G.R. No.

125221 June 19, 1997

REYNALDO M. LOZANO, petitioner, vs. HON. ELIEZER R. DE LOS SANTOS, Presiding Judge, RTC, Br. 58, Angeles City; and ANTONIO
ANDA, respondents.

PUNO, J.:

This petition for certiorari seeks to annul and set aside the decision of the Regional Trial Court, Branch 58, Angeles City which ordered
the Municipal Circuit Trial Court, Mabalacat and Magalang, Pampanga to dismiss Civil Case No. 1214 for lack of jurisdiction.

The facts are undisputed. On December 19, 1995, petitioner Reynaldo M. Lozano filed Civil Case No. 1214 for damages against
respondent Antonio Anda before the Municipal Circuit Trial Court (MCTC), Mabalacat and Magalang, Pampanga. Petitioner alleged that
he was the president of the Kapatirang Mabalacat-Angeles Jeepney Drivers' Association, Inc. (KAMAJDA) while respondent Anda was the
president of the Samahang Angeles-Mabalacat Jeepney Operators' and Drivers' Association, Inc. (SAMAJODA); in August 1995, upon the
request of the Sangguniang Bayan of Mabalacat, Pampanga, petitioner and private respondent agreed to consolidate their respective
associations and form the Unified Mabalacat-Angeles Jeepney Operators' and Drivers Association, Inc. (UMAJODA); petitioner and
private respondent also agreed to elect one set of officers who shall be given the sole authority to collect the daily dues from the
members of the consolidated association; elections were held on October 29, 1995 and both petitioner and private respondent ran for
president; petitioner won; private respondent protested and, alleging fraud, refused to recognize the results of the election; private
respondent also refused to abide by their agreement and continued collecting the dues from the members of his association despite
several demands to desist. Petitioner was thus constrained to file the complaint to restrain private respondent from collecting the dues
and to order him to pay damages in the amount of P25,000.00 and attorney's fees of P500.00. 1

Private respondent moved to dismiss the complaint for lack of jurisdiction, claiming that jurisdiction was lodged with the Securities and
Exchange Commission (SEC). The MCTC denied the motion on February 9, 1996. 2 It denied reconsideration on March 8, 1996. 3

Private respondent filed a petition for certiorari before the Regional Trial Court, Branch 58, Angeles City. 4 The trial court found the
dispute to be intracorporate, hence, subject to the jurisdiction of the SEC, and ordered the MCTC to dismiss Civil Case No. 1214
accordingly. 5 It denied reconsideration on May 31, 1996. 6

Hence this petition. Petitioner claims that:

THE RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION AND SERIOUS
ERROR OF LAW IN CONCLUDING THAT THE SECURITIES AND EXCHANGE COMMISSION HAS JURISDICTION OVER A CASE OF DAMAGES
BETWEEN HEADS/PRESIDENTS OF TWO (2) ASSOCIATIONS WHO INTENDED TO CONSOLIDATE/MERGE THEIR ASSOCIATIONS BUT NOT
YET [SIC] APPROVED AND REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION.7

The jurisdiction of the Securities and Exchange Commission (SEC) is set forth in Section 5 of Presidential Decree No. 902-A. Section 5
reads as follows:

Sec. 5. . . . [T]he Securities and Exchange Commission [has] original and exclusive jurisdiction to hear and decide cases involving:

(a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners, amounting to
fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, members of
associations or organizations registered with the Commission.

(b) Controversies arising out of intracorporate or partnership relations, between and among stockholders, members or associates;
between any or all of them and the corporation, partnership or association of which they are stockholders, members, or associates,
respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or
right to exist as such entity.

(c) Controversies in the election or appointment of directors, trustees, officers or managers of such corporations, partnerships or
associations.

(d) Petitions of corporations, partnerships or associations to be declared in the state of suspension of payments in cases where the
corporation, partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them

1
when they respectively fall due or in cases where the corporation, partnership or association has no sufficient assets to over its
liabilities, but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree.

The grant of jurisdiction to the SEC must be viewed in the light of its nature and function under the law. 8 This jurisdiction is determined
by a concurrence of two elements: (1) the status or relationship of the parties; and (2) the nature of the question that is the subject of
their controversy. 9

The first element requires that the controversy must arise out of intracorporate or partnership relations between and among
stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between such corporation, partnership or association and the State in so far as it
concerns their individual franchises. 10 The second element requires that the dispute among the parties be intrinsically connected with
the regulation of the corporation, partnership or association or deal with the internal affairs of the corporation, partnership or
association. 11 After all, the principal function of the SEC is the supervision and control of corporations, partnership and associations with
the end in view that investments in these entities may be encouraged and protected, and their entities may be encouraged and
protected, and their activities pursued for the promotion of economic development. 12

There is no intracorporate nor partnership relation between petitioner and private respondent. The controversy between them arose
out of their plan to consolidate their respective jeepney drivers' and operators' associations into a single common association. This
unified association was, however, still a proposal. It had not been approved by the SEC, neither had its officers and members submitted
their articles of consolidation is accordance with Sections 78 and 79 of the Corporation Code. Consolidation becomes effective not upon
mere agreement of the members but only upon issuance of the certificate of consolidation by the SEC. 13 When the SEC, upon
processing and examining the articles of consolidation, is satisfied that the consolidation of the corporations is not inconsistent with the
provisions of the Corporation Code and existing laws, it issues a certificate of consolidation which makes the reorganization
official. 14 The new consolidated corporation comes into existence and the constituent corporations dissolve and cease to exist. 15

The KAMAJDA and SAMAJODA to which petitioner and private respondent belong are duly registered with the SEC, but these
associations are two separate entities. The dispute between petitioner and private respondent is not within the KAMAJDA nor the
SAMAJODA. It is between members of separate and distinct associations. Petitioner and private respondent have no intracorporate
relation much less do they have an intracorporate dispute. The SEC therefore has no jurisdiction over the complaint.

The doctrine of corporation by estoppel 16 advanced by private respondent cannot override jurisdictional requirements. Jurisdiction is
fixed by law and is not subject to the agreement of the parties. 17 It cannot be acquired through or waived, enlarged or diminished by,
any act or omission of the parties, neither can it be conferred by the acquiescence of the court. 18

Corporation by estoppel is founded on principles of equity and is designed to prevent injustice and unfairness. 19 It applies when persons
assume to form a corporation and exercise corporate functions and enter into business relations with third person. Where there is no
third person involved and the conflict arises only among those assuming the form of a corporation, who therefore know that it has not
been registered, there is no corporation by estoppel. 20

IN VIEW WHEREOF, the petition is granted and the decision dated April 18, 1996 and the order dated May 31, 1996 of the Regional Trial
Court, Branch 58, Angeles City are set aside. The Municipal Circuit Trial Court of Mabalacat and Magalang, Pampanga is ordered to
proceed with dispatch in resolving Civil Case No. 1214. No costs.

SO ORDERED.

Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.

Footnotes

1 Complaint, Annex "C" to the Petition, Rollo, pp. 25-28.

2 Annex "D" to the Petition, Rollo, pp. 35-37.

3 Annex "E" to the Petition, Rollo, p. 37.

4 Civil Case No. 8237.

5 Annex "A" to the Petition, Rollo, pp. 18-21.

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6 Annex "B" to the Petition, Rollo, pp. 22-24.

7 Petition, p. 6, Rollo, p. 8.

8 Union Glass & Container Corporation v. Securities and Exchange Commission, 126 SCRA 32, 38 [1983].

9 Macapalan v. Katalbas-Moscardon, 227 SCRA 49, 54 [1993]; Viray v. Court of Appeals, 191 SCRA 308, 323 [1990].

10 Union Glass & Container Corporation v. Securities and Exchange Commission, supra, at 38; Agpalo, Comments on the Corporation
Code of the Philippines, pp. 447-448 [1993].

11 Dee v. Securities and Exchange Commission, 199 SCRA 238, 250 [1991]; Union Glass & Container Corporation v. Securities and
Exchange Commission, supra, at 38.

12 Union Glass & Container Corporation v. Securities and Exchange Commission, supra, at 38, citing Whereas Clauses of P.D. 902-A.

13 Section 79, Corporation Code; Campos, The Corporation Code, Comments, Notes and Selected Cases, vol. 2, p. 447 [1990].

14 Lopez, The Corporation Code of the Philippines Annotated, vol. 2, p. 940 [1994].

15 Section 80, Corporation Code.

16 Section 21, Corporation Code.

17 De Leon v. Court of Appeals, 245 SCRA 166, 176 [1995]; Lozon v. National Labor Relations Commission, 240 SCRA 1, 11 [1995].

18 Lozon v. National Labor Relations Commission, supra, at 11 [1995]; De Jesus v. Garcia, 19 SCRA 554, 558 [1967]; Calimlim v. Ramirez,
118 SCRA 399, 406 [1982].

19 Lopez, supra, v. 1, pp. 340-341 [1994].

20 Hall v. Piccio, 86 Phil. 603, 605 [1950]; also cited in Agpalo, supra, at 85.

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G.R. No. 136448 November 3, 1999

LIM TONG LIM, petitioner, vs. PHILIPPINE FISHING GEAR INDUSTRIES, INC., respondent.

PANGANIBAN, J.:

A partnership may be deemed to exist among parties who agree to borrow money to pursue a business and to divide the profits or
losses that may arise therefrom, even if it is shown that they have not contributed any capital of their own to a "common fund." Their
contribution may be in the form of credit or industry, not necessarily cash or fixed assets. Being partner, they are all liable for debts
incurred by or on behalf of the partnership. The liability for a contract entered into on behalf of an unincorporated association or
ostensible corporation may lie in a person who may not have directly transacted on its behalf, but reaped benefits from that contract.

The Case

In the Petition for Review on Certiorari before us, Lim Tong Lim assails the November 26, 1998 Decision of the Court of Appeals in CA-GR
CV
41477, 1 which disposed as follows:

WHEREFORE, [there being] no reversible error in the appealed decision, the same is hereby affirmed. 2

The decretal portion of the Quezon City Regional Trial Court (RTC) ruling, which was affirmed by the CA, reads as follows:

WHEREFORE, the Court rules:

1. That plaintiff is entitled to the writ of preliminary attachment issued by this Court on September 20, 1990;

2. That defendants are jointly liable to plaintiff for the following amounts, subject to the modifications as hereinafter made by reason of
the special and unique facts and circumstances and the proceedings that transpired during the trial of this case;

a. P532,045.00 representing [the] unpaid purchase price of the fishing nets covered by the Agreement plus P68,000.00 representing the
unpaid price of the floats not covered by said Agreement;

b. 12% interest per annum counted from date of plaintiff's invoices and computed on their respective amounts as follows:

i. Accrued interest of P73,221.00 on Invoice No. 14407 for P385,377.80 dated February 9, 1990;

ii. Accrued interest for P27,904.02 on Invoice No. 14413 for P146,868.00 dated February 13, 1990;

iii. Accrued interest of P12,920.00 on Invoice No. 14426 for P68,000.00 dated February 19, 1990;

c. P50,000.00 as and for attorney's fees, plus P8,500.00 representing P500.00 per appearance in court;

d. P65,000.00 representing P5,000.00 monthly rental for storage charges on the nets counted from September 20, 1990 (date of
attachment) to September 12, 1991 (date of auction sale);

e. Cost of suit.

With respect to the joint liability of defendants for the principal obligation or for the unpaid price of nets and floats in the amount of
P532,045.00 and P68,000.00, respectively, or for the total amount P600,045.00, this Court noted that these items were attached to
guarantee any judgment that may be rendered in favor of the plaintiff but, upon agreement of the parties, and, to avoid further
deterioration of the nets during the pendency of this case, it was ordered sold at public auction for not less than P900,000.00 for which
the plaintiff was the sole and winning bidder. The proceeds of the sale paid for by plaintiff was deposited in court. In effect, the amount
of P900,000.00 replaced the attached property as a guaranty for any judgment that plaintiff may be able to secure in this case with the
ownership and possession of the nets and floats awarded and delivered by the sheriff to plaintiff as the highest bidder in the public
auction sale. It has also been noted that ownership of the nets [was] retained by the plaintiff until full payment [was] made as stipulated
in the invoices; hence, in effect, the plaintiff attached its own properties. It [was] for this reason also that this Court earlier ordered the
attachment bond filed by plaintiff to guaranty damages to defendants to be cancelled and for the P900,000.00 cash bidded and paid for
by plaintiff to serve as its bond in favor of defendants.

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From the foregoing, it would appear therefore that whatever judgment the plaintiff may be entitled to in this case will have to be
satisfied from the amount of P900,000.00 as this amount replaced the attached nets and floats. Considering, however, that the total
judgment obligation as computed above would amount to only P840,216.92, it would be inequitable, unfair and unjust to award the
excess to the defendants who are not entitled to damages and who did not put up a single centavo to raise the amount of P900,000.00
aside from the fact that they are not the owners of the nets and floats. For this reason, the defendants are hereby relieved from any and
all liabilities arising from the monetary judgment obligation enumerated above and for plaintiff to retain possession and ownership of
the nets and floats and for the reimbursement of the P900,000.00 deposited by it with the Clerk of Court.

SO ORDERED. 3

The Facts

On behalf of "Ocean Quest Fishing Corporation," Antonio Chua and Peter Yao entered into a Contract dated February 7, 1990, for the
purchase of fishing nets of various sizes from the Philippine Fishing Gear Industries, Inc. (herein respondent). They claimed that they
were engaged in a business venture with Petitioner Lim Tong Lim, who however was not a signatory to the agreement. The total price of
the nets amounted to P532,045. Four hundred pieces of floats worth P68,000 were also sold to the Corporation. 4

The buyers, however, failed to pay for the fishing nets and the floats; hence, private respondents filed a collection suit against Chua, Yao
and Petitioner Lim Tong Lim with a prayer for a writ of preliminary attachment. The suit was brought against the three in their capacities
as general partners, on the allegation that "Ocean Quest Fishing Corporation" was a nonexistent corporation as shown by a Certification
from the Securities and Exchange Commission. 5 On September 20, 1990, the lower court issued a Writ of Preliminary Attachment,
which the sheriff enforced by attaching the fishing nets on board F/B Lourdes which was then docked at the Fisheries Port, Navotas,
Metro Manila.

Instead of answering the Complaint, Chua filed a Manifestation admitting his liability and requesting a reasonable time within which to
pay. He also turned over to respondent some of the nets which were in his possession. Peter Yao filed an Answer, after which he was
deemed to have waived his right to cross-examine witnesses and to present evidence on his behalf, because of his failure to appear in
subsequent hearings. Lim Tong Lim, on the other hand, filed an Answer with Counterclaim and Crossclaim and moved for the lifting of
the Writ of Attachment. 6 The trial court maintained the Writ, and upon motion of private respondent, ordered the sale of the fishing
nets at a public auction. Philippine Fishing Gear Industries won the bidding and deposited with the said court the sales proceeds of
P900,000. 7

On November 18, 1992, the trial court rendered its Decision, ruling that Philippine Fishing Gear Industries was entitled to the Writ of
Attachment and that Chua, Yao and Lim, as general partners, were jointly liable to pay respondent. 8

The trial court ruled that a partnership among Lim, Chua and Yao existed based (1) on the testimonies of the witnesses presented and
(2) on a Compromise Agreement executed by the three 9 in Civil Case No. 1492-MN which Chua and Yao had brought against Lim in the
RTC of Malabon, Branch 72, for (a) a declaration of nullity of commercial documents; (b) a reformation of contracts; (c) a declaration of
ownership of fishing boats; (d) an injunction and (e) damages. 10 The Compromise Agreement provided:

a) That the parties plaintiffs & Lim Tong Lim agree to have the four (4) vessels sold in the amount of P5,750,000.00 including the fishing
net. This P5,750,000.00 shall be applied as full payment for P3,250,000.00 in favor of JL Holdings Corporation and/or Lim Tong Lim;

b) If the four (4) vessel[s] and the fishing net will be sold at a higher price than P5,750,000.00 whatever will be the excess will be divided
into 3: 1/3 Lim Tong Lim; 1/3 Antonio Chua; 1/3 Peter Yao;

c) If the proceeds of the sale the vessels will be less than P5,750,000.00 whatever the deficiency shall be shouldered and paid to JL
Holding Corporation by 1/3 Lim Tong Lim; 1/3 Antonio Chua; 1/3 Peter Yao. 11

The trial court noted that the Compromise Agreement was silent as to the nature of their obligations, but that joint liability could be
presumed from the equal distribution of the profit and loss. 21

Lim appealed to the Court of Appeals (CA) which, as already stated, affirmed the RTC.

Ruling of the Court of Appeals

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In affirming the trial court, the CA held that petitioner was a partner of Chua and Yao in a fishing business and may thus be held liable as
a such for the fishing nets and floats purchased by and for the use of the partnership. The appellate court ruled:

The evidence establishes that all the defendants including herein appellant Lim Tong Lim undertook a partnership for a specific
undertaking, that is for commercial fishing . . . . Oviously, the ultimate undertaking of the defendants was to divide the profits among
themselves which is what a partnership essentially is . . . . By a contract of partnership, two or more persons bind themselves to
contribute money, property or industry to a common fund with the intention of dividing the profits among themselves (Article 1767,
New Civil Code). 13

Hence, petitioner brought this recourse before this Court. 14

The Issues

In his Petition and Memorandum, Lim asks this Court to reverse the assailed Decision on the following grounds:

I THE COURT OF APPEALS ERRED IN HOLDING, BASED ON A COMPROMISE AGREEMENT THAT CHUA, YAO AND PETITIONER LIM ENTERED
INTO IN A SEPARATE CASE, THAT A PARTNERSHIP AGREEMENT EXISTED AMONG THEM.

II SINCE IT WAS ONLY CHUA WHO REPRESENTED THAT HE WAS ACTING FOR OCEAN QUEST FISHING CORPORATION WHEN HE BOUGHT
THE NETS FROM PHILIPPINE FISHING, THE COURT OF APPEALS WAS UNJUSTIFIED IN IMPUTING LIABILITY TO PETITIONER LIM AS WELL.

III THE TRIAL COURT IMPROPERLY ORDERED THE SEIZURE AND ATTACHMENT OF PETITIONER LIM'S GOODS.

In determining whether petitioner may be held liable for the fishing nets and floats from respondent, the Court must resolve this key
issue: whether by their acts, Lim, Chua and Yao could be deemed to have entered into a partnership.

This Court's Ruling

The Petition is devoid of merit.

First and Second Issues:

Existence of a Partnership

and Petitioner's Liability

In arguing that he should not be held liable for the equipment purchased from respondent, petitioner controverts the CA finding that a
partnership existed between him, Peter Yao and Antonio Chua. He asserts that the CA based its finding on the Compromise Agreement
alone. Furthermore, he disclaims any direct participation in the purchase of the nets, alleging that the negotiations were conducted by
Chua and Yao only, and that he has not even met the representatives of the respondent company. Petitioner further argues that he was
a lessor, not a partner, of Chua and Yao, for the "Contract of Lease " dated February 1, 1990, showed that he had merely leased to the
two the main asset of the purported partnership — the fishing boat F/B Lourdes. The lease was for six months, with a monthly rental of
P37,500 plus 25 percent of the gross catch of the boat.

We are not persuaded by the arguments of petitioner. The facts as found by the two lower courts clearly showed that there existed a
partnership among Chua, Yao and him, pursuant to Article 1767 of the Civil Code which provides:

Art. 1767 — By the contract of partnership, two or more persons bind themselves to contribute money, property, or industry to a
common fund, with the intention of dividing the profits among themselves.

Specifically, both lower courts ruled that a partnership among the three existed based on the following factual findings: 15

(1) That Petitioner Lim Tong Lim requested Peter Yao who was engaged in commercial fishing to join him, while Antonio Chua was
already Yao's partner;

(2) That after convening for a few times, Lim, Chua, and Yao verbally agreed to acquire two fishing boats, the FB Lourdes and the FB
Nelson for the sum of P3.35 million;

(3) That they borrowed P3.25 million from Jesus Lim, brother of Petitioner Lim Tong Lim, to finance the venture.

6
(4) That they bought the boats from CMF Fishing Corporation, which executed a Deed of Sale over these two (2) boats in favor of
Petitioner Lim Tong Lim only to serve as security for the loan extended by Jesus Lim;

(5) That Lim, Chua and Yao agreed that the refurbishing, re-equipping, repairing, dry docking and other expenses for the boats would be
shouldered by Chua and Yao;

(6) That because of the "unavailability of funds," Jesus Lim again extended a loan to the partnership in the amount of P1 million secured
by a check, because of which, Yao and Chua entrusted the ownership papers of two other boats, Chua's FB Lady Anne Mel and Yao's
FB Tracy to Lim Tong Lim.

(7) That in pursuance of the business agreement, Peter Yao and Antonio Chua bought nets from Respondent Philippine Fishing Gear, in
behalf of "Ocean Quest Fishing Corporation," their purported business name.

(8) That subsequently, Civil Case No. 1492-MN was filed in the Malabon RTC, Branch 72 by Antonio Chua and Peter Yao against Lim Tong
Lim for (a) declaration of nullity of commercial documents; (b) reformation of contracts; (c) declaration of ownership of fishing boats; (4)
injunction; and (e) damages.

(9) That the case was amicably settled through a Compromise Agreement executed between the parties-litigants the terms of which are
already enumerated above.

From the factual findings of both lower courts, it is clear that Chua, Yao and Lim had decided to engage in a fishing business, which they
started by buying boats worth P3.35 million, financed by a loan secured from Jesus Lim who was petitioner's brother. In their
Compromise Agreement, they subsequently revealed their intention to pay the loan with the proceeds of the sale of the boats, and to
divide equally among them the excess or loss. These boats, the purchase and the repair of which were financed with borrowed money,
fell under the term "common fund" under Article 1767. The contribution to such fund need not be cash or fixed assets; it could be an
intangible like credit or industry. That the parties agreed that any loss or profit from the sale and operation of the boats would be
divided equally among them also shows that they had indeed formed a partnership.

Moreover, it is clear that the partnership extended not only to the purchase of the boat, but also to that of the nets and the floats. The
fishing nets and the floats, both essential to fishing, were obviously acquired in furtherance of their business. It would have been
inconceivable for Lim to involve himself so much in buying the boat but not in the acquisition of the aforesaid equipment, without which
the business could not have proceeded.

Given the preceding facts, it is clear that there was, among petitioner, Chua and Yao, a partnership engaged in the fishing business. They
purchased the boats, which constituted the main assets of the partnership, and they agreed that the proceeds from the sales and
operations thereof would be divided among them.

We stress that under Rule 45, a petition for review like the present case should involve only questions of law. Thus, the foregoing factual
findings of the RTC and the CA are binding on this Court, absent any cogent proof that the present action is embraced by one of the
exceptions to the rule. 16 In assailing the factual findings of the two lower courts, petitioner effectively goes beyond the bounds of a
petition for review under Rule 45.

Compromise Agreement

Not the Sole Basis of Partnership

Petitioner argues that the appellate court's sole basis for assuming the existence of a partnership was the Compromise Agreement. He
also claims that the settlement was entered into only to end the dispute among them, but not to adjudicate their preexisting rights and
obligations. His arguments are baseless. The Agreement was but an embodiment of the relationship extant among the parties prior to
its execution.

A proper adjudication of claimants' rights mandates that courts must review and thoroughly appraise all relevant facts. Both lower
courts have done so and have found, correctly, a preexisting partnership among the parties. In implying that the lower courts have
decided on the basis of one piece of document alone, petitioner fails to appreciate that the CA and the RTC delved into the history of
the document and explored all the possible consequential combinations in harmony with law, logic and fairness. Verily, the two lower
courts' factual findings mentioned above nullified petitioner's argument that the existence of a partnership was based only on the
Compromise Agreement.
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Petitioner Was a Partner,

Not a Lessor

We are not convinced by petitioner's argument that he was merely the lessor of the boats to Chua and Yao, not a partner in the fishing
venture. His argument allegedly finds support in the Contract of Lease and the registration papers showing that he was the owner of the
boats, including F/B Lourdes where the nets were found.

His allegation defies logic. In effect, he would like this Court to believe that he consented to the sale of his own boats to pay a debt
of Chua and Yao, with the excess of the proceeds to be divided among the three of them. No lessor would do what petitioner did.
Indeed, his consent to the sale proved that there was a preexisting partnership among all three.

Verily, as found by the lower courts, petitioner entered into a business agreement with Chua and Yao, in which debts were undertaken
in order to finance the acquisition and the upgrading of the vessels which would be used in their fishing business. The sale of the boats,
as well as the division among the three of the balance remaining after the payment of their loans, proves beyond cavil that F/B Lourdes,
though registered in his name, was not his own property but an asset of the partnership. It is not uncommon to register the properties
acquired from a loan in the name of the person the lender trusts, who in this case is the petitioner himself. After all, he is the brother of
the creditor, Jesus Lim.

We stress that it is unreasonable — indeed, it is absurd — for petitioner to sell his property to pay a debt he did not incur, if the
relationship among the three of them was merely that of lessor-lessee, instead of partners.

Corporation by Estoppel

Petitioner argues that under the doctrine of corporation by estoppel, liability can be imputed only to Chua and Yao, and not to him.
Again, we disagree.

Sec. 21 of the Corporation Code of the Philippines provides:

Sec. 21. Corporation by estoppel. — All persons who assume to act as a corporation knowing it to be without authority to do so shall be
liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof: Provided however, That when any
such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not
be allowed to use as a defense its lack of corporate personality.

One who assumes an obligation to an ostensible corporation as such, cannot resist performance thereof on the ground that there was in
fact no corporation.

Thus, even if the ostensible corporate entity is proven to be legally nonexistent, a party may be estopped from denying its corporate
existence. "The reason behind this doctrine is obvious — an unincorporated association has no personality and would be incompetent to
act and appropriate for itself the power and attributes of a corporation as provided by law; it cannot create agents or confer authority
on another to act in its behalf; thus, those who act or purport to act as its representatives or agents do so without authority and at their
own risk. And as it is an elementary principle of law that a person who acts as an agent without authority or without a principal is
himself regarded as the principal, possessed of all the right and subject to all the liabilities of a principal, a person acting or purporting to
act on behalf of a corporation which has no valid existence assumes such privileges and obligations and becomes personally liable for
contracts entered into or for other acts performed as such agent. 17

The doctrine of corporation by estoppel may apply to the alleged corporation and to a third party. In the first instance, an
unincorporated association, which represented itself to be a corporation, will be estopped from denying its corporate capacity in a suit
against it by a third person who relied in good faith on such representation. It cannot allege lack of personality to be sued to evade its
responsibility for a contract it entered into and by virtue of which it received advantages and benefits.

On the other hand, a third party who, knowing an association to be unincorporated, nonetheless treated it as a corporation and
received benefits from it, may be barred from denying its corporate existence in a suit brought against the alleged corporation. In such
case, all those who benefited from the transaction made by the ostensible corporation, despite knowledge of its legal defects, may be
held liable for contracts they impliedly assented to or took advantage of.

8
There is no dispute that the respondent, Philippine Fishing Gear Industries, is entitled to be paid for the nets it sold. The only question
here is whether petitioner should be held jointly 18 liable with Chua and Yao. Petitioner contests such liability, insisting that only those
who dealt in the name of the ostensible corporation should be held liable. Since his name does not appear on any of the contracts and
since he never directly transacted with the respondent corporation, ergo, he cannot be held liable.

Unquestionably, petitioner benefited from the use of the nets found inside F/B Lourdes, the boat which has earlier been proven to be an
asset of the partnership. He in fact questions the attachment of the nets, because the Writ has effectively stopped his use of the fishing
vessel.

It is difficult to disagree with the RTC and the CA that Lim, Chua and Yao decided to form a corporation. Although it was never legally
formed for unknown reasons, this fact alone does not preclude the liabilities of the three as contracting parties in representation of it.
Clearly, under the law on estoppel, those acting on behalf of a corporation and those benefited by it, knowing it to be without valid
existence, are held liable as general partners.

Technically, it is true that petitioner did not directly act on behalf of the corporation. However, having reaped the benefits of the
contract entered into by persons with whom he previously had an existing relationship, he is deemed to be part of said association and
is covered by the scope of the doctrine of corporation by estoppel. We reiterate the ruling of the Court in Alonso v. Villamor: 19

A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position,
entraps and destroys the other. It is, rather, a contest in which each contending party fully and fairly lays before the court the facts in
issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice
be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as
an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts. There should be no vested
rights in technicalities.

Third Issue:

Validity of Attachment

Finally, petitioner claims that the Writ of Attachment was improperly issued against the nets. We agree with the Court of Appeals that
this issue is now moot and academic. As previously discussed, F/B Lourdes was an asset of the partnership and that it was placed in the
name of petitioner, only to assure payment of the debt he and his partners owed. The nets and the floats were specifically
manufactured and tailor-made according to their own design, and were bought and used in the fishing venture they agreed upon.
Hence, the issuance of the Writ to assure the payment of the price stipulated in the invoices is proper. Besides, by specific agreement,
ownership of the nets remained with Respondent Philippine Fishing Gear, until full payment thereof.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

SO ORDERED.

Melo, Purisima and Gonzaga-Reyes, JJ., concur.

Vitug, J., pls. see concurring opinion.

Separate Opinions

VITUG, J., concurring opinion;

I share the views expressed in the ponencia of an esteemed colleague, Mr. Justice Artemio V. Panganiban, particularly the finding that
Antonio Chua, Peter Yao and petitioner Lim Tong Lim have incurred the liabilities of general partners. I merely would wish to elucidate a
bit, albeit briefly, the liability of partners in a general partnership.

When a person by his act or deed represents himself as a partner in an existing partnership or with one or more persons not actual
partners, he is deemed an agent of such persons consenting to such representation and in the same manner, if he were a partner, with
respect to persons who rely upon the representation. 1 The association formed by Chua, Yao and Lim, should be, as it has been deemed,
a de facto partnership with all the consequent obligations for the purpose of enforcing the rights of third persons. The liability of general
partners (in a general partnership as so opposed to a limited partnership) is laid down in Article 1816 2 which posits that all partners
shall be liable pro rata beyond the partnership assets for all the contracts which may have been entered into in its name, under its
9
signature, and by a person authorized to act for the partnership. This rule is to be construed along with other provisions of the Civil Code
which postulate that the partners can be held solidarily liable with the partnership specifically in these instances — (1) where, by any
wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-
partners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is
liable therefor to the same extent as the partner so acting or omitting to act; (2) where one partner acting within the scope of his
apparent authority receives money or property of a third person and misapplies it; and (3) where the partnership in the course of its
business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in
the custody of the partnership 3 — consistently with the rules on the nature of civil liability in delicts and quasi-delicts.
Footnotes
1 Penned by J. Portia Alino-Hormachuelos; with the concurrence of JJ. Buenaventura J. Guerrero, Division chairman, and Presbitero J. Velasco Jr., member.
2 CA Decision, p. 12; rollo, p. 36.
3 RTC Decision penned by Judge Maximiano C. Asuncion. pp. 11-12; rollo, pp. 48-49.
4 CA Decision, pp. 1-2; rollo, pp. 25-26.
5 Ibid., p. 2; rollo, p. 26.
6 RTC Decision, p. 2; Rollo, p. 39.
7 Petition, p. 4; rollo, p. 11.
8 Ibid.
9 RTC Decision, pp. 6-7; rollo, pp. 43-44.
10 Respondent's Memorandum, pp. 5, 8; rollo, pp. 107, 109.
11 CA Decision, pp. 9-10; rollo, pp. 33-34.
12 RTC Decision, p. 10; rollo, p. 47.
13 Ibid.
14 This case was deemed submitted for resolution on August 10, 1999, when this Court received petitioner's Memorandum signed by Atty. Roberto A. Abad. Respondent's
Memorandum signed by Atty. Benjamin S. Benito was filed earlier on July 27, 1999.
15 Nos. 1-7 are from CA Decision p. 9 (rollo, p. 33); No. 8 is from RTC Decision, p. 5 (rollo, p. 42); and No. 9 is from CA Decision, pp. 9-10 (rollo, pp. 33-34).
16 See Fuentes v. Court of Appeals, 268 SCRA 703, February 26, 1997.
17 Salvatierra v. Garlitos, 103 SCRA 757, May 23, 1958, per Felix J.; citing Fay v. Noble, 7 Cushing [Mass.] 188.
18 The liability is joint if it is not specifically stated that it is solidary," Maramba v. Lozano, 126 Phil 833, June 29, 1967, per Makalintal, J. See also Article 1207 of the Civil
Code, which provides: "The concurrence of two or more creditors or of two or more debtors in one [and] the same obligation does not imply that each one of the former
has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation
expressly so states, or when the law or the nature of the obligation requires solidarity.
19 16 Phil. 315, July 26, 1910, per Moreland, J.
VITUG, J., concurring opinion;
1 Art. 1825. When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to anyone, as a partner in an existing
partnership or with one or more persons not actual partners, he is liable to any such persons to whom such representation has been made, who has, on the faith of such
representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable
to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner
making the representation or consenting to its being made:
(1) When a partnership liability results, he is liable as though he were an actual member of the partnership;
(2) When no partnership liability results, he is liable pro rata with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise
separately.
When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons
consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon
the representation. When all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the
joint act or obligation of the person acting and the persons consenting to the representation.
2 All partners, including industrial ones, shall be liable pro rata with all their property and after all the partnership assets have been exhausted, for the contracts which
may be entered into in the name and for the account of the partnership, under its signature and by a person authorized to act for the partnership. However, any partner
may enter into a separate obligation to perform a partnership contract.
3 Art. 1824 in relation to Article 1822 and Article 1823, New Civil Code.

10
G.R. No. 117010 April 18, 1997

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ENGR. CARLOS GARCIA y PINEDA, PATRICIO BOTERO y VALES, LUISA MIRAPLES (at
large), accused, PATRICIO BOTERO y VALES, accused-appellant.

PUNO, J.:

Before us is an appeal from the decision of the Regional Trial Court in Criminal Case No. 93871 convicting accused-appellant Patricio
Botero of illegal recruitment in large scale and sentencing him to suffer the penalty of life imprisonment. 1

In an Information dated July 21, 1992, accused-appellant Patricio Botero together with Carlos P. Garcia and Luisa Miraples were charged
with the crime of illegal recruitment in large scale defined by Article 38 (b) and penalized under Article 39 (a) of the Labor Code, as
amended by Presidential Decree Nos. 1920 and 2018, committed as follows:

That on or before March 2, 1992, and subsequently thereafter, in the Municipality of Mandaluyong, Metro Manila, Philippines, a place
within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together and mutually helping
and aiding each other, representing themselves to have authority, license and/or permit to contract, enlist and recruit workers for
overseas employment, did then and there willfully, unlawfully and feloniously for a fee, recruit and promise job placement/employment
abroad to the following individuals, to wit:

1. Gloria Silaras y Barbero

2. Rolando Consigna y Ogana

3. Ma. Carmen Daluaidao

4. Zosimo La Puebla, Jr.

5. Mario Espada y Melodia

6. Arnel Santilla y Villalos

7. Elsa Delubio

8. Abener Siriban y Abatuan

9. Franklin Cabingan y Casalla

10. Jose Erwin Estinoso

11. Edgardo Belen y Juanillo

12. Ariel Rivada y Pascual

13. Sunny Pinco y Pascua

14. Rolando Santiago y Magno

15. Alfredo Estinoso y Estrada

16. Luisito Vargas y Quizon

without first securing the required license or authority from the Department of Labor and Employment.

11
Contrary to law.2 (Emphasis supplied.)

Accused Garcia and Botero pleaded not guilty upon arraignment on January 19, 1993 and March 31, 1993, respectively. Miraples
remained at large as the warrant of arrest against her was returned unserved. A joint trial was conducted against the two (2) accused
considering that their cases involve the same parties and issues. 3

Six (6) out of the sixteen (16) complainants testified as prosecution witnesses. 4 These complainants were Edgardo Belen, Gloria Silaras,
Alfredo Estinoso, Jose Erwin Esclada, Elsa Delubio and Ariel Rivada. They testified that on various dates in March 1992, they went to
Ricorn Philippine International Shipping Lines, Inc. (hereinafter Ricorn), an entity which recruits workers for overseas employment, with
office at Rm. 410, Jovan Building, 600 Shaw Blvd., Mandaluyong, Metro Manila. They applied as seamen, cook, waiter, chambermaid or
laundrywoman overseas.5 Esclada applied to accused Botero. All the other complainants coursed their application to accused Garcia
who represented himself as president of Ricorn.6 Complainants were required to submit their NBI and police clearance, birth certificate,
passport, seaman's book and Survival of Life at Sea (SOLAS). 7 As they did not have the last three (3) documents, they were asked to pay
five thousand pesos (P5,000.00) as processing fee. They paid to Ricorn's treasurer, Luisa Miraples. 8 They were issued receipts signed by
Miraples. The receipts were under Ricorn's heading. 9

Garcia and Botero assured complainants of employment after the May 11, 1992 election. Accused Botero, as the vice-president of
Ricorn, followed-up their passports, seaman's book and SOLAS. He told some applicants to wait for their papers and informed the others
that their papers were in order.

After the election, complainants went back to Ricorn to check on their applications. They discovered that Ricorn had abandoned its
office at Jovan Building for non-payment of rentals. 10 Hoping against hope, they went back to the building several times to recover their
money. Their persistence was to no avail for Garcia and Botero were nowhere to be found. They then went to the Mandaluyong Police
Station and filed their complaints. 11 They also checked with the Securities and Exchange Commission (SEC) and discovered that Ricorn
was not yet incorporated. They also found that Ricorn was not licensed by the Department of Labor and Employment (DOLE) to engage
in recruitment activities. 12

Accused Garcia testified that he is an electrical engineer by profession. According to him, the group of Teresita Celso, Patricio Botero,
Alice Mayonte, Luisa Miraples and Edna Hemolaga approached him at a baptismal party to join Ricorn. He was asked to contribute one
hundred thousand pesos (P100,000.00). He told them he would borrow the money from his brother in the United States.

In February 1992, accused Garcia saw the group again in a small apartment in San Juan which they utilized as their office. He met them
once more at Ricorn's office at Jovan Bldg. where there were many applicants for overseas jobs. This time, they asked him to become
Ricorn's president and to contribute only twenty thousand pesos (P20,000.00). He declined the offer. Allegedly, he already knew that
Ricorn was not licensed by the Philippine Overseas Employment Agency (POEA) or registered as a corporation with the Securities and
Exchange Commission (SEC). He denied he issued receipts to complainants in this case. 13

Accused-appellant Botero is a marine engineer by profession but was working as a barber when the trial took place. He testified that he
became acquainted with Ricorn when he applied for overseas employment as a machinist. He dealt with accused Garcia who claimed to
be the President of Ricorn. Eventually, he gained the trust of Garcia and became an employee of Ricorn. Three (3) times a week, he
reported for work at Jovan Building. 14 As a former seaman, he was familiar with the processing of passport, seaman's book and SOLAS.
His job consisted in following-up these documents. He left Ricorn when he discovered it was not licensed by the POEA nor was it
registered with the SEC. 15 He denied he recruited the complainants and received any money from them. 16 However, on cross-
examination, he admitted that in February 1992, he met Garcia in TADE recruitment agency. Garcia convinced him to become one of the
incorporators of Ricorn. He gave money to Garcia for Ricorn's registration with the SEC. They held office at Jovan Building from March 2,
1992 to April 20, 1992. 17

After trial, accused Garcia and Botero were convicted in a decision dated April 19, 1995, to wit:

WHEREFORE, in view of the foregoing, accused CARLOS P. GARCIA and PATRICIO BOTERO are found guilty beyond reasonable doubt of
the offense of illegal recruitment on (sic) a large scale constituting economic sabotage under Article 38 (b) and punishable under Article
39 (a) of the Labor Code as amended and are sentenced to suffer the penalty of life imprisonment and to pay a fine of P100,000.00
each. They are also ordered to indemnify and pay jointly and severally each of the six (6) complainants the amount of P5,000.00. Both
accused are also ordered to pay the cost of suit.

SO ORDERED. 18
12
The case against accused Miraples was archived by the court. 19 She has remained at large.

Only accused Botero, thru counsel, filed a Notice of Appeal. In his Brief, he raises the following assignments of error, to wit: 20

THE LOWER COURT ERRED IN HOLDING THAT THE EVIDENCE PRESENTED BY THE PROSECUTION AGAINST ACCUSED-APPELLANT
PATRICIO BOTERO IS SUFFICIENT FOR CONVICTION.

II

THE LOWER COURT ERRED IN NOT HOLDING THAT IN TRUTH AND IN FACT THE ACCUSED-APPELLANT PATRICIO BOTERO DID NOT
CONSPIRE WITH CO-ACCUSED CARLOS P. GARCIA.

III

THE LOWER COURT ERRED IN NOT HOLDING THAT ACCUSED-APPELLANT PATRICIO BOTERO IS NOT RESPONSIBLE FOR ILLEGAL
RECRUITMENT ACTIVITIES OF CO-ACCUSED CARLOS P. GARCIA.

IV

THE LOWER COURT ERRED IN GIVING CREDENCE TO THE TESTIMONY OF JOSE ERWIN ESCLADA WHICH IS NOT ADMISSIBLE FOR BEING
INCONSISTENT , HIGHLY IMPROBABLE AND EXAGGERATED AND IN NOT GIVING WEIGHT TO THE ACCUSED-APPELLANT PATRICIO
BOTERO'S EVIDENCE.

We sustain appellant's conviction.

Appellant Botero predicates his appeal on the alleged insufficiency of evidence to support his conviction. More particularly, he assails
the credibility of witness Esclada.

Esclada initially testified that he dealt with accused Garcia when he filed his application with Ricorn as a seaman. On cross-examination,
however, he admitted it was really accused Botero with whom he transacted, viz:

Q: But I thought you stated earlier on the third time, you talked to a certain Edna because Carlos Garcia is not around (sic) on the same
time, it was Carlos Garcia who instructed you to give P5,000.00.

A I have told a lie, sir. My conscience could not take it.

COURT TO THE WITNESS

Q. So, what is the truth now because I will put you in jail?

A. When I applied at Ricorn (Phil.) with Mr. Botero, Mr. Garcia

was not around but it was Botero who said that my papers were alright. 21

In effect, accused-appellant Botero wants this court to apply the doctrine of falsus in uno, falsus in omnibus (false in one part, false in
everything) and to disregard the entire testimony of Esclada.

Under present jurisprudence, this maxim of law is rarely adhered to by the courts. 22 It is possible to admit and lend credence to the
testimony of a witness whom the Court has earlier found to have willfully perjured himself. ". . . (T)he testimony of a witness may be
believed in part and disbelieved in part, depending upon the corroborative evidence and the probabilities and improbabilities of the
case." 23 In the case at bar, we hold that the trial court did not err in giving credence to the testimony of Esclada against appellant
Botero since it was corroborated on its material points by the testimony of other witnesses. In fact, Esclada's testimony against Botero is
trustworthy as he gave it after his conscience bothered him for not telling the truth.

We reject appellant Botero's pretense that he is also a victim rather than a culprit in this case. He insist he was a mere applicant of
Ricorn and not a conspirator of the other accused who defrauded the complainants. He claims that even as a Ricorn employee, he
merely performed "minimal activities" like following-up applicants' passports, seaman's book and SOLAS, and conducting simple
interviews. He denies he had a hand in the selection of workers to be employed abroad. 24 These submissions are at war with the
evidence on record. His co-accused Garcia introduced him to the complainants as the vice-president of Ricorn. He used a table with a
13
nameplate confirming he was the vice-president of Ricorn. 25 He procured the passports, seaman's books and SOLAS for the applicants.
It was from him that the complainants inquired about the status of their applications. 26 He also admitted he gave money to accused
Garcia for Ricorn's incorporation.

Beyond any reasonable doubt, appellant Botero engaged in recruitment and placement activities in that he, through Ricorn, promised
the complainants employment abroad. Under the Labor Code, recruitment and placement refers to "any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad whether for profit or not: Provided, That any person or entity which in any manner, offers or promises
for a fee employment to two or more persons shall be deemed engaged in recruitment, and placement." 27

All the essential elements of the crime of illegal recruitment in large scale are present in this case, to wit:

(1) the accused engages in the recruitment and placement of workers, as defined under Article 13 (b) or in any prohibited activities
under Article 34 of the Labor Code;

(2) accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the
securing of a license or an authority to recruit and deploy workers, either locally or overseas; and

(3) accused commits the same against three (3) or more persons, individually or as a group. 28

It is a fact that Ricorn had no license to recruit from DOLE. In the office of Ricorn, a notice was posted informing job applicants that its
recruitment license is still being processed. Yet, Ricorn already entertained applicants and collected fees for processing their travel
documents. 29

For engaging in recruitment of workers without obtaining the necessary license from the POEA, Boteros should suffer the consequences
of Ricorn's illegal act for "(i)f the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the
officer or officers of the corporation, partnership, association or entity responsible for violation; . . . " 30 The evidence shows that
appellant Botero was one of the incorporators of Ricorn. For reasons that cannot be discerned from the records, Ricorn's incorporation
was not consummated. Even then, appellant cannot avoid his liabilities to the public as an incorporator of Ricorn. He and his co-accused
Garcia held themselves out to the public as officers of Ricorn. They received money from applicants who availed of their services. They
are thus estopped from claiming that they are not liable as corporate officials of Ricorn. 31 Section 25 of the Corporation Code provides
that "(a)ll persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for
all the debts, liabilities and damages incurred or arising as a result thereof: Provided, however, That when any such ostensible
corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to
use as a defense its lack of corporate personality."

Appellant Botero is guilty of the crime of illegal recruitment in a large scale considering it was proven that he, together with his cohorts,
were able to defraud the six complainant-witnesses in this case. Under Article 38 (b) of the Labor Code, illegal recruitment in large scale
is perpetrated if committed against three (3) or more persons individually or as a group. And under Article 39 (a) of the same Code,
accused-appellant's crime is punishable by life imprisonment and a fine of one hundred thousand pesos (P100,000.00).

Finally, it is fruitless for appellant to deny he conspired with his co-accused to commit the crime at bar. The fact that all the accused
were co-conspirators in defrauding the complainants could be inferred from their acts. They played different roles in defrauding
complainants: accused Garcia was the president, appellant Botero was the vice-president and accused-at-large Miraples was the
treasurer of Ricorn. 32 Each one played a part in the recruitment of complainants. They were indispensable to each other.

IN VIEW WHEREOF, the decision of the Regional Trial Court convicting accused-appellant Patricio Botero of the crime of illegal
recruitment in large scale is affirmed in all respects. Costs against accused-appellant.

SO ORDERED.
Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.
Footnotes
1 Decision penned by Presiding Judge Jose R. Hernandez, Branch 158, National Capital Judicial Region, Pasig, Metro Manila.
2 Rollo, p. 3.
3 Rollo, p. 3.
4 Ibid.
5 TSN dated February 15, 1993, pp. 4, 9; TSN dated February 17, 1993, p. 3; TSN dated March 3, 1993, p. 3; TSN dated March 8, 1993, p. 4.

14
6 TSN dated February 9, 1993, p. 10; TSN dated February 15, 1993, p. 4; TSN dated February 9, 1993, p. 6; TSN dated February 24, 1993, p. 13. TSN dated March 3, 1993,
pp. 3, 9, 11; TSN dated March 8, 1993, pp. 8, 9, 11; TSN dated April 27, 1993, p. 3; Decision, p. 2; Rollo, p. 20.
7 TSN dated February 9, 1993, p. 11.
8 TSN dated February 9, 1993, p. 11; TSN dated February 15, 1993, p. 4; TSN dated February 17, 1993, p. 3, TSN dated February 24, 1993, pp. 4, 6; TSN dated March 3,
1993, pp. 3, 10, 13; TSN dated March 8, 1993, pp. 4, 13.
9 TSN dated February 15, 1993, p. 7; TSN dated February 24, 1993, p. 7; Exhibits "B", "D", "E", "G", "H", "J", and "K".
10 TSN dated February 15, 1993, p. 5; TSN dated February 17, 1993, p. 4; TSN dated February 24, 1993, p. 5; TSN dated March 3, 1993, pp. 4, 5; TSN dated March 3, 1993,
p. 5.
11 TSN dated February 15, 1993, p. 6.
12 TSN dated February 15, 1993, p. 6; TSN dated March 3, 1993, p. 5; Exhibits "A" and "I".
13 TSN dated January 19, 1993, p. 3.
14 TSN dated October 6, 1993, p. 7.
15 Ibid, p. 8.
16 Ibid, p. 7.
17 Ibid, p. 6.
18 Decision, p. 8; Rollo, p. 26.
19 Original Record, p. 215.
20 Appellant's Brief, p. 1; Rollo, p. 60.
21 TSN dated February 24, 1993, p. 12.
22 Lagunsad v. Court of Appeals, 229 SCRA 596, 599 (1994) citing People v. Pacis, 130 SCRA 540 (1984), People v. Surban, 123 SCRA 218 (1983).
23 People v. Cura, 240 SCRA 203, 234 (1995) citing People v. Refuerzo, 82 Phil. 576 (1949).
24 Appellant's Brief, p. 17; Rollo, p. 77
25 TSN dated February 24, 1993, p. 6.
26 TSN dated February 17, 1993, p. 6; TSN dated February 24, 1993, pp. 6, 10; TSN dated March 3, 1993, pp. 9, 14; TSN dated April 21, 1993, p. 2; TSN dated April 27, 1993,
p. 3; TSN dated May 11, 1993, p. 2.
27 Article 13 (b), Labor Code of the Philippines, 1996 ed.
28 People v. Bautista, 241 SCRA 216, 220 (1995).
29 TSN dated February 24, 1993, p. 5.
30 Article 39 (d), Labor Code of the Philippines, 1996 ed.
31 Albert v. University Publishing Co., Inc., 13 SCRA 84 (1965); Vda. de Salvatierra v. Hon. Garlitos etc., and Refuerzo, 103 Phil. 757, 764 (1958).
32 People v. Alforte, 219 SCRA 458, 468 (1993).

15
G.R. No. 156759 June 5, 2013

ALLEN A. MACASAET, NICOLAS V. QUIJANO, JR., ISAIAS ALBANO, LILY REYES, JANET BAY, JESUS R. GALANG, AND RANDY
HAGOS, Petitioners,
vs.
FRANCISCO R. CO, JR., Respondent.

DECISION

BERSAMIN, J.:

To warrant the substituted service of the summons and copy of the complaint, the serving officer must first attempt to effect the same
upon the defendant in person. Only after the attempt at personal service has become futile or impossible within a reasonable time may
the officer resort to substituted service.

The Case

Petitioners – defendants in a suit for libel brought by respondent – appeal the decision promulgated on March 8, 2002 1 and the
resolution promulgated on January 13, 2003,2 whereby the Court of Appeals (CA) respectively dismissed their petition for certiorari,
prohibition and mandamus and denied their motion for reconsideration. Thereby, the CA upheld the order the Regional Trial Court
(RTC), Branch 51, in Manila had issued on March 12, 2001 denying their motion to dismiss because the substituted service of the
summons and copies of the complaint on each of them had been valid and effective.3

Antecedents

On July 3, 2000, respondent, a retired police officer assigned at the Western Police District in Manila, sued Abante Tonite, a daily tabloid
of general circulation; its Publisher Allen A. Macasaet; its Managing Director Nicolas V. Quijano; its Circulation Manager Isaias Albano; its
Editors Janet Bay, Jesus R. Galang and Randy Hagos; and its Columnist/Reporter Lily Reyes (petitioners), claiming damages because of an
allegedly libelous article petitioners published in the June 6, 2000 issue of Abante Tonite. The suit, docketed as Civil Case No. 00-97907,
was raffled to Branch 51 of the RTC, which in due course issued summons to be served on each defendant, including Abante Tonite, at
their business address at Monica Publishing Corporation, 301-305 3rd Floor, BF Condominium Building, Solana Street corner A. Soriano
Street, Intramuros, Manila.4

In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the stated address to effect the personal service of the
summons on the defendants. But his efforts to personally serve each defendant in the address were futile because the defendants were
then out of the office and unavailable. He returned in the afternoon of that day to make a second attempt at serving the summons, but
he was informed that petitioners were still out of the office. He decided to resort to substituted service of the summons, and explained
why in his sheriff’s return dated September 22, 2005,5 to wit:

SHERIFF’S RETURN

This is to certify that on September 18, 2000, I caused the service of summons together with copies of complaint and its annexes
attached thereto, upon the following:

1. Defendant Allen A. Macasaet, President/Publisher of defendant AbanteTonite, at Monica Publishing Corporation, Rooms 301-305 3rd
Floor, BF Condominium Building, Solana corner A. Soriano Streets, Intramuros, Manila, thru his secretary Lu-Ann Quijano, a person of
sufficient age and discretion working therein, who signed to acknowledge receipt thereof. That effort (sic) to serve the said summons
personally upon said defendant were made, but the same were ineffectual and unavailing on the ground that per information of Ms.
Quijano said defendant is always out and not available, thus, substituted service was applied;

16
2. Defendant Nicolas V. Quijano, at the same address, thru his wife Lu-Ann Quijano, who signed to acknowledge receipt thereof. That
effort (sic) to serve the said summons personally upon said defendant were made, but the same were ineffectual and unavailing on the
ground that per information of (sic) his wife said defendant is always out and not available, thus, substituted service was applied;

3. Defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes, at the same address, thru Rene Esleta, Editorial
Assistant of defendant AbanteTonite, a person of sufficient age and discretion working therein who signed to acknowledge receipt
thereof. That effort (sic) to serve the said summons personally upon said defendants were made, but the same were ineffectual and
unavailing on the ground that per information of (sic) Mr. Esleta said defendants is (sic) always roving outside and gathering news, thus,
substituted service was applied.

Original copy of summons is therefore, respectfully returned duly served.

Manila, September 22, 2000.

On October 3, 2000, petitioners moved for the dismissal of the complaint through counsel’s special appearance in their behalf, alleging
lack of jurisdiction over their persons because of the invalid and ineffectual substituted service of summons. They contended that the
sheriff had made no prior attempt to serve the summons personally on each of them in accordance with Section 6 and Section 7, Rule
14 of the Rules of Court. They further moved to drop Abante Tonite as a defendant by virtue of its being neither a natural nor a juridical
person that could be impleaded as a party in a civil action.

At the hearing of petitioners’ motion to dismiss, Medina testified that he had gone to the office address of petitioners in the morning of
September 18, 2000 to personally serve the summons on each defendant; that petitioners were out of the office at the time; that he
had returned in the afternoon of the same day to again attempt to serve on each defendant personally but his attempt had still proved
futile because all of petitioners were still out of the office; that some competent persons working in petitioners’ office had informed him
that Macasaet and Quijano were always out and unavailable, and that Albano, Bay, Galang, Hagos and Reyes were always out roving to
gather news; and that he had then resorted to substituted service upon realizing the impossibility of his finding petitioners in person
within a reasonable time.

On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners to file their answers to the complaint within the
remaining period allowed by the Rules of Court,6 relevantly stating:

Records show that the summonses were served upon Allen A. Macasaet, President/Publisher of defendant AbanteTonite, through
LuAnn Quijano; upon defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes, through Rene Esleta, Editorial
Assistant of defendant Abante Tonite (p. 12, records). It is apparent in the Sheriff’s Return that on several occasions, efforts to served
(sic) the summons personally upon all the defendants were ineffectual as they were always out and unavailable, so the Sheriff served
the summons by substituted service.

Considering that summonses cannot be served within a reasonable time to the persons of all the defendants, hence substituted service
of summonses was validly applied. Secretary of the President who is duly authorized to receive such document, the wife of the
defendant and the Editorial Assistant of the defendant, were considered competent persons with sufficient discretion to realize the
importance of the legal papers served upon them and to relay the same to the defendants named therein (Sec. 7, Rule 14, 1997 Rules of
Civil Procedure).

WHEREFORE, in view of the foregoing, the Motion to Dismiss is hereby DENIED for lack of merit..

Accordingly, defendants are directed to file their Answers to the complaint within the period still open to them, pursuant to the rules.

SO ORDERED.

Petitioners filed a motion for reconsideration, asserting that the sheriff had immediately resorted to substituted service of the summons
upon being informed that they were not around to personally receive the summons, and that Abante Tonite, being neither a natural nor
a juridical person, could not be made a party in the action.

On June 29, 2001, the RTC denied petitioners’ motion for reconsideration. 7 It stated in respect of the service of summons, as follows:

The allegations of the defendants that the Sheriff immediately resorted to substituted service of summons upon them when he was
informed that they were not around to personally receive the same is untenable. During the hearing of the herein motion, Sheriff Raul

17
Medina of this Branch of the Court testified that on September 18, 2000 in the morning, he went to the office address of the defendants
to personally serve summons upon them but they were out. So he went back to serve said summons upon the defendants in the
afternoon of the same day, but then again he was informed that the defendants were out and unavailable, and that they were always
out because they were roving around to gather news. Because of that information and because of the nature of the work of the
defendants that they are always on field, so the sheriff resorted to substituted service of summons. There was substantial compliance
with the rules, considering the difficulty to serve the summons personally to them because of the nature of their job which compels
them to be always out and unavailable. Additional matters regarding the service of summons upon defendants were sufficiently
discussed in the Order of this Court dated March 12, 2001.

Regarding the impleading of Abante Tonite as defendant, the RTC held, viz:

"Abante Tonite" is a daily tabloid of general circulation. People all over the country could buy a copy of "Abante Tonite" and read it,
hence, it is for public consumption. The persons who organized said publication obviously derived profit from it. The information written
on the said newspaper will affect the person, natural as well as juridical, who was stated or implicated in the news. All of these facts
imply that "Abante Tonite" falls within the provision of Art. 44 (2 or 3), New Civil Code. Assuming arguendo that "Abante Tonite" is not
registered with the Securities and Exchange Commission, it is deemed a corporation by estoppels considering that it possesses attributes
of a juridical person, otherwise it cannot be held liable for damages and injuries it may inflict to other persons.

Undaunted, petitioners brought a petition for certiorari, prohibition, mandamusin the CA to nullify the orders of the RTC dated March
12, 2001 and June 29, 2001.

Ruling of the CA

On March 8, 2002, the CA promulgated its questioned decision, 8 dismissing the petition for certiorari, prohibition, mandamus, to wit:

We find petitioners’ argument without merit. The rule is that certiorari will prosper only if there is a showing of grave abuse of
discretion or an act without or in excess of jurisdiction committed by the respondent Judge. A judicious reading of the questioned orders
of respondent Judge would show that the same were not issued in a capricious or whimsical exercise of judgment. There are factual
bases and legal justification for the assailed orders. From the Return, the sheriff certified that "effort to serve the summons personally
xxx were made, but the same were ineffectual and unavailing xxx.

and upholding the trial court’s finding that there was a substantial compliance with the rules that allowed the substituted service.

Furthermore, the CA ruled:

Anent the issue raised by petitioners that "Abante Tonite is neither a natural or juridical person who may be a party in a civil case," and
therefore the case against it must be dismissed and/or dropped, is untenable.

The respondent Judge, in denying petitioners’ motion for reconsideration, held that:

xxxx

Abante Tonite’s 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

18
Petitioners hereby submit that:

1. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER HEREIN
PETITIONERS.

2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY IN THE
INSTANT CASE.11

Ruling

The petition for review lacks merit.

Jurisdiction over the person, or jurisdiction in personam –the power of the court to render a personal judgment or to subject the parties
in a particular action to the judgment and other rulings rendered in the action – is an element of due process that is essential in all
actions, civil as well as criminal, except in actions in rem or quasi in rem. Jurisdiction over the defendantin an action in rem or quasi in
rem is not required, and the court acquires jurisdiction over an actionas long as it acquires jurisdiction over the resthat is thesubject
matter of the action. The purpose of summons in such action is not the acquisition of jurisdiction over the defendant but mainly to
satisfy the constitutional requirement of due process. 12

The distinctions that need to be perceived between an action in personam, on the one hand, and an action inrem or quasi in rem, on the
other hand, are aptly delineated in Domagas v. Jensen,13 thusly:

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

On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the
discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is to
subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal with the status, ownership or
liability of a particular property but which are intended to operate on these questions only as between the particular parties to the
proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments therein are binding only upon
the parties who joined in the action.

As a rule, Philippine courts cannot try any case against a defendant who does not reside and is not found in the Philippines because of
the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court; but when the case is an action in rem or
quasi in rem enumerated in Section 15, Rule 14 of the Rules of Court, Philippine courts have jurisdiction to hear and decide the case
because they have jurisdiction over the res, and jurisdiction over the person of the non-resident defendant is not essential. In the latter
instance, extraterritorial service of summons can be made upon the defendant, and such extraterritorial service of summons is not for
the purpose of vesting the court with jurisdiction, but for the purpose of complying with the requirements of fair play or due process, so
that the defendant will be informed of the pendency of the action against him and the possibility that property in the Philippines
belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff, and he can thereby take steps to
protect his interest if he is so minded. On the other hand, when the defendant in an action in personam does not reside and is not found
in the Philippines, our courts cannot try the case against him because of the impossibility of acquiring jurisdiction over his person unless
he voluntarily appears in court.14

19
As the initiating party, the plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court by the act of filing the
initiatory pleading. As to the defendant, the court acquires jurisdiction over his person either by the proper service of the summons, or
by a voluntary appearance in the action.15

Upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court forthwith issues the corresponding
summons to the defendant.16 The summons is directed to the defendant and signed by the clerk of court under seal. It contains the
name of the court and the names of the parties to the action; a direction that the defendant answers within the time fixed by the Rules
of Court; and a notice that unless the defendant so answers, the plaintiff will take judgment by default and may be granted the relief
applied for.17 To be attached to the original copy of the summons and all copies thereof is a copy of the complaint (and its attachments,
if any) and the order, if any, for the appointment of a guardian ad litem. 18

The significance of the proper service of the summons on the defendant in an action in personam cannot be overemphasized. The
service of the summons fulfills two fundamental objectives, namely: (a) to vest in the court jurisdiction over the person of the
defendant; and (b) to afford to the defendant the opportunity to be heard on the claim brought against him. 19 As to the former, when
jurisdiction in personam is not acquired in a civil action through the proper service of the summons or upon a valid waiver of such
proper service, the ensuing trial and judgment are void. 20 If the defendant knowingly does an act inconsistent with the right to object to
the lack of personal jurisdiction as to him, like voluntarily appearing in the action, he is deemed to have submitted himself to the
jurisdiction of the court.21 As to the latter, the essence of due process lies in the reasonable opportunity to be heard and to submit any
evidence the defendant may have in support of his defense. With the proper service of the summons being intended to afford to him
the opportunity to be heard on the claim against him, he may also waive the process. 21 In other words, compliance with the rules
regarding the service of the summons is as much an issue of due process as it is of jurisdiction.23

Under the Rules of Court, the service of the summons should firstly be effected on the defendant himself whenever practicable. Such
personal service consists either in handing a copy of the summons to the defendant in person, or, if the defendant refuses to receive
and sign for it, in tendering it to him.24 The rule on personal service is to be rigidly enforced in order to ensure the realization of the two
fundamental objectives earlier mentioned. If, for justifiable reasons, the defendant cannot be served in person within a reasonable time,
the service of the summons may then be effected either (a) by leaving a copy of the summons at his residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copy at his office or regular place of business with some
competent person in charge thereof. 25 The latter mode of service is known as substituted service because the service of the summons
on the defendant is made through his substitute.

It is no longer debatable that the statutory requirements of substituted service must be followed strictly, faithfully and fully, and any
substituted service other than that authorized by statute is considered ineffective.26 This is because substituted service, being in
derogation of the usual method of service, is extraordinary in character and may be used only as prescribed and in the circumstances
authorized by statute.27 Only when the defendant cannot be served personally within a reasonable time may substituted service be
resorted to. Hence, the impossibility of prompt personal service should be shown by stating the efforts made to find the defendant
himself and the fact that such efforts failed, which statement should be found in the proof of service or sheriff’s return.28 Nonetheless,
the requisite showing of the impossibility of prompt personal service as basis for resorting to substituted service may be waived by the
defendant either expressly or impliedly.29

There is no question that Sheriff Medina twice attempted to serve the summons upon each of petitioners in person at their office
address, the first in the morning of September 18, 2000 and the second in the afternoon of the same date. Each attempt failed because
Macasaet and Quijano were "always out and not available" and the other petitioners were "always roving outside and gathering news."
After Medina learned from those present in the office address on his second attempt that there was no likelihood of any of petitioners
going to the office during the business hours of that or any other day, he concluded that further attempts to serve them in person
within a reasonable time would be futile. The circumstances fully warranted his conclusion. He was not expected or required as the
serving officer to effect personal service by all means and at all times, considering that he was expressly authorized to resort to
substituted service should he be unable to effect the personal service within a reasonable time. In that regard, what was a reasonable
time was dependent on the circumstances obtaining. While we are strict in insisting on personal service on the defendant, we do not
cling to such strictness should the circumstances already justify substituted service instead. It is the spirit of the procedural rules, not
their letter, that governs.30

In reality, petitioners’ insistence on personal service by the serving officer was demonstrably superfluous. They had actually received the
summonses served through their substitutes, as borne out by their filing of several pleadings in the RTC, including an answer with

20
compulsory counterclaim ad cautelam and a pre-trial brief ad cautelam. They had also availed themselves of the modes of discovery
available under the Rules of Court. Such acts evinced their voluntary appearance in the action.

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

WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002; and ORDERS petitioners to pay the costs of suit.

SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO
Chief Justice
TERESITA J. LEONARDO-DE CASTRO MARTIN S. VILLARAMA, JR.
Associate Justice Associate Justice
BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes
1
Rollo, pp. 53-59; penned by Associate Justice Eugenio S. Labitoria (retired), with Associate Justice Teodoro P. Regino (retired) and Associate Justice Rebecca De Guia-
Salvador concurring.
2
Id. at 61-62.
3
Id. at 134-136.
4 Id. at 108.

5
Id. at 109.
6 Id. at 134-136.

7 Id. at 149-150.

8 Supra note 1, at 56.

9 Id. at 57-58.

10 Supra note 2.

11 Rollo, p. 33.

12 Gomez v. Court of Appeals, G.R. No. 127692, March 10, 2004,425 SCRA 98, 104.

13
G.R. No. 158407, January 17, 2005, 448 SCRA 663, 673-674.
14 Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation, G.R. No. 172242, August 14, 2007, 530 SCRA 170, 187-188; Romualdez-Licaros v. Licaros, G.R. No. 150656,

April 29, 2003, 401 SCRA 762, 769-770; Valmonte v. Court of Appeals, G.R. No. 108538, January 22, 1996, 252 SCRA 92.
15 Pursuant to Section 20, Rule 14 of the Rules of Court, the defendant’s voluntary appearance in the action is equivalent to the service of summons; see also Davao Light

and Power Co., Inc. v. Court of Appeals, G.R. No. 93262, November 29, 1991, 204 SCRA 343, 347; Munar v. Court of Appeals, 238 SCRA 372, 379; Minucher v. Court of
Appeals, G.R. No. 97765, September 24, 1992, 214 SCRA 242, 250.
16
Section 1, Rule 14, Rules of Court.
17 Section2, Rule 14, Rules of Court.

18 Id.

19 Umandap vs. Sabio, Jr., G.R. No. 140244, August 29, 2000, 339 SCRA 243, 247.

20 Vda. de Macoy v. Court of Appeals, G.R. No. 95871, February 13, 1992, 206 SCRA 244, 251;Venturanza v. Court of Appeals, No.L-7776, December 11, 1987, 156 SCRA

305, 311-312; Filmerco Commercial Co., Inc. v. Intermediate Appellate Court, No. L-70661, April 9, 1987, 149 SCRA 193, 198-199; Consolidated Plywood Industries, Inc. v.
Breva, No. L-82811, October 18, 1988, 166 SCRA 589, 593-594; Philippine National Construction Corp. v. Ferrer-Calleja, No.L-80485, November 11, 1988, 167 SCRA 294,
301.

21
21 La Naval Drug Corporation v. Court of Appeals, G.R. No. 103200, August 31, 1994, 236 SCRA 78, 86.
22 Keister v. Navarro, No. L-29067, May 31, 1977, 77 SCRA 209, 214-215; Vda. de Macoy v. Court of Appeals, supra note 20.
23 Samartino v. Raon,G.R. No. 131482, July 3, 2002, 383 SCRA 664, 670.

24
Section 6, Rule 14, Rules of Court.
25 Section 7, Rule 14, Rules of Court.

26 Keisterv. Navarro, supranote 22, at 215.

27 Ang Ping v. Court of Appeals, G.R. No. 126947, July 15, 1999, 310 SCRA 343, 350.

28 Keisterv. Navarro,supra, note 22; see also Wong v. Factor-Koyama, G.R. No. 183802, September 17, 2009, 600 SCRA 256, 268; Jose v. Boyon, G.R. No. 147369, October

23, 2003, 414 SCRA 216, 222; Casimina v. Legaspi, G.R. No. 147530. June 29, 2005, 462 SCRA 171, 177-178; Oaminal v. Castillo, G.R. No. 152776, October 8, 2003, 413
SCRA 189, 196-197; Laus v. Court of Appeals, G.R. No. 101256, March 8, 1993, 219 SCRA 688, 699.
29
E.g., in Orosa v. Court of Appeals, G.R. No. 118696, September 3, 1996, 261 SCRA 376, 379, where the substituted service was sustained notwithstanding thatthe
requirement for the showing of impossibility of personal service of summons was not complied with by the sheriff before resorting to substituted service, because the
defendants subsequently filed a motion for additional time to file answer, which was deemed a waiver of objection to the personal jurisdiction of the trial court.
30 Robinson v. Miralles, G.R. No. 163584, December 12, 2006, 510 SCRA 678, 684.

22