Swagman vs.

CA

Facts: Sometime in 1996 and 1997, Swagman through Atty. Infante and Hegerty, its president and vice-
president, respectively, obtained from Christian loans evidenced by three promissory notes dated 7
August 1996, 14 March 1997, and 14 July 1997. Each of the promissory notes is in the amount of
US$50,000 payable after three years from its date with an interest of 15% per annum payable every
three months. In a letter dated 16 December 1998, Christian informed the petitioner corporation that he
was terminating the loans and demanded from the latter payment of said loans

On 2 February 1999, Christian filed with the RTC a complaint for a sum of money and damages against
the petitioner corporatio, Hegerty, and Atty. Infante.

The petitioner corporation, together with its president and vice-president, filed an Answer raising as
defenses lack of cause of action. According to them, Christian had no cause of action because the three
promissory notes were not yet due and demandable.

The trial court ruled that under Section 5 of Rule 10 of the 1997 Rules of Civil Procedure, a complaint
which states no cause of action may be cured by evidence presented without objection. Thus, even if
the plaintiff had no cause of action at the time he filed the instant complaint, as defendants’ obligation
are not yet due and demandable then, he may nevertheless recover on the first two promissory notes in
view of the introduction of evidence showing that the obligations covered by the two promissory notes
are now due and demandable. When the instant case was filed on February 2, 1999, none of the
promissory notes was due and demandable, but , the first and the second promissory notes have
already matured during the course of the proceeding. Hence, payment is already due.

This finding was affirmed in toto by the CA.

Issue: Whether or not a complaint that lacks a cause of action at the time it was filed be cured by the
accrual of a cause of action during the pendency of the case.

Held: No. Cause of action, as defined in Section 2, Rule 2 of the 1997 Rules of Civil Procedure, is the act
or omission by which a party violates the right of another. Its essential elements are as follows:

1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

2. An obligation on the part of the named defendant to respect or not to violate such right; and

3. Act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for
recovery of damages or other appropriate relief.

It is, thus, only upon the occurrence of the last element that a cause of action arises, giving the plaintiff
the right to maintain an action in court for recovery of damages or other appropriate relief.
Such interpretation by the trial court and CA of Section 5, Rule 10 of the 1997 Rules of Civil Procedure is
erroneous. The curing effect under Section 5 is applicable only if a cause of action in fact exists at the
time the complaint is filed, but the complaint is defective for failure to allege the essential
facts.Amendments of pleadings are allowed under Rule 10 of the 1997 Rules of Civil Procedure in order
that the actual merits of a case may be determined in the most expeditious and inexpensive manner
without regard to technicalities, and that all other matters included in the case may be determined in a
single proceeding, thereby avoiding multiplicity of suits.

Manotoc vs CA

Facts:

Mrs. Agapita Trajano sought the enforcement of a foreign judgment rendered by the US District Court of
Hawaii against Ma. Imelda M. Manotoc (Imee Marcos) for the wrongful death of Mr. Archimedes
Trajano committed by military intelligence in the Philippines allegedly working for Manotoc.

The RTC issued summons for Manotoc addressed at Alexandra Homes, Pasig. It was served on a Macky
dela Cruz described as a caretaker of her unit. Manotoc failed to file her answer and was declared in
default.

On October 1993, manotoc filed a motion to dismiss on the ground of lack of jurisdiction over her
person, stating that she is not a resident of the said condo and that she does not hold office there, as
well as that Macky dela Cruz is not her representative or employee. Thus no valid service was made.
Further, she states that she is a resident of Singapore.

On October 1994, the RTC denied the motion. On December 1994, denied her MR for lack of merit.

Manotoc filed a petition for certiorari and prohibition with the CA on January 1995, that was denied on
March 1997, and the MR denied on April 1997. The CA ruled that:

1) As per findings of the trial court, the residence of Manotoc was indeed at Alexandra Homes.

2) The disembarkation/embarkation cord and certification were hearsay. It rejected a proof of her
residency in Singapore based on her passport in which two pages were withheld.

Issue:

Whether there was valid substituted service.

Held:

No.

In actions strictly ‘in perosnam’jurisdiction over the person of the defendant is mandatory and can be
complied with valid service of summons.
If defendant cannot be served, for excusable reason, within a reasonable time, substituted service can
be resorted to.

It is extraordinary in character and a derogation of the usual method of service thus rules for such must
be faithfully complied with.

The requirements of valid substituted service if there is impossibility of prompt personal service which is
15-30 days for the sheriff are:

1) By leaving copies of summons at defendant’s residence with a person of suitable age and
discretion residing therein or by leaving copies at the defendant’s office or regular place of business with
some competent person in charge.

2) The sheriff must narrate in specific details how service in person became impossible.

3) The attempt must be extraordinary and at least three times. The person of suitable age and
discretion must be at least 18 years old, able to read the summons written in English, and must be with
confidential relation to defendant. A competent person in charge can be the president or manager.

The substituted service was invalid because the sheriff did not comply with the requirements. Macky
dela Cruz was not a representative of Manotoc. Therefore, since there was no valid service of summons,
there was no jurisdiction acquired. The RTC’s decision is null and void.

EB Villarosa & partner ltd vs benito

FACTS:

E.B. Villarosa & Partners is a limited partnership with principal office address at 102 Juan Luna
St., Davao City and with branch offices at Parañaque and Cagayan de Oro City (CDO). Villarosa and
Imperial Development (ID) executed an Agreement wherein Villarosa agreed to develop certain parcels
of land in CDO belonging to ID into a housing subdivision. ID, filed a Complaint for Breach of Contract
and Damages against Villarosa before the RTC allegedly for failure of the latter to comply with its
contractual obligation.

Summons, together with the complaint, were served upon Villarosa, through its Branch Manager
Wendell Sabulbero at the address at CDO but the Sheriff’s Return of Service stated that the summons
was duly served "E.B. Villarosa & Partner thru its Branch Manager at their new office Villa Gonzalo, CDO,
and evidenced by the signature on the face of the original copy of the summons." Villarosa 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. Villarosa contends that the RTC did not acquire jurisdiction over its
person since the summons was improperly served upon its employee in its branch office at CDO who is
not one of those persons named in Sec. 11, Rule 14 upon whom service of summons may be made. ID
filed a Motion to Declare Villarosa in Default alleging that Villarosa has failed to file an Answer despite
its receipt allegedly on May 5, 1998 of the summons and the complaint, as shown in the Sheriff's Return.

Issue: Won an agent of a corporation can receive summons in behalf of their corporation?

HELD: The court agrees with the contention of Villarosa. Earlier cases have uphold service of summons
upon a construction project manager; a corporation's assistant manager; ordinary clerk of a corporation;
private secretary of corporate executives; retained counsel; officials who had charge or control of the
operations of the corporation, like the assistant general manager; or the corporation's Chief Finance and
Administrative Office. In these cases, these persons were considered as "agent" within the
contemplation of the old rule.”

“Notably, under the new Rules, service of summons upon an AGENT of the corporation is NO LONGER
authorized.”

“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 Section11, Rule 14. 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.”

“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 liberal construction rule cannot be invoked and utilized as a
substitute for the plain legal requirements as to the manner in which summons should be served on a
domestic corporation. .”

Republic vs Sandiganbayan

FACTS:

One of the foremost concerns of the Aquino Government in February 1986 was the recovery of the
unexplained or ill-gotten wealth reputedly amassed by former President and Mrs. Ferdinand E. Marcos,
their relatives, friends and business associates. Thus, the very first Executive Order (EO) issued by then
President Corazon Aquino upon her assumption to office after the ouster of the Marcoses was EO No. 1,
issued on February 28, 1986. It created the Presidential Commission on Good Government (PCGG) and
charged it with the task of assisting the President in the "recovery of all ill-gotten wealth accumulated by
former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close
associates, whether located in the Philippines or abroad, including the takeover or sequestration of all
business enterprises and entities owned or controlled by them during his administration, directly or
through nominees, by taking undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship."

In all the alleged ill-gotten wealth cases filed by the PCGG, this Court has seen fit to set aside
technicalities and formalities that merely serve to delay or impede judicious resolution. This Court
prefers to have such cases resolved on the merits at the Sandiganbayan. But substantial justice to the
Filipino people and to all parties concerned, not mere legalisms or perfection of form, should now be
relentlessly and firmly pursued. Almost two decades have passed since the government initiated its
search for and reversion of such ill-gotten wealth. The definitive resolution of such cases on the merits is
thus long overdue. If there is proof of illegal acquisition, accumulation, misappropriation, fraud or illicit
conduct, let it be brought out now. Let the ownership of these funds and other assets be finally
determined and resolved with dispatch, free from all the delaying technicalities and annoying
procedural sidetracks.

Issue:

Whether or not President Marcos committed prohibited and inhibited acts as a president during his
term of office

Held:

Yes

Ratio:

It is settled that judicial admissions may be made: (a) in the pleadings filed by the parties; (b) in the
course of the trial either by verbal or written manifestations or stipulations; or (c) in other stages of
judicial proceedings, as in the pre-trial of the case.[82] Thus, facts pleaded in the petition and answer, as
in the case at bar, are deemed admissions of petitioner and respondents, respectively, who are not
permitted to contradict them or subsequently take a position contrary to or inconsistent with such
admissions.[83]

The sum of $304,372.43 should be held as the only known lawful income of respondents since they did
not file any Statement of Assets and Liabilities (SAL), as required by law, from which their net worth
could be determined. Besides, under the 1935 Constitution, Ferdinand E. Marcos as President could not
receive any other emolument from the Government or any of its subdivisions and instrumentalities.[84]
Likewise, under the 1973 Constitution, Ferdinand E. Marcos as President could not receive during his
tenure any other emolument from the Government or any other source.[85] In fact, his management of
businesses, like the administration of foundations to accumulate funds, was expressly prohibited under
the 1973 Constitution:

Article VII, Sec. 4(2) The President and the Vice-President shall not, during their tenure, hold any other
office except when otherwise provided in this Constitution, nor may they practice any profession,
participate directly or indirectly in the management of any business, or be financially interested directly
or indirectly in any contract with, or in any franchise or special privilege granted by the Government or
any other subdivision, agency, or instrumentality thereof, including any government owned or
controlled corporation.

Article VII, Sec. 11 No Member of the National Assembly shall appear as counsel before any court
inferior to a court with appellate jurisdiction, x x x. Neither shall he, directly or indirectly, be interested
financially in any contract with, or in any franchise or special privilege granted by the Government, or
any subdivision, agency, or instrumentality thereof including any government owned or controlled
corporation during his term of office. He shall not intervene in any matter before any office of the
government for his pecuniary benefit.

Article IX, Sec. 7 The Prime Minister and Members of the Cabinet shall be subject to the provision of
Section 11, Article VIII hereof and may not appear as counsel before any court or administrative body, or
manage any business, or practice any profession, and shall also be subject to such other disqualification
as may be provided by law.

Their only known lawful income of $304,372.43 can therefore legally and fairly serve as basis for
determining the existence of a prima facie case of forfeiture of the Swiss funds.

Respondents argue that petitioner was not able to establish a prima facie case for the forfeiture of the
Swiss funds since it failed to prove the essential elements under Section 3, paragraphs (c), (d) and (e) of
RA 1379. As the Act is a penal statute, its provisions are mandatory and should thus be construed strictly
against the petitioner and liberally in favor of respondent Marcoses.

We hold that it was not for petitioner to establish the Marcoses other lawful income or income from
legitimately acquired property for the presumption to apply because, as between petitioner and
respondents, the latter were in a better position to know if there were such other sources of lawful
income. And if indeed there was such other lawful income, respondents should have specifically stated
the same in their answer. Insofar as petitioner Republic was concerned, it was enough to specify the
known lawful income of respondents.

Section 9 of the PCGG Rules and Regulations provides that, in determining prima facie evidence of ill-
gotten wealth, the value of the accumulated assets, properties and other material possessions of those
covered by Executive Order Nos. 1 and 2 must be out of proportion to the known lawful income of such
persons. The respondent Marcos couple did not file any Statement of Assets and Liabilities (SAL) from
which their net worth could be determined. Their failure to file their SAL was in itself a violation of law
and to allow them to successfully assail the Republic for not presenting their SAL would reward them for
their violation of the law.