra Homes did
not at all establish plaintiff's position that she was a resident of said place.
On the other hand, Agapita Trajano, for plaintiffs' estate, presented Robert Swift,
lead counsel for plaintiffs in the Estate of Ferdinand Marcos Human Rights
Litigation, who testified that he participated in the deposition taking of Ferdinand R.
Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified that petitioner's
residence was at the Alexandra Apartment, Greenhills.8 In addition, the entries 9 in
the logbook of Alexandra Homes from August 4, 1992 to August 2, 1993, listing the
name of petitioner Manotoc and the Sheriff's Return, 10 were adduced in evidence.

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condominium unit mentioned earlier.4 When petitioner failed to file her Answer, the
trial court declared her in default through an Order 5 dated October 13, 1993.

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On October 11, 1994, the trial court rejected Manotoc's Motion to Dismiss on the
strength of its findings that her residence, for purposes of the Complaint, was
Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue, Pasig, Metro Manila,
based on the documentary evidence of respondent Trajano. The trial court relied
on the presumption that the sheriff's substituted service was made in the regular
performance of official duty, and such presumption stood in the absence of proof to
the contrary.11
On December 21, 1994, the trial court discarded Manotoc's plea for
reconsideration for lack of merit.12
Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the
Court of Appeals (CA) on January 20, 1995, docketed as CA-G.R. SP No. 36214
seeking the annulment of the October 11, 1994 and December 21, 1994 Orders of
Judge Aurelio C. Trampe.
Ruling of the Court of Appeals
On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the
Petition for Certiorariand Prohibition. The court a quo adopted the findings of the
trial court that petitioner's residence was at Alexandra Homes, Unit E-2104, at No.
29 Meralco Avenue, Pasig, Metro Manila, which was also the residence of her
husband, as shown by the testimony of Atty. Robert Swift and the Returns of the
registered mails sent to petitioner. It ruled that the Disembarkation/Embarkation
Card and the Certification dated September 17, 1993 issued by Renato A. De
Leon, Assistant Property Administrator of Alexandra Homes, were hearsay, and
that said Certification did not refer to July 1993 the month when the substituted
service was effected.
In the same Decision, the CA also rejected petitioner's Philippine passport as proof
of her residency in Singapore as it merely showed the dates of her departure from
and arrival in the Philippines without presenting the boilerplate's last two (2) inside
pages where petitioner's residence was indicated. The CA considered the
withholding of those pages as suppression of evidence. Thus, according to the CA,
the trial court had acquired jurisdiction over petitioner as there was a valid
substituted service pursuant to Section 8, Rule 14 of the old Revised Rules of
Court.

Hence, petitioner has come before the Court for review on certiorari .

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On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied
by the CA in its Resolution 16 dated October 8, 1997.

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The assigned errors bring to the fore the crux of the disagreement the validity of
the substituted service of summons for the trial court to acquire jurisdiction over
petitioner.
The Court's Ruling

The Issues
We GRANT the petition.
Petitioner raises the following assignment of errors for the Court's consideration:
Acquisition of Jurisdiction
I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
RENDERING THE DECISION AND RESOLUTION IN QUESTION (ANNEXES A
AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE IN RULING THAT THE
TRIAL COURT ACQUIRED JURISDICTION OVER THE PERSON OF THE
PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN
ACCORDANCE WITH SECTION 8, RULE 14 OF THE REVISED RULES OF
COURT.
II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR
WHEN IT RULED THAT THERE WAS A VALID SERVICE OF SUMMONS ON AN
ALLEGED CARETAKER OF PETITIONER'S RESIDENCE IN COMPLETE
DEFIANCE OF THE RULING IN CASTILLO v. CFI OF BULACAN, BR. IV, G.R.
NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE
PROPRIETY OF SUCH SERVICE UPON MERE OVERSEERS OF PREMISES
WHERE A PARTY SUPPOSEDLY RESIDES.
III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
CONCLUDING THAT THE RESIDENCE OF THE HUSBAND IS ALSO THE
RESIDENCE OF HIS WIFE CONTRARY TO THE RULING INTHE BANK OF THE
PHILIPPINE ISLANDS v. DE COSTER, G.R. NO. 23181, MARCH 16, 1925, 47
PHIL. 594.
IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN
FAILING TO APPLY THE RULE ON EXTRA-TERRITORIAL SERVICE OF
SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES
OF COURT.17

Jurisdiction over the defendant is acquired either upon a valid service of summons
or the defendant's voluntary appearance in court. When the defendant does not
voluntarily submit to the court's jurisdiction or when there is no valid service of
summons, "any judgment of the court which has no jurisdiction over the person of
the defendant is null and void." 18 In an action strictly in personam, personal service
on the defendant is the preferred mode of service, that is, by handing a copy of the
summons to the defendant in person. If defendant, for excusable reasons, cannot
be served with the summons within a reasonable period, then substituted service
can be resorted to. While substituted service of summons is permitted, "it is
extraordinary in character and in derogation of the usual method of
service." 19 Hence, it must faithfully and strictly comply with the prescribed
requirements and circumstances authorized by the rules. Indeed, "compliance with
the rules regarding the service of summons is as much important as the issue of
due process as of jurisdiction." 20
Requirements for Substituted Service
Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case
provides:
SEC. 8.21 Substituted service. - If the defendant cannot be served within a
reasonable time as provided in the preceding section [personal service on
defendant], service may be effected (a) by leaving copies of the summons at the
defendant's residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant's office or regular place
of business with some competent person in charge thereof.

(1) Impossibility of Prompt Personal Service


The party relying on substituted service or the sheriff must show that defendant
cannot be served promptly or there is impossibility of prompt service.22 Section 8,
Rule 14 provides that the plaintiff or the sheriff is given a "reasonable time" to
serve the summons to the defendant in person, but no specific time frame is
mentioned. "Reasonable time" is defined as "so much time as is necessary under
the circumstances for a reasonably prudent and diligent man to do, conveniently,
what the contract or duty requires that should be done, having a regard for the
rights and possibility of loss, if any[,] to the other party." 23 Under the Rules, the
service of summons has no set period. However, when the court, clerk of court, or
the plaintiff asks the sheriff to make the return of the summons and the latter
submits the return of summons, then the validity of the summons lapses. The
plaintiff may then ask for an alias summons if the service of summons has
failed.24 What then is a reasonable time for the sheriff to effect a personal service in
order to demonstrate impossibility of prompt service? To the plaintiff, "reasonable
time" means no more than seven (7) days since an expeditious processing of a
complaint is what a plaintiff wants. To the sheriff, "reasonable time" means 15 to 30
days because at the end of the month, it is a practice for the branch clerk of court
to require the sheriff to submit a return of the summons assigned to the sheriff for
service. The Sheriff's Return provides data to the Clerk of Court, which the clerk
uses in the Monthly Report of Cases to be submitted to the Office of the Court
Administrator within the first ten (10) days of the succeeding month. Thus, one
month from the issuance of summons can be considered "reasonable time" with
regard to personal service on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with due
care, utmost diligence, and reasonable promptness and speed so as not to
prejudice the expeditious dispensation of justice. Thus, they are enjoined to try
their best efforts to accomplish personal service on defendant. On the other hand,
since the defendant is expected to try to avoid and evade service of summons, the
sheriff must be resourceful, persevering, canny, and diligent in serving the process
on the defendant. For substituted service of summons to be available, there must
be several attempts by the sheriff to personally serve the summons within a

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We can break down this section into the following requirements to effect a valid
substituted service:

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reasonable period [of one month] which eventually resulted in failure to prove
impossibility of prompt service. "Several attempts" means at least three (3) tries,
preferably on at least two different dates. In addition, the sheriff must cite why such
efforts were unsuccessful. It is only then that impossibility of service can be
confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and circumstances
surrounding the attempted personal service.25 The efforts made to find the
defendant and the reasons behind the failure must be clearly narrated in detail in
the Return. The date and time of the attempts on personal service, the inquiries
made to locate the defendant, the name/s of the occupants of the alleged
residence or house of defendant and all other acts done, though futile, to serve the
summons on defendant must be specified in the Return to justify substituted
service. The form on Sheriff's Return of Summons on Substituted Service
prescribed in the Handbook for Sheriffs published by the Philippine Judicial
Academy requires a narration of the efforts made to find the defendant personally
and the fact of failure.26 Supreme Court Administrative Circular No. 5 dated
November 9, 1989 requires that "impossibility of prompt service should be shown
by stating the efforts made to find the defendant personally and the failure of such
efforts," which should be made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendant's house or residence, it
should be left with a person of "suitable age and discretion then residing
therein." 27 A person of suitable age and discretion is one who has attained the age
of full legal capacity (18 years old) and is considered to have enough discernment
to understand the importance of a summons. "Discretion" is defined as "the ability
to make decisions which represent a responsible choice and for which an
understanding of what is lawful, right or wise may be presupposed".28 Thus, to be
of sufficient discretion, such person must know how to read and understand
English to comprehend the import of the summons, and fully realize the need to
deliver the summons and complaint to the defendant at the earliest possible time
for the person to take appropriate action. Thus, the person must have the "relation
of confidence" to the defendant, ensuring that the latter would receive or at least

(4) A Competent Person in Charge


If the substituted service will be done at defendant's office or regular place of
business, then it should be served on a competent person in charge of the place.
Thus, the person on whom the substituted service will be made must be the one
managing the office or business of defendant, such as the president or manager;
and such individual must have sufficient knowledge to understand the obligation of
the defendant in the summons, its importance, and the prejudicial effects arising
from inaction on the summons. Again, these details must be contained in the
Return.
Invalid Substituted Service in the Case at Bar
Let us examine the full text of the Sheriff's Return, which reads:
THIS IS TO CERTIFY that on many occasions several attempts were made to
serve the summons with complaint and annexes issued by this Honorable Court in
the above entitled case, personally upon the defendant IMELDA 'IMEE' MARCOSMANOTOC located at Alexandra Condominium Corpration [sic] or Alexandra
Homes E-2 Room 104 No. 29 Merlaco [sic] Ave., Pasig, Metro-Manila at
reasonable hours of the day but to no avail for the reason that said defendant is
usually out of her place and/or residence or premises. That on the 15th day of July,
1993, substituted service of summons was resorted to in accordance with the
Rules of Court in the Philippines leaving copy of said summons with complaint and
annexes thru [sic] (Mr) Macky de la Cruz, caretaker of the said defendant,
according to (Ms) Lyn Jacinto, Receptionist and Telephone Operator of the said
building, a person of suitable age and discretion, living with the said defendant at
the given address who acknowledged the receipt thereof of said processes but he
refused to sign (emphases supplied).

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be notified of the receipt of the summons. The sheriff must therefore determine if
the person found in the alleged dwelling or residence of defendant is of legal age,
what the recipient's relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to
immediately deliver it to the defendant or at least notify the defendant of said
receipt of summons. These matters must be clearly and specifically described in
the Return of Summons.

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WHEREFORE, said summons is hereby returned to this Honorable Court of origin,
duly served for its record and information.
Pasig, Metro-Manila July 15, 1993.29
A meticulous scrutiny of the aforementioned Return readily reveals the absence of
material data on the serious efforts to serve the Summons on petitioner Manotoc in
person. There is no clear valid reason cited in the Return why those efforts proved
inadequate, to reach the conclusion that personal service has become impossible
or unattainable outside the generally couched phrases of "on many occasions
several attempts were made to serve the summons x x x personally," "at
reasonable hours during the day," and "to no avail for the reason that the said
defendant is usually out of her place and/or residence or premises." Wanting in
detailed information, the Return deviates from the ruling in Domagas v.
Jensen 30 and other related cases 31 that the pertinent facts and circumstances on
the efforts exerted to serve the summons personally must be narrated in the
Return. It cannot be determined how many times, on what specific dates, and at
what hours of the day the attempts were made. Given the fact that the substituted
service of summons may be assailed, as in the present case, by a Motion to
Dismiss, it is imperative that the pertinent facts and circumstances surrounding the
service of summons be described with more particularity in the Return or
Certificate of Service.
Besides, apart from the allegation of petitioner's address in the Complaint, it has
not been shown that respondent Trajano or Sheriff Caelas, who served such
summons, exerted extraordinary efforts to locate petitioner. Certainly, the second
paragraph of the Complaint only states that respondents were "informed, and so
[they] allege" about the address and whereabouts of petitioner. Before resorting to
substituted service, a plaintiff must demonstrate an effort in good faith to locate the
defendant through more direct means.32 More so, in the case in hand, when the
alleged petitioner's residence or house is doubtful or has not been clearly
ascertained, it would have been better for personal service to have been pursued
persistently.
In the case Umandap v. Sabio, Jr., 33 it may be true that the Court held that a
Sheriff's Return, which states that "despite efforts exerted to serve said process
personally upon the defendant on several occasions the same proved futile,"

Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms
would encourage routine performance of their precise duties relating to substituted
service for it would be quite easy to shroud or conceal carelessness or laxity in
such broad terms. Lastly, considering that monies and properties worth millions
may be lost by a defendant because of an irregular or void substituted service, it is
but only fair that the Sheriff's Return should clearly and convincingly show the
impracticability or hopelessness of personal service.
Granting that such a general description be considered adequate, there is still a
serious nonconformity from the requirement that the summons must be left with a
"person of suitable age and discretion" residing in defendant's house or residence.
Thus, there are two (2) requirements under the Rules: (1) recipient must be a
person of suitable age and discretion; and (2) recipient must reside in the house or
residence of defendant. Both requirements were not met. In this case, the Sheriff's
Return lacks information as to residence, age, and discretion of Mr. Macky de la
Cruz, aside from the sheriff's general assertion that de la Cruz is the "resident
caretaker" of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged
receptionist and telephone operator of Alexandra Homes. It is doubtful if Mr. de la
Cruz is residing with petitioner Manotoc in the condominium unit considering that a
married woman of her stature in society would unlikely hire a male caretaker to
reside in her dwelling. With the petitioner's allegation that Macky de la Cruz is not
her employee, servant, or representative, it is necessary to have additional
information in the Return of Summons. Besides, Mr. Macky de la Cruz's refusal to

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conforms to the requirements of valid substituted service. However, in view of the


numerous claims of irregularities in substituted service which have spawned the
filing of a great number of unnecessary special civil actions of certiorari and
appeals to higher courts, resulting in prolonged litigation and wasteful legal
expenses, the Court rules in the case at bar that the narration of the efforts made
to find the defendant and the fact of failure written in broad and imprecise words
will not suffice. The facts and circumstances should be stated with more
particularity and detail on the number of attempts made at personal service, dates
and times of the attempts, inquiries to locate defendant, names of occupants of the
alleged residence, and the reasons for failure should be included in the Return to
satisfactorily show the efforts undertaken. That such efforts were made to
personally serve summons on defendant, and those resulted in failure, would
prove impossibility of prompt personal service.

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sign the Receipt for the summons is a strong indication that he did not have the
necessary "relation of confidence" with petitioner. To protect petitioner's right to due
process by being accorded proper notice of a case against her, the substituted
service of summons must be shown to clearly comply with the rules.
It has been stated and restated that substituted service of summons must faithfully
and strictly comply with the prescribed requirements and in the circumstances
authorized by the rules.34
Even American case law likewise stresses the principle of strict compliance with
statute or rule on substituted service, thus:
The procedure prescribed by a statute or rule for substituted or constructive
service must be strictly pursued.35 There must be strict compliance with the
requirements of statutes authorizing substituted or constructive service.36
Where, by the local law, substituted or constructive service is in certain situations
authorized in the place of personal service when the latter is inconvenient or
impossible, a strict and literal compliance with the provisions of the law must be
shown in order to support the judgment based on such substituted or constructive
service.37 Jurisdiction is not to be assumed and exercised on the general ground
that the subject matter of the suit is within the power of the court. The inquiry must
be as to whether the requisites of the statute have been complied with, and such
compliance must appear on the record.38 The fact that the defendant had actual
knowledge of attempted service does not render the service effectual if in fact the
process was not served in accordance with the requirements of the statute.39
Based on the above principles, respondent Trajano failed to demonstrate that there
was strict compliance with the requirements of the then Section 8, Rule 14 (now
Section 7, Rule 14 of the 1997 Rules of Civil Procedure).
Due to non-compliance with the prerequisites for valid substituted service, the
proceedings held before the trial court perforce must be annulled.
The court a quo heavily relied on the presumption of regularity in the performance
of official duty. It reasons out that "[t]he certificate of service by the proper officer

The Court acknowledges that this ruling is still a valid doctrine. However, for the
presumption to apply, the Sheriff's Return must show that serious efforts or
attempts were exerted to personally serve the summons and that said efforts
failed. These facts must be specifically narrated in the Return. To reiterate, it must
clearly show that the substituted service must be made on a person of suitable age
and discretion living in the dwelling or residence of defendant. Otherwise, the
Return is flawed and the presumption cannot be availed of. As previously
explained, the Return of Sheriff Caelas did not comply with the stringent
requirements of Rule 14, Section 8 on substituted service.

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is prima facie evidence of the facts set out herein, and to overcome the
presumption arising from said certificate, the evidence must be clear and
convincing." 40

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In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the
presumption of regularity in the performance of official functions by the sheriff is
not applicable in this case where it is patent that the sheriff's return is defective
(emphasis supplied)." While the Sheriff's Return in the Venturanza case had no
statement on the effort or attempt to personally serve the summons, the Return of
Sheriff Caelas in the case at bar merely described the efforts or attempts in
general terms lacking in details as required by the ruling in the case of Domagas v.
Jensen and other cases. It is as if Caelas' Return did not mention any effort to
accomplish personal service. Thus, the substituted service is void.
On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E2104, at No. 29 Meralco Avenue, Pasig City, our findings that the substituted
service is void has rendered the matter moot and academic. Even assuming that
Alexandra Homes Room 104 is her actual residence, such fact would not make an
irregular and void substituted service valid and effective.
IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and
the assailed March 17, 1997 Decision and October 8, 1997 Resolution of the Court
of Appeals and the October 11, 1994 and December 21, 1994 Orders of the
Regional Trial Court, National Capital Judicial Region, Pasig City, Branch 163 are
hereby REVERSED and SET ASIDE.No costs.
SO ORDERED.

SECOND DIVISION

FILOMENA DOMAGAS, Petitioner, v. VIVIAN LAYNO JENSEN, Respondent.


DECISION
CALLEJO, SR., J.:
This is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, of
the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 73995, which
affirmed the Decision2 of the Regional Trial Court (RTC) of Dagupan City, Branch
44, in Civil Case No. 2000-0244-D, which declared null and void the decision of the
Municipal Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No. 879.3
The antecedent facts follow.
On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible
entry against respondent Vivian Jensen before the MTC of Calasiao, Pangasinan.
The petitioner alleged in her complaint that she was the registered owner of a
parcel of land covered by Original Certificate of Title (OCT) No. P-30980, situated
in Barangay Buenlag, Calasiao, Pangasinan, and with an area of 827 square
meters. On January 9, 1999 the respondent, by means of force, strategy and
stealth, gained entry into the petitioner's property by excavating a portion thereof
and thereafter constructing a fence thereon. As such, the petitioner was deprived
of a 68-square meter portion of her property along the boundary line. The petitioner
prayed that, after due proceedings, judgment be rendered in her favor, thus:
3. And, after trial, judgment be rendered:
a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of
Preliminary Injunction permanent;
b) ORDERING defendant, his representatives, agents and persons acting under
her, to vacate the portion of the property of the plaintiff occupied by them and to
desist from entering, excavating and constructing in the said property of the plaintiff
described in paragraph 2 hereof and/or from disturbing the peaceful ownership and

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[G.R. NO. 158407 : January 17, 2005]

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possession of the plaintiff over the said land, pending the final resolution of the
instant action;
c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND
(P5,000.00) PESOS per month from January 9, 1999 up to the time she finally
vacates and removes all constructions made by her in the property of the plaintiff
and up to the time she finally restores the said property in the condition before her
illegal entry, excavation and construction in the property of the plaintiff;
d) ORDERING defendant to pay actual damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS; moral damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS; attorney's fees of THIRTY THOUSAND
(P30,000.00) PESOS in retainer's fee and ONE THOUSAND FIVE HUNDRED
(P1,500.00) PESOS per court appearance fee; exemplary damages in the amount
of TWENTY THOUSAND (P20,000.00) PESOS, and, costs.
Plaintiff further prays for other reliefs and remedies just and equitable in the
premises.4
The case was docketed as Civil Case No. 879. The summons and the complaint
were not served on the respondent because the latter was apparently out of the
country. This was relayed to the Sheriff by her (the respondent's) brother, Oscar
Layno, who was then in the respondent's house at No. 572 Barangay Buenlag,
Calasiao, Pangasinan. The Sheriff left the summons and complaint with Oscar
Layno, who received the same.5
Nonetheless, on May 17, 1999, the court rendered judgment ordering the
respondent and all persons occupying the property for and in the latter's behalf to
vacate the disputed area and to pay monthly rentals therefor, including actual
damages, attorney's fees, and exemplary damages. The fallo of the decision
reads:
1) Ordering the defendant, her representatives, agents and persons acting under
her, to vacate the 68-square meters which she encroached upon;
2) Ordering the defendant to pay a monthly rental of P1,000.00 to the plaintiff;

SO ORDERED.6
The respondent failed to appeal the decision. Consequently, a writ of execution
was issued on September 27, 1999.
On August 16, 2000, the respondent filed a complaint against the petitioner before
the RTC of Dagupan City for the annulment of the decision of the MTC in Civil
Case No. 879, on the ground that due to the Sheriff's failure to serve the complaint
and summons on her because she was in Oslo, Norway, the MTC never acquired
jurisdiction over her person. The respondent alleged therein that the service of the
complaint and summons through substituted service on her brother, Oscar Layno,
was improper because of the following: (a) when the complaint in Civil Case No.
879 was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan,
but of Oslo, Norway, and although she owned the house where Oscar Layno
received the summons and the complaint, she had then leased it to Eduardo
Gonzales; (b) she was in Oslo, Norway, at the time the summons and the
complaint were served; (c) her brother, Oscar Layno, was merely visiting her house
in Barangay Buenlag and was not a resident nor an occupant thereof when he
received the complaint and summons; and (d) Oscar Layno was never authorized
to receive the summons and the complaint for and in her behalf.7
The respondent further alleged that the MTC had no jurisdiction over the subject
matter of the complaint in Civil Case No. 879 because the petitioner, the plaintiff
therein, failed to show prior possession of the property. She further claimed that
the alleged forcible entry was simply based on the result of the survey conducted
by Geodetic Engineer Leonardo de Vera showing that the property of the
respondent encroached on that of the petitioner.
The respondent filed a Manifestation dated August 31, 2000, and appended
thereto the following: (a) a copy8 of her passport showing that she left the country
on February 17, 1999; (b) a copy9 of the Contract of Lease dated November 24,
1997, executed by her and Eduardo D. Gonzales over her house for a period of
three (3) years or until November 24, 2000; (c) her affidavit10 stating, inter alia, that
she owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she

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3) To pay plaintiff actual damages of P20,000.00; attorney's fees of P15,000.00


and exemplary damages in the amount of P20,000.00 plus the costs.

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leased to Eduardo Gonzales; that she was married to Jarl Jensen, a citizen of
Norway, on August 23, 1987 and had resided in Norway with her husband since
1993; that she arrived in the Philippines on December 31, 1998, but left on
February 17, 1999; she returned to the Philippines on July 30, 2000 and learned,
only then, of the complaint against her and the decision of the MTC in Civil Case
No. 879; her brother Oscar Layno was not a resident of the house at Barangay
Buenlag; and that she never received the complaint and summons in said case; (d)
the affidavit11 of Oscar Layno declaring that sometime in April 1999, he was in the
respondent's house to collect rentals from Eduardo Gonzales; that the Sheriff
arrived and served him with a copy of the summons and the complaint in Civil
Case No. 879; and that he never informed the respondent of his receipt of the said
summons and complaint; (e) an affidavit12of Eduardo Gonzales stating that he
leased the house of the respondent and resided thereat; the respondent was not a
resident of the said house although he (Gonzales) allowed the respondent to
occupy a room therein whenever she returned to the Philippines as a balikbayan;
and that Oscar Layno was not residing therein but only collected the rentals.
In her answer to the complaint, the petitioner alleged that the respondent was a
resident of Barangay Buenlag, Calasiao, Pangasinan and was the owner of the
subject premises where Oscar Layno was when the Sheriff served the summons
and complaint; that the service of the complaint and summons by substituted
service on the respondent, the defendant in Civil Case No. 879, was proper since
her brother Oscar Layno, a resident and registered voter of Barangay. Buenlag,
Calasiao, Pangasinan, received the complaint and summons for and in her behalf.
The petitioner appended the following to her answer: (a) a copy13 of the Deed of
Absolute Sale executed by Jose Layno in her favor, dated August 26, 1992,
showing that the respondent was a resident of Barangay Buenlag, Calasiao,
Pangasinan; (b) a Real Estate Mortgage14 executed by the respondent, dated
February 9, 1999 showing that she was a resident of Barangay Buenlag, Calasiao,
Pangasinan; (c) the Joint Affidavit15 of Vicenta Peralta and Orlando Macalanda,
both residents of Barangay Buenlag, Calasiao, Pangasinan, declaring that the
respondent and her brother Oscar Layno were their neighbors; that the respondent
and her brother had been residents of Barangay Buenlag since their childhood;
that although the respondent left the country on several occasions, she returned to
the Philippines and resided in her house at No. 572 located in the said barangay;

After due proceedings, the trial court rendered a decision in favor of the
respondent. The dispositive portion reads:
WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and
against defendant Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case
No. 879, entitled Filomena Domagas v. Vivian Layno Jensen is declared null and
void, for lack of jurisdiction over the person of the plaintiff and the subject matter.
2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:
A.) Actual damages, representing litigation expenses in the amount ofP50,000.00;
b.) Attorney's fees in the amount of P50,000.00;

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and (d) the Voter's Registration Record16 of Oscar Layno, approved on June 15,
1997.

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complaint in Civil Case No. 879 was one for ejectment, which is an action quasi in
rem. The appellate court ruled that since the defendant therein was temporarily out
of the country, the summons and the complaint should have been
servedvia extraterritorial service under Section 15 in relation to Section 16, Rule 14
of the Rules of Court, which likewise requires prior leave of court. Considering that
there was no prior leave of court and none of the modes of service prescribed by
the Rules of Court was followed by the petitioner, the CA concluded that there was
really no valid service of summons and complaint upon the respondent, the
defendant in Civil Case No. 879.
Hence, the present petition.
The petitioner assails the decision of the CA, alleging that the appellate court erred
in holding that the respondent's complaint for ejectment is an action quasi in
rem. The petitioner insists that the complaint for forcible entry is an action
in personam; therefore, substituted service of the summons and complaint on the
respondent, in accordance with Section 7, Rule 14 of the Rules of Court, is valid.
The petitioner, likewise, asserts that Oscar Layno is a resident and a registered
voter of Barangay Buenlag, Calasiao, Pangasinan; hence, the service of the
complaint and summons on the respondent through him is valid.

c.) Moral Damages in the amount of P50,000.00;


d.) Exemplary Damages in the amount of P50,000.00; andcralawlibrary
e.) Costs of suit.
SO ORDERED.17
The trial court declared that there was no valid service of the complaint and
summons on the respondent, the defendant in Civil Case No. 879, considering that
she left the Philippines on February 17, 1999 for Oslo, Norway, and her brother
Oscar Layno was never authorized to receive the said complaint and summons for
and in her behalf.
The petitioner appealed the decision to the CA which, on May 6, 2003, rendered
judgment affirming the appealed decision with modifications. The CA ruled that the

The respondent, on the other hand, asserts that the action for forcible entry filed
against her was an action quasi in rem, and that the applicable provision of the
Rules of Court is Section 15 of Rule 14, which calls for extraterritorial service of
summons.
The sole issue is whether or not there was a valid service of the summons and
complaint in Civil Case No. 879 on the respondent herein who was the defendant
in the said case. The resolution of the matter is anchored on the issue of whether
or not the action of the petitioner in the MTC against the respondent herein is an
action in personam or quasi in rem.
The ruling of the CA that the petitioner's complaint for forcible entry of the petitioner
against the respondent in Civil Case No. 879 is an action quasi in rem, is
erroneous. The action of the petitioner for forcible entry is a real action and one in
personam.

On the other hand, a proceeding quasi in rem is one brought against persons
seeking to subject the property of such persons to the discharge of the claims
assailed.26 In an action quasi in rem, an individual is named as defendant and the
purpose of the proceeding is to subject his interests therein to the obligation or
loan burdening the property.27 Actions quasi in rem deal with the status, ownership
or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to
ascertain or cut off the rights or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined in the action.28
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when. - Subject to the provisions of
the next succeeding section, a person deprived of the possession of any land or
building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor,
vendee, or other person against whom the possession of any land or building is

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The settled rule is that the aim and object of an action determine its
character.18 Whether a proceeding is in rem, or in personam, or quasi in rem for
that matter, is determined by its nature and purpose, and by these only.19 A
proceeding in personam is a proceeding to enforce personal rights and obligations
brought against the person and is based on the jurisdiction of the person, although
it may involve his right to, or the exercise of ownership of, specific property, or seek
to compel him to control or dispose of it in accordance with the mandate of the
court.20 The purpose of a proceeding in personam is to impose, through the
judgment of a court, some responsibility or liability directly upon the person of the
defendant.21 Of this character are suits to compel a defendant to specifically
perform some act or actions to fasten a pecuniary liability on him.22 An action in
personam is said to be one which has for its object a judgment against the person,
as distinguished from a judgment against the propriety to determine its state. It has
been held that an action in personam is a proceeding to enforce personal rights or
obligations; such action is brought against the person. As far as suits for injunctive
relief are concerned, it is well-settled that it is an injunctive act in
personam.23In Combs v. Combs,24 the appellate court held that proceedings to
enforce personal rights and obligations and in which personal judgments are
rendered adjusting the rights and obligations between the affected parties is
in personam. Actions for recovery of real property are in personam.25

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unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or other person,
may, at any time within one (1) year after such unlawful deprivation or withholding
of possession, bring an action in the proper Municipal Trial Court against the
person or persons unlawfully withholding or depriving of possession, or any person
or persons claiming under them, for the restitution of such possession, together
with damages and costs.
Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of
preliminary prohibition or mandatory injunction:
Sec. 15. Preliminary Injunction. - The court may grant preliminary injunction, in
accordance with the provisions of Rule 58 hereof, to prevent the defendant from
committing further acts of dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry or unlawful detainer
may, within five (5) days from the filing of the complaint, present a motion in the
action for forcible entry or unlawful detainer for the issuance of a writ of preliminary
mandatory injunction to restore him in his possession. The court shall decide the
motion within thirty (30) days from the filing thereof.
If, after due proceedings, the trial court finds for the plaintiff, it shall then render
judgment in his or her favor, thus:
Sec. 17. Judgment. - If, after trial, the court finds that the allegations of the
complaint are true, it shall render judgment in favor of the plaintiff for the restitution
of the premises, the sum justly due as arrears of rent or as reasonable
compensation for the use and occupation of the premises, attorney's fees and
costs. If it finds that said allegations are not true, it shall render judgment for the
defendant to recover his costs. If a counterclaim is established, the court shall
render judgment for the sum found in arrears from either party and award costs as
justice requires.
From the aforementioned provisions of the Rules of Court and by its very nature
and purpose, an action for unlawful detainer or forcible entry is a real action and in

As gleaned from the averments of the petitioner's complaint in the MTC, she
sought a writ of a preliminary injunction from the MTC and prayed that the said writ
be made permanent. Under its decision, the MTC ordered the defendant therein
(the respondent in this case), to vacate the property and pay a "monthly rental"
of P1,000.00 to the plaintiff therein (the petitioner in this case).
On the issue of whether the respondent was validly served with the summons and
complaint by the Sheriff on April 5, 1999, the petitioner asserts that since her action
of forcible entry against the respondent in Civil Case No. 879 was in personam,
summons may be served on the respondent, by substituted service, through her
brother, Oscar Layno, in accordance with Section 7, Rule 14 of the Rules of Court.
The petitioner avers that Oscar Layno, a person of suitable age and discretion,
was residing in the house of the respondent on April 5, 1999. She avers that the
fact that the house was leased to and occupied by Eduardo Gonzales was of no
moment. Moreover, the Sheriff is presumed to have performed his duty of properly
serving the summons on the respondent by substituted service.
The contention of the petitioner has no merit.
In Asiavest Limited v. Court of Appeals, 31 the Court had the occasion to state:
In an action in personam, jurisdiction over the person of the defendant is
necessary for the court to validly try and decide the case. Jurisdiction over the
person of a resident defendant who does not voluntarily appear in court can be
acquired by personal service of summons as provided under Section 7, Rule 14 of
the Rules of Court. If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance with Section 8 of
said Rule. If he is temporarily out of the country, any of the following modes of
service may be resorted to: (a) substituted service set forth in Section 8; (2)
personal service outside the country, with leave of court; (3) service by publication,
also with leave of court; or (4) any other manner the court may deem sufficient.32

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personam because the plaintiff seeks to enforce a personal obligation or liability on


the defendant under Article 539 of the New Civil Code,29 for the latter to vacate the
property subject of the action, restore physical possession thereof to the plaintiff,
and pay actual damages by way of reasonable compensation for his use or
occupation of the property.30

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Thus, any judgment of the court which has no jurisdiction over the person of the
defendant is null and void.33
In the present case, the records show that the respondent, before and after his
marriage to Jarl Jensen on August 23, 1987, remained a resident of Barangay
Buenlag, Calasiao, Pangasinan. This can be gleaned from the Deed of Absolute
Sale dated August 26, 1992 in which she declared that she was a resident of said
barangay. Moreover, in the Real Estate Mortgage Contract dated February 9,
1999, ten days before the complaint in Civil Case No. 879 was filed, the petitioner
categorically stated that she was a Filipino and a resident of Barangay Buenlag,
Calasiao, Pangasinan. Considering that the respondent was in Oslo, Norway,
having left the Philippines on February 17, 1999, the summons and complaint in
Civil Case No. 879 may only be validly served on her through substituted service
under Section 7, Rule 14 of the Rules of Court, which reads:
SEC. 7. Substituted service. - If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service may
be effected (a) by leaving copies of the summons at the 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.
Strict compliance with the mode of service is required in order that the court may
acquire jurisdiction over the person of the defendant.34 The statutory requirement
of substituted service must be followed faithfully and strictly and any substituted
service other than that authorized by the statute is rendered ineffective.35 As the
Court held in Hamilton v. Levy :36
'The pertinent facts and circumstances attendant to the service of summons must
be stated in the proof of service or Officer's Return; otherwise, any substituted
service made in lieu of personal service cannot be upheld. This is necessary
because substituted service is in derogation of the usual method of service. It is a
method extraordinary in character and hence may be used only as prescribed and
in the circumstances authorized by statute. Here, no such explanation was made.
Failure to faithfully, strictly, and fully comply with the requirements of substituted
service renders said service ineffective.37

The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of


summons reads:
Respectfully returned to the court of origin the herein summons and enclosures in
the above-entitled case, the undersigned caused the service on April 5, 1999.
Defendant Vivian Layno Jensen is out of the country as per information from her
brother Oscar Layno, however, copy of summons and enclosures was received by
her brother Oscar Layno on April 5, 1999 as evidenced by his signature appearing
in the original summons.

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In Keister v. Narcereo,38 the Court held that the term "dwelling house" or
"residence" are generally held to refer to the time of service; hence, it is not
sufficient to leave the summons at the former's dwelling house, residence or place
of abode, as the case may be. Dwelling house or residence refers to the place
where the person named in the summons is living at the time when the service is
made, even though he may be temporarily out of the country at the time. It is, thus,
the service of the summons intended for the defendant that must be left with the
person of suitable age and discretion residing in the house of the defendant.
Compliance with the rules regarding the service of summons is as much important
as the issue of due process as of jurisdiction.39

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As gleaned from the said return, there is no showing that as of April 5, 1999, the
house where the Sheriff found Oscar Layno was the latter's residence or that of the
respondent herein. Neither is there any showing that the Sheriff tried to ascertain
where the residence of the respondent was on the said date. It turned out that the
occupant of the house was a lessor, Eduardo Gonzales, and that Oscar Layno was
in the premises only to collect the rentals from him. The service of the summons on
a person at a place where he was a visitor is not considered to have been left at
the residence or place or abode, where he has another place at which he ordinarily
stays and to which he intends to return.41
The Voter's Registration Record of Oscar Layno dated June 15, 1997 wherein he
declared that he was a resident of No. 572 Barangay Buenlag, Calasiao,
Pangasinan, as well as the Joint Affidavit of Vicenta Peralta and Orlando
Macasalda cannot prevail over the Contract of Lease the respondent had executed
in favor of Eduardo Gonzales showing that the latter had resided and occupied the
house of the respondent as lessee since November 24, 1997, and the affidavit of
Eduardo Gonzales that Oscar Layno was not residing in the said house on April 5,
1999.

Calasiao, Pangasinan, April 6, 1999.

In sum, then, the respondent was not validly served with summons and the
complaint in Civil Case No. 879 on April 5, 1999, by substituted service. Hence, the
MTC failed to acquire jurisdiction over the person of the respondent; as such, the
decision of the MTC in Civil Case No. 879 is null and void.

(Sgd.)
EDUARDO J. ABULENCIA

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No
costs.

Junior Process Server40

SO ORDERED.

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SECOND DIVISION
[G.R. NO. 168723 : July 9, 2008]
DOLE PHILIPPINES, INC. (TROPIFRESH DIVISION), Petitioner, v. HON.
REINATO G. QUILALA in his capacity as pairing judge of Branch 150, RTCMakati City, and ALL SEASON FARM, CORP., Respondents.
DECISION
QUISUMBING, J.:
This Petition for Review assails the Decision1 dated May 20, 2005 of the Court of
Appeals in CA-G.R. SP No. 87723 and its Resolution2 dated June 28, 2005,
denying the motion for reconsideration. The appellate court had affirmed the
Order3 dated February 6, 2004 of the Regional Trial Court (RTC) of Makati City,
Branch 150, in Civil Case No. 03-093 and its Order4 dated September 16, 2004
denying the motion for partial reconsideration.
The factual antecedents of this case are as follows.
In a complaint filed with the RTC of Makati City, presided over by Pairing Judge
Reinato Quilala, private respondent All Season Farm Corporation ("All Season")

On May 20, 2003, Dole filed a motion to dismiss the complaint on the following
grounds: (a) the RTC lacked jurisdiction over the person of Dole due to improper
service of summons; (b) the complaint failed to state a cause of action; (c) All
Season was not the real party in interest; and (d) the officers of Dole cannot be
sued in their personal capacities for alleged acts performed in their official
capacities as corporate officers of Dole.5 In its Order dated February 6, 2004, the
RTC denied said motion. Dole moved for partial reconsideration raising the same
issues but its motion was denied.
Thereafter, Dole filed a petition for certiorari with the Court of Appeals contending
that the alias summons was not properly served. The appellate court, however,
ruled otherwise. It reasoned that Dole's president had known of the service of the
alias summons although he did not personally receive and sign it. It also held that
in today's corporate setup, documents addressed to corporate officers are received
in their behalf by their staff.6 Dole sought reconsideration, but its motion was
likewise denied.
Hence, this petition where petitioner raises the lone issue:

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sought the recovery of a sum of money, accounting and damages from petitioner
Dole Philippines, Inc. (Tropifresh Division) ("Dole") and several of its officers.
According to Dole, an alias summons was served upon it through a certain Marifa
Dela Cruz, a legal assistant employed by Dole Pacific General Services, Ltd.,
which is an entity separate from Dole.

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Petitioner contends that for the court to validly acquire jurisdiction over a domestic
corporation, summons must be served only on the corporate officers enumerated
in Section 11,8 Rule 14 of the 1997 Rules of Civil Procedure. Petitioner maintains
that the alias summons was not validly served on it since the alias summons was
served on Marifa Dela Cruz, an employee of Dole Pacific General Services, Ltd.,
which is an entity separate and distinct from petitioner. It further avers that even if
she were an employee of the petitioner, she is not one of the officers enumerated
under Section 11, Rule 14. Thus, the RTC, without proper service of summons,
lacks jurisdiction over petitioner as defendant below.
Private respondent All Season, for its part, contends that the trial court had
acquired jurisdiction over petitioner, since petitioner received the alias summons
through its president on April 23, 2003. According to private respondent, there was
full compliance with Section 11, Rule 14, when Marifa Dela Cruz received the
summons upon instruction of petitioner's president as indicated in the Officer's
Return.9 More so, petitioner had admitted that it received the alias summons in its
Entry of Appearance with Motion for Time10 filed on May 5, 2003.
Well-settled is the rule that service of summons on a domestic corporation is
restricted, limited and exclusive to the persons enumerated in Section 11, Rule 14
of the 1997 Rules of Civil Procedure, following the rule in statutory construction
that expressio unios est exclusio alterius.11 Service must therefore be made on the
president, managing partner, general manager, corporate secretary, treasurer, or
in-house counsel.

WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR OF


LAW WHEN IT ALLOWED SUBSTITUTED SERVICE ON A PRIVATE
CORPORATION WHEN IT HELD THAT DOLE WAS VALIDLY SERVED WITH
SUMMONS IN SPITE OF THE FACT THAT SUMMONS WAS NOT SERVED ON
ITS PRESIDENT, MANAGING PARTNER, GENERAL MANAGER, CORPORATE
SECRETARY, TREASURER OR IN-HOUSE COUNSEL THEREBY IGNORING
THE RULE ON SERVICE OF SUMMONS ON PRIVATE DOMESTIC
CORPORATIONS.7

In this case, it appears that on April 23, 2003, Marifa Dela Cruz, a legal assistant,
received the alias summons.12 Contrary to private respondent's claim that it was
received upon instruction of the president of the corporation as indicated in the
Officer's Return, such fact does not appear in the receiving copy of the alias
summons which Marifa Dela Cruz signed. There was no evidence that she was
authorized to receive court processes in behalf of the president. Considering that
the service of summons was made on a legal assistant, not employed by herein
petitioner and who is not one of the designated persons under Section 11, Rule 14,
the trial court did not validly acquire jurisdiction over petitioner.

Simply stated, the issue in this case is whether there was a valid service of
summons on petitioner for the trial court to acquire jurisdiction over the person of
the corporate defendant below, now the petitioner herein.

However, under Section 20 of the same Rule, a defendant's voluntary appearance


in the action is equivalent to service of summons.13 As held previously by this

Page

Court, the filing of motions seeking affirmative relief, such as, to admit answer, for
additional time to file answer, for reconsideration of a default judgment, and to lift
order of default with motion for reconsideration, are considered voluntary
submission to the jurisdiction of the court.14

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Note that on May 5, 2003, petitioner filed an Entry of Appearance with Motion for
Time. It was not a conditional appearance entered to question the regularity of the
service of summons, but an appearance submitting to the jurisdiction of the court
by acknowledging the receipt of the alias summons and praying for additional time
to file responsive pleading.15 Consequently, petitioner having acknowledged the
receipt of the summons and also having invoked the jurisdiction of the RTC to
secure affirmative relief in its motion for additional time, petitioner effectively
submitted voluntarily to the jurisdiction of the RTC. It is estopped now from
asserting otherwise, even before this Court.16The RTC therefore properly took
cognizance of the case against Dole Philippines, Inc., and we agree that the trial
and the appellate courts committed no error of law when Dole's contentions were
overruled.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated May
20, 2005 of the Court of Appeals in CA-G.R. SP No. 87723 and its Resolution
dated June 28, 2005 are AFFIRMED. Costs against petitioner.
SO ORDERED.

THIRD DIVISION
G.R. NO. 184333 : April 1, 2013
SIXTO N. CHU, Petitioner, v. MACH ASIA TRADING
CORPORATION, Respondent.
DECISION

This is a petition for review on certiorari assailing the Decision1 dated July 25, 2007
of the Court of Appeals (CA) in CA-G.R. CV No. 70666, and the Resolution2 dated
August 28, 2008 denying petitioner's Motion for Reconsideration.
The factual and procedural antecedents are as follows:chanroblesvirtualawlibrary
Respondent Mach Asia Trading Corporation is a corporation engaged in importing
dump trucks and heavy equipments. On December 8, 1998, petitioner Sixto N. Chu
purchased on installment one (1) Hitachi Excavator worth P900,000.00 from the
respondent. Petitioner initially paid P180,000.00 with the balance of P720,000.00
to be paid in 12 monthly installments through Prime Bank postdated checks. On
March 29, 1999, petitioner again purchased two (2) heavy equipments from the
respondent on installment basis in the sum of P1,000,000.00, namely: one (1)
motorgrader and one (1) payloader. Petitioner made a down payment
of P200,000.00 with the balance of P800,000.00 payable in 12 monthly
installments through Land Bank postdated checks.3chanroblesvirtualawlibrary
However, upon presentment of the checks for encashment, they were dishonored
by the bank either by reason of "closed account," "drawn against insufficient
funds," or "payment stopped." Respondent informed petitioner that the checks
were dishonored and invited him to its office to replace the checks. On September
16, 1999, respondent sent petitioner a formal demand letter urging the latter to
settle his accounts within five days from receipt of the letter. In response, petitioner
sent respondent a letter explaining that his business was badly hit by the Asian
economic crisis and that he shall endeavor to pay his obligation by giving partial
payments. He said that he shall also voluntarily surrender the subject units should
he fail to do so.4chanroblesvirtualawlibrary
On November 11, 1999, respondent filed a complaint before the Regional Trial
Court (RTC) of Cebu City for sum of money, replevin, attorney's fees and damages
against the petitioner. Respondent prayed for the payment of the unpaid balance
of P1,661,947.27 at 21% per annum until full payment, 25% of the total amount to
be recovered as attorney's fees, litigation expenses and
costs.5chanroblesvirtualawlibrary

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PERALTA, J.:

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On November 29, 1999, the RTC issued an Order6 allowing the issuance of a writ
of replevin on the subject heavy equipments.
On December 9, 1999, Sheriff Doroteo P. Cortes proceeded at petitioner's given
address for the purpose of serving the summons, together with the complaint, writ
of replevin and bond. However, the Sheriff failed to serve the summons personally
upon the petitioner, since the latter was not there. The Sheriff then resorted to
substituted service by having the summons and the complaint received by a
certain Rolando Bonayon, a security guard of the
petitioner.7chanroblesvirtualawlibrary
Petitioner failed to file any responsive pleading, which prompted respondent to
move for the declaration of defendant in default. On January 12, 2000, the RTC
issued an Order declaring defendant in default and, thereafter, allowed respondent
to present its evidence ex parte.
On December 15, 2000, after respondent presented its evidence, the RTC
rendered a Decision against the petitioner, thus:chanroblesvirtualawlibrary
1. By adjudicating and adjudging plaintiff's right of ownership and possession over
the subject units mentioned and described in the complaint, and which were
already seized and turned over to the plaintiff by virtue of the writ of replevin.
2. Ordering defendants to pay to plaintiff the sum of (sic) equivalent to 25% of the
total amount recovered or value of the heavy equipments possessed as attorney's
fees, and to reimburse no less than P15,000.00 as expenses for litigation, plus the
cost of the premium of replevin bond in the amount
of P11,333.50.8chanroblesvirtualawlibrary
Aggrieved, petitioner sought recourse before the CA, docketed as CA-G.R. CV No.
70666. Petitioner argued that the RTC erred in concluding that the substituted
service of summons was valid, and that, consequently, there was error on the part
of the RTC when it declared him in default, in proceeding with the trial of the case,
and rendering an unfavorable judgment against him.

WHEREFORE, IN LIGHT OF THE FOREGOING, the Decision of the Regional


Trial Court of Cebu, Branch 17, in Civil Case No. CEB-24551, rendered on
December 15, 2000, is hereby AFFIRMED with the sole modification as to award of
attorney's fees, which is hereby reduced to 10% of the value of the heavy
equipments recovered.
SO ORDERED.10chanroblesvirtualawlibrary
Ruling in favor of the respondent, the CA opined, among others, that the
requirement of due process was complied with, considering that petitioner actually
received the summons through his security guard. It held that where the summons
was in fact received by the defendant, his argument that the Sheriff should have
first tried to serve summons on him personally before resorting to substituted
service of summons deserves scant consideration. Thus, in the interest of fairness,
the CA said that the process server's neglect or inadvertence in the service of
summons should not unduly prejudice the respondent's right to speedy justice.
The CA also noted that petitioner failed to set up a meritorious defense aside from
his contention that summons was not properly served. It went further and decided
the case on the merits and ruled that petitioner has an unpaid obligation due to
respondent for the heavy machineries he purchased from the latter. It, however,
reduced the amount of attorney's fees awarded to 10% of the value of the heavy
equipments recovered.
Petitioner filed a Motion for Reconsideration, but it was denied in the
Resolution11 dated August 28, 2008.
Hence, the petition assigning the following errors:chanroblesvirtualawlibrary
I
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN
DEFIANCE OF LAW AND JURISPRUDENCE IN FINDING THAT THE TRIAL

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On July 25, 2007, the CA rendered a Decision9 affirming the Decision of the RTC,
the decretal portion of which reads:chanroblesvirtualawlibrary

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COURT ACQUIRED JURISDICTION OVER THE PERSON OF THE DEFENDANT
EVEN WHEN THE SUBSTITUTED SERVICE OF SUMMONS WAS
IMPROPER.12chanroblesvirtualawlibrary
II
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN
DEFIANCE OF LAW AND JURISPRUDENCE IN HOLDING THAT HEREIN
PETITIONER SHOULD HAVE SET UP A MERITORIOUS DEFENSE EVEN WHEN
THE SUMMONS WAS IMPROPERLY SERVED.13chanroblesvirtualawlibrary
Petitioner argues that there was no valid substituted service of summons in the
present case. He maintains that jurisdiction over the person of the defendant is
acquired only through a valid service of summons or the voluntary appearance of
the defendant in court. Hence, when there is no valid service of summons and no
voluntary appearance by the defendant, any judgment of a court, which acquired
no jurisdiction over the defendant, is null and void.
On its part, respondent posits that the RTC acquired jurisdiction over the person of
the petitioner and the judgment by default of the RTC was based on facts, law, and
jurisprudence and, therefore, should be enforced against the petitioner.
The petition is meritorious.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the
other hand, jurisdiction over the defendants in a civil case is acquired either
through the service of summons upon them or through their voluntary appearance
in court and their submission to its authority.14chanroblesvirtualawlibrary
As a rule, summons should be personally served on the defendant. It is only when
summons cannot be served personally within a reasonable period of time that
substituted service may be resorted to.15 Section 7, Rule 14 of the Rules of Court
provides:chanroblesvirtualawlibrary
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

It is to be noted that in case of substituted service, there should be a report


indicating that the person who received the summons in the defendant's behalf
was one with whom the defendant had a relation of confidence, ensuring that the
latter would actually receive the summons.16chanroblesvirtualawlibrary
Also, impossibility of prompt personal service must be shown by stating that efforts
have been made to find the defendant personally and that such efforts have failed.
This is necessary because substituted service is in derogation of the usual method
of service. It is a method extraordinary in character, hence, may be used only as
prescribed and in the circumstances authorized by statute. The statutory
requirements of substituted service must be followed strictly, faithfully and fully, and
any substituted service other than that authorized by statute is considered
ineffective.17chanroblesvirtualawlibrary
In the case at bar, the Sheriff's Return provides:chanroblesvirtualawlibrary

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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.

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c) Payloader with Serial No. KLD70-54224
After the issuance of the Sheriff's inventory receipt, the units were turned over to Al
Caballero and companion, representatives of plaintiff, who shipped the same to
Cebu to be deposited with MACH ASIA TRADING CORPORATION, Block 26
MacArthur Highway, Reclamation Area, Cebu City, for safekeeping, subject to the
provision of Sec. 6, Rule 60 of the Rules of Court.18chanroblesvirtualawlibrary
Clearly, it was not shown that the security guard who received the summons in
behalf of the petitioner was authorized and possessed a relation of confidence that
petitioner would definitely receive the summons. This is not the kind of service
contemplated by law. Thus, service on the security guard could not be considered
as substantial compliance with the requirements of substituted service.
Moreover, the reasoning advanced by the CA in ruling against the petitioner was
based merely on conjectures and surmises. The CA even went as far as to
conclude that the process server's neglect should not have unduly prejudiced the
respondent, thus:chanroblesvirtualawlibrary

1. That the Summons, together with the complaint, writ of replevin and bond was
received on December 7, 1999, by Rolando Bonayon, a security guard on
defendant Sixto Chu at his given address who received and signed receipt thereof.

Hence, if Chu had actually received the summons through his security guard, the
requirement of due process would have nevertheless been complied with. x x x.
Based on the presumption that a person takes ordinary care of his concerns, the
security guard would not have allowed the sheriff to take possession of the
equipments without the prior permission of Chu; otherwise he would be
accountable to Chu for the said units. Chu, for his part, would not have given his
permission without being informed of the fact of the summons and the writ of
replevin issued by the lower court, which permission includes the authority to
receive the summons and the writ of replevin.

2. That the writ of replevin was duly executed on the same date, December 7,
1999, Tacloban City and San Jorge, Samar of the following properties subject of
the writ.

Thus, where summons was in fact received by defendant, his argument that the
sheriff should have tried first to serve summons on him personally before resorting
to substituted service of summons is not meritorious.

Respectfully returned to the Honorable Regional Trial Court, Branch 17, Cebu City,
the Summons and writ issued in the above-entitled case with the following
information, to wit:chanroblesvirtualawlibrary

a) Excavator Hitachi with Serial No. WHO44-116-0743


b) Motorgrader with Serial No. N525PS-1014

x x x.

x x x.
In the interest of fairness, the process server's neglect or inadvertence in the
service of summons should not, thus, unduly prejudice plaintiff-appellee's right to
speedy justice. x x x 19chanroblesvirtualawlibrary
The service of summons is a vital and indispensable ingredient of due process. As
a rule, if defendants have not been validly summoned, the court acquires no
jurisdiction over their person, and a judgment rendered against them is null and
void.20 Since the RTC never acquired jurisdiction over the person of the petitioner,
the judgment rendered by the court could not be considered binding upon him for
being null and void.
WHEREFORE, premises considered, the petition is GRANTED. The Decision of
the Court of Appeals, dated July 25, 2007, as well as its Resolution dated August
28, 2008, in CA-G.R. CV No. 70666 is hereby REVERSED and SET ASIDE. The
Decision of the Regional Trial Court dated December 15, 2000 is declared NULL
and VOID. The Regional Trial Court is hereby ORDERED to validly serve
summons upon Sixto N. Chu and, thereafter, proceed with the trial of the main
action with dispatch.
SO ORDERED.

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Evidently, plaintiff-appellee cannot be penalized, through no fault of its own, for an


irregular or defective return on service of summons. x x x.

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petition for certiorari, prohibition and mandamus and denied their motion for
reconsideration. Thereby, the CAupheld the order the Regional Trial Court (RTC),
Branch 51, in Manila had issued on March 12, 2001 denying their motion to
dismiss because the substituted service of the summons and copies of the
complaint on each of them had been valid and effective.3
Antecedents
On July 3, 2000, respondent, a retired police officer assigned at the Western Police
District in Manila, sued Abante Tonite, a daily tabloid of general circulation; its
Publisher Allen A. Macasaet; its Managing Director Nicolas V. Quijano; its
Circulation Manager Isaias Albano; its Editors Janet Bay, Jesus R. Galang and
Randy Hagos; and its Columnist/Reporter Lily Reyes (petitioners), claiming
damages because of an allegedly libelous article petitioners published in the June
6, 2000 issue of Abante Tonite. The suit, docketed as Civil Case No. 00-97907,
was raffled to Branch 51 of the RTC, which in due course issued summons to be
served on each defendant, including Abante Tonite, at their business address at
Monica Publishing Corporation, 301-305 3rd Floor, BF Condominium Building,
Solana Street corner A. Soriano Street, Intramuros, Manila.4
FIRST DIVISION
G.R. No. 156759, June 05, 2013
ALLEN A. MACASAET, NICOLAS V. QUIJANO, JR., ISAIAS ALBANO, LILY
REYES, JANET BAY, JESUS R. GALANG, AND RANDY
HAGOS, Petitioners, v. FRANCISCO R. CO, JR., Respondent.
DECISION
BERSAMIN, J.:
To warrant the substituted service of the summons and copy of the complaint, the
serving officer must first attempt to effect the same upon the defendant in person.
Only after the attempt at personal service has become futile or impossible within a
reasonable time may the officer resort to substituted service.
The Case
Petitioners defendants in a suit for libel brought by respondent appeal the
decision promulgated on March 8, 20021 and the resolution promulgated on
January 13, 2003,2 whereby the Court of Appeals (CA) respectively dismissed their

In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the
stated address to effect the personal service of the summons on the defendants.
But his efforts to personally serve each defendant in the address were futile
because the defendants were then out of the office and unavailable. He returned in
the afternoon of that day to make a second attempt at serving the summons, but
he was informed that petitioners were still out of the office. He decided to resort to
substituted service of the summons,and explained why in his sheriffs return dated
September 22, 2000,5 to wit:cralavvonlinelawlibrary
SHERIFFS RETURN
This is to certify that on September 18, 2000, I caused the service of summons
together with copies of complaint and its annexes attached thereto, upon the
following:cralavvonlinelawlibrary
1. Defendant Allen A. Macasaet, President/Publisher of defendant Abante Tonite, at
Monica Publishing Corporation, Rooms 301-305 3rd Floor, BF Condominium
Building, Solana corner A. Soriano Streets, Intramuros, Manila, thru his secretary
Lu-Ann Quijano, a person of sufficient age and discretion working therein, who
signed to acknowledge receipt thereof. That effort (sic) to serve the said summons
personally upon said defendant were made, but the same were ineffectual and
unavailing on the ground that per information of Ms. Quijano said defendant is
always out and not available, thus, substituted service was
applied;chanroblesvirtualawlibrary

3. Defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily
Reyes, at the same address, thru Rene Esleta, Editorial Assistant of defendant
Abante Tonite, a person of sufficient age and discretion working therein who signed
to acknowledge receipt thereof. That effort (sic) to serve the said summons
personally upon said defendants were made, but the same were ineffectual and
unavailing on the ground that per information of (sic) Mr. Esleta said defendants is
(sic) always roving outside and gathering news, thus, substituted service was
applied.
Original copy of summons is therefore, respectfully returned duly served.
Manila, September 22, 2000.
On October 3, 2000, petitioners moved for the dismissal of the complaint through
counsels special appearance in their behalf,alleging lack of jurisdiction over their
persons because of the invalid and ineffectual substituted service of summons.
They contended that the sheriff had made no prior attempt to serve the summons
personally on each of them in accordance with Section 6 and Section 7, Rule 14 of
the Rules of Court. They further moved to drop Abante Tonite as a defendant by
virtue of its being neither a natural nor a juridical person that could be impleaded
as a party in a civil action.
At the hearing of petitioners motion to dismiss, Medina testified that he had gone
to the office address of petitioners in the morning of September 18, 2000 to
personally serve the summons on each defendant; that petitioners were out of the
office at the time; that he had returned in the afternoon of the same day to again
attempt to serve on each defendant personally but his attempt had still proved
futile because all of petitioners were still out of the office; that some competent
persons working in petitioners office had informed him that Macasaet and Quijano
were always out and unavailable, and that Albano, Bay, Galang, Hagos and Reyes
were always out roving to gather news; and that he had then resorted to
substituted service upon realizing the impossibility of his finding petitioners in
person within a reasonable time.
On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners

Page

2. Defendant Nicolas V. Quijano, at the same address, thru his wife Lu-Ann
Quijano, who signed to acknowledge receipt thereof. That effort (sic) to serve the
said summons personally upon said defendant were made, but the same were
ineffectual and unavailing on the ground that per information of (sic) his wife said
defendant is always out and not available, thus, substituted service was
applied;chanroblesvirtualawlibrary

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to file their answers to the complaint within the remaining period allowed by
the Rules of Court,6 relevantly stating:cralavvonlinelawlibrary
Records show that the summonses were served upon Allen A. Macasaet,
President/Publisher of defendant Abante Tonite, through Lu-Ann Quijano; upon
defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily
Reyes, through Rene Esleta, Editorial Assistant of defendant Abante Tonite (p. 12,
records). It is apparent in the Sheriffs Return that on several occasions, efforts to
served (sic) the summons personally upon all the defendants were ineffectual as
they were always out and unavailable, so the Sheriff served the summons by
substituted service.
Considering that summonses cannot be served within a reasonable time to the
persons of all the defendants, hence substituted service of summonses was validly
applied. Secretary of the President who is duly authorized to receive such
document, the wife of the defendant and the Editorial Assistant of the defendant,
were considered competent persons with sufficient discretion to realize the
importance of the legal papers served upon them and to relay the same to the
defendants named therein (Sec. 7, Rule 14, 1997 Rules of Civil Procedure).
WHEREFORE, in view of the foregoing, the Motion to Dismiss is hereby DENIED
for lack of merit..
Accordingly, defendants are directed to file their Answers to the complaint within
the period still open to them, pursuant to the rules.
SO ORDERED.
Petitioners filed a motion for reconsideration, asserting that the sheriff had
immediately resorted to substituted service of the summons upon being informed
that they were not around to personally receive the summons, and that Abante
Tonite, being neither a natural nor a juridical person, could not be made a party in
the action.
On June 29, 2001, the RTC denied petitioners motion for reconsideration.7 It
stated in respect of the service of summons, as follows:cralavvonlinelawlibrary
The allegations of the defendants that the Sheriff immediately resorted to
substituted service of summons upon them when he was informed that they were
not around to personally receive the same is untenable. During the hearing of the
herein motion, Sheriff Raul Medina of this Branch of the Court testified that on
September 18, 2000 in the morning, he went to the office address of the
defendants to personally serve summons upon them but they were out. So he went
back to serve said summons upon the defendants in the afternoon of the same
day, but then again he was informed that the defendants were out and unavailable,

Ruling of the CA
On March 8, 2002, the CApromulgated its questioned decision,8 dismissing the
petition for certiorari, prohibition, mandamus, to wit:cralavvonlinelawlibrary
We find petitioners argument without merit. The rule is that certiorari will prosper
only if there is a showing of grave abuse of discretion or an act without or in excess
of jurisdiction committed by the respondent Judge. A judicious reading of the
questioned orders of respondent Judge would show that the same were not issued
in a capricious or whimsical exercise of judgment. There are factual bases and
legal justification for the assailed orders. From the Return, the sheriff certified that
effort to serve the summons personally xxx were made, but the same were
ineffectual and unavailing xxx.
and upholding the trial courts finding that there was a substantial compliance with
the rules that allowed the substituted service.
Furthermore, the CA ruled:cralavvonlinelawlibrary
Anent the issue raised by petitioners that Abante Tonite is neither a natural or
juridical person who may be a party in a civil case, and therefore the case against
it must be dismissed and/or dropped, is untenable.
The respondent Judge, in denying petitioners motion for reconsideration, held

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and that they were always out because they were roving around to gather news.
Because of that information and because of the nature of the work of the
defendants that they are always on field, so the sheriff resorted to substituted
service of summons. There was substantial compliance with the rules, considering
the difficulty to serve the summons personally to them because of the nature of
their job which compels them to be always out and unavailable. Additional matters
regarding the service of summons upon defendants were sufficiently discussed in
the Order of this Court dated March 12, 2001.
Regarding the impleading of Abante Tonite as defendant, the RTC held,
viz:cralavvonlinelawlibrary
Abante Tonite is a daily tabloid of general circulation. People all over the country
could buy a copy of Abante Tonite and read it, hence, it is for public consumption.
The persons who organized said publication obviously derived profit from it. The
information written on the said newspaper will affect the person, natural as well as
juridical, who was stated or implicated in the news. All of these facts imply that
Abante Tonite falls within the provision of Art. 44 (2 or 3), New Civil Code.
Assuming arguendo that Abante Tonite is not registered with the Securities and
Exchange Commission, it is deemed a corporation by estoppels considering that it
possesses attributes of a juridical person, otherwise it cannot be held liable for
damages and injuries it may inflict to other persons.
Undaunted, petitioners brought a petition for certiorari, prohibition, mandamus in
the CA to nullify the orders of the RTC dated March 12, 2001 and June 29, 2001.

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that:cralavvonlinelawlibrary
xxxx
Abante Tonites newspapers are circulated nationwide, showing ostensibly its being
a corporate entity, thus the doctrine of corporation by estoppel may appropriately
apply.
An unincorporated association, which represents itself to be a corporation, will be
estopped from denying its corporate capacity in a suit against it by a third person
who relies in good faith on such representation.
There being no grave abuse of discretion committed by the respondent Judge in
the exercise of his jurisdiction, the relief of prohibition is also unavailable.
WHEREFORE, the instant petition is DENIED. The assailed Orders of respondent
Judge are AFFIRMED.
SO ORDERED.9
On January 13, 2003, the CA denied petitioners motion for reconsideration.10
Issues
Petitioners hereby submit that:cralavvonlinelawlibrary
1.

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN


HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER
HEREIN PETITIONERS.

2.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY


SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY IN THE
INSTANT CASE.11
Ruling

The petition for review lacks merit. Jurisdiction over the person, or jurisdiction in
personam the power of the court to render a personal judgment or to subject the
parties in a particular action to the judgment and other rulings rendered in the
action is an element of due process that is essential in all actions, civil as well as
criminal, except in actions in rem or quasi in rem. Jurisdiction over the defendant in
an action in rem or quasi in rem is not required, and the court acquires jurisdiction
over an action as long as it acquires jurisdiction over the res that is the subject

The distinctions that need to be perceived between an action in personam, on the


one hand, and an action in rem or quasi in rem, on the other hand, are aptly
delineated in Domagas v. Jensen,13thusly:cralavvonlinelawlibrary
The settled rule is that the aim and object of an action determine its character.
Whether a proceeding is in rem, or in personam, or quasi in rem for that matter, is
determined by its nature and purpose, and by these only. A proceeding
in personam is a proceeding to enforce personal rights and obligations brought
against the person and is based on the jurisdiction of the person, although it may
involve his right to, or the exercise of ownership of, specific property, or seek to
compel him to control or dispose of it in accordance with the mandate of the court.
The purpose of a proceeding in personam is to impose, through the judgment of a
court, some responsibility or liability directly upon the person of the defendant. Of
this character are suits to compel a defendant to specifically perform some act or
actions to fasten a pecuniary liability on him. An action in personam is said to be
one which has for its object a judgment against the person, as distinguished from a
judgment against the prop[er]ty to determine its state. It has been held that an
action in personam is a proceeding to enforce personal rights or obligations; such
action is brought against the person. As far as suits for injunctive relief are
concerned, it is well-settled that it is an injunctive act in personam. In Combs v.
Combs, the appellate court held that proceedings to enforce personal rights and
obligations and in which personal judgments are rendered adjusting the rights and
obligations between the affected parties is in personam. Actions for recovery of
real property are in personam.
On the other hand, a proceeding quasi in rem is one brought against persons
seeking to subject the property of such persons to the discharge of the claims
assailed. In an action quasi in rem, an individual is named as defendant and the
purpose of the proceeding is to subject his interests therein to the obligation or
loan burdening the property. Actions quasi in rem deal with the status, ownership
or liability of a particular property but which are intended to operate on these
questions only as between the particular parties to the proceedings and not to
ascertain or cut off the rights or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined in the action.
As a rule, Philippine courts cannot try any case against a defendant who does not
reside and is not found in the Philippines because of the impossibility of acquiring
jurisdiction over his person unless he voluntarily appears in court;but when the
case is an action in rem or quasi in rem enumerated in Section 15, Rule 14 of
the Rules of Court, Philippine courts have jurisdiction to hear and decide the case
because they have jurisdiction over the res, and jurisdiction over the person of the

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matter of the action. The purpose of summons in such action is not the acquisition
of jurisdiction over the defendant but mainly to satisfy the constitutional
requirement of due process.12

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non-resident defendant is not essential. In the latter instance, extraterritorial
service of summons can be made upon the defendant, and such extraterritorial
service of summons is not for the purpose of vesting the court with jurisdiction, but
for the purpose of complying with the requirements of fair play or due process, so
that the defendant will be informed of the pendency of the action against him and
the possibility that property in the Philippines belonging to him or in which he has
an interest may be subjected to a judgment in favor of the plaintiff, and he can
thereby take steps to protect his interest if he is so minded. On the other hand,
when the defendant in an action in personam does not reside and is not found in
the Philippines, our courts cannot try the case against him because of the
impossibility of acquiring jurisdiction over his person unless he voluntarily appears
in court.14
As the initiating party, the plaintiff in a civil action voluntarily submits himself to the
jurisdiction of the court by the act of filing the initiatory pleading. As to the
defendant, the court acquires jurisdiction over his person either by the proper
service of the summons, or by a voluntary appearance in the action.15
Upon the filing of the complaint and the payment of the requisite legal fees, the
clerk of court forthwith issues the corresponding summons to the defendant.16 The
summons is directed to the defendant and signed by the clerk of court under seal.
It contains the name of the court and the names of the parties to the action; a
direction that the defendant answers within the time fixed by theRules of Court;
and a notice that unless the defendant so answers, the plaintiff will take judgment
by default and may be granted the relief applied for.17 To be attached to the original
copy of the summons and all copies thereof is a copy of the complaint (and its
attachments, if any) and the order, if any, for the appointment of a guardian ad
litem.18
The significance of the proper service of the summons on the defendant in an
action in personamcannot be overemphasized. The service of the summons fulfills
two fundamental objectives, namely: (a) to vest in the court jurisdiction over the
person of the defendant;and (b) to afford to the defendant the opportunity to be
heard on the claim brought against him.19 As to the former, when jurisdiction in
personam is not acquired in a civil action through the proper service of the
summons or upon a valid waiver of such proper service, the ensuing trial and
judgment are void.20 If the defendant knowingly does an act inconsistent with the
right to object to the lack of personal jurisdiction as to him, like voluntarily
appearing in the action, he is deemed to have submitted himself to the jurisdiction
of the court.21 As to the latter, the essence of due process lies in the reasonable
opportunity to be heard and to submit any evidence the defendant may have in
support of his defense.With the proper service of the summons being intended to
afford to him the opportunity to be heard on the claim against him, he may also

Under the Rules of Court, the service of the summons should firstly be effected on
the defendant himself whenever practicable. Such personal service consists either
in handing a copy of the summons to the defendant in person, or, if the defendant
refuses to receive and sign for it, in tendering it to him.24 The rule on personal
service is to be rigidly enforced in order to ensure the realization of the two
fundamental objectives earlier mentioned. If, for justifiable reasons, the defendant
cannot be served in person within a reasonable time, the service of the summons
may then be effected either (a) by leaving a copy of the summons at his residence
with some person of suitable age and discretion then residing therein, or (b) by
leaving the copy at his office or regular place of business with some competent
person in charge thereof.25 The latter mode of service is known as substituted
service because the service of the summons on the defendant is made through his
substitute.
It is no longer debatable that the statutory requirements of substituted service must
be followed strictly, faithfully and fully, and any substituted service other than that
authorized by statute is considered ineffective.26 This is because substituted
service, being in derogation of the usual method of service, is extraordinary in
character and may be used only as prescribed and in the circumstances
authorized by statute.27 Only when the defendant cannot be served personally
within a reasonable time may substituted service be resorted to. Hence, the
impossibility of prompt personal service should be shown by stating the efforts
made to find the defendant himself and the fact that such efforts failed, which
statement should be found in the proof of service or sheriffs return.28Nonetheless,
the requisite showing of the impossibility of prompt personal service as basis for
resorting to substituted service may be waived by the defendant either expressly or
impliedly.29
There is no question that Sheriff Medina twice attempted to serve the summons
upon each of petitioners in person at their office address, the first in the morning of
September 18, 2000 and the second in the afternoon of the same date. Each
attempt failed because Macasaet and Quijano were always out and not available
and the other petitioners were always roving outside and gathering news. After
Medina learned from those present in the office address on his second attempt that
there was no likelihood of any of petitioners going to the office during the business
hours of that or any other day, he concluded that further attempts to serve them in
person within a reasonable timewould be futile. The circumstances fully warranted
his conclusion. He was not expected or required as the serving officer to effect
personal service by all means and at all times, considering that he was expressly
authorized to resort to substituted service should he be unable to effect the

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waive the process.22 In other words, compliance with the rules regarding the
service of the summons is as much an issue of due process as it is of jurisdiction.23

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personal service within a reasonable time. In that regard, what was a reasonable
time was dependent on the circumstances obtaining. While we are strict in insisting
on personal service on the defendant, we do not cling to such strictness should the
circumstances already justify substituted service instead. It is the spirit of the
procedural rules, not their letter, that governs.30
In reality, petitioners insistence on personal service by the serving officer was
demonstrably superfluous. They had actually received the summonses served
through their substitutes, as borne out by their filing of several pleadings in the
RTC, including an answer with compulsory counterclaimad cautelam and a pre-trial
brief ad cautelam. They had also availed themselves of the modes of discovery
available under the Rules of Court. Such acts evinced their voluntary appearance
in the action.
Nor can we sustain petitioners contention that Abante Tonite could not be sued as
a defendant due to its not being either a natural or a juridical person. In rejecting
their contention, the CA categorized Abante Tonite as a corporation by estoppel as
the result of its having represented itself to the reading public as a corporation
despite its not being incorporated. Thereby, the CA concluded that the RTC did not
gravely abuse its discretion in holding that the non-incorporation of Abante Tonite
with the Securities and Exchange Commission was of no consequence, for,
otherwise, whoever of the public who would suffer any damage from the
publication of articles in the pages of its tabloids would be left without recourse. We
cannot disagree with the CA, considering that the editorial box of the daily tabloid
disclosed that although Monica Publishing Corporation had published the tabloid
on a daily basis, nothing in the box indicated that Monica Publishing Corporation
had owned Abante Tonite.
WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002;
and ORDERSpetitioners to pay the costs of suit.
SO ORDERED.

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