G.R. No.

172204               July 2, 2014

CATHAY METAL CORPORATION, Petitioner, 

vs.
LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., Respondent.

DECISION

LEONEN, J.:

The Rules of Court governs court procedures, including the rules on service of notices and summons. The Cooperative
Code p~ovisions on notices cannot replace the rules on summons under the Rules of Court. Rule 14, Section 11 of the
Rules of Court provides an-exclusive enumeration of the persons authorized to receive summons for juridical entities.
These persons are the juridical entity's president, managing partner, general manager, corporate secretary, treasurer, or
in-house counsel.

This petition under Rule45 assails the Court of Appeals’ decision dated November 25, 2005, and its resolution dated April
5, 2006. The Court of Appeals remanded the case to the trial court for respondent’s presentation of evidence.

Respondent Laguna West Multi-Purpose Cooperative is a cooperative recognized under Republic Act No. 6657 or the
Comprehensive Agrarian Reform Law.1 It allegedly entered into a joint venture agreement with farmer-beneficiaries
through Certificates of Land Ownership Award (CLOA) in Silang, Cavite. 2 While respondent was negotiating with the
farmer-beneficiaries, petitioner CathayMetal Corporation entered into Irrevocable Exclusive Right to Buy (IERB) contracts
with the same farmerbeneficiaries.3 Under the IERB, the farmer-beneficiaries committed themselves to sell to petitioner
their agricultural properties upon conversion to industrial or commercial properties or upon expiration of the period of
prohibition from transferringtitle to the properties.4

In 1996, respondent caused the annotation of its adverse claim on the farmer-beneficiaries’ certificates of title.5

On November 9, 1998, the Department of Agrarian Reform issued an order converting the properties from agricultural to
mixed use.6

In 1999, petitioner and the farmer-beneficiaries executed contracts of sale of the properties. 7 Transfer certificates of
titlewere also issued in the name of petitioner in the same year.8 The annotations in the original titles were copied to
petitioner's titles.9

Respondent’s Vice-President, Orlando dela Peña, sent two letters dated March 20, 2000 and April 12, 2000 to petitioner,
informing it of respondent’s claim to the properties.10 Petitioner did not respond.11

On September 15, 2000,petitioner filed a consolidated petition for cancellation of adverse claims on its transfer certificates
of title with the Regional Trial Court of Tagaytay City. 12 It served a copy of the petition by registered mail to respondent's
alleged official address at "Barangay Mayapa, Calamba, Laguna."13 The petition was returned to sender because
respondent could not be found at that address. 14 The postman issued a certification stating that the reason for the return
was that the "cooperative [was] not existing."15 Petitioner allegedly attempted to serve the petition upon respondent
personally.16 However, this service failed for the same reason.17

Upon petitioner's motion, the Regional Trial Court issued an order on December 15, 2000 declaring petitioner’s
substituted service, apparently by registered mail,18 to have been effected,19 thus:

Acting on the "Manifestation And Motion For Substituted Service" filed by petitioner Cathay Metal Corporation, thru
counsel, and finding the reasons therein statedto be meritorious, the same is hereby GRANTED.

Accordingly, this Court hereby declares that substituted service of the Consolidated Petition for Cancellation of Adverse
Claim on the President of Laguna West Multi-Purpose Cooperative, Inc. has been effected. The latter ishereby given a
period of fifteen (15) days from the delivery of said pleadings to the Clerk of Court within which to file their opposition to
the Consolidated petition for cancellation of adverse claim.20

Petitioner was later allowed to present its evidence ex parte.21

1
Upon learning that a case involvingits adverse claim was pending, respondent, through Mr. Orlando dela Peña, filed a
manifestation and motion, alleging that respondent never received a copy of the summons and the petition. 22 It moved for
the service of the summons and for a copy of the petition to be sent to No. 160, Narra Avenue, Looc, Calamba, Laguna.23

The Regional Trial Court granted respondent's manifestation and motion on March 16, 2001. 24 It ordered that respondent
be furnished with a copy of the petition at its new address.25

Instead of furnishing respondent with a copy of the petition, petitioner filed on April 16, 2001 a motion for reconsideration
of the March 16, 2001 Regional Trial Court order. 26 In its motion for reconsideration, petitioner argued that the case was
already submitted for decision after all of petitioner’s evidence had been admitted, and a memorandum had been
filed.27 Therefore, it was too late for respondent to ask the court that it be furnished with a copy of the petition. 28 Moreover,
because respondent was already in default, a manifestation and motion, without allegations of grounds for a motion to lift
order of default, would not give it personality to participate in the proceedings. 29 Petitioner sent a copy of the motion for
reconsideration to respondent by registered mail and set the motion for hearing on April 20, 2001. 30 Respondent failed to
appear atthe hearing on the motion for reconsideration. On April 20, 2001, the Regional Trial Court submitted the motion
for resolution.31

Respondent received a copy of the motion for reconsideration after the hearing. On August 13, 2001, respondent filed a
motion for leave to admit attached opposition32 and opposition to petitioner’s motion for reconsideration of the March
16,2001 Regional Trial Court order.33 Respondent argued that since petitioner’s ex parte presentation of evidence was
secured through extrinsic fraud, there should be a new trial to give respondent a fair day in court. 34This was opposed by
petitioner on September 6, 2001.35 Petitioner emphasized its alleged compliance with the Cooperative Code rule on
notices and respondent’s failure to file its comment despite the court’s order that approved petitioner’s substituted
service.36 Petitioner further pointed out that it had always questioned the authority of Mr. dela Peñato act for respondent.37

On January 16, 2003, the Regional Trial Court granted petitioner's motion for reconsideration. 38 It found that respondent's
alleged representatives failed to prove their authorities to represent respondent.39 It ruled that service should be made to
the address indicated in its Cooperative Development Authority Certificate of Registration.40 The case was declared
submitted for decision.41

Respondent filed a motion for reconsideration of the January 16, 2003 order of the Regional Trial Court.42

On March 21, 2003, the Regional Trial Court issued a decision granting petitioner’s petition for cancellation of
annotations.43 The Register of Deeds of Cavite was ordered to cancel the annotations onthe certificates of title.44

On April 3, 2003, the Regional Trial Court issued an order 45 rescinding its March 21, 2003 decision for having been
prematurely rendered, thus:

This is regard to the Decision dated March 21, 2003 which the Court has rendered in this particular case.

A review of the records show that the court for reasons unexplained, has committed an error in judgment in rendering said
decision unmindful of the fact thatthere is still a pending incident (Oppositor Laguna’s Motion for Reconsideration) which
has first to be resolved.

Fully aware that the error if allowed to remain unrectified would cause a grave injustice and deeply prejudiced [sic] the
herein respondent, the Court, faithfully adhering to the principle enunciated by the Honorable Supreme Court in the case
of Astraquilio vs Javier, 13 CRA 125 which provides that:

"It is one of the inherent powers of the court to amend and control its process and orders so as to make them conformable
to law and justice. This power includes the right to reverse itself, especially when in its opinion it has committed an error or
mistake in judgment, and that to adhere to its decision will cause injustice to a party litigant."

do hereby, with deep and sincere apologies to the party-litigants, more particularly to the herein respondent Laguna West
Multi-Purpose Cooperative, Inc., RECALL and RESCIND its Decision which was prematurely rendered.46

In an order dated May 26, 2003, the Regional Trial Court denied respondent’s motion for reconsideration of the January
16, 2003 order.47

2
On June 23, 2003, the Regional Trial Court decided to grant48 petitioner's petition for cancellation of annotation on the
basis of the following facts:49

. . . These annotations were subsequently copied to the Transfer Certificates of Titles over the parcels of land subject of
this suit that were issued in the name of Cathay. . . . Upon verification, Cathay found that Laguna did not file any claim
against the farmer-beneficiaries or Cathay since the time the annotations were made. . . . Moreover, affidavits of adverse
claim and supporting documents that Laguna supposedly submitted to the Register of Deeds of Cavite were certified
bythe Register of Deeds to be inexistent in the registry's vault. . . . Moreover, the Cooperative Development Authority
likewise certified that Laguna has been inoperative since 1992 and during the period when the annotations were made in
1996. The Bureau ofPosts has also certified that Laguna's office at Barangay Mayapa, Calamba, Laguna, its official
address as indicated in its Articles of Incorporation and Confirmation of Registration is "closed".50

According to the Regional Trial Court, since respondent was inoperative at the time when its adverse claims were
annotated, "there [was] no reason for [it] to believe that the person who caused the annotations of adverse claim on the
titles of the farmer-beneficiaries . . . was authorized to do so."51

The Regional Trial Court ordered the Register of Deeds to cancel the annotations on the transfer certificates of title. 52 It
held that Section 70 of Presidential Decree No. 1529 or the Property Registration Decree declares that "an adverse claim
is effective [only]for a period of thirty (30) days and may be cancelled upon filing of a verified petition after the lapse of this
period."53 Since the 30-day period had already lapsed, the annotations were already the subject of cancellation.54

Respondent appealed to the Court of Appeals based on two grounds:

1) Petitioner-appellee secured the favorable orders of the lower court in fraud of appellant LagunaWest by
sending the petition, all other pleadings, and notices to its former address, thus, denying its day in court; and

2) The trial court erred in applying the rule on substituted service, thus, it did not validly acquire jurisdiction over
the appellant.55

The Court of Appeals granted respondent's appeal on November 25, 2005. The dispositive portion of the Court of
Appeals' decision reads:

WHEREFORE, premises considered, the appeal is hereby granted. The case is ordered remanded for appellant's
presentation of evidence and thereafter, for the trial court to render judgment, albeit with dispatch.56

The Court of Appeals ruled thatthere was no valid service of summons upon respondent in accordance with Rule 14,
Section 11 of the Revised Rules of Civil Procedure. 57 Hence, the "court acquire[d] no jurisdiction to pronounce a judgment
in the case."58

The Court of Appeals denied petitioner's motion for reconsideration on April 5, 2006.59

The issue in this case is whether respondent was properly served with summons or notices of the hearing on the petition
for cancellation of annotations of adverse claim on the properties.

Petitioner emphasized the following points:

Summons was served upon respondentat its official registered address at Barangay Mayapa, Calamba, Laguna.60Since
no one received the summons, petitioner insisted that the trial court issue an order to effect substituted
service.61 Respondent still did not file its answer.62

Later, a certain Orlando dela Peña would filea manifestation and motion dated February 27, 2001 purportedly on behalf of
respondent.63 Mr. dela Peña claimed that he was an authorized representative of respondent and that respondent was
already holding office at No. 160, Narra Avenue, Looc, Calamba, Laguna, which was not the official address of
respondent.64 Mr. dela Peña never submitted proof of his authority torepresent respondent. He was also never a
memberof respondent cooperative.65

However, Mr. dela Peña was stillallowed to file an answer or opposition.66 Petitioner filed a motion for reconsideration
opposing the order allowing him to file an answer or opposition on behalf of respondent. 67Respondent failed to oppose
3
this. He did not participate further.68 Later, a certain Mr. Geriberto Dragon would claim to be an officer of respondent. He
would file an opposition on its behalf after the period to file an opposition had lapsed.69 Mr. Dragon alleged that
respondent’s address was at No. 167, Barangay Looc, Calamba, Laguna.70 Like Mr. dela Peña, Mr. Dragon had never
been a member or officer of respondent.71

Petitioner argued that Mr. dela Peña and Mr. Dragon never submitted proof of their authority to represent
respondent.72 They were never officers or members of respondent cooperative.73 Therefore, petitioner cannot be blamed
for being skeptical about Mr. dela Peña’s and Mr. Dragon’s claims of authority.74

Moreover, Mr. dela Peña and Mr. Dragon could not claim to have been authorized to represent respondent because it was
determined to be inoperative since 1992.75 In 2002, respondent was dissolved by the Cooperative Development
Authority.76

Petitioner’s motion for reconsideration of the trial court order allowing respondent to file an answer or opposition to the
petition for cancellation of annotation was granted because of Mr. dela Peña’s and Mr. Dragon’s failure to show evidence
ofauthority to act on behalf of respondent.77

Petitioner argued that summons could only be validly served to respondent’s official address as indicated in its registration
with the Cooperative Development Authority.78 This is because respondent as a registered cooperative is governed by
Republic Act No. 6938, a substantive law that requires summons to be servedto respondent’s official address.79

Substantive law takes precedence over procedural rules.80

Petitioner cites Article 52 of Republic Act No. 6938:

Article 52. Address. – Every cooperative shall have an official postal address to which all notice and communications shall
be sent. Such address and every change thereof shall be registered with the Cooperative Development Authority.

Further, petitioner argues that there is no law that requires parties to serve summons to "every unsubstantiated address
alleged by [a] party."81

Petitioner also argued that the Court of Appeals erred when it remanded the case for trial because respondent already
admitted that its adverse claims were based not on a right over the property but on the "alarm[ing] . . . possibility of losing
the deal"82 with the owners of the property. There was no agreement yet vesting in respondent any right over the
properties.83 Moreover, the annotations on the title were made in 1996 when respondent was already inoperative.84

Meanwhile, respondent emphasized thatit entered into a joint venture agreement with the farmer-beneficiaries. 85While in
the process of negotiations, petitioner suddenly entered into the picture by offering the farmer-beneficiaries an
IrrevocableExclusive Right to Buy (IERB) contracts.86 It was then that respondent caused the annotation of an adverse
claim on the titles.87

Respondent, through its Vice President, Mr. dela Peña, wrote two letters between March and April 2000 relative to its
adverse claims in an attempt to amicably settle what seemed then as a brewing dispute.88 These letters were written on
respondent’s letterheads indicating the address, No. 167, Barangay Looc, Calamba, Laguna.89

Petitioner deliberately served summons upon respondent to its old address. 90 Later, petitioner would be allowed to present
evidence ex parte.91

Moreover, respondent was unable to appear at the hearing on the motion for reconsideration of the court order allowing
respondent to file its answer or opposition. Basedon the records, respondent’s failure to appear was due to petitioner
setting the hearing on April 20, 2001 and mailing respondent’s a copy of the motion on April 16, 2001 or just four (4) days
before the hearing.92

Respondent filed a motion for leave to admit attached opposition to petitioner’s motion for reconsideration. This was
opposed by petitioner. Pending respondent’s motion for leave toadmit attached opposition, the trial court already issued
its order dated January 16, 2013, granting petitioner’s motion for reconsideration of the order allowing respondent to file
its answer or opposition to the petition for cancellation of adverse claims.93

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Respondent filed a motion for reconsideration of the order dated January 16, 2003. While the said incidents were
pending,the trial court rendered its decision dated March 21, 2003, granting petitioner’s petition to cancel the annotations
of adverse claims.94 This, according to respondent, was a premature decision.95

The trial court rescinded the March 21, 2003 decision. On May 26, 2003, the trial court denied respondent’s motion for
reconsideration.96

Within the period allowed for respondent to file its petition for certiorari, the trial court rendered judgment granting
petitioner’s petition to cancel the annotations of adverse claims on the title.97

Respondent appealed to the Court of Appeals. The appellate court remanded the case to the lower court so that
respondent could be allowed to present evidence.98

Respondent argued that petitioner was not being fair when it served summons to respondent’s old address despite
knowledge of its actual address.99

Moreover, respondent argued that itsrights over the property should be best determined after trial.100

According to respondent, had there been a trial, it would have:

4.2.1 Presented documentary evidence that its negotiation with the former landowners had earned for it part-
ownership of the properties, or at the very least, the exclusive authority to deal with potential buyers or developers
of the properties such as petitioner.

4.2.2 Offered in evidence the actual Joint Venture Agreements ("JVA") between the former landowners and
Laguna West whereby Laguna West had made partial payment of the former landowners’ 40% share in the joint
venture. Laguna Westhad thus acquired interest over the properties, or had the same or better right than the
registered owner thereof.

4.2.3 Proved by competent evidence that the annotation sought to be cancelled was not a simple adverse claim
but qualifies as a registration of an interest over the subject properties;

4.2.4 Presented Laguna West’s authorized representatives, Orlando dela Peña, Geriberto Dragon and Ediza
Saliva, and one or two of the original landowners to testify on their dealings with Laguna West.

4.2.5 Called on the officers of the CD on questions about a cooperative’s address of record vis-à-vis its
actualaddress as known to the party that the cooperativehad previously been communicating with, in this case,
petitioner.101

We rule that respondent was not validly served with summons or notice of the hearing. However, its annotations of
adverse claims should be cancelled for being based on a future claim.

I
Respondent was not validly served with summons

Republic Act No. 6938 of 1990 or the Cooperative Code of the Philippines provides that cooperatives are mandated to
have an official postal address to which notices shall be sent, thus:

Art. 52. Address. – Every cooperative shall have an official postal address to which all notices and communications shall
be sent. Such address and every change thereof shall be registered with the Cooperative Development Authority.

This provision was retained in Article 51 of RepublicAct No. 9520 or the Philippine Cooperative Codeof 2008. Article 51
provides:

Art. 51. Address. Every cooperativeshall have an official postal address to which all notices and communications shall be
sent. Such address and every change thereof shall be registered with the Authority.

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Relying on the above provision, petitioner argued that respondent was sufficiently served with summons and a copy of its
petition for cancellation of annotations because it allegedly sent these documents to respondent’s official address as
registered with the Cooperative Development Authority. Petitioner further argued that the Rules of Procedure cannot
trump the Cooperative Code with respect to notices. This is because the Cooperative Code is substantive law, as
opposed to the Rules of Procedure, which pertains only to matters of procedure.

Petitioner is mistaken.

The promulgation of the Rules of Procedure is among the powers vested only in this court. Article VIII, Section 5(5)
provides:

Sec. 5. The Supreme Court shall have the following powers:

....

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure
in all courts, the admission to the practice of law,the integrated bar, and legal assistance to the underprivileged.Such rules
shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of
the same grade, and shall not diminish, increase, or modifysubstantive rights. Rules of procedure of special courts and
quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.

This means that on matters relating toprocedures in court, it shall be the Rules of Procedure that will govern. Proper court
procedures shall be determined by the Rules as promulgated by this court.

Service of notices and summons on interested parties in a civil, criminal, or special proceeding is court procedure. Hence,
it shall be governed by the Rules of Procedure.

The Cooperative Code provisions may govern matters relating to cooperatives’ activities as administered by the
Cooperative Development Authority. However, they are not procedural rules that will govern court processes. A
Cooperative Code provision requiring cooperatives to have an official address to which all notices and communications
shall be sent cannot take the place of the rules on summonsunder the Rules of Court concerning a court proceeding.

This is not to say that the noticescannot be sent to cooperatives in accordance with the Cooperative Code. Notices may
be sent to a cooperative’s official address. However, service of notices sent to the official address in accordance with the
Cooperative Code may not be used as a defense for violations of procedures, specially when such violation affects
another party’s rights.

Section 11, Rule 14 of the Rules ofCourt provides the rule on service of summons upon a juridical entity. It provides that
summons may be served upon a juridical entity only through its officers. Thus:

Sec. 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing
partner, general manager, corporate secretary, treasurer, or in-house counsel.

We have already established that the enumeration in Section 11 of Rule 14 is exclusive. 102 Service of summons upon
persons other than those officers enumerated in Section 11 is invalid.103 Even substantial compliance is not sufficient
service of summons.104

This provision of the rule does not limit service to the officers’ places of residence or offices. If summons may not be
served upon these persons personally at their residences or offices, summons may be served upon any of the officers
wherever they may be found.

Hence, petitioner cannot use respondent's failure to amend its Articles of Incorporation to reflect its new address as an
excuse from sending or attempting to send to respondent copies of the petition and the summons. The Rules of Court
provides that noticesshould be sent to the enumerated officers. Petitioner failed to do this. Nonotice was ever sent to any
of the enumerated officers.

6
Petitioner insists that it should not be made to inquire further as to the whereabouts of respondent after the attempt to
serve the summons by registered mail to respondent’s address as allegedly indicated in its Articles of Incorporation. The
Rules does not provide that it needs to do so. However, it provides for service by publication. Service by publication is
available when the whereabouts of the defendant is unknown. Section 14, Rule 14 of the Rules of Court provides:

Sec. 14. Service upon defendant whose identity or whereabouts are unknown. – In any action where the defendant is
designated as an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by
diligent inquiry, service may, by leave of court, be effected upon him by publication in a newspaper of general circulation
and in such places and for such time as the court may order. (Emphasis supplied)

This is not a matter of acquiringjurisdiction over the person of respondent since this is an action in rem. In an action in
rem, jurisdiction over the person is not required as long asthere is jurisdiction over the res. This case involves the issue of
fair play and ensuring that parties are accorded due process.

In this case, petitioner served summons upon respondent by registered mail and, allegedly, by personal service at the
office address indicated in respondent’s Certificate of Registration. Summons was not served upon respondent’s officers.
It was also not published in accordance with the Rules of Court. As a result, respondent was not given an opportunity to
present evidence, and petitioner was able to obtain from the Regional Trial Court an order cancelling respondent’s
annotations of adverse claims.

Respondent was, therefore, not validly served with summons.

II
Respondent’s alleged non-
operation does not bar it from
authorizing a person to act on
its behalf in court
proceedings

Petitioner argues that failure to serve the summons upon respondent was due to respondent's non-operation and failure to
amend its Articles of Incorporation to reflectits new address. Petitioner's conclusion that respondent was no longer
operating was based only on the postmaster's certification. According to the postmaster’s certification, it failed to serve the
petition for cancellation of annotation to respondent’s official address becauseof respondent’s nonexistence or closure.
Petitioner failed to consider that the postmaster was not in the position to make a reliable statement as to the existence or
closure of an entity.

Moreover, the Cooperative Development Authority's certification stating that respondent was not submitting any financial
report since 1992, which was proof of its non-operation, was a mere statement of what was indicative of non-operation. It
was not yet a conclusive statement that respondent was not in operation.

In any case, even assuming that respondent was not operating, it might still exercise its powers as a cooperative until it
would get dissolved. Section 9 of Republic Act No. 6938 provides the powers and capacities of registered cooperatives.

Section 9. Cooperative Powers and Capacities.- A cooperative registered under this Code shall have the following powers
and capacities:

(1) To sue and be sued in its cooperative name;

(2) Of succession;

(3) To amend its articles of cooperation in accordance with the provisions of this code;

(4) To adopt by-laws not contrary to law, morals or public policy, and to amend and repeal the same in
accordance with this Code;

(5) To purchase, receive, take orgrant, hold, convey, sell, lease, pledge, mortgage, and otherwise deal with such
real and personal property as the transaction of the lawful affairs of the cooperative may reasonably and
necessarily require, subject to the limitations prescribed by law and the Constitution;
7
 (6) To enter into division, mergeror consolidation, as provided in this Code;

(7) To join federations or unions, as provided in this Code;

(8) To accept and receive grants, donations and assistance from foreign and domestic sources; and

(9) To exercise such other powers granted in this Code or necessary to carry out its purpose or purposes as
stated in its articles of cooperation.

Prior to dissolution, a cooperative isentitled to the exercise of these powers. It may engage indeals involving its properties
or rights. It may cause the annotation of claims it deems to have in order to protect such claim. Contrary to petitioner’s
claim, respondent is not prevented from authorizing persons to act on its behalf.

In any case, even if petitioner alleged that respondent was already dissolved by virtue of a November7, 2002 resolution of
Cooperative Development Authority, the relevant acts of respondent had occurred before such resolution.

The resolution of the issue of representation could have facilitated the resolution of the case on the merits.

III
The trial court could have
resolved the issue of
representation; premature
decisions elicit suspicion

The court must not trifle with jurisdictional issues. It is inexcusable that a case involving issues that the trial court had full
control of had to be elevated to this court for determination.

The trial court had every opportunityto resolve the validity of Mr. dela Peña’s and Mr. Dragon’s alleged authority to act on
behalf of respondent. The trial court had, in fact, already allowed respondent to file its answer and oppose petitioner’s
petitionfor cancellation of annotation. It could have easily ordered Mr. dela Peña or Mr. Dragon to produce evidence of
their authority to represent respondent.

Moreover, there had been at least two motions for reconsideration filed before the trial court finallydecided the petitioner’s
petition for cancellation of annotation.

The first was filed by petitioner when the trial court granted respondent’s manifestation and motion on March 16, 2001.
The trial court could have heard the parties on the issue of representation at this instance had it noted petitioner’s non-
compliance with the rule that the notice of hearing must "be served in such a manner as to ensure its receipt by the other
party at least three (3) days before the date of the hearing."105 Section 4, Rule 15 provides:

Sec. 4. Hearing of motion. – Except for motions which the court may act upon without prejudicing the rights of the adverse
party, every written motion shall be set for hearing by the applicant. Every written motion required to be heard and the
notice of the hearing thereof shall be served in such a manner as to ensure its receipt by the other party at least three (3)
days before the date of hearing, unless the court for good cause sets the hearing on shorter notice.

In this case, petitioner set the case for hearing on April 20, 2001. It served a copy upon respondent by registered mail only
on April 16, 2001 or four (4) days before the set date for hearing. To be covered by the three-day rule under Rule 15,
Section 4, petitioner should ensure respondent’s receipt of the notice by April 17, 2001. We take judicial notice that
service by registered mail in our jurisdiction does not take place in one day. Service of notice by registered mail only four
(4) days before the date of hearing, therefore, does not amount to ensuring the other party’s receipt at least three (3) days
before the hearing.

The second motion for reconsideration was filed by respondent when the Regional Trial Court granted petitioner’s motion
for reconsideration of its order of March 16, 2001.Hence, for the second time, the trial court had an opportunity to hear
whether Mr. dela Peña or Mr. Dragon was properly authorized to act on behalf of respondent.

8
On one hand, nobody’s rights would have been prejudiced had respondent been allowed to prove the alleged
representatives’ authorities. On the other hand, there is a likelihood ofprejudice, in this case, if the court relied purely on
technicalities.

Thus, we reiterate this court’s ruling in Alonso v. Villamor:106

. . . In other words, [processes] are a means to an end. When they lose the character of the one and become the other,
the administration of justice is at fault and courts are correspondingly remiss in the performance of their obvious duty.

. . . To take advantage of [a purely technical error] for other purposes than to cure it, does not appeal to a fair sense of
justice. Its presentation as fatal to [a party]’s case smacks of skill rather than right. A litigation is not a game of
technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and
destroys the other. It is, rather, a contest in which each contending party fully and fairly lays before the court the facts in
issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure,
asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapier’s thrust. Technicality,
when it deserts its proper office as anaid to justice and becomes its great hindrance and chief enemy, deservesscant
consideration from courts. There should be no vested rights in technicalities. No litigant should be permitted to challenge a
record of a court of these Islands for defect of form when his substantial rights have not been prejudiced thereby.

Both motions for reconsideration filed in the trial court were opportunities to hear the parties on the issue of representation
and to ensure that all parties were given their fair opportunity to be heard. The trial court ignored both opportunities and
chose to rule based on technicalities to the prejudice of respondent.

The rules cannot be interpreted asa means to violate due process rights. Courts should, as much as possible, give parties
the opportunity to present evidence as to their claims so that decisions will be made based on the merits of the case.

The trial court issued a decision pending incidents yet to be resolved. We take this opportunity to remind courtsthat the
issuance of fair decisions is the heart of our functions. The judiciary is expected to take seriously its task of crafting
decisions with utmostjudiciousness. Premature decisions only elicit suspicion of the courts and diminish our role as
administrator of justice.

IV
Rights still under negotiations
are not adverse claims

Ordinarily, this case would be remanded to the trial court for the presentation of respondent’s evidence. However, this
case has been pending in this court for about eight (8) years.In the interest of judicial economy and efficiency, and given
that the court records are sufficient to make a determination on the validity of respondent’s adverse claim, we shall rule on
the issue. Respondent had been assailing the lack of service of summons upon it and the resulting cancellation of its
alleged adverse claim on the titles. Its claim is anchored on its disrupted negotiations with the farmer-beneficiaries
involving the properties. In its memorandum filed on March 1, 2007, respondent stated:

1.2 Some ten (10) years ago, Laguna West entered into [sic] Joint Venture Agreement ("JVA") with various farmer-CLOA
beneficiaries in the Kaong-Kalayugan area of Silang, Cavite for a total lot area of Eight Hundred Fifty Five Thousand and
Nine Hundred Fourteen (855,914) square meters.

1.3 To hold the CLOA beneficiaries to their commitment to submit their respective lots to the JVA, Laguna West promised
them a guaranteed share of 40% in the proceeds of the project.

1.4 But, while Laguna West was still in the process of finalizing the negotiations with these farmer-beneficiaries, petitioner
entered the picture by offering an alleged "Irrevocable Exclusive Right to Buy (IERB)" contracts with the same farmer-
landowners for the purpose of converting the subject vast track [sic] of land into an industrial, commercial and residential
area.

1.5 Alarmed with the possibility that it could lose the deal to a big and moneyed corporation, Laguna Westcaused the
annotation of adverse claims on the thirty-nine (39) TCTs in 1996.107 Respondent’s annotations on petitioner’s certificates
of title are similarly worded, thus:

9
Entry No. . . . -AFFIDAVIT OF ADVERSE CLAIM- Covering the parcel of land described in this title as per Affidavit of
Adverse Claim executed by Calisto M. Dela Pena [sic] of Laguna West Multi-Purpose Cooperative Inc., wherein the
registered owner entered into a Joint Venture Agreement, as per Affidavit ofAdverse Claim, subs. and sworn to before the
Not. Public for . . ., a copy is on file in this registry.

Date of inst.- . . . .

Date of inscription- . . . .

NOTE: The foregoing annotations were copied from TCT. . . .108

Another version of the annotation is worded as follows:

Entry No. . . . -ADVERSE CLAIM- Signed and executed by Calixto M. dela Pena [sic], president and Chairman of
Cooperative, [alleging] therein the existence of Joint Venture Agreement with the registered owner and that there are
aboutto dispose said lot, exec. before the Not. Public . . . Copy is on file in this registry. Date of inst.- . . . . Date of
inscription- . . . .109

NOTE: The foregoing annotations were copied from TCT. . . .

The purpose of annotations of adverse claims on title is to apprise the whole world of the controversy involving a property.
These annotations protect the adverse claimant's rights before or during the pendency of a case involving a property. It
notifies third persons that rights that may be acquired with respect to a property are subject to the results of the case
involving it.

Section 70 of Presidential Decree No. 1529 or the Property Registration Decree governs adverse claims. It describes an
adverse claim as a statement in writing setting forth a subsequent right or interest claimed involving the property, adverse
tothe registered owner. Thus:

Section 70. Adverse claim. – Whoever claims any part or interest in registered land adverse to the registered owner,
arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering
the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a
reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a
description of the land in which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimant’s residence, and a place at which all
notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse ofsaid
period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest:
Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the
same claimant.

Before the lapse of thirty days aforesaid, any party in interest may file a petition in the court of First Instance where the
land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of
the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is
adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and
hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than
one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may
withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect.

A claim based on a future right does notripen into an adverse claim as defined in Section 70 of Presidential Decree No.
1529. A right still subject to negotiations cannot be enforced against a title holder or against one that has a legitimate title
to the property based on possession, ownership, lien, or any valid deed of transfer.

Respondent’s claim was not based on any of those.1awp++i1 Its claim was based on a deal with the CLOA farmer-
beneficiaries, which did not materialize.

10
Respondent alleged that had there been a trial, it could have "[p]resented documentary evidence that its negotiation with
the former landowners had earned for it part-ownership of the properties, or . . . the exclusive authority to deal with
potential buyers or developers."110 Respondent contradicts itself. For there to be a contract, there must be a meeting of the
minds between the parties. There could not have been any contract earning for respondent part-ownership or any right
since it was still undergoing negotiations with the farmer-beneficiaries. At that stage, meeting of the minds was absent.
The terms were not yet final. Hence, no right or obligation could attach to the parties. In essence, parties cannot claim,
much less make an adverse claim of any right, from terms that are still under negotiations.

Respondent also alleged that had it been allowed to offer as evidence the joint venture agreement it entered with the
farmer-beneficiaries, it would have shown that it "had made partial payment of the former landowners’ 40% share in the
joint venture,"111 acquiring for itself an "interest over the properties, or . . . better right than the registered
owner[s]."112 Respondent was mistaken.

Republic Act No. 6657 or the Comprehensive Agrarian Reform Law prohibits its own circumvention. The prohibition on
disposition includes all rights relating to disposition such as sale, and promise of sale of property upon the happening of
conditions that remove the restrictions on disposition.

Republic Act No. 6657 prohibits the sale, transfer, or conveyance of awarded lands within ten (10) years, subject only to a
few exceptions. Section 27 of the Act provides:

SECTION 27. Transferability of Awarded Lands. —Lands acquired by beneficiaries underthis Act may not be sold,
transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified
beneficiaries for a period of ten (10) years: provided, however, that the children or the spouse of the transferorshall have a
right to repurchase the land from the government or LBP withina period of two (2) years. Due notice of the availability of
the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is
situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be given
due notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred orconveyed, with prior
approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transferor
conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which
shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the
latter has already paid, together with the value of improvements he has made on the land Republic Act No. 6657 also
provides that the awarded lands may be converted to residential, commercial,or industrial use if these are not
economically feasible anymore or because of urbanization, greater economic value will be derived with their conversion.
Section 65 of the Act provides:

SECTION 65. Conversion of Lands. — After the lapse of five (5) years from its award, when the land ceases to be
economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a
greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or
the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or
conversion of the land and its disposition: provided, that the beneficiary shall have fully paid his obligation.

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

1) Subject to a few exceptions, landsacquired by beneficiaries may be conveyed to non-beneficiaries after ten
(10) years.

2) Before the lapse of ten (10) years but after the lapse of five (5) years, a beneficiary may dispose of the
acquired land if it "ceases to be economically feasible and sound for agricultural purposes, or the locality has
become urbanized and the land will have a greater economic value" 113 with its residential, commercial, or
industrial use.

These implications are easily abused. Hence, Republic Act No. 6657 included among the prohibitions any act that will
circumvent its provisions. Thus:

11
SECTION 73. Prohibited Acts and Omissions. — The following are prohibited: (a) The ownership or possession, for the
purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention limits or award
ceilings by any person, natural or juridical, except those under collective ownership by farmer-beneficiaries. (b) The
forcible entry or illegal detainer by persons who are not qualified beneficiaries under thisAct to avail themselves of the
rights and benefits of the Agrarian Reform Program. (c) The conversion by any landowner of his agricultural land into any
nonagricultural use with intent to avoid the application of this Act to his landholdings and to dispossess his tenant farmers
of the land tilled by them. (d) The willful prevention or obstruction by any person, association or entity of the
implementation of the CARP. (e) The sale, transfer, conveyance or change of the nature of lands outside of urban centers
and city limits either in whole or in part after the effectivity of this Act. The date ofthe registration of the deed of
conveyance in the Register of Deeds with respect to titled lands and the date of the issuance ofthe tax declaration to the
transferee of the property with respect to unregistered lands, as the case may be, shall be conclusive for the purpose of
this Act. (f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the
land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act. (Emphasis supplied)

The prohibition from disposition of the properties encompasses all rights relating to disposition, including the right to
convey ownership or to promise the sale and transfer of property from the farmer-beneficiaries to anyone upon the
happening of certain conditions that will remove the conveyance restrictions.

The conveyance of the property withinthe prohibited period or before its conversion to non-agricultural use isan outright
violation of Republic Act No. 6657. Meanwhile, the promise of sale of properties upon the happening of conditions that will
remove restrictions carry with it an intent to circumvent the provisions of Republic Act No. 6657. This law prohibits its
circumvention.

In this case, the CLOAs were awarded to the farmer-beneficiaries between 1990 and 1992.114 Since the affidavit of
adverse claim annotated on petitioner’s certificates of title was annotated in 1996 and the properties were converted only
in 1998, respondent’sjoint venture agreement with the farmer-beneficiaries could not have validly transferred rights to
respondent.

The 10-year period of prohibition against conveyance had not yet lapsed at that time.1âwphi1 Neither were the properties
already converted to non-agricultural use at that time. Respondent's adverse claim, therefore, based on its alleged
payment of the farmer-beneficiaries' 40% could not be valid.

In sum, whether or not there were provisions on transfer of rights or promise to transfer rights in the joint venture
agreement, there could be no basis for respondent’s adverse claim. Lack of that provision means that respondent does
not have any valid claim or right over the properties at all. Meanwhile, inclusion of such provision is illegal and, therefore,
void.

This ruling is also applicable to petitioner, which entered into irrevocable exclusive right to buy contracts from the farmer-
beneficiaries. These contracts provided that the farmer-beneficiaries committed themselves to selling their properties to
petitioner upon expiration of the period of prohibition to transfer or upon conversion of the properties from agricultural to
industrial or commercial use, whichever comes first. These contracts were execl!ted between farmer-beneficiaries and
petitioner during the period of prohibition and before the properties' conversion from agricultural to mixed use. Upon
conversion of the properties, these were immediately sold to petitioner. Intent to circumvent the provisions of Republic Act
No. 6657 is, therefore, apparent. Petitioner's contracts are, therefore, also illegal and void. Hence, this decision is without
prejudice to the right of interested parties. to seek the cancellation of petitioner's certificates of title obtained in violation of
the law.

WHEREFORE, the petition is GRANTED. The Register of Deeds of Cavite is ORDERED to cancel the annotations of
adverse claims on the transfer certificates· of title.

SO ORDERED.

G.R. No. 184197               February 11, 2010

12
RAPID CITY REALTY AND DEVELOPMENT CORPORATION, Petitioner, 
vs.
ORLANDO VILLA and LOURDES PAEZ-VILLA,1 Respondents.

DECISION

CARPIO MORALES, J.:

Sometime in 2004, Rapid City Realty and Development Corporation (petitioner) filed a complaint for declaration of nullity
of subdivision plans . . . mandamus and damages against several defendants including Spouses Orlando and Lourdes
Villa (respondents). The complaint, which was docketed at the Regional Trial Court of Antipolo City as Civil Case No. 04-
7350, was lodged at Branch 71 thereof.

After one failed attempt at personal service of summons, Gregorio Zapanta (Zapanta), court process server, resorted to
substituted service by serving summons upon respondents’ househelp who did not acknowledge receipt thereof and
refused to divulge their names. Thus Zapanta stated in the Return of Summons:

THIS IS TO CERTIFY that on September 24, 2004, the undersigned caused the service of summons together with a copy
of the complaint with its annexes to defendant Spouses Lourdes Estudillo Paez-Cline and Orlando Villa at their given
address at 905 Padre Faura Street, Ermita Manila, as per information given by two lady househelps who are also residing
at the said address, the defendant spouses are not around at that time. On the 27th of September, 2004, I returned to the
same place to serve the summons. I served the summons and the copy of the complaint with its annexes to the two ladies
(The same lady househelp I met on Sept. 24, 2004) but they refused to sign to acknowledge receipt and they refused to
tell their name as per instruction of the defendants. With me who can attest to the said incident is Mr. Jun Llanes, who
was with me at that time.2 x x x (emphasis and underscoring supplied)

Despite substituted service, respondents failed to file their Answer, prompting petitioner to file a "Motion to Declare
Defendants[-herein respondents] in Default" which the trial court granted by Order of May 3, 2005.

More than eight months thereafter or on January 30, 2006, respondents filed a Motion to Lift Order of Default,3claiming
that on January 27, 2006 they "officially received all pertinent papers such as Complaint and Annexes. Motion to
Dismiss of the Solicitor General and the ORDER dated May 3, 2005 granting the Motion to Declare [them] in Default." And
they denied the existence of two women helpers who allegedly refused to sign and acknowledge receipt of the summons.
In any event, they contended that assuming that the allegation were true, the helpers had no authority to receive the
documents.4

By Order of July 17, 2006, the trial court set aside the Order of Default and gave herein respondents five days to file their
Answer. Respondents just the same did not file an Answer, drawing petitioner to again file a Motion to declare them in
default, which the trial court again granted by Order of February 21, 2007.

On April 18, 2007, respondents filed an Omnibus Motion for reconsideration of the second order declaring them in default
and to vacate proceedings, this time claiming that the trial court did not acquire jurisdiction over their persons due to
invalid service of summons.

The trial court denied respondents’ Omnibus Motion by Order of May 22, 2007 and proceeded to receive ex-
parteevidence for petitioner.

Respondents, via certiorari, challenged the trial court’s February 21, 2007 and April 18, 2007 Orders before the Court of
Appeals.

In the meantime, the trial court, by Decision of September 4, 2007, rendered judgment in favor of petitioner.

By Decision of April 29, 2008,5 the appellate court annulled the trial court’s Orders declaring respondents in default for the
second time in this wise:

In assailing the orders of the trial court through their Motion to Lift… and later their Omnibus  Motion… the petitioners
[herein-respondents] never raised any other defense in avoidance of the respondents’ [herein petitioners] claim, and
instead focused all their energies on questioning the said court’s jurisdiction. The latter motion clearly stated prefatorily
13
their counsel’s reservation or "special appearance to question jurisdiction" over the persons of the petitioners. "A party
who makes a special appearance in court challenging the jurisdiction of said court based on the ground of invalid service
of summons is not deemed to have submitted himself to the jurisdiction of the court." 6(citation omitted; italics, emphasis
and underscoring supplied)

Petitioner’s motion for reconsideration having been denied by the appellate court by Resolution of August 12, 2008, it
comes to the Court via petition for review on certiorari, arguing in the main that respondents, in filing the first Motion to Lift
the Order of Default, voluntarily submitted themselves to the jurisdiction of the court.

The petition is impressed with merit.

It is settled that if there is no valid service of summons, the court can still acquire jurisdiction over the person of the
defendant by virtue of the latter’s voluntary appearance. Thus Section 20 of Rule 14 of the Rules of Court provides:

Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person shall not be
deemed a voluntary appearance.

And Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi and Lolita Dy, et al. enlightens:

Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of legal processes
exerted over his person, or his voluntary appearance in court. As a general proposition, one who seeks an affirmative
relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this rule that we have had occasion to
declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default
judgment, and to lift order of default with motion for reconsideration, is considered voluntary submission to the court’s
jurisdiction. This, however, is tempered by the concept of conditional appearance, such that a party who makes a special
appearance to challenge, among others, the court’s jurisdiction over his person cannot be considered to have submitted
to its authority.

Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly
made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instances where
a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution.7 (italics and
underscoring supplied)

In their first Motion to Lift the Order of Default8 dated January 30, 2006, respondents alleged:

xxxx

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

5. It would be the height of injustice if the respondents is [sic] denied the equal protection of the laws[;]

6. Respondents must be afforded "Due process of Law" as enshrined in the New Constitution, which is a basic
right of every Filipino, since they were not furnished copies of pleadings by the plaintiff and the Order dated May
3, 2005;

x x x x9

and accordingly prayed as follows:

14
WHEREFORE, . . . it is most respectfully prayed . . . that the Order dated May 5, 2005 declaring [them] in default be
LIFTED.10

Respondents did not, in said motion, allege that their filing thereof was a special appearance for the purpose only to
question the jurisdiction over their persons. Clearly, they had acquiesced to the jurisdiction of the court.

WHEREFORE, the petition is GRANTED. The assailed Court of Appeals Decision of April 29, 2008
is REVERSED and SET ASIDE.

Let the original records of Civil Case No. 04-7350 be remanded to the court of origin, Regional Trial Court of Antipolo City,
Branch 71.

SO ORDERED.

G.R. No. L-68037 July 29, 1992

PARAMOUNT INSURANCE CORPORATION, petitioner, 

vs.
HON. MAXIMO M. JAPZON, Presiding Judge, Br. 36, RTC, Manila; City Sheriff and Deputy Sheriffs Nestor
Macabilin & Teodoro Episcope, public respondents, JOSE LARA and ARSENIO PAED, private respondents.

ROMERO, J.:

Assailed in this petition for certiorari and prohibition with preliminary injunction is the decision 1 of the Regional Trial Court
of Manila, Branch 36 dated August 30, 1983 in Civil Case No. 82-4416 entitled "Jose Lara and Arsenio Paed v. Willy
Garcia, Emilio Macasieb, Domingo Natividad, Willy Manuel, and Paramount Insurance Co. Inc." ordering petitioner to pay
private respondents an aggregate sum of P175,000.00 as insurer of a motor vehicle owned by Domingo Natividad despite
the absence of jurisdiction over its persons.

It appears that on May 27, 1978, Jose Lara contracted the services of a passenger jeepney with Plate No. PUJ K5-826,
owned and operated by Willy Garcia (Garcia for brevity), to transport his family, relatives and friends from Manila to
Pangasinan. The said jeepney was then driven by Emilio Macasieb (Macasieb for brevity).

On the very same date, within the vicinity of Barangay Parsolingan in Gerona, Tarlac, a Ford truck F-600 with Plate No.
WL-628, then driven by Willy Manuel (Manuel for brevity) while cruising the National Highway on its way to Manila,
overtook an unidentified motor vehicle and in the process hit and sideswept the said passenger jeepney then driven by
Macasieb. As a consequence of such mishap, the two (2) passengers of the jeepney, namely: Jose Lara (Lara for brevity)
and Arsenio Paed (Paed for brevity) sustained physical injuries of varying degrees. Specifically, Lara suffered serious
physical injuries resulting in the amputation of his right arm while Paed suffered serious physical injuries which
incapacitated him to work for more than two (2) weeks. Aside from bodily injuries suffered by its passengers, both vehicles
suffered minor damages at their respective points of impact. The insurer of said truck is herein petitioner Paramount
Surety and Insurance Co. Inc. 2

After the said accident, Natividad filed a notice of claim with Paramount and the latter lost no time in dispatching and/or
contracting an independent adjuster handling casualty and marine claims, the EM Salvatierra Adjustment Office.

Thereafter, the adjustment of Natividad's claims were transferred to Speedway Adjustment and Appraisal Corporation
which investigated the facts surrounding the incident and recommended petitioner to pay Natividad under its policy, using
the "no fault" clause under the Insurance Code as its basis of liability.

15
A check in the amount of Eight Hundred Pesos (P800.00) covered by Check No. EBC-10036191F was paid to Paed's
wife, Priscilla Paed. It was covered by Voucher No. 32358. 3

In addition to said amount, another check in the amount of Five Thousand Pesos (P5,000.00) covered by EBC Check No.
3082 was paid by Paramount to Central Luzon Doctor's Hospital covering the expense for medical treatment and
hospitalization of the victims, Lara and Paed. It was covered by Voucher No. 32196. 4

On or about June 5, 1978, Lara and Paed filed a criminal case against Manuel for Reckless Imprudence resulting in
Damage to Property docketed as Criminal Case No. 2227 before the Municipal Trial Court of Gerona, Tarlac. 5

During the pendency of said criminal case, Lara filed a manifestation reserving the right to file a separate civil action
against the operators of the two (2) vehicles, namely: Natividad and Garcia as well as the two (2) drivers, Manuel and
Macasieb. 6

Accordingly, Lara and Paed filed on September 17, 1978 a civil case for damages docketed as Civil Case No. 82-4416
against Garcia, Macasieb, Manuel, Natividad, and impleaded Paramount, the latter as insurer of the Ford truck. 7

A certain Atty. Segundo Gloria filed a notice of appearance dated November 16, 1978 where he informed the court that he
was appearing for and in behalf of the defendants Natividad, Manuel and Paramount. 8 Subsequently, on December 14,
1978, he filed an answer with crossclaim and counterclaim. 9

During the trial of Criminal Case No. 2227 for Reckless Imprudence resulting in Damage to Property, accused Manuel
pleaded guilty to the crime charged on September 18, 1979, and was accordingly, sentenced to imprisonment of six
months of arresto mayor maximum under Article 365 of the Revised Penal Code. 10

In the interim period, a fire gutted the City Hall of Manila on November 19, 1981 and the records of the case were burned
to ashes. Subsequently, on January 25, 1982, plaintiffs (herein private respondents Lara and Paed) filed a petition for
reconstitution of the judicial records of the case 11 which was approved without any opposition in the order of the court
dated November 4, 1982. 12

On February 17, 1983, the court reiterated its order before the reconstitution of the judicial records declaring defendants
Natividad, Manuel and Paramount in default in view of their continued failure to appear during the trial of the case and
allowed the plaintiffs (Lara and Paed) to make a formal offer of exhibits and considered the case submitted for decision. 13

After protracted proceedings which lasted for almost five years, the Regional Trial Court of Manila, rendered a decision
dated August 30, 1983, the decretal portion of which states:

WHEREFORE, finding the evidence presented by plaintiff sufficient to prove the allegations of the
complaint, judgment is hereby rendered in favor of the plaintiffs and against the defendants ordering the
latter to pay jointly and severally plaintiff Jose Lara, the amount of P15,000.00 for medical and
hospitalization expenses; the sum of P80,000.00 as moral and exemplary damages; the sum of
P50,000.00 as compensatory damages; to pay jointly and severally plaintiff Arsenio Paed the sum of
P20,000.00 as moral and actual damages and to pay the sum of P10,000.00 by way of attorney's fees
and the costs of suit. 14

A copy of the said decision was served on the petitioner's counsel, Atty. Segundo Gloria, on October 5, 1981. 15 No
appeal from the judgment having been filed within the reglementary period or up to October 20, 1983, the same became
final and executory. So, on March 2, 1984, Lara and Paed, now private respondents, filed an ex-partemotion for execution
of the said judgment and the trial court granted the same on July 10, 1984. 16

It was only on March 3, 1984 that Paramount, now petitioner, filed a motion to set aside the Decision raising the issue that
the court has not validly acquired jurisdiction over its person. 17

Hence, the present recourse.

After deliberating on the petition, the Court issued a temporary restraining order on July 30, 1984 as prayed for and
enjoined the respondents from enforcing the Decision dated August 30, 1983 and the Writ of Execution dated July 10,
1984, both rendered and issued in Civil Case No. 82-4416. 18
16
The pivotal issue to be resolved in this case is whether or not the court validly acquired jurisdiction over petitioner despite
the appearance of Atty. Segundo M. Gloria who allegedly was not retained or authorized to file an answer for it. 19

Petitioner now claims that the Decision of the trial court dated August 30, 1983, should be set aside since the court has
not validly acquired jurisdiction over its person, not having been validly served with summons and a copy of the complaint
nor did it actively participate in the said proceedings. It alleged that Atty. Segundo Gloria was not its retained counsel at
that time nor was he authorized by petitioner to act for and in its behalf; and that private respondents' claims for moral,
exemplary and compensatory damages as well as attorney's fees are not recoverable from petitioner. 20

The petition is devoid of merit.

Jurisdiction is the power with which courts are invested for administering justice, that is, for hearing and deciding
cases. 21 In order for the court to have authority to dispose of the case on the merits, it must acquire jurisdiction over the
subject matter and the parties. 22

Jurisdiction over the person of the defendant in civil cases is acquired either by his voluntary appearance in court and his
submission to its authority or by service of summons. The service of summons is intended to give notice to the defendant
or respondent that an action has been commenced against it. The defendant or respondent is thus put on guard as to the
demands of the plaintiff or the petitioner. 23

Consequently, petitioner's contentions that it was not properly served with summons and that Atty. Segundo Gloria was
not authorized to appear for and in its behalf are untenable.

In the case at bar, although petitioner questioned the propriety of the service of summons, it however failed to
substantiate its allegation that it was not properly served with summons. Hence, the disputable presumption that official
duty has been regularly performed prevails. 24

The records of the case, however, showed that all the pleadings, including the answer with crossclaim and counterclaim
filed by Atty. Segundo Gloria stated that he represented the defendants Natividad, Manuel and Paramount. In fact, he
even filed a notice of appearance informing the court that he is representing the said defendants. 25

It is worth noting that this is not the first time petitioner raised the issue of warrant of jurisdiction over its person as well as
warrant of authority of a lawyer to appear for and in its behalf. In the case docketed as G.R. No. 68066 entitled
"Paramount Insurance Corp. v. Luna," this Court had the opportunity to rule that "the mere filling of the answer with
crossclaim raised a presumption of authority to appear for petitioner Paramount Insurance Corporation . . . in accordance
with Section 21, Rule 138 of the Rules of Court. Such presumption is rebuttable, but only by clear and positive proof.

In the absence of such clear and positive proof, the presumption of authority . . . should prevail over the petitioner's self-
serving denial of such authority.

It strains credulity that a counsel who has no personal interest in the case would fight for and defend a case with
persistence and vigor if he has not been authorized or employed by the party concerned. 26

To the mind of the Court, the instant petition is filed merely to derail its execution. It took Paramount almost six years to
question the jurisdiction of the lower court. Moreover, as earlier adverted to, the controverted Decision of August 30, 1983,
became final and executory on October 20, 1983. In any event, it is axiomatic that there is no justification in law and in
fact for the reopening of a case which has long become final and which in fact was already executed on July 18, 1984.
Time and again, this Court has said that the doctrine of finality of judgment is grounded on fundamental considerations of
public policy and sound practice and at the risk of occasional error, the judgments of courts must become final at some
definite date fixed by law. 27

However, there is merit in petitioner's contention that its liability is limited only to P50,000.00 as expressed in Insurance
Policy No. CV-3466 issued on February 23, 1978. 28 The said insurance policy clearly and categorically placed the
petitioners liability for all damages arising out of death or bodily injury sustained by one person as a result of any one
accident at P50,000.00. Said amount complied with the minimum fixed by law then prevailing, Section 377 of Presidential
Decree No. 6123 (which was retained by P.D. No. 1460, the Insurance Code of 1978), which provided that the liability of
land transportation vehicle operators for bodily injuries sustained by a passenger arising out of the use of their vehicles
shall not be less than P12,000.00. Since the petitioner's liability under the insurance contract is neither less than
P12,000.00 nor contrary to law, morals, good customs, public order or public policy, said stipulation must be upheld as
17
effective and binding between the parties. Therefore, the terms of the contract constitute the measure of the insurer's
liability. 29

WHEREFORE, the petition is DISMISSED and the temporary restraining order of July 30, 1984 is LIFTED. The decision
of the Regional Trial Court of Manila, Branch 36, dated August 30, 1983, is hereby AFFIRMED with the MODIFICATION
that petitioner be held liable to pay respondents Jose Lara and Arsenio Paed the amount of P50,000.00 each which is the
limit of its liability under the insurance policy minus the amounts of P5,000.00 and P800.00 which it paid for the
hospitalization and medical expenses, respectively, of respondents.

Costs against petitioner.

SO ORDERED.

G.R. No. L-58036 March 16, 1987

ELISEO BOTICANO, petitioner, 
vs.
MANUEL CHU, JR., respondent.

PARAS, J.:

This is a petition for review on certiorari seeking to reverse and set aside the following: (a) the decision of the Court of
Appeals * promulgated on March 31, 1981 in CA-G.R. No. 65287-R entitled: "Eliseo Boticano, plaintiff-appellee v. Jaime
Sigua, defendant and Manuel Chu, Jr., defendant-appellant" which holds that the defendant-appellant was not properly
served with summons and (b) the resolution denying petitioner's motion for reconsideration of said decision.

The findings of fact of the trial court are as follows:

Petitioner Eliseo Boticano is the registered owner of a Bedford truck with plate No. QC-870, T-Pilipinas '77 which he was
using in hauling logs for a certain fee. At 11:00 o'clock in the evening of September 3, 1971, while loaded with logs, it was
properly parked by its driver Maximo Dalangin at the shoulder of the national highway in Barrio Labi, Bongabon, Nueva
Ecija when it was hit and bumped at the rear portion by a Bedford truck bearing plate No. QK-516, T-Pilipinas '77 owned
by private respondent Manuel Chu, Jr. and driven by Jaime Sigua, the former's co-defendant in this case. Manuel Chu, Jr.
acknowledged ownership thereof and agreed with petitioner to shoulder the expenses of the repair of the damaged truck
of the latter. (Decision, Civil Case No. 6754, Rollo, pp. 36-37).

When Manuel Chu, Jr. failed to comply with aforesaid agreement as well as to pay damages representing lost income
despite petitioner's demands, the latter (plaintiff in the lower court), filed a complaint on November 24, 1977 at the Court of
First Instance of Nueva Ecija, Branch VII at Cabanatuan City, against private respondent Manuel Chu, Jr. (truck owner)
and Jaime Sigua (his driver) both as defendants in Civil Case No. 6754 "Eliseo Boticano v. Manuel Chu, Jr. and Jaime
Sigua" for damages. (Record on Appeal, Rollo, pp. 45-47).

Summons was issued on December 12, 1977 but was returned unserved for defendant Jaime Sigua because he was no
longer connected with San Pedro Saw Mill, Guagua, Pampanga, while another copy of the summons for Manuel Chu, Jr.
was returned duly served on him thru his wife Veronica Chu at his dwelling house.

On February 15, 1978 petitioner moved to dismiss the case against Jaime Sigua and to declare Manuel Chu, Jr. in default
for failure to file responsive pleadings within the reglementary period. The motion was granted by the lower court in an
Order dated September 4, 1978, allowing petitioner to adduce his evidence ex parte on October 17, 1978. (Petition, Rollo,
pp. 8-9).

18
From the evidence adduced by the plaintiff (petitioner herein) the trial court found that private respondent Manuel Chu, Jr.
is responsible for the fault and negligence of his driver Sigua under Article 2180 of the Civil Code, whose negligence and
lack of due care was the immediate and proximate cause of the damage to petitioner's truck and ruled in favor of plaintiff-
petitioner.

The dispositive portion of the judgment reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff, Eliseo Boticano, and against herein
defendant, Manuel Chu, Jr. ordering the latter as follows:

(a) To pay the plaintiff the sum of P6,970.00 representing actual damages;

(b) To pay the plaintiff the sum of P73,700.00 representing unrealized income for the non-use of the
plaintiff's damaged truck for the period of eleven (11) months;

(c) To pay the plaintiff the sum of P2,000.00 for and as attorney's fees; and

(d) To pay the costs of this suit.

SO ORDERED.

Cabanatuan City, November 28, 1978. (Ibid,, pp. 13-14).

On March 19, 1979 private respondent Manuel Chu, Jr. filed with the trial court a "Notice of Appeal" and an Urgent Motion
for Extension of Time to file Record on Appeal which was granted by the trial court on the same date.

On March 26, 1979, Atty. Hermenegildo D. Ocampo, counsel of record of private respondent, filed a "Motion to Withdraw
as Counsel" while the new counsel Atty. Wilfredo G. Laxamana entered his appearance on April 18, 1979 and filed his
record on appeal on the same date.

On May 4, 1979 petitioner filed with the trial court a Motion to Dismiss Appeal and for execution which was set for hearing
on May 14, 1979 wherein private respondent's counsel personally appeared and opposed petitioner's motion while on the
latter date petitioner filed his reply to opposition, after which on May 16, 1979 the trial court issued an order denying
aforesaid motion, while on May 22, 1979, the trial court issued another order approving private respondent's Record on
Appeal. (Rollo, pp. 9-10).

After the case was brought to the Court of Appeals and the parties had filed their respective briefs, said Appellate Court
issued its decision on March 31, 1981, the dispositive portion of which reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS the appealed judgment is hereby set aside, for
being null and void. This case is directed to be remanded to the court of origin; that appellant be properly
served with summons and a copy of the complaint; and that the necessary and appropriate proceedings
or action be taken thereafter, as the circumstances and the case win warrant.

With costs against appellee.

SO ORDERED.

Judgment is set aside. (Rollo, p. 33)

On April 20, 1981, petitioner filed with the respondent Court of Appeals a Motion for Reconsideration and on June 3, 1981
a Supplemental Motion for Reconsideration. On August 28, 1981 respondent Court of Appeals issued an order denying
petitioner's Motion for Reconsideration. (Rollo, pp. 9-11).

Hence, this petition, with the following assigned errors:

19
1. THE RESPONDENT COURT OF APPEALS COMMITTED A MISTAKE IN HOLDING THAT PRIVATE RESPONDENT
MANUEL CHU JR. WAS NOT PROPERLY SERVED WITH SUMMONS DESPITE THE FACT THAT THE SUMMONS
WAS SERVED TO HIM THROUGH HIS WIFE;

2. THE RESPONDENT COURT OF APPEALS COMMITTED A MISTAKE IN HOLDING THAT PRIVATE RESPONDENT
DID NOT VOLUNTARILY SUBMIT HIMSELF TO THE JURISDICTION OF THE TRIAL COURT DESPITE HIS
VOLUNTARY APPEARANCE, THRU COUNSEL ON A FIXED DATE OF HEARING AND BY FILING WITH THE LOWER
COURT A NOTICE OF APPEAL, APPEAL BOND, MOTION FOR EXTENSION OF TIME TO FILE RECORD ON
APPEAL, MOTION FOR WITHDRAWAL OF APPEARANCE, NOTICE OF APPEARANCE, AND OPPOSITION TO
MOTION TO DISMISS APPEAL AND FOR ISSUANCE OF WRIT OF EXECUTION;

3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT PRIVATE RESPONDENT HAS WAIVED
ANY QUESTION ON THE TRIAL COURT'S JURISDICTION OVER HIS PERSON BY HIS DELIBERATE FAILURE AND
REFUSAL TO SEEK RELIEF FROM THE TRIAL COURT.

4. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN SETTING ASIDE THE JUDGMENT IN CIVIL CASE
NO. 6754, COURT OF FIRST INSTANCE OF CABANATUAN ClTY, BRANCH VII AND IN DIRECTING THAT THE CASE
BE REMANDED TO THE COURT OF ORIGIN SO THAT APPELLANT CAN BE PROPERLY SERVED WITH SUMMONS.
(Petition, Rollo, pp. 12-23)

In compliance with the resolution of the Second Division of this Court of October 12, 1981 (Rollo, p. 79-A) private
respondent filed his comment on November 13, 1981 (Rollo, pp. 84-87). Petition er then filed a reply thereto in compliance
with the resolution of December 7, 1981 (Rollo, p. 39) after which the petition was given due course in the resolution of
February 8, 1982 and the parties were required to file their respective memoranda (Rollo, p. 43). Petitioner filed his
memorandum on March 19, 1982 (Rollo, pp. 45-59) while private respondent filed his memorandum on April 15, 1982
(Rollo, pp. 60-64). Thereafter, in the resolution of April 30, 1982, the case was submitted for decision. (Rollo, p. 65).

There is no dispute as to the facts of this case, as shown by the admission of private respondent to the extent of making
an agreement with petitioner to shoulder the expenses of the repair of the damaged truck of the latter and the findings of
the Court of Appeals that petitioner's evidence fully supports the findings of facts of the trial court as well as its judgment
under appeal.

Neither does private respondent deny receipt of the summons in question. The bone of contention appears to be in the
manner of service of said summons on the wife of private respondent at their dwelling instead of on private respondent
himself personally.

Petitioner contends in favor of validity of such service while private respondent maintains the opposite view which was
sustained by respondent Court of Appeals to the effect that the Sheriff resorted to substituted service under Section 8,
Rule 14 of the Rules of Court, without first complying with the mode of personal service required under Section 7 of the
same Rule.

Thus, the principal issue which arises in this case which involves an inquiry into procedural due process, is whether or not
the question of jurisdiction over the person of the defendant can be raised for the first time on appeal.

The question has been answered in the negative by the Supreme Court in a long line of decisions. In fact, one of the
circumstances considered by the Court as indicative of waiver by the defendant-appellant of any alleged defect of
jurisdiction over his person arising from defective or even want of process, is his failure to raise the question of jurisdiction
in the Court of First Instance and at the first opportunity. It has been held that upon general principles, defects in
jurisdiction arising from irregularities in the commencement of the proceedings, defective process or even absence of
process may be waived by a failure to make seasonable objections. (Castro v. Cebu Portland Cement Co., 71 Phil. 481
[1941] citing Machan v. De la Trinidad, 3 Phil. 684; Vergara v. Laciapag 28 Phil. 439; U.S. v. Inductivo, 40 Phil. 84;
Soriano v. Ramirez, 44 Phil. 519). More recently, in reiteration of the same principle, the Court ruled in Dalman v. City
Court of Dipolog City, Branch II, that as to the dismissal of the criminal case, the question of jurisdiction which was never
raised in said case before the trial court cannot be done at this stage and level (134 SCRA 244 [1985]).

Coming to the case at bar, it has been pointed out that during the stages of the proceedings in the court below, defendant-
appellant could have questioned the jurisdiction of the lower court but he did not.

20
It can of course be argued that the failure to question the lower court's jurisdiction cannot be accounted against Chu for
his having been declared in default gave him no chance to participate in the court deliberations and therefore no chance
to raise the jurisdictional issue, but then, he could have done so, in the subsequent pleadings he filed. Besides, even
assuming that such failure cannot be taken against him, the fact is he had VOLUNTARILY submitted himself to the court's
jurisdiction.

On the contrary, private respondent voluntarily appeared thru counsel in the trial court. He filed a Notice of Appeal, Appeal
Bond, Motion for Extension of Time to File Record on Appeal, Record on Appeal, Motion for Withdrawal of Appearance,
Notice of Appearance and Opposition to Plaintiff's Motion to Dismiss Appeal and for Issuance of a Writ of Execution. Not
only did he submit pleadings and motions, but he likewise appeared in person, thru counsel in the hearing held on May
14, 1979 at 8:30 a.m. and orally argued in open court on the pending incident. (Rollo, pp. 53-54).

Under Section 23, Rule 14 of the Rules of Court, the defendant's voluntary appearance in the action shall be equivalent to
service. Thus, under this principle, it has been consistently held by the Supreme Court that the defect of summons is
cured by the voluntary appearance of the defendant. (Infante v. Toledo and Lanting, 44 Phil. 834 [1918]; Aguilos v.
Sepulvede, 53 SCRA 274 [1973]; J.M. Tuazon & Co. v. Estabillo, 62 SCRA 1; Castro v. Cebu Portland Cement
Co., supra).

The Court of Appeals is however of the view that from all the actions and steps taken by the appellant no presumption can
arise that he voluntarily submitted himself to the jurisdiction of the Court. In fact according to said Court, all of these
actions taken by the appellant are geared and mustered towards contesting the court's jurisdiction over his person, or of
attacking the validity of the judgment on jurisdictional grounds. (Decision, CA, G.R. No. 65287-R; Rollo, p. 31).

It will be noted however, that the Notice of Appeal (Rollo, p. 38) unmistakably indicates the reason for the appeal, which
reads:

2. That, the herein defendant is not contented with the aforesaid Decision for it is contrary to the evidence
and the law and the award of damages is so excessively unsupported by any evidence to warrant the
same; hence, he is appealing said Decision to the Hon. Court of Appeals, Manila, both on questions of
facts and law.

As clearly shown in the foregoing, the above-stated conclusion of the Court of Appeals has evidently no basis.

Of equal importance is the question: if the defendant in the Regional Trial Court (RTC) has been declared in default, may
he appeal the default judgment that may subsequently be rendered even if he has not  asked the RTC to set aside the
declaration of default? The answer is in the affirmative. However a distinction must be made as to the effects of such
appeal.

(a) If an appeal is made without first asking the RTC to set aside the declaration of default, and the
appellate court sets aside on said declaration, all he can get is a review of the RTC's default
judgment without the opportunity of having the higher court consider defense evidence (for the simple
reason that no evidence was even adduced by him in the RTC) (See Rule 41, sec. 2, par. 3, Rules of
Court).

(b) If upon the other hand, the defendant first asks the RTC to set aside the declaration of default (See
Rule 18, secs. 2 and 3, Rules of Court), and he is able to prevail, the declaration win be set aside, and he
will now have the opportunity to present his evidence in the RTC. Thus, even if he finally loses in the
RTC's subsequent decision, his defense can be considered, when appeal is made to the appellate
tribunal. Of course, even if the default declaration is not  set aside despite his motion for the setting aside,
he will be entitled to all notices in the court proceedings, and can file any pleading he may wish to file,
including the notice of appeal. (See Rule 13, sec. 9, Rules of Court).

Incidentally, the afore-mentioned rules apply to default declarations in the Metropolitan Trial Courts, the Municipal Trial
Courts, and the Municipal Circuit Trial Courts, for under Batas Pambansa Bilang 129, the said inferior courts will follow the
rules in the RTC. Note however that in summary proceedings, there can be no default declarations.

In the case at bar, there is no question that summons was timely issued and received by private respondent. In fact, he
never denied actual receipt of such summons but confined himself to the argument that the Sheriff should prove that
personal service was first made before resorting to substituted service,
21
This brings to the fore the question of procedural due process. In Montalban v. Maximo  (22 SCRA 1077 [1968]) the Court
ruled that "The constitutional requirement of due process exacts that the service be such as may be reasonably expected
to give the notice desired. Once the service provided by the rules reasonably accomplishes that end, the requirement of
justice is answered; the traditional notions of fair play are satisfied; due process is served."

Indeed, such construction is but fair, and in accord with substantial justice. The burden on a plaintiff is not to be enlarged
with a restrictive construction desired by the defendant. (Ibid., p. 1078).

Finally in a last ditch effort, private respondent insists that there was no valid service of summons because private
respondent is a partner and general manager in San Pedro Sawmill. Consequently the wife of private respondent to whom
summons and complaint were allegedly served not being partnership, cannot receive the same under Section 13 of Rule
14 of the Rules of Court.

It has however been settled that actions must be brought by the real parties in interest and against the persons who are
bound by the judgment obtained therein. (Salmon and Pacific Commercial Company v. Tan Cueco, 36 Phil. 557-558
[1917]).

The title of the case both in the trial court, in the Court of Appeals and in this Court shows that the partnership is not a
party. On the contrary, as previously stated private respondent himself assumed the responsibility of the accident and is
now estopped to disclaim the liabilities pertaining thereto.

From what has been discussed the following conclusions are hereby made: jurisdiction was properly acquired by the trial
court over the person of respondent thru both service of summons and voluntary appearance in court; he was therefore
properly declared in default for not having filed any answer; despite respondent's failure to file a motion to set aside the
declaration of default, he has the right to appeal the default judgment but in the appeal only the evidence of the petitioner
may be considered, respondent not having adduced any defense evidence; We agree with the findings of fact by the trial
court, the same being unrebutted.

WHEREFORE, the assailed decision and resolution of the Court of Appeals are REVERSED and SET ASIDE, and the
decision of the then Court of First Instance (now Regional Trial Court)of Nueva Ecija, Cabanatuan City in Civil Case No.
6754 "Eliseo Boticano v. Manuel Chu, Jr. and Jaime Sigua" is hereby REINSTATED. No costs.

SO ORDERED.

G.R. No. L-62781 August 19, 1988

PAN-ASIATIC TRAVEL CORP., petitioner, 

vs.
COURT OF APPEALS, HON. AMANTE S. PURISIMA, as Presiding Judge, Court of First Instance of Manila, Branch
VII, CITY SHERIFF OF MANILA, and DESTINATIONS TRAVEL PHIL., INC., respondents.

CORTES, J.:

On March 21, 1980, Destinations Travel Phil., Inc. (hereafter, DESTINATIONS) filed a complaint against Pan-Asiatic
Travel Corp. (hereafter, PAN-ASIATIC) for the refund of the price of alleged unutilized airplane tickets issued by the latter
for passengers recruited by the former, which refund allegedly totalled P48,742.33.

On June 4, 1980, DESTINATIONS filed a Motion to Declare Defendant in Default. After receipt of said Motion, PAN-
ASIATIC, by way of special appearance, filed a Motion to Dismiss for the sole purpose of objecting to the trial court's
jurisdiction over its person on the ground that it was not properly served with summons. Two days after the filing of the
Motion to Dismiss, DESTINATIONS filed on June 25, 1980 an amended complaint increasing its claim for reimbursement

22
of refunds to P103,866.35. At the hearing of said Motion to Dismiss, PAN-ASIATIC was informed of the filing of the
amended complaint; hence, it withdrew its Motion to Dismiss.

Subsequently, a copy of the amended complaint and summons were served on PAN-ASIATIC. PAN-ASIATIC filed
several motions for extension of time within which to file its answer. However, instead of filing an Answer, it filed a Motion
for Bill of Particulars which was granted by the trial court.

DESTINATIONS did not file a Bill of Particulars. Instead, on May 9, 1981, it served and filed a Motion to Admit attached
"Second Amended Complaint" which Second Amended Complaint detailed the causes of action, to wit:

a. Claim for reimbursement of refunds

for unutilized tickets (Paragraphs 5

and 6 of the Complaint) P86,459.85

b. Claim for commissions Paragraphs

and 8 of the (Complaint). 2,077.33

c. Claim for incentives (Paragraphs 9

and 10 of the Complaint) 5,868.57

d. Claim for reimbursement Paragraphs

11-17 of the Complaint) .5,868.57

Total Claims (Paragraph 18). .P103,866.35

(Should be .P100,274.32)

Said Second Amended Complaint was admitted by the trial judge in an Order dated May 28, 1981, which Order was
served on petitioner on June 9, 1981. However, no new summons was served on petitioner. On July 15, 1981
DESTINATIONS filed a Motion to Declare Defendant in Default which was granted. Then, trial was held ex parte. On
January 4, 1982 the trial court rendered judgment by default against PAN-ASIATIC, which received a copy of the decision
on January 25, 1982.

On February 24, 1982, petitioner filed its Omnibus Motion to Lift Order of Default and to Vacate Judgment by Default,
alleging that the trial court's decision was rendered without jurisdiction because petitioner was never served with
summons on the Second Amended Complaint, and that it was deprived of its day in court on account of fraud, accident,
mistake and/or excusable negligence. The motion was denied by the trial judge in an Order dated March 31, 1982. A copy
of the Order was served on petitioner on April 2, 1982. On the same date, April 2, 1982, PAN-ASIATIC filed a Motion for
Reconsideration of the Order of March 31. While the Motion for Reconsideration was pending, petitioner filed on April 30,
1982 its notice of appeal, appeal bond and record on appeal, and at the same time withdrew its Motion for
Reconsideration which withdrawal was granted by the trial court.

On May 19, 1982, DESTINATIONS filed a Motion for Execution which the trial court granted on June 15, 1982.
Meanwhile, the appeal of PAN-ASIATIC, was Dismissed on the ground that the Decision of January 4, 1982 had become
final and executory and that the appeal was filed beyond the reglementary period.

On July 7, 1982, PAN-ASIATIC filed a petition for certiorari and mandamus before the Court of Appeals, alleging that the
trial court acted without jurisdiction in dismissing the appeal and in issuing the writ of execution. The appellate tribunal
dismissed the petition. Hence, this present action to which this Court gave due course on November 23, 1983.

The parties present the following issues for resolution by the Court:

23
I

WHETHER OR NOT THE TRIAL COURT HAD JURISDICTION OVER THE PERSON OF PETITIONER WHEN IT
RENDERED THE DECISION OF JANUARY 4, 1982.

II

WHETHER OR NOT PETITIONER'S APPEAL IN CIVIL CASE NO. 130608 WAS FILED WITHIN THE REGLEMENTARY
PERIOD.

1. Petitioner contends that the Second Amended Complaint introduced new causes of action not alleged in the original nor
in the first amended complaint. Hence, it is argued that new summons had to be served on petitioner, for the court to
acquire jurisdiction over its (petitioner's) person.

The Second Amended Complaint does introduce new causes of action. For while in the first amended complaint,
DESTINATIONS prayed for reimbursement of refunds for unutilized airplane tickets only, in the Second Amended
Complaint, there were claims for commissions and incentives, although the total amount of the claims was the same as
the amount claimed in the first amended complaint.

But was there need to serve new summons on PAN-ASIATIC?

In the 1923 case of Atkins, Kroll and Co. v. Domingo, [44 Phil. 681 (1924)], this Court had occasion to lay down the rule
that if the defendant had appeared in the action, service of an amended complaint (which introduces a new cause of
action) in the same manner as any other pleading or motion is sufficient, even if no new summons is served. This ruling
was reiterated in the case of Ong Peng v. Custodio [G.R. No. L-14911, March 25, 1961, 1 SCRA 780] in more categorical
terms:

If he (defendant) had not yet appeared, a new summons must be served upon him as regards the
amended complaint, otherwise the court would have no power to try the new causes of action alleged
therein, unless he had lodged an answer thereto. Simply sending a copy of the amended complaint to the
defendant by registered mail is not equivalent to service of summons in such case. However, if the
defendant had already appeared in response to the first summons, so that he was already in court when
the amended complaint was filed, then ordinary service of that pleading upon him, personally or by mail,
would be sufficient, and no new summons need be served upon him.

In the instant case, summons on the first amended complaint was properly served on PAN-ASIATIC. After which, the
company filed several motions for extension of time within which to file responsive pleading, and then a Motion for Bill of
Particulars, all of which motions were granted by the trial court. With the filing of these motions, PAN-ASIATIC had
effectively appeared in the case and voluntarily submitted itself to the jurisdiction of the court. Hence, no new summons
on the Second Amended Complaint was necessary, ordinary service being sufficient.

In cases where a complaint is amended, the Rules of Court provide for the period within which the defendant must answer
thus:

SEC. 3. Answer to amended complaint.—If the complaint is amended, the time fixed for the filing and
service of the answer shall, unless otherwise ordered, run from notice of the order admitting the amended
complaint. An answer filed before the amendment shall stand as an answer to the amended complaint,
unless a new answer is filed within ten (10) days from notice of service as herein provided.

There is no question that PAN-ASIATIC was properly served with a copy of the Second Amended Complaint and that on
June 9, 1981, it received a copy of the Order admitting said Second Amended Complaint. Since it failed to serve and file
its Answer within fifteen (15) days from June 9, 1981, the trial court was correct in declaring the company in default, in
holding trial ex parte, and in eventually rendering judgment by default.

2. Anent the second issue, petitioner contends that its Omnibus Motion to Lift Order of Default and to Vacate Judgment by
Default is in the nature of a Petition for Relief under Rule 38. Hence, the Order denying the Omnibus Motion which was
received by petitioner on April 2, 1982, is itself appealable. PAN-ASIATIC thus argues that it had thirty (30) days from

24
April 2, 1982 within which to appeal said Order. Since it filed its notice of appeal, appeal bond and record on appeal on
April 30, 1982, then, it is claimed, the appeal was perfected on time.

Petitioner's premise is incorrect. The Omnibus Motion to Lift Order of Default and to Vacate Judgment is in the nature of a
Motion for New Trial under Rule 37, and-not a Petition for Relief under Rule 38.

Be it recalled that a copy of the Judgment by Default was received by PAN-ASIATIC on January 25, 1982. The Omnibus
Motion was filed on February 24,1982, which was within the period to appeal. Since the motion was filed before the
decision became final, it could not be a Petition for Relief under Rule 38, but a Motion for New Trial.

... It is a well-known rule that (a petition for relief under Rule 38) may be filed only when the order or
judgment from which it is sought has already become final and executory (Veluz vs. J.P. of Sariaya, 42
Phil. 557; Anuran vs. Aquino, 38 Phil. 29; Quirino vs. PNB, 101 Phil. 705; 54 Off. Gaz. [14] 4248), so that
as long as the judgment against which relief is sought has not yet become final, the petition aforesaid is
not available as a remedy. Instead, the aggrieved party may file a motion for new trial, under Rule 37 in
courts of first instance, and under section 16, Rule 4, in inferior courts, in order that the court may correct
any errors, mistakes or injustices committed in its judgment. [Punzalan v. Papica, et al., 107 Phil. 246
(1960).]

Since the Omnibus Motion is in the nature of a Motion for New Trial, the Order denying said motion is NOT itself
appealable. However, the time during which the motion was pending must be deducted from the thirty-day appeal period.
Pursuant to section 3, Rule 41 which reads:

SEC. 3. How appeal is taken.—Appeal may be taken by serving upon the adverse party and filing with the
trial court within thirty (30) days from notice of order or judgment, a notice of appeal, an appeal bond, and
a record on appeal. The time during which a motion to set aside thejudgment or order or for a new trial
has been pending shall be deducted, unless such motion fails to satisfy the requirements of Rule 37.

But where such a motion has been filed during office hours of the last day of the period herein provided,
the appeal must be perfected within the day following that in which the party appealing received notice of
the denial of said motion.

From January 25, 1982 (the date when PAN-ASIATIC received a copy of the Judgment by Default) to February 24, 1982
(the date when the Omnibus Motion was filed) is twenty-nine days. Petitioner therefore had one more day from April 2,
1982 (the day when PAN-ASIATIC received a copy of the Order denying the Omnibus Motion), within which to appeal.
Instead of appealing, however, petitioner filed on the same day, April 2, 1982 a motion for reconsideration of the Order,
only to withdraw it on April 30, 1982, as it filed its notice of appeal, appeal bond and record on appeal.

Since the motion for reconsideration was withdrawn, then it is as if no motion for reconsideration was ever filed. Thus, the
one day remaining period remained unchanged. Clearly, therefore, the appeal interposed on April 30, 1982 was filed out
of time.

WHEREFORE, the petition is hereby DISMISSED. Costs against the petitioner.

SO ORDERED.

G.R. No. 149380            July 3, 2002

FEDERICO S. SANDOVAL II, Petitioner, 

vs.
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL (HRET) and AURORA ROSARIO A. ORETA,Respondents.

25
BELLOSILLO, J.:

Was substituted service of summons validly effected on herein petitioner Federico S. Sandoval II in the election protest
filed by herein respondent Aurora Rosario A. Oreta before the House of Representatives Electoral Tribunal (HRET)? This
is the only issue for resolution in the instant Petition for Certiorari with Prayer for Temporary Restraining Order and/or
Preliminary Injunction under Rule 65 of the 1997 Rules of Civil Procedure assailing HRET Resolutions Nos. 01-081 dated
12 July 2001 and 01-118 dated 9 August 2001.

Petitioner Sandoval and respondent Oreta were candidates for the lone congressional district of Malabon-Navotas during
the 14 May 2001 national elections. The canvass of the election returns yielded ninety two thousand and sixty-two
(92,062) votes for petitioner while respondent obtained seventy two thousand eight hundred sixty-two (72,862) votes, 1 or a
difference of nineteen thousand two hundred (19,200) votes. On 22 May 2001 petitioner was proclaimed duly elected
representative by the District Board of Canvassers of Malabon-Navotas. After taking his oath of office, he assumed the
post at noon of 30 June 2001.2

On 1 June 2001 respondent Oreta filed with HRET an election protest against petitioner, docketed as HRET Case No. 01-
027. The protest assailed the alleged electoral frauds and anomalies in one thousand three hundred eight (1,308)
precincts of the Malabon-Navotas District.3 On 4 June 2001 HRET issued the corresponding summons for service upon
petitioner.4 On 7 June 2001 HRET Process Server Pacifico Lim served the summons by substituted service upon a certain
Gene Maga who signed the process server’s copy of the summons and indicated thereon his position as
"maintenance" along with the date and time of his receipt thereof as 7 June 2001 at 1:25 p.m. 5 The pro-forma affidavit of
service executed by the process server a day after service of the summons stated –

That on 6/7/01 I personally served the following document to counsels and parties at their respective addresses.
DOCUMENT – Summons
HRET CASE NO. – 01-027
PARTY/COUNSEL – Rep. Federico S. Sandoval
ADDRESS – No. 992 M. Naval St., Navotas, M.M.
RECEIVED BY – Gene Maga
POSITION – Maintenance6

On 12 July 2001 HRET issued Resolution No. 01-081  which took note of petitioner Sandoval’s failure to file an answer to
the election protest within ten (10) days from date of service of the summons on 7 June 2001 and entered in his behalf a
general denial of the allegations set forth in the protest.7 The HRET also ordered the parties to proceed to preliminary
conference.8 On 18 July 2001 the HRET ordered both petitioner and respondent to file their respective preliminary
conference briefs.9 Petitioner received the order on 20 July 2001 as shown by the rubber stamp bearing his name and his
district office in Navotas and indicating the time and date of receipt as well as the person with corresponding position, i.e.,
administrative staff, who received the order.10 Initially, on 1 August 2001, it was only respondent Oreta who filed the
required preliminary conference brief.11

On 6 August 2001, instead of filing a preliminary conference brief, petitioner moved for reconsideration of Resolution No.
01-081 and prayed for the admission of his answer with counter-protest. 12 He argued that the substituted service of
summons upon him was improperly effected upon a maintenance man Gene Maga who was "neither a regular employee
nor responsible officer at [petitioner’s] office."13 In Resolution No. 01-118, the HRET denied reconsideration of the assailed
resolution and admission of petitioner’s answer with counter-protest.14

On 30 August 2001 petitioner Sandoval filed the instant petition with prayer for temporary restraining order and
preliminary injunction questioning Resolutions Nos. 01-081 and 01-118 and assailing the HRET’s jurisdiction over his
person. In due time, we denied the plea for injunctive writs. 15 Petitioner was constrained to file his preliminary conference
brief ad cautelam and to attend the preliminary conference on 18 October 2001, which had been postponed several times
upon his request.

On 29 October 2001 respondent Oreta filed her Comment to the instant petition. On 3 January 2002 the Office of the
Solicitor General filed a Manifestation and Motion In Lieu of Comment. The Solicitor General found that the substituted
service of summons upon petitioner was faulty and thus recommended favorable action on the petition. On 12 February
2002 HRET also submitted a Manifestation and Motion In lieu of Comment manifesting that as a nominal party in the
instant case it was not filing a "separate comment" from the Solicitor General’s pleading.

26
We agree with the Solicitor General. Preliminarily, we note the established rule vesting jurisdiction in this Court over the
instant petition for certiorari. While the Constitution provides that the HRET shall be the sole judge of all contests relating
to the elections, returns and qualifications of members of Congress,16 this regime however does not bar this Court from
entertaining petitions where the threshold of legitimate review is breached. Indeed, it is well-settled that judicial guidance
is appropriate where jurisdictional issues are involved or charges of grave abuse of discretion are presented in order that
we may vindicate established claims of denial of due process or correct veritable abuses of discretion so grave or glaring
that no less than the Constitution itself calls for remedial action.17

That this Court may very well inquire into jurisdictional issues concerning the HRET may be inferred from Sec. 1, Art. VIII,
of the Constitution which has expanded judicial power to include the determination of "whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government". Previously, we have taken cognizance of certiorari proceedings where the rules of procedure of the HRET,
as in the instant case, were involved. Garcia v. Ang Ping18 involved the requirement of cash deposit in addition to filing
fees under Rule 32 of the 1998 HRET Rules. In Loyola v. HRET19  we explained the import of a general denial under Rule
27 of the Revised Rules of the House of Representatives Electoral Tribunal. Lazatin v. HRET 20 affirmed the power of the
HRET to set its own prescriptive periods for filing election protests. We explored in Arroyo v. HRET21 the suppletory
applicability of the rules of evidence to the HRET rules to adjudge the correct number of votes for each of the two (2)
competing congressional candidates.

The instant petition is intricately related to the election protest filed by respondent Oreta with the HRET where the integrity
of the election proceedings in one thousand three hundred and eight (1,308) precincts of the Malabon-Navotas
congressional district is attacked as having been grossly manipulated to distort the people's will. This is a serious charge
which if true would taint the assumption of petitioner as congressman of this district. In view of the delicate nature and the
gravity of the charge, the observance of the HRET Rules of Procedure, in conjunction with our own Rules of Court, must
be taken seriously. Indubitably these rules affect not only the inherent fairness of the proceedings below, a matter of due
process, but equally important, influence the speedy and orderly determination of the true will of the electorate, our
democratic ideal.

The propriety of the substituted service of summons upon petitioner Sandoval is therefore no less pivotal, for upon it
depends not simply the jurisdiction of the HRET over the person of petitioner but also the breadth of fairness of the
proceedings therein, where the opportunity to be heard on the grave accusations against him and more significantly on his
own counter-protest is properly withheld or compulsorily observed. Compliance with the rules on the service of summons
is both a concern of jurisdiction as it is of due process. 22 Petitioner should have been given by public respondent a fair
chance to defend the legitimacy of his lead of nineteen thousand two hundred (19,200) votes over respondent Oreta and
dispel any cloud on his election.

The matter of serving summons is governed by the 1997 Rules of Civil Procedure which applies suppletorily to
the Revised Rules of the House of Representatives Electoral Tribunal through its Rule 80.23 Sections 6 and 7 of Rule 14 of
the 1997 Rules of Civil Procedure provide -

Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy
thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.

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

It is well-established that summons upon a respondent or a defendant (i.e., petitioner herein) must be served by handing a
copy thereof to him in person or, if he refuses to receive it, by tendering it to him. Personal service of summons most
effectively ensures that the notice desired under the constitutional requirement of due process is accomplished. If
however efforts to find him personally would make prompt service impossible, service may be completed by substituted
service, i.e., by leaving copies of the summons at his dwelling house or residence with some person of suitable age and
discretion then residing therein or by leaving the copies at his office or regular place of business with some competent
person in charge thereof.

Substituted service derogates the regular method of personal service. It is an extraordinary method since it seeks to bind
the respondent or the defendant to the consequences of a suit even though notice of such action is served not upon him
but upon another whom the law could only presume would notify him of the pending proceedings. As safeguard measures
for this drastic manner of bringing in a person to answer for a claim, it is required that statutory restrictions for substituted
27
service must be strictly, faithfully and fully observed.24 In our jurisdiction, for service of summons to be valid, it is
necessary first to establish the following circumstances, i.e., (a) impossibility of service of summons within a reasonable
time, (b) efforts exerted to locate the petitioners and, (c) service upon a person of sufficient age and discretion residing
therein or some competent person in charge of his office or regular place of business. It is also essential that the pertinent
facts proving these circumstances be stated in the proof of service or officer's return itself and only under exceptional
terms may they be proved by evidence aliunde.25 Failure to comply with this rule renders absolutely void the substituted
service along with the proceedings taken thereafter for lack of jurisdiction over the person of the defendant or the
respondent.26

We find no merit in respondent Oreta's austere argument that personal service need not be exhausted before substituted
service may be used since time in election protest cases is of the essence. Precisely, time in election protest cases is very
critical so all efforts must be realized to serve the summons and a copy of the election protest by the means most likely to
reach the protestee. No speedier method could achieve this purpose than by personal service thereof. As already stated,
the preferential rule regarding service of summons found in the Rules of Court applies suppletorily to the Revised Rules of
the House of Representatives Electoral Tribunal.27 Hence, as regards the hierarchy in the service of summons, there
ought to be no rational basis for distinguishing between regular court cases and election protest cases pending before the
HRET.

In affirming the substituted service of summons and its jurisdiction over the person of petitioner Sandoval and rejecting
admission of his answer with counter-protest, the HRET rationalized -

Based on the records of the case, summons was received by a Gene Maga of the Maintenance, District Office on
June 7, 2001 at 1:25 p.m. On July 27, 2001, an Affidavit of Service, attached to the Tribunal’s receiving copy of
the summons, was jointly executed by Process Server Pacifico Lim and Accounting Clerk Aurora Napolis. This
Affidavit of Service states that Pacifico Lim found a certain Gene Maga at Protestee’s district office who identified
himself as a member of the staff of Protestee and thus, Pacifico Lim left the summons with him (Maga). This
Affidavit likewise stated that after Pacifico Lim left the Tribunal premises to serve the summons to Protestee,
Aurora Napolis talked to Primitivo P. Reyes, a congressional staff of Protestee’s father, Rep. Vicente A. Sandoval,
who came to the HRET and who assured that there was somebody at Protestee’s district office who could receive
the summons. On June 16, 2001 or on the 9th day from June 7, 2001, the Chief of Staff of Protestee at the House
of Representatives inquired by telephone with the Office of the Secretary of the Tribunal as to the last day for
Protestee to file his answer x x x x There was valid service of summons effected on Protestee. Pacifico Lim
attested to the fact that he found Gene Maga at Protestee’s district office during office hours, i.e., 1:25 p.m., who
presented himself as Protestee’s staff at said office. The tribunal finds no fault on the part of its process server in
effecting substituted service through Gene Maga.28

We seriously disagree. In the first place, the conclusions relied upon by HRET are nowhere stated in the process server's
affidavit of service. The record will show that the affidavit of service, which is dated 8 June 2001 and not 27 July 2001 as
above-quoted, gives only barren details, such as the date of receipt and the position of the person receiving the
summons. The HRET findings were instead based on the 27 July 2001 joint affidavit of Process Server Pacifico Lim and
Accounting Clerk Aurora Napolis executed long after the summons was served on 7 June 2001. The joint affidavit is
clearly not the officer's return referred to in the rules on substituted service of summons but a specie of
evidence aliunde generally inadmissible to prove compliance with the requirements of substituted service unless under
exceptional circumstances, which were nowhere in this case.

It is truly unfortunate that the purported substituted service of summons upon petitioner Sandoval was irregularly
executed. Except for the time and place of service and the signature of the "maintenance" man who received the
summons, there is absolutely nothing in the process server's affidavit of service indicating the impossibility of personal
service of summons upon petitioner within a reasonable time. We can take judicial notice of the fact that petitioner is a
very visible and active member of Congress such that to effect personal service upon him, all it would have taken the
process server was a few hours more of a little extra work. Regrettably, the affidavit of service, indeed the entire record of
this case, does not specify the efforts exerted to serve the summons personally upon petitioner. Upon this ground alone,
the assailed service of summons should already fail miserably.

Moreover, we do not find in the record, much less in the affidavit of service executed by the process server, that the
summons and a copy of the election protest were served on a competent person in charge of petitioner's office. It must be
emphasized that Gene Maga, the recipient of the summons, was merely a "maintenance" man who offered his services
not only to petitioner but to anyone who was so minded to hire his assistance. His occupation as a freelance service
contractor, not as employee of petitioner Sandoval, is very clear not only from the assertion of petitioner in his motion for

28
reconsideration of Resolution No. 01-081 that Maga was "neither a regular employee nor responsible officer at
[petitioner’s] office"29 but also from Maga's own adverse admission under oath -

1. Ako po ay isang maintenance man na naglilinis at nag-rerepair ng mga bagay-bagay sa mga opisina at bahay
ng kung sino man ang mag-utos at umupa sa aking serbisyo.

2. Noong June 7, 2001,ako po ay napagutusan ni Gng. Jeannie N. Sandoval, asawa ni Cong. Federico S.
Sandoval II, na linisan ang "district office" ni Cong. Sandoval sa M. Naval St., San Jose, Navotas, Metro Manila.
Si Gng. Sandoval ay regular kong pinagsisilbihan at gumagawa para sa kanya ng kung anumang ipag-utos niya
sa akin.30

It bears emphasis that these assertions were not rebutted, despite the opportunity to do so, in a separate comment we
required the HRET to file, as a result of its decision to submit instead a Manifestation and Motion In Lieu of Comment.
Clearly, the fact that Maga was not an employee of petitioner as Representative of the Malabon-Navotas Congressional
District but an independent contractor for odd maintenance jobs deserves credence since it is petitioner and Maga
themselves who would be in the best position to verify the latter's professional status. It follows from this that Maga, not
being an employee thereof, would be an incompetent person to receive the summons in petitioner's behalf.

Granting that Gene Maga was an employee of petitioner at his district office, an assumption that we stress is contrary to
the evidence on record, still it cannot be said that he was qualified to receive the summons. To be a "competent" person
to receive the summons means that he should be "duly qualified" and "having sufficient capacity, ability or
authority."31 In Keister v. Navarro32  we set out the qualifications of the persons designated by the Rules of Court to whom
copies of the process may be left: "The rule presupposes that such a relation of confidence exists between the person
with whom the copy is left and the defendant and, therefore, assumes that such person will deliver the process to
defendant or in some way give him notice thereof."

The mere fact that Maga allegedly identified himself to the process server as "member of the staff of [petitioner] Rep.
Federico S. Sandoval II,"33 does not ipso facto render him competent to receive the summons. By this alleged statement,
Maga did not communicate any assurance that he could take delivery of the summons effectively to justify the process
server to assume such authority. Even in the affidavit of service, which should have proved first hand the pertinent facts
justifying substituted service, Maga's indisputable representation was only that of a "maintenance" man, an affirmation
which should have immediately alerted the process server to the fact that he had no authority to receive the summons for
petitioner Sandoval. There is certainly nothing contained in the record to demonstrate that he was the "receiving
(employee?) of said office, which sufficiently conveys that he was tasked as he is to receive for the office ," which would
have given rise to the presumption that the process server left or tendered the summons on a duly qualified person.34

As "maintenance" man, it is reasonable to assume that Gene Maga was not tasked to deal with or handle documents
flowing in and out of petitioner's office. He may have been very efficient in tinkering with the light bulbs of the district office
or plugging leaking water pipes, but it is also reasonable for anyone to assume, especially the process server who must
have been oriented about the requirements of substituted service, that petitioner could not have reposed such confidence
in Maga to accept official documents for the district office or to turn over as a matter of course documents that he would
have received. Clearly, in being assigned to do maintenance work and by ordinary human understanding, Maga could not
be presumed to appreciate the importance of the papers delivered to him. With due diligence which the process server
ought to have exercised, he would not have been oblivious to this delineation of tasks.

Moreover, by virtue of his functions and presumed expertise, the process server could have easily discerned the absence
of authority on the part of Maga to receive documents from the very informal manner by which he received the summons,
i.e., he merely wrote his name and signed the receiving copy of the summons and indicated therein his humble position.
This unceremonious receipt of the important summons is in stark contrast with the manner by which the same process
server secured the proof of receipt by petitioner's district office of the HRET Order  of 18 July 2001 which was done by
rubber stamp bearing the name of petitioner and his district office in Navotas and indicating the time and date of receipt as
well as the person with corresponding position, i.e., administrative staff, who received the order.

Not only was Gene Maga an incompetent person to receive the summons, he was also, more plainly, not in charge of
petitioner’s office. To be "in charge" means to have "care and custody of, under control of, or entrusted to the
management or direction of."35 Applied to the instant case, Maga had obviously no control and management of the district
office as noticeably shown by his occupation as "maintenance" man. While it is not necessary that the person in charge of
a defendant's regular place of business be specially authorized to receive summons, it being enough that he appears to
be in charge,36 we do not think that anyone, more so the process server, would be led to believe that Maga has been
entrusted the management of office records to ensure the smooth flow of important documents therein. As in Far
29
Corporation v. Francisco,37 no one would think that Maga was so "integrated" in the responsibilities and duties of
petitioner as Congressman for Malabon-Navotas to make it a priori supposable that he would realize and know what
should be done with any legal papers served on him. We would not dare establish a precedent whereby any employee or
anyone who pretends to be an employee, although found in the office of his employer, could validly receive summons for
him.

We also do not find any evidence aliunde to prove the requisites of a valid substituted service of summons. The process
server or any other responsible HRET employee did not present evidence confirming the necessity for such method of
serving the summons nor exhibiting the authority of Maga, the "maintenance" man, to receive the document. There is also
nothing in this case to prove, under the rules of evidence consistently relied upon by HRET,38 that anyone with whom
petitioner had a relationship of confidence knew of the outstanding summons and pending election protest to have
ensured petitioner's receipt or at least notification thereof.

On its face, there is no evidentiary value to the allegation that an HRET employee, Accounting Clerk Aurora Napolis, was
assured by the staff39 of petitioner's father, Congressman Vicente A. Sandoval, that someone at petitioner's district office
would be receiving the summons.40 In the first place, the process server could not have relied upon this purported
assurance since it was not made nor communicated subsequently to him while in the process of serving the
summons.41 More importantly, the record is bereft of any basis to show that the staff of Congressman Vicente A. Sandoval
was petitioner's own "speaking agent"42 who had knowledge and authority to guarantee receipt of the summons by a
competent person in charge of his district office.

Moreover, we cannot give weight to the allegation appearing in the assailed Resolution No. 01-118 that a person who
supposedly identified himself as the Chief of Staff of petitioner Sandoval called up the Office of the Secretary of the HRET
to inquire about the last day for filing petitioner's answer to the election protest, 43 a claim apparently intended to establish
that petitioner had notice of the summons and the election protest against him. For one, neither the 27 July 2001 joint
affidavit of Process Server Pacifico Lim and Accounting Clerk Aurora Napolis, which the HRET mistook to be the affidavit
of service, nor the 24 August 2001 supplemental affidavit of Process Server Pacifico Lim 44 made any reference to this
supposed telephone call. It further appears that no document on record discloses the alleged employee at the HRET
Office of the Secretary with whom the purported Chief of Staff had talked on the phone. At any rate, the Chief of Staff of
petitioner has under oath denied having placed such call.45

It must also be stressed that, as a matter of reliability and trustworthiness, a telephone conversation must first be
authenticated before it can even be received in evidence. To this end, it is critical that the person with whom the witness
was conversing on the phone is first satisfactorily identified, by voice recognition or any other means, as the Chief of
Staff.46 In the instant case, there is no evidence to conclude that the person who called up the HRET Office of the
Secretary was the Chief of Staff of petitioner Sandoval except for the unverified and hearsay identification allegedly made
by the caller himself/herself. Worst, the record does not even divulge the alleged employee at the HRET Office of the
Secretary from whom the purported caller asked about the relevant matter.

Lastly, there is no proof that petitioner actually received the summons as well as a copy of the election protest which
would have otherwise satisfied the purpose of giving notice of the pending suit. What we can infer from the record is his
knowledge of the HRET Order  of 18 July 2001, copy received by his staff on 20 July 2001, requiring him to file his
preliminary conference brief. On the other hand, we certainly cannot presume his knowledge of the election protest in the
absence of a reasonable basis for so doing.

In the absence of even the barest compliance with the procedure for substituted service of summons outlined in the Rules
of Court, the presumption of regularity in the performance of public functions does not apply.47 It is unmistakable that the
process server hastily served the summons upon petitioner Sandoval by substituted service without first attempting to
personally serve the process. This violates the rule granting absolute preference to personal service of summons and,
only secondarily, when the defendant cannot be promptly served in person and after compliance with stringent formal and
substantive requirements, permitting resort to substituted service. In light of the defective and irregular substituted service
of summons, the HRET did not acquire jurisdiction over the person of petitioner and consequently the period within which
to file his answer with counter-protest did not start to run.

Under the circumstances, petitioner was thus justified in promptly filing his motion for reconsideration of Resolution No.
01-081 and in praying without delay for admission of his answer with counter-protest on 6 August 2001, barely seventeen
(17) days from receipt of the HRET Order, which was what presumably called his attention with certainty as to the
pendency of the election protest. Clearly, there was no delay in filing the motion. At any rate, it is enough to say that
where the ground invoked as basis for affirmative relief is lack of jurisdiction, the appropriate pleading or motion may be

30
filed anytime before it is barred by estoppel or laches.48 Needless to state, neither of these equitable principles obtains in
the instant case to bar reconsideration of the assailed HRET resolutions.

In granting the petition, we note that petitioner Sandoval is not seeking the annulment of the proceedings a quo or any
part thereof. On the contrary, all he is asking for is the admission of his answer with counter-protest to the election protest
filed by respondent Oreta. No legitimate policy considerations, much less legal obstacles, exist to deny him this relief. The
result would have been different if he had asked for the dismissal of the HRET proceedings for, in that event, the prayer
would be denied and the proceedings would continue although the wrongful substituted service would be immediately
corrected by serving an alias summons upon the defendant.49

Finally, the only benefit which petitioner will reap from the admission of his answer with counter-protest is his standing to
prove his affirmative defenses and to present evidence in support of his own allegations of fraud. To be sure, the relief
does not grant him the right to require respondent Oreta as protestant before the HRET to prove the material facts
necessary to her cause of action - he already possesses this right when a general denial was entered in his
behalf.50 Balancing thus what he stands to gain from the instant petition and any inconvenience that a party may suffer
therefrom, allowing him to file, and for the HRET to admit, his answer with counter-protest upon a clear jurisdictional
ground, certainly, does not exact any momentous adjustment of the proceedings before the HRET. Be that as it may, the
correction of jurisdictional errors is an established function of the writ of certiorari and more imperatively, our mandate
under the Constitution.

WHEREFORE, the instant Petition for Certiorari is GRANTED. Resolutions Nos. 01-081  and 01-118 of respondent House
of Representatives Electoral Tribunal (HRET) are MODIFIED to the effect that the Answer with Counter-Protest of
petitioner Federico S. Sandoval II is admitted to form part of the record of the election protest filed by respondent Aurora
Rosario A. Oreta and to govern, in a manner appropriate under the Revised Rules of the House of Representatives
Electoral Tribunal, the proceedings to be taken hereafter, including but not limited to the right to present evidence on his
counter-protest. No pronouncement as to costs.

SO ORDERED.

G.R. No. 152776             October 8, 2003

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

DECISION

PANGANIBAN, J.:

In the instant case, the receipt of the summons by the legal secretary of the defendants -- respondents herein -- is
deemed proper, because they admit the actual receipt thereof, but merely question the manner of service. Moreover,
when they asked for affirmative reliefs in several motions and thereby submitted themselves to the jurisdiction of the trial
court, whatever defects the service of summons may have had were cured.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to nullify the March 26, 2002 Decision 2 of
the Court of Appeals (CA) in CA-GR SP No. 66562. The assailed Decision disposed thus:

"WHEREFORE, the [D]ecision dated 23 August 2001 is hereby NULLIFIED and SET ASIDE and Civil Case No. OZC-00-
13 ordered DISMISSED, without prejudice. Costs against [petitioner]."3

31
The Antecedents

The antecedents of the case were narrated by the CA as follows:

"On 09 March 2000, [Petitioner Henry Oaminal] filed a complaint for collection against [Respondents Pablito and
Guia Castillo] with the Regional Trial Court [RTC] of Ozamis City (Branch 35) x x x. The complaint prayed that
[respondents] be ordered to pay ₱1,500,000.00 by way of liquidated damages and ₱150,000.00 as attorney's
fees.

"On 30 May 2000, the summons together with the complaint was served upon Ester Fraginal, secretary of
[Respondent] Mrs. Castillo.

"On 06 June 2000, [respondents] filed their 'Urgent Motion to Declare Service of Summons Improper and Legally
Defective' alleging that the Sheriff's Return has failed to comply with Section (1), Rule 14 of the Rules of Court or
substituted service of summons.

"The scheduled hearing of the Motion on 14 July 2000 did not take place because x x x [RTC] Judge [Felipe
Zapatos] took a leave of absence from July 17 to 19, 2000[;] hence[,] it was re-scheduled to 16 August 2000.

"On 19 October 2000, [petitioner] filed an Omnibus Motion to Declare [Respondents] in Default and to Render
Judgment because no answer [was] filed by [the latter].

"[Respondents] forthwith filed the following:

'a. Omnibus Motion Ad Cautelam to Admit Motion to Dismiss and Answer with Compulsory
Counter-claim dated 9 November 2000 which was set for hearing on 27 November 2000 at 8:30
a.m.;

'b. x x x Urgent Motion to Dismiss also dated 9 November 2000 which was also set for hearing on
27 November 2000 at 8:30 a.m. The said motion was anchored on the premise that x x x
[petitioner's] complaint was barred by improper venue and litis pendentia; and

'c. Answer with Compulsory Counter-Claim dated 9 November 2000.'

"On 16 November 2000, x x x [the] judge denied [respondents'] Motion to Dismiss, admitted [their] Answer, and
set the pre-trial [on] 17 January 2001.

"On 24 November 2000, [respondents] filed an 'Urgent Motion to Inhibit Ad Cautelam' against Judge [Zapatos], 'in
the higher interest of substantial justice and the [r]ule of [l]aw x x x.'

"On 27 December 2000, Judge [Zapatos] denied the motion and transferred the January 17th pre-trial to 19
February 2001.

"[Respondents] filed an 'Urgent Omnibus Motion for Reconsideration with the Accompanying Plea to Reset' dated
22 January 2001. The motion requested that it be set for consideration and approval by the trial court on 05
February 2001 at 8:30 a.m. Said motion in the main prayed 'that an order be issued by the Honorable Court
reconsidering its adverse order dated 16 November 2000, by dismissing the case at bar on the ground of
improper venue or in the alternative, that the Honorable Presiding Judge reconsider and set aside its order dated
December 27, 2000 by inhibiting himself from the case at hand.'

"On 22 May 2001, Judge [Zapatos] ruled that [respondents'] 'Omnibus Motion Ad Cautelam to Admit Motion to
Dismiss and Answer with Counterclaim' was filed outside the period to file answer, hence he (1) denied the
Motion to Admit Motion to Dismiss and Answer; (2) declared [respondents] in default; and (3) ordered [petitioner]
to present evidence ex-parte within ten days from receipt of [the] order, [failing] which, the case will be dismissed.

"On 23 August 2001, Judge [Zapatos] rendered a decision on the merits, with the following dispositi[on]:

32
 'WHEREFORE, finding by preponderance of evidence, judgment is hereby rendered in favor of
[petitioner], ordering [respondents] to pay x x x:

1) ₱1,500,000.00 by way of [l]iquidated [d]amages;

2) ₱20,000.00 as attorney's fees and litigation expenses; and

3) x x x cost[s].'"4

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

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

Ruling of the Court of Appeals

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

Hence, this Petition.5

Issues

Petitioner submits the following issues for our consideration:

"I

Whether respondents' recourse to a Petition for Certiorari [was] appropriate when the remedy of appeal was available?

"II

Whether the Decision of the trial court attained finality?

"III

Whether the Honorable Third Division of the Court of Appeals [was] correct in entertaining and in granting the Writ of
Certiorari when the facts clearly establish[ed] that not only was [an] appeal available, but x x x there were other plain,
speedy and adequate remedies in the ordinary course of law?

"IV

Whether the Honorable Third Division of the Court of Appeals had jurisdiction to nullify and set aside the Decision of the
trial court and dismiss the case?

"V

[Whether] receipt by a legal secretary of a summons [is deemed] receipt by a lawyer in contemplation of law?"6

Simply stated, the issues boil down to the following: (1) whether the Petition for certiorari before the CA was proper; and
(2) whether the trial court acquired jurisdiction over respondents.

33
Since the Petition for certiorari was granted by the CA based on the trial court's alleged lack of jurisdiction over
respondents, the second issue shall be discussed ahead of the former.

The Court's Ruling

The present Petition is partly meritorious.

First Issue:

Jurisdiction over Defendants

Petitioner contends that the trial court validly acquired jurisdiction over the persons of respondents, because the latter
never denied that they had actually received the summons through their secretary. Neither did they dispute her
competence to receive it.

Moreover, he argues that respondents automatically submitted themselves to the jurisdiction of the trial court when they
filed, on November 9, 2000, an Omnibus Motion to Dismiss or Admit Answer, a Motion to Dismiss on the grounds of
improper venue and litis pendentia, and an Answer with Counterclaim.

On the other hand, respondents insist that the substituted service of summons on them was improper. Thus, they allege
that the trial court did not have the authority to render its August 23, 2001 Decision.

We clarify.

Service of Summons

In civil cases, the trial court acquires jurisdiction over the person of the defendant either by the service of summons or by
the latter's voluntary appearance and submission to the authority of the former. Where the action is in personam and the
defendant is in the Philippines, the service of summons may be made through personal or substituted service in the
manner provided for by Sections 6 and 7 of Rule 14 of the Revised Rules of Court, which read:

"Section 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a
copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.

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

Personal service of summons is preferred over substituted service. Resort to the latter is permitted when the summons
cannot be promptly served on the defendant in person and after stringent formal and substantive requirements have been
complied with.7

For substituted service of summons to be valid, it is necessary to establish the following circumstances: (a) personal
service of summons within a reasonable time was impossible; (b) efforts were exerted to locate the party; and (c) the
summons was served upon a person of sufficient age and discretion residing at the party's residence or upon a competent
person in charge of the party's office or regular place of business. 8 It is likewise required that the pertinent facts proving
these circumstances are stated in the proof of service or officer's return.

In the present case, the Sheriff's Return9 failed to state that efforts had been made to personally serve the summons on
respondents. Neither did the Return indicate that it was impossible to do so within a reasonable time.1a\^/phi1.net It
simply stated:

"THIS IS TO CERTIFY that on the 30th day of May 2000, copies of the summons together with the complaint and
annexes attached thereto were served upon the defendants Pablito M. Castillo and Guia B. Castillo at their place
of business at No. 7, 21st Avenue, Cubao, Quezon City thru MS. ESTER FREGINAL, secretary, who is
authorized to receive such kind of process. She signed in receipt of the original as evidenced by her signature
appearing on the original summons.
34
 "That this return is submitted to inform the Honorable x x x Court that the same was duly served."10

Nonetheless, nothing in the records shows that respondents denied actual receipt of the summons through their
secretary, Ester Fraginal. Their "Urgent Motion to Declare Service of Summons Improper and Legally Defective"11did not
deny receipt thereof; it merely assailed the manner of its service. In fact, they admitted in their Motion that the "summons,
together with the complaint, was served by the Sheriff on Ester Fraginal, secretary of the defendants at No. 7, 21st
Avenue, Cubao, Quezon City on 30 May 2000."12

That the defendants' actual receipt of the summons satisfied the requirements of procedural due process had previously
been upheld by the Court thus:

"x x x [T]here is no question that summons was timely issued and received by private respondent. In fact, he
never denied actual receipt of such summons but confined himself to the argument that the Sheriff should prove
that personal service was first made before resorting to substituted service.

"This brings to the fore the question of procedural due process. In Montalban v. Maximo (22 SCRA 1077 [1968])
the Court ruled that 'The constitutional requirement of due process exacts that the service be such as may be
reasonably expected to give the notice desired. Once the service provided by the rules reasonably accomplishes
that end, the requirement of justice is answered; the traditional notions of fair play are satisfied; due process is
served.'"13

There is likewise no showing that respondents had heretofore pursued the issue of lack of jurisdiction; neither did they
reserve their right to invoke it in their subsequent pleadings. If at all, what they avoided forfeiting and waiving -- both in
their Omnibus Motion ad Cautelam to Admit Motion to Dismiss and Answer with Compulsory Counter-Claim 14 and in their
Motion to Dismiss15 -- was their right to invoke the grounds of improper venue and litis pendentia. They argued therein:

"3. x x x. To be sure, the [respondents] have already prepared a finalized draft of their [M]otion to [D]ismiss the
case at bar, based on the twin compelling grounds of 'improper venue' and [the] additional fact that 'there exists a
case between the parties involving the same transaction/s covered by the plaintiff's cause of action.' x x x;

"4. That as things now stand, the [respondents] are confronted with the dilemma of filing their [M]otion to [D]ismiss
based on the legal grounds stated above and thus avoid forfeiture and waiver of these rights as provided for by
the Rules and also file the corresponding [M]otion to [A]dmit x x x [A]nswer as mandated by the Omnibus Rule.

x x x x x x x x x"16

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

Voluntary Appearance and Submission

Assuming arguendo that the service of summons was defective, such flaw was cured and respondents are deemed to
have submitted themselves to the jurisdiction of the trial court when they filed an Omnibus Motion to Admit the Motion to
Dismiss and Answer with Counterclaim, an Answer with Counterclaim, a Motion to Inhibit, and a Motion for
Reconsideration and Plea to Reset Pre-trial. The filing of Motions seeking affirmative relief -- to admit answer, for
additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for
reconsideration -- are considered voluntary submission to the jurisdiction of the court. 18 Having invoked the trial court's
jurisdiction to secure affirmative relief, respondents cannot -- after failing to obtain the relief prayed for -- repudiate the
very same authority they have invoked.19

Second Issue:

Propriety of the Petition for Certiorari

Petitioner contends that the certiorari Petition filed by respondents before the CA was improper, because other remedies
in the ordinary course of law were available to them. Thus, he argues that the CA erred when it took cognizance of and
granted the Petition.
35
Well-settled is the rule that certiorari will lie only when a court has acted without or in excess of jurisdiction or with grave
abuse of discretion.20 As a condition for the filing of a petition for certiorari, Section 1 of Rule 65 of the Rules of Court
additionally requires that "no appeal nor any plain, speedy and adequate remedy in the ordinary course of law" must be
available.21 It is axiomatic that the availability of the right of appeal precludes recourse to the special civil action for
certiorari.22

Here, the trial court's judgment was a final Decision that disposed of the case. It was therefore a fit subject of an
appeal.23 However, instead of appealing the Decision, respondents filed a Petition for certiorari on September 11, 2001.

Be that as it may, a petition for certiorari may be treated as a petition for review under Rule 45. Such move is in
accordance with the liberal spirit pervading the Rules of Court and in the interest of substantial justice, especially (1) if the
petition was filed within the reglementary period for filing a petition for review;24 (2) errors of judgment are averred;25 and
(3) there is sufficient reason to justify the relaxation of the rules. 26 Besides, it is axiomatic that the nature of an action is
determined by the allegations of the complaint or petition and the character of the relief sought.27 The Court explained:

"x x x. It cannot x x x be claimed that this petition is being used as a substitute for appeal after that remedy has been lost
through the fault of petitioner. Moreover, stripped of allegations of 'grave abuse of discretion,' the petition actually avers
errors of judgment rather than of jurisdiction, which are the subject of a petition for review."28

The present case satisfies all the above requisites. The Petition for certiorari before the CA was filed within the
reglementary period of appeal. A review of the records shows that respondents filed their Petition on September 11, 2001
-- four days after they had received the RTC Decision. Verily, there were still 11 days to go before the lapse of the period
for filing an appeal. Aside from charging grave abuse of discretion and lack of jurisdiction, they likewise assigned as errors
the order and the judgment of default as well as the RTC's allegedly unconscionable and iniquitous award of liquidated
damages.29 We find the latter issue particularly significant, considering that the trial court awarded ₱1,500,000 as
liquidated damages without the benefit of a hearing and out of an obligation impugned by respondents because of
petitioner's failure to pay.30 Hence, there are enough reasons to treat the Petition for certiorari as a petition for review.

In view of the foregoing, we rule that the Petition effectively tolled the finality of the trial court Decision. 31Consequently, the
appellate court had jurisdiction to pass upon the assigned errors. The question that remains is whether it was correct in
setting aside the Decision and in dismissing the case.

Trial Court's Default Orders Erroneous

A review of the assailed Decision reveals that the alleged lack of jurisdiction of the trial court over the defendants therein
was the reason why the CA nullified the former's default judgment and dismissed the case without prejudice. However, we
have ruled earlier that the lower court had acquired jurisdiction over them. Given this fact, the CA erred in dismissing the
case; as a consequence, it failed to rule on the propriety of the Order and the judgment of default. To avoid circuitousness
and further delay, the Court deems it necessary to now rule on this issue.

As much as possible, suits should be decided on the merits and not on technicalities. 32 For this reason, courts have
repeatedly been admonished against default orders and judgments that lay more emphasis on procedural niceties at the
expense of substantial justice.33 Not being based upon the merits of the controversy, such issuances may indeed amount
to a considerable injustice resulting in serious consequences on the part of the defendant. Thus, it is necessary to
examine carefully the grounds upon which these orders and judgments are sought to be set aside.34 1ªvvphi1.nét

Respondents herein were declared in default by the trial court on May 22, 2001, purportedly because of their delay in filing
an answer. Its unexpected volte face came six months after it had ruled to admit their Answer on November 16, 2000, as
follows:

"That with respect to the Motion to Admit Answer, this Court is not in favor of terminating this case on the basis of
technicality for failure to answer on time, hence, as ruled in the case of Nantz v. Jugo and Cruz, 43 O.G. No. 11, p. 4620,
it was held:

'Lapses in the literal observance of a rule of procedure will be overlooked when they do not involve public policy, when
they arose from an honest mistake or unforeseen accident, when they have not prejudiced the adverse party and have not
deprived the court ot its authority. Conceived in the best traditions of practical and moral justice and common sense, the
Rules of Court frown upon hairsplitting technicalities that do not square with their liberal tendency and with the ends of
justice unless something in the nature of the factors just stated intervene. x x x'
36
"WHEREFORE, x x x in the interest of justice, the Answer of the [respondents] is hereby admitted."35

Indiana Aerospace University v. Commission on Higher Education36 held that no practical purpose was served in declaring
the defendants in default when their Answer had already been filed -- albeit after the 15-day period, but before they were
declared as such. Applying that ruling to the present case, we find that respondents were, therefore, imprudently declared
in default.1a\^/phi1.net

WHEREFORE, the Petition is hereby GRANTED IN PART, and the Decision of the Court of Appeals MODIFIED. The trial
court's Order of Default dated May 22, 2001 and Judgment of Default dated August 23, 2001 are ANNULLED, and the
case remanded to the trial court for further proceedings on the merits. No costs.

SO ORDERED.

G.R. No. 169919               September 11, 2009

B. D. LONG SPAN BUILDERS, INC., Petitioner, 

vs.
R. S. AMPELOQUIO REALTY DEVELOPMENT, INC., Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the Court of Appeals’ Decision2 dated 14 July 2005 and Resolution dated 30 September
2005 in CA-G.R. CV No. 78259. The Court of Appeals reversed the Decision3 dated 14 January 2003 of the Regional Trial
Court of Muntinlupa City, Branch 206 (RTC).

The Antecedent Facts

Petitioner B. D. Long Span Builders, Inc. and respondent R. S. Ampeloquio Realty Development, Inc. are corporations
duly organized and existing under the laws of the Republic of the Philippines.

On 31 July 1999, petitioner and respondent entered into an Agreement wherein petitioner agreed to render "rip rapping"
construction services at respondent’s Ampeloquio International Resort in Ternate, Cavite, for the contract price of ₱50
million. On the same day, the parties entered into a second Agreement for the same construction project, stipulating a
contract price of ₱30 million, hence bringing the total contract price of the project to ₱80 million. Both Agreements
required petitioner to deposit with respondent a cash bond of one percent (1%) of the contract price, to be returned to
petitioner upon completion of the project. In compliance, petitioner deposited with respondent a cash bond amounting to
₱800,000.

Respondent failed to fulfill its obligations under the Agreements, resulting in the cancellation of the project. Petitioner
demanded the return of the ₱800,000 cash bond, but respondent refused to do so. Petitioner’s legal counsel sent two (2)
demand letters dated 19 April 2002 and 10 May 2002 to respondent, but the latter still refused to return the ₱800,000
cash bond.

On 24 September 2002, petitioner (plaintiff) filed with the RTC a complaint for rescission of contract and damages against
respondent (defendant). On 17 October 2002, summons and a copy of the complaint were served on respondent, through
its staff member, Romel Dolahoy.4

37
Respondent failed to file an Answer or any responsive pleading to the complaint. Upon motion of petitioner, the RTC
issued an Order dated 29 November 2002, declaring respondent in default, and allowing petitioner to present evidence ex
parte.

The Trial Court’s Ruling

On 14 January 2003, the RTC rendered a Decision, the dispositive portion of which reads:

WHEREFORE, finding preponderance of evidence in support of the instant complaint, the same is granted.

Judgment is rendered declaring the aforesaid contracts entered into by plaintiff with defendant, both dated July 31, 1999
for the rip rapping construction project at the Ampeloquio International Resort in Ternate, Cavite, as RESCINDED.

Moreover, defendant corporation is ordered to:

1) Return the amount of ₱800,000.00 posted by the plaintiff as cash bond with legal interest accruing thereto from
the time of its demand until fully paid;

2) Pay the plaintiff the amount of ₱50,000.00 as nominal damages;

3) Pay the plaintiff the amount of ₱100,000.00 as exemplary damages;

4) Pay the plaintiff the amount of ₱50,000.00 as and by way of attorney's fees; and

5) Pay the cost of suit in the amount of ₱10,539.00.

SO ORDERED.5

The Court of Appeals’ Ruling

Upon receipt of the RTC decision, respondent filed a Notice of Appeal dated 12 February 2003 with the Court of Appeals.
After considering the pleadings filed by petitioner and respondent, the Court of Appeals rendered judgment6 which
reversed and set aside the decision of the RTC. The dispositive portion of the Court of Appeals’ Decision reads:

WHEREFORE, in view of the foregoing, the decision dated January 14, 2003 of the Regional Trial Court, Branch 206,
Muntinlupa City in Civil Case No. 02-217 is hereby REVERSED and SET ASIDE.

SO ORDERED.7

Petitioner filed a Motion for Reconsideration, but this was denied by the Court of Appeals in its Resolution of 30
September 2005.8

Hence, this appeal.

The Issue

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

The Court’s Ruling

We find the appeal without merit.

Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the other hand, jurisdiction over the
defendants in a civil case is acquired either through the service of summons upon them or through their voluntary
appearance in court and their submission to its authority.9 The service of summons is a vital and indispensable ingredient

38
of due process.10 As a rule, if defendants have not been validly summoned, the court acquires no jurisdiction over their
person, and a judgment rendered against them is null and void.11

Section 11 of Rule 14 of the 1997 Rules of Civil Procedure states:

SEC. 11. Service upon domestic private juridical entity.— When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing
partner, general manager, corporate secretary, treasurer, or in-house counsel.

As a rule, summons should be personally served on the defendant. In case of a domestic private juridical entity, the
service of summons must be made upon an officer who is named in the statute (i.e., the president, managing partner,
general manager, corporate secretary, treasurer, or in-house counsel), otherwise, the service is insufficient.12 The purpose
is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to
insure that the summons be served on a representative so integrated with the corporation that such person will know what
to do with the legal papers served on him.13 However, if the summons cannot be served on the defendant personally
within a reasonable period of time, then substituted service may be resorted to. Section 7 of Rule 14 provides:

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

Nonetheless, the impossibility of prompt personal service must be shown by stating that efforts have been made to find
the defendant personally and that such efforts have failed.14 This is necessary because substituted service is in derogation
of the usual method of service. It is a method extraordinary in character and hence may be used only as prescribed and in
the circumstances authorized by statute.15 The statutory requirements of substituted service must be followed strictly,
faithfully and fully, and any substituted service other than that authorized by statute is considered ineffective.16

In Orion Security Corporation v. Kalfam Enterprises, Inc.,17 this Court held that in case of substituted service, there should
be a report indicating that the person who received the summons in the defendant’s behalf was one with whom the
defendant had a relation of confidence ensuring that the latter would actually receive the summons.

In this case, the Return by Process Server provides:

This is to certify that:

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

Henceforth, the said Summons with the attached complaint & its annexes to Atty. Evangeline V. Tiongson, Clerk of Court
V, this Court, is respectfully returned, DULY SERVED, by substituted service.

October 17, 2002, Muntinlupa City

Angelito C. Reyes

Process Server18
Clearly, the summons was not served personally on the defendant (respondent) through any of the officers enumerated in
Section 11 of Rule 14; rather, summons was served by substituted service on the defendant’s staff member, Romel
Dolahoy. Substituted service was resorted to on the server’s first attempt at service of summons, and there was no
indication that prior efforts were made to render prompt personal service on the defendant.

Moreover, nothing on record shows that Romel Dolahoy, the staff member who received the summons in respondent’s
behalf, shared such relation of confidence ensuring that respondent would surely receive the summons. Thus, following
our ruling in Orion, we are unable to accept petitioner’s contention that service on Romel Dolahoy constituted substantial
compliance with the requirements of substituted service.1avvphi1
39
Petitioner’s contention that respondent’s filing of Notice of Appeal effectively cured any defect in the service of summons
is devoid of merit. It is well-settled that a defendant who has been declared in default has the following remedies, to wit:
(1) he may, at any time after discovery of the default but before judgment, file a motion, under oath, to set aside the order
of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable neglect, and that he
has a meritorious defense; (2) if judgment has already been rendered when he discovered the default, but before the
same has become final and executory, he may file a motion for new trial under Section 1(a) of Rule 37; (3) if he
discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2
of Rule 38; and (4) he may also appeal from the judgment rendered against him as contrary to the evidence or to the law,
even if no petition to set aside the order of default has been presented by him. 19 Thus, respondent, which had been
declared in default, may file a notice of appeal and question the validity of the trial court’s judgment without being
considered to have submitted to the trial court’s authority.

WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals’ Decision dated 14 July 2005 and Resolution
dated 30 September 2005 in CA-G.R. CV No. 78259. Let the case be REMANDED to the trial court for further
proceedings upon valid service of summons to respondent.

SO ORDERED.

G.R. No. 195619               September 5, 2012

PLANTERS DEVELOPMENT BANK, Petitioner, 

vs.
JULIE CHANDUMAL, Respondent.

DECISION

REYES, J.:

In this petition for review under Rule 45 of the Rules of Court, Planters Development Bank (PDB) questions the
Decision1 dated July 27, 2010 of the Court of Appeals (CA), as well as its Resolution 2 dated February 16, 2011, denying
the petitioner's motion for reconsideration in CA-G.R. CV No. 82861. The assailed decision nullified the Decision3 dated
May 31, 2004 of the Regional Trial Court (RTC), Las Piñas City, Branch 255 in Civil Case No. LP-99-0137.

Antecedent Facts

The instant case stemmed from a contract to sell a parcel of land, together with improvements, between BF Homes, Inc.
(BF Homes) and herein respondent Julie Chandumal (Chandumal). The property subject of the contract is located in
Talon Dos, Las Piñas City and covered by Transfer Certificate of Title No. T-10779. On February 12, 1993, BF Homes
sold to PDB all its rights, participations and interests over the contract.

Chandumal paid her monthly amortizations from December 1990 until May 1994 when she began to default in her
payments. In a Notice of Delinquency and Rescission of Contract with Demand to Vacate 4 dated July 14, 1998, PDB gave
Chandumal a period of thirty (30) days from receipt within which to settle her installment arrearages together with all its
increments; otherwise, all her rights under the contract shall be deemed extinguished and terminated and the contract
declared as rescinded. Despite demand, Chandumal still failed to settle her obligation.

On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession was filed by PDB
against Chandumal, docketed as Civil Case No. LP-99-0137. PDB alleged that despite demand, Chandumal failed and/or
refused to pay the amortizations as they fell due; hence, it caused the rescission of the contract by means of notarial act,
as provided in Republic Act (R.A.) No. 6552.5 According to PDB, it tried to deliver the cash surrender value of the subject
property, as required under R.A. No. 6552, in the amount of ₱ 10,000.00; however, the defendant was unavailable for
such purpose.6
40
Consequently, summons was issued and served by deputy sheriff Roberto T. Galing (Sheriff Galing). According to his
return, Sheriff Galing attempted to personally serve the summons upon Chandumal on July 15, 19 and 22, 1999 but it was
unavailing as she was always out of the house on said dates. Hence, the sheriff caused substituted service of summons
on August 5, 1999 by serving the same through Chandumal’s mother who acknowledged receipt thereof.7

For her failure to file an answer within the prescribed period, PDB filed on April 24, 2000 an ex parte motion to declare
Chandumal in default. On January 12, 2001, the RTC issued an Order granting the motion of PDB.8

On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer.
She maintained that she did not receive the summons and/or was not notified of the same. She further alleged that her
failure to file an answer within the reglementary period was due to fraud, mistake or excusable negligence. In her answer,
Chandumal alleged the following defenses: (a) contrary to the position of PDB, the latter did not make any demand for her
to pay the unpaid monthly amortization; and (b) PDB did not tender or offer to give the cash surrender value of the
property in an amount equivalent to fifty percent (50%) of the actual total payment made, as provided for under Section
3(b) of R.A. No. 6552. Moreover, Chandumal claimed that since the total payment she made amounts to ₱ 782,000.00,
the corresponding cash surrender value due her should be ₱ 391,000.00.9

Per Order10 dated August 2, 2001, the RTC denied Chandumal’s motion to set aside the order of default. Her motion for
reconsideration was also denied for lack of merit.11 Conformably, the RTC allowed PDB to present its evidence ex
parte.12 On May 31, 2004, the RTC rendered a

Decision13 in favor of PDB, the dispositive portion of which reads:

WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the plaintiff Planters Development Bank
and against defendant Julie Chandumal as follows, to wit:

1. Declaring the notarial rescission of the Contract to Sell dated 03 January 1990 made by the plaintiff per the Notice of
Delinquency and Rescission of Contract with Demand to Vacate dated 14 July 1998 as judicially confirmed and ratified;

2. Requiring the plaintiff to deposit in the name of the defendant the amount of ₱ 10,000.00 representing the cash
surrender value for the subject property with the Land Bank of the Philippines, Las Pi[ñ]as City Branch in satisfaction of
the provisions of R.A. No. 6552; and,

3. Ordering the defendant to pay the plaintiff the amount of ₱ 50,000.00 as and by way of attorney’s fees, including the
costs of suit.

SO ORDERED.14

From the foregoing judgment, Chandumal appealed to the CA.

On July 27, 2010, the CA, without ruling on the propriety of the judicial confirmation of the notarial rescission, rendered the
assailed decision nullifying the RTC decision due to invalid and ineffective substituted service of summons. The
dispositive portion of the CA decision provides:

WHEREFORE, premises considered, the decision of Branch 255 of the Regional Trial Court of Las Piñas City, dated May
31, 2004, in Civil Case No. LP-99-0137 is hereby NULLIFIED and VACATED.

SO ORDERED.15

PDB filed a motion for reconsideration but it was denied by the CA in its Resolution dated February 16, 2011.

Hence, this petition based on the following assignment of errors:

The Honorable Court of Appeals erred in reversing the decision of the trial court on the ground of improper service of
summons;

41
II

The decision of the trial court is valid as it duly acquired jurisdiction over the person of respondent Chandumal through
voluntary appearance; and

III

The trial court did not err in confirming and ratifying the notarial rescission of the subject contract to sell.16

PDB contends that the RTC properly acquired jurisdiction over the person of Chandumal.1âwphi1 According to PDB,
there was proper service of summons since the sheriff complied with the proper procedure governing substituted service
of summons as laid down in Section 7, Rule 14 of the Rules of Court. PDB alleges that it is clear from the sheriff’s return
that there were several attempts on at least three (3) different dates to effect personal service within a reasonable period
of nearly a month, before he caused substituted service of summons. The sheriff likewise stated the reason for his failure
to effect personal service and that on his fourth attempt, he effected the service of summons through Chandumal’s mother
who is unarguably, a person of legal age and with sufficient discretion. PDB also argues that Chandumal voluntarily
submitted herself to the jurisdiction of the court when she filed an Urgent Motion to Set Aside Order of Default and to
Admit Attached Answer.

For her part, Chandumal asserts that she never received a copy of the summons or was ever notified of it and she only
came to know of the case sometime in July or August 2000, but she was already in the United States of America by that
time, and that the CA correctly ruled that there was no valid service of summons; hence, the RTC never acquired
jurisdiction over her person.

Issues

1. Whether there was a valid substituted service of summons;

2. Whether Chandumal voluntarily submitted to the jurisdiction of the trial court; and

3. Whether there was proper rescission by notarial act of the contract to sell.

Our Ruling

The fundamental rule is that jurisdiction over a defendant in a civil case is acquired either through service of summons or
through voluntary appearance in court and submission to its authority. If a defendant has not been properly summoned,
the court acquires no jurisdiction over its person, and a judgment rendered against it is null and void.17

Where the action is in personam18 and the defendant is in the Philippines, service of summons may be made through
personal service, that is, summons shall be served by handing to the defendant in person a copy thereof, or if he refuses
to receive and sign for it, by tendering it to him.19 If the defendant cannot be personally served with summons within a
reasonable time, it is then that substituted service may be made.20 Personal service of summons should and always be the
first option, and it is only when the said summons cannot be served within a reasonable time can the process server
resort to substituted service.21

No valid substituted service of

summons

In this case, the sheriff resorted to substituted service of summons due to his failure to serve it personally. In Manotoc v.
Court of Appeals,22 the Court detailed the requisites for a valid substituted service of summons, summed up as follows: (1)
impossibility of prompt personal service – the party relying on substituted service or the sheriff must show that the
defendant cannot be served promptly or there is impossibility of prompt service; (2) specific details in the return – the
sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted personal service;
(3) a person of suitable age and discretion – the sheriff must determine if the person found in the alleged dwelling or
residence of defendant is of legal age, what the recipient’s relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the defendant or at
least notify the defendant of said receipt of summons, which matters must be clearly and specifically described in the
Return of Summons; and (4) a competent person in charge, who must have sufficient knowledge to understand the
42
obligation of the defendant in the summons, its importance, and the prejudicial effects arising from inaction on the
summons.23 These were reiterated and applied in Pascual v. Pascual, 24 where the substituted service of summon made
was invalidated due to the sheriff’s failure to specify in the return the necessary details of the failed attempts to effect
personal service which would justify resort to substituted service of summons.

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

Respondent voluntarily submitted

to the jurisdiction of the trial court

Despite that there was no valid substituted service of summons, the Court, nevertheless, finds that Chandumal voluntarily
submitted to the jurisdiction of the trial court.

Section 20, Rule 14 of the Rules of Court states:

Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the
defendant shall not be deemed a voluntary appearance.

When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer, she effectively
submitted her person to the jurisdiction of the trial court as the filing of a pleading where one seeks an affirmative relief is
equivalent to service of summons and vests the trial court with jurisdiction over the defendant’s person. Thus, it was ruled
that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and
to lift order of default with motion for reconsideration is considered voluntary submission to the trial court’s
jurisdiction.27 The Court notes that aside from the allegation that she did not receive any summons, Chandumal’s motion to
set aside order of default and to admit attached answer failed to positively assert the trial court’s lack of jurisdiction. In
fact, what was set forth therein was the substantial claim that PDB failed to comply with the requirements of R.A. No. 6552
on payment of cash surrender value,28 which already delves into the merits of PDB’s cause of action. In addition,
Chandumal even appealed the RTC decision to the CA, an act which demonstrates her recognition of the trial court’s
jurisdiction to render said judgment.

Given Chandumal’s voluntary submission to the jurisdiction of the trial court, the RTC, Las Piñas City, Branch 255, had all
authority to render its Decision dated May 31, 2004. The CA, therefore, erred in nullifying said RTC decision and
dispensing with the resolution of the substantial issue raised herein, i.e., validity of the notarial rescission. Instead,
however, of remanding this case to the CA, the Court will resolve the same considering that the records of the case are
already before us and in order to avoid any further delay.29

There is no valid rescission of the

contract to sell by notarial act
pursuant to Section 3(b), R.A. No. 6552

That the RTC had jurisdiction to render the decision does not necessarily mean, however, that its ruling on the validity of
the notarial rescission is in accord with the established facts of the case, the relevant law and jurisprudence.1âwphi1

PDB claims that it has validly rescinded the contract by notarial act as provided under R.A. No. 6552. Basically, PDB
instituted Civil Case No. LP-99-0137 in order to secure judicial confirmation of the rescission and to recover possession of
the property subject of the contract.

In Leaño v. Court of Appeals,30 it was held that:

43
R. A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial, residential) the right of the
seller to cancel the contract upon non-payment of an installment by the buyer, which is simply an event that prevents the
obligation of the vendor to convey title from acquiring binding force. The law also provides for the rights of the buyer in
case of cancellation. Thus, Sec. 3 (b) of the law provides that:

"If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property
equivalent to fifty percent of the total payments made and, after five years of installments, an additional five percent every
year but not to exceed ninety percent of the total payments made: Provided, That the actual cancellation of the contract
shall take place after thirty days from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash surrender value to the buyer." 31 (Citation omitted and
emphasis ours)

R.A. No. 6552 recognizes the right of the seller to cancel the contract but any such cancellation must be done in
conformity with the requirements therein prescribed. In addition to the notarial act of rescission, the seller is required to
refund to the buyer the cash surrender value of the payments on the property. The actual cancellation of the contract can
only be deemed to take place upon the expiry of a thirty (30)-day period following the receipt by the buyer of the notice of
cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value.32

In this case, it is an admitted fact that PDB failed to give Chandumal the full payment of the cash surrender value. In its
complaint,33 PDB admitted that it tried to deliver the cash surrender value of the subject property as required under R.A.
No. 6552 but Chandumal was "unavailable" for such purpose. Thus, it prayed in its complaint that it be ordered to "deposit
with a banking institution in the Philippines, for the account of Defendants (sic), the amount of Ten Thousand Pesos (₱
10,000.00), Philippine Currency, representing the cash surrender value of the subject property; x x x."34 The allegation that
Chandumal made herself unavailable for payment is not an excuse as the twin requirements for a valid and effective
cancellation under the law, i.e., notice of cancellation or demand for rescission by a notarial act and the full payment of the
cash surrender value, is mandatory.35 Consequently, there was no valid rescission of the contract to sell by notarial act
undertaken by PDB and the RTC should not have given judicial confirmation over the same.

WHEREFORE, the petition is DENIED. The Decision dated July 27, 2010 of the Court of Appeals, as well as its
Resolution dated February 16, 2011, denying the Motion for Reconsideration in CA-G.R. CV No. 82861 are AFFIRMED in
so far as there was no valid service of summons. Further, the Court DECLARES that there was no valid rescission of
contract pursuant to R.A. No. 6552. Accordingly, the Decision dated May 31, 2004 of the Regional Trial Court, Las Piñas
City, Branch 255 in Civil Case No. LP-99-0 137 is REVERSED and SET ASIDE, and is therefore, DISMISSED for lack of
merit.

SO ORDERED.

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.

44
The Case

Petitioners – defendants in a suit for libel brought by respondent – appeal the decision promulgated on March 8,
20021 and the resolution promulgated on January 13, 2003,2 whereby the Court of Appeals (CA) respectively dismissed
their petition for certiorari, prohibition and mandamus and denied their motion for reconsideration. Thereby, the CA upheld
the order the Regional Trial Court (RTC), Branch 51, in Manila had issued on March 12, 2001 denying their motion to
dismiss because the substituted service of the summons and copies of the complaint on each of them had been valid and
effective.3

Antecedents

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

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

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.
45
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 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.

46
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

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
47
process that is essential in all actions, civil as well as criminal, except in actions in rem or quasi in rem. Jurisdiction over
the defendantin an action in rem or quasi in rem is not required, and the court acquires jurisdiction over an actionas long
as it acquires jurisdiction over the resthat is thesubject matter of the action. The purpose of summons in such action is not
the acquisition of jurisdiction over the defendant but mainly to satisfy the constitutional requirement of due process.12

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

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

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

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

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

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

The significance of the proper service of the summons on the defendant in an action in personam cannot be
overemphasized. The service of the summons fulfills two fundamental objectives, namely: (a) to vest in the court
jurisdiction over the person of the defendant; and (b) to afford to the defendant the opportunity to be heard on the claim
brought against him.19 As to the former, when jurisdiction in personam is not acquired in a civil action through the proper
service of the summons or upon a valid waiver of such proper service, the ensuing trial and judgment are void.20 If the
48
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 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.

49
G.R. No. 159590             October 18, 2004

HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, petitioner, 

vs.
CECILIA DIEZ CATALAN, respondent.

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

G.R. No. 159591             October 18, 2004

HSBC INTERNATIONAL TRUSTEE LIMITED, petitioner, 

vs.
CECILIA DIEZ CATALAN, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us are two petitions for review on certiorari under Rule 45 of the Rules of Court separately filed by the Hongkong
and Shanghai Banking Corporation Limited (HSBANK) and HSBC International Trustee Limited (HSBC TRUSTEE). They
seek the reversal of the consolidated Decision,1 dated August 14, 2003, of the Court of Appeals (CA) in CA-G.R. SP Nos.
75756 and 75757, which dismissed the petitions for certiorari of herein petitioners assailing the Order, dated May 15,
2002, of the Regional Trial Court, Branch 44, Bacolod City (RTC) in Civil Case No. 01-11372 that denied their respective
motions to dismiss the amended complaint of respondent Cecilia Diez Catalan.

The factual antecedents are as follows:

On January 29, 2001, respondent filed before the RTC, a complaint for a sum of money with damages against
petitioner HSBANK, docketed as Civil Case No. 01-11372, due to HSBANK’s alleged wanton refusal to pay her
the value of five HSBANK checks issued by Frederick Arthur Thomson (Thomson) amounting to
HK$3,200,000.00.2

On February 7, 2001, summons was served on HSBANK at the Enterprise Center, Tower I, Ayala Avenue corner Paseo
de Roxas St., Makati City.3 HSBANK filed a Motion for Extension of Time to File Answer or Motion to Dismiss dated
February 21, 2001.4 Then, it filed a Motion to Dismiss, dated March 8, 2001, on the grounds that (a) the RTC has no
jurisdiction over the subject matter of the complaint; (b) the RTC has not acquired jurisdiction for failure of the plaintiff to
pay the correct filing or docket fees; (c) the RTC has no jurisdiction over the person of HSBANK; (d) the complaint does
not state a cause of action against HSBANK; and (e) plaintiff engages in forum-shopping.5

On September 10, 2001, Catalan filed an Amended Complaint impleading petitioner HSBC TRUSTEE as co-defendant
and invoking Article 19 of the Civil Code as basis for her cause of action.6

The Amended Complaint alleges:

Defendants HSBANK and HSBC TRUSTEE, doing business in the Philippines, are corporations duly organized
under the laws of the British Virgin Islands with head office at 1 Grenville Street, St. Helier Jersey, Channel
Islands and with branch offices at Level 12, 1 Queen’s Road Central, Hongkong and may be served with
summons and other court processes through their main office in Manila with address at HSBC, the Enterprise
Center, Tower 1, Ayala Avenue corner Paseo de Roxas Street, Makati City.

Sometime in March 1997, Thomson issued five HSBANK checks payable to Catalan, to wit:

50
 CHECK NO. DATE AMOUNT
807852 Mar. 15, 1997 $600,000.00
807853 Mar. 17, 1997 800,000.00
807854 Mar. 17, 1997 600,000.00
807855 Mar. 22, 1997 600,000.00
807856 Mar. 23, 1997 600,000.00

TOTAL $3,200,000.00

The checks when deposited were returned by HSBANK purportedly for reason of "payment stopped" pending
confirmation, despite the fact that the checks were duly funded. On March 18, 1997, Thomson wrote a letter to a certain
Ricky Sousa7 of HSBANK confirming the checks he issued to Catalan and requesting that all his checks be cleared. On
March 20, 1997, Thomson wrote another letter to Sousa of HSBANK requesting an advice in writing to be sent to the
Philippine National Bank, through the fastest means, that the checks he previously issued to Catalan were already
cleared. Thereafter, Catalan demanded that HSBANK make good the checks issued by Thomson. On May 16, 1997,
Marilou A. Lozada, personal secretary and attorney-in-fact of Thomson, wrote a letter to Sousa of HSBANK informing him
that HSBANK’s failure to clear all the checks had saddened Thomson and requesting that the clearing of the checks be
facilitated. Subsequently, Thomson died and Catalan forwarded her demand to HSBC TRUSTEE. Catalan sent
photocopies of the returned checks to HSBC TRUSTEE. Not satisfied, HSBC TRUSTEE through deceit and trickery,
required Catalan, as a condition for the acceptance of the checks, to submit the original copies of the returned checks,
purportedly, to hasten payment of her claim. HSBC TRUSTEE succeeded in its calculated deception because on April 21,
1999, Catalan and her former counsel went to Hongkong at their own expense to personally deliver the originals of the
returned checks to the officers of HSBC TRUSTEE, anxious of receiving the money value of the checks but HSBC
TRUSTEE despite receipt of the original checks, refused to pay Catalan’s claim. Having seen and received the original of
the checks, upon its request, HSBC TRUSTEE is deemed to have impliedly accepted the checks. Moreover, the refusal of
HSBANK and HSBC TRUSTEE to pay the checks is equivalent to illegal freezing of one’s deposit. On the assurance of
HSBC TRUSTEE that her claim will soon be paid, as she was made to believe that payments of the checks shall be made
by HSBC TRUSTEE "upon sight," the unsuspecting Catalan left the originals of the checks with HSBC TRUSTEE and was
given only an acknowledgment receipt. Catalan made several demands and after several more follow ups, on August 16,
1999, Phoenix Lam, Senior Vice President of HSBC TRUSTEE, in obvious disregard of her valid claim, informed Catalan
that her claim is disapproved. No reason or explanation whatsoever was made why her claim was disapproved, neither
were the checks returned to her. Catalan appealed for fairness and understanding, in the hope that HSBC TRUSTEE
would act fairly and justly on her claim but these demands were met by a stonewall of silence. On June 9, 2000, Catalan
through counsel sent a last and final demand to HSBC TRUSTEE to remit the amount covered by the checks but despite
receipt of said letter, no payment was made. Clearly, the act of the HSBANK and HSBC TRUSTEE in refusing to honor
and pay the checks validly issued by Thomson violates the abuse of rights principle under Article 19 of the Civil Code
which requires that everyone must act with justice, give everyone his due and observe honesty and good faith. The
refusal of HSBANK and HSBC TRUSTEE to pay the checks without any valid reason is intended solely to prejudice and
injure Catalan. When they declined payment of the checks despite instructions of the drawer, Thomson, to honor them,
coupled with the fact that the checks were duly funded, they acted in bad faith, thus causing damage to Catalan. A person
may not exercise his right unjustly or in a manner that is not in keeping with honesty or good faith, otherwise he opens
himself to liability for abuse of right.8

Catalan prays that HSBANK and HSBC TRUSTEE be ordered to pay ₱20,864,000.00 representing the value of the five
checks at the rate of ₱6.52 per HK$1 as of January 29, 2001 for the acts of HSBANK and HSBC TRUSTEE in refusing to
pay the amount justly due her, in addition to moral and exemplary damages, attorney’s fees and litigation expenses.9

On October 2, 2001, HSBANK filed a Motion to Dismiss Amended Complaint on the grounds that: (a) the RTC has no
jurisdiction over the subject matter of the complaint since the action is a money claim for a debt contracted by Thomson
before his death which should have been filed in the estate or intestate proceedings of Thomson; (b) Catalan engages in
forum shopping by filing the suit and at the same time filing a claim in the probate proceeding filed with another branch of
the RTC; (c) the amended complaint states no cause of action against HSBANK since it has no obligation to pay the
checks as it has not accepted the checks and Catalan did not re-deposit the checks or make a formal protest; (d) the RTC
has not acquired jurisdiction over the person of HSBANK for improper service of summons; and, (e) it did not submit to
the jurisdiction of the RTC by filing a motion for extension of time to file a motion to dismiss.10

51
Meanwhile, on October 17, 2001, summons for HSBC TRUSTEE was tendered to the In House Counsel of HSBANK
(Makati Branch) at the Enterprise Center, Tower 1, Ayala Avenue corner Paseo de Roxas, Makati. Without submitting
itself to the jurisdiction of the RTC, HSBC TRUSTEE filed a Special Appearance for Motion to Dismiss Amended
Complaint, dated October 29, 2001, questioning the jurisdiction of the RTC over it.11 HSBC TRUSTEE alleges that tender
of summons through HSBANK Makati did not confer upon the RTC jurisdiction over it because: (a) it is a corporation
separate and distinct from HSBANK; (b) it does not hold office at the HSBANK Makati or in any other place in the
Philippines; (c) it has not authorized HSBANK Makati to receive summons for it; and, (d) it has no resident agent upon
whom summons may be served because it does not transact business in the Philippines.

Subsequently, HSBC TRUSTEE filed a Submission, dated November 15, 2001, attaching the Affidavit executed in
Hongkong by Phoenix Lam, Senior Vice-President of HSBC TRUSTEE, attesting to the fact that: 1) HSBC TRUSTEE has
not done nor is it doing business in the Philippines; 2) it does not maintain any office in Makati or anywhere in the
Philippines; 3) it has not appointed any agent in Philippines; and 4) HSBANK Makati has no authority to receive any
summons or court processes for HSBC TRUSTEE.12

On May 15, 2002, the RTC issued an Order denying the two motions to dismiss. 13 The RTC held that it has jurisdiction
over the subject matter of the action because it is an action for damages under Article 19 of the Civil Code for the acts of
unjustly refusing to honor the checks issued by Thomson and not a money claim against the estate of Thomson; that
Catalan did not engage in forum-shopping because the elements thereof are not attendant in the case; that the question
of cause of action should be threshed out or ventilated during the proceedings in the main action and after the plaintiff and
defendants have adduced evidence in their favor; that it acquired jurisdiction over the person of defendants because the
question of whether a foreign corporation is doing business or not in the Philippines cannot be a subject of a Motion to
Dismiss but should be ventilated in the trial on the merits; and defendants voluntarily submitted to the jurisdiction of the
RTC setting up in their Motions to Dismiss other grounds aside from lack of jurisdiction.

HSBANK and HSBC TRUSTEE filed separate motions for reconsideration 14 but both proved futile as they were denied by
the RTC in an Order dated December 20, 2002.15

On February 21, 2003, Catalan moved to declare HSBANK and HSBC TRUSTEE in default for failure to file their answer
to the amended complaint.

On March 5, 2003, HSBANK and HSBC TRUSTEE filed separate petitions for certiorari and/or prohibition with the CA,
docketed as CA-G.R. SP Nos. 7575616 and 75757,17 respectively.

Subsequently, HSBANK and HSBC TRUSTEE filed before the RTC separate Answers ad cautelam, both dated March 18,
2003, as a "precaution against being declared in default and without prejudice to the separate petitions for certiorari
and/or prohibition then pending with the CA."18

Meanwhile, the two petitions for certiorari before the CA were consolidated and after responsive pleadings were filed, the
cases were deemed submitted for decision.

In a consolidated Decision dated August 14, 2003, the CA dismissed the two petitions for certiorari. 19 The CA held that the
filing of petitioners’ answers before the RTC rendered moot and academic the issue of the RTC’s lack of jurisdiction over
the person of the petitioners; that the RTC has jurisdiction over the subject matter since it is one for damages under
Article 19 of the Civil Code for the alleged unjust acts of petitioners and not a money claim against the estate of Thomson;
and, that the amended complaint states a cause of action under Article 19 of the Civil Code which could merit a favorable
judgment if found to be true. The CA noted that Catalan may have prayed for payment of the value of the checks but
ratiocinated that she merely used the value as basis for the computation of the damages.

Hence, the present petitions.

In G.R. No. 159590, HSBANK submits the following assigned errors:

I.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE COURT A QUO,
ACTING AS AN (SIC) REGULAR COURT, HAS JURISDICTION OVER THE AMENDED COMPLAINT
SEEKING TO ORDER HSBC TRUSTEE, THE EXECUTOR OF THE DECEASED FREDERICK ARTHUR

52
 THOMSON, TO PAY SUBJECT CHECKS ISSUED BY THE LATE FREDERICK ARTHUR THOMSON,
ADMITTEDLY IN PAYMENT OF HIS INDEBTEDNESS TO CATALAN.

II.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE AMENDED
COMPLAINT DOES NOT SEEK TO ORDER HSBANK AND HSBC INTERNATIONAL TRUSTEE
LIMITED TO PAY THE OBLIGATION OF THE (SIC) FREDERICK ARTHUR THOMSON AS EVIDENCED
BY THE CHECKS, BUT PRAYS FOR DAMAGES EQUIVALENT OR COMPUTED ON THE BASIS OF
THE VALUE OF THE CHECKS BECAUSE THE DEFENDANTS FAILED TO COMPLY WITH THE
MANDATES OF ARTICLE 19 OF THE NEW CIVIL CODE.

III.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT ALLEGATIONS IN

THE AMENDED COMPLAINT MAKE OUT A CAUSE OF ACTION WHICH COULD MERIT A
FAVORABLE JUDGMENT IF FOUND TO BE TRUE, OR IN NOT HOLDING THAT THE AMENDED
COMPLAINT STATES NO CAUSE OF ACTION AGAINST HSBANK, AS DRAWEE BANK.

IV.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN DISREGARDING THE FACT THAT
CATALAN ENGAGED IN FORUM SHOPPING BY FILING THE AMENDED COMPLAINT WHILE HER
PETITION FOR THE PROBATE OF THE SUPPOSED WILL OF THE DECEASED FREDERICK
ARTHUR THOMSON IS PENDING WITH ANOTHER BRANCH OF THE COURT A QUO.

V.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT HSBANK HAD
SUBMITTED TO THE JURISDICTION OF THE COURT A QUO BY SUBMITTING AN ANSWER TO THE
AMENDED COMPLAINT.20

In G.R. No. 159591, HSBC TRUSTEE also assigns the foregoing first, second and fifth errors as its own.21 In addition, it
claims that:

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT ORDERING THE DISMISSAL OF THE
AMENDED COMPLAINT AGAINST HSBC TRUSTEE DESPITE THE FACT IT HAS NOT BEEN DULY SERVED
WITH SUMMONS.22

HSBANK and HSBC TRUSTEE contend in common that Catalan has no cause of action for abuse of rights under Article
19 of the Civil Code; that her complaint, under the guise of a claim for damages, is actually a money claim against the
estate of Thomson arising from checks issued by the latter in her favor in payment of indebtedness.

HSBANK claims that the money claim should be dismissed on the ground of forum-shopping since Catalan also filed a
petition for probate of the alleged last will of Thomson before RTC, Branch 48, Bacolod City, docketed as Spec. Proc No.
00-892. In addition, HSBANK imputes error upon the CA in holding that by filing an answer to the amended complaint,
petitioners are estopped from questioning the jurisdiction of the RTC.

HSBC TRUSTEE maintains that the RTC did not acquire jurisdiction over it for improper service of summons.

In her Comment, Catalan insists that her complaint is one for damages under Article 19 of the Civil Code for the wanton
refusal to honor and pay the value of five checks issued by the Thomson amounting to HK$3,200,000.00. She argues that
the issue of jurisdiction has been rendered moot by petitioners’ participation in the proceedings before the RTC.

Succinctly, the issues boil down to the following:

1) Does the complaint state a cause of action?

53
 2) Did Catalan engage in forum-shopping by filing the complaint for damages when she also filed a petition for
probate of the alleged last will of Thomson with another branch of the RTC? and,

3) Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE? Corollary thereto, did the filing of the
answer before the RTC render the issue of lack of jurisdiction moot and academic?

We shall resolve the issue in seriatim.

Does the complaint state a cause of action against HSBANK and HSBC TRUSTEE?

The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would justify
the relief demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged therein?23 The inquiry
is into the sufficiency, not the veracity of the material allegations.24 If the allegations in the complaint furnish sufficient
basis on which it can be maintained, it should not be dismissed regardless of the defense that may be presented by the
defendants.25

Catalan anchors her complaint for damages on Article 19 of the Civil Code. It speaks of the fundamental principle of law
and human conduct that a person "must, in the exercise of his rights and in the performance of his duties, act with justice,
give every one his due, and observe honesty and good faith." It sets the standards which may be observed not only in the
exercise of one’s rights but also in the performance of one’s duties. When a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for
which the wrongdoer must be held responsible.26 But a right, though by itself legal because recognized or granted by law
as such, may nevertheless become the source of some illegality. A person should be protected only when he acts in the
legitimate exercise of his right, that is, when he acts with prudence and in good faith; but not when he acts with negligence
or abuse.27 There is an abuse of right when it is exercised for the only purpose of prejudicing or injuring another. The
exercise of a right must be in accordance with the purpose for which it was established, and must not be excessive or
unduly harsh; there must be no intention to injure another.28

Thus, in order to be liable under the abuse of rights principle, three elements must concur, to wit: (a) that there is a legal
right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.29

In this instance, after carefully examining the amended complaint, we are convinced that the allegations therein are in the
nature of an action based on tort under Article 19 of the Civil Code. It is evident that Catalan is suing HSBANK and HSBC
TRUSTEE for unjustified and willful refusal to pay the value of the checks.

HSBANK is being sued for unwarranted failure to pay the checks notwithstanding the repeated assurance of the drawer
Thomson as to the authenticity of the checks and frequent directives to pay the value thereof to Catalan. Her allegations
in the complaint that the gross inaction of HSBANK on Thomson’s instructions, as well as its evident failure to inform
Catalan of the reason for its continued inaction and non-payment of the checks, smack of insouciance on its part, are
sufficient statements of clear abuse of right for which it may be held liable to Catalan for any damages she incurred
resulting therefrom. HSBANK’s actions, or lack thereof, prevented Catalan from seeking further redress with Thomson for
the recovery of her claim while the latter was alive.

HSBANK claims that Catalan has no cause of action because under Section 189 of the Negotiable Instruments Law, "a
check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and
the bank is not liable to the holder unless and until it accepts or certifies it." However, HSBANK is not being sued on the
value of the check itself but for how it acted in relation to Catalan’s claim for payment despite the repeated directives of
the drawer Thomson to recognize the check the latter issued. Catalan may have prayed that she be paid the value of the
checks but it is axiomatic that what determines the nature of an action, as well as which court has jurisdiction over it, are
the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the
claims asserted therein.30

Anent HSBC TRUSTEE, it is being sued for the baseless rejection of Catalan’s claim. When Catalan parted with the
checks as a requirement for the processing of her claim, even going to the extent of traveling to Hongkong to deliver
personally the checks, HSBC TRUSTEE summarily disapproved her claim with nary a reason. HSBC TRUSTEE gave no
heed to Catalan’s incessant appeals for an explanation. Her pleas fell on deaf and uncaring corporate ears. Clearly,
HSBC TRUSTEE’s acts are anathema to the prescription for human conduct enshrined in Article 19 of the Civil Code.

Did Catalan engage in forum-shopping?

54
It has been held that forum-shopping exists where a litigant sues the same party against whom another action or actions
for the alleged violation of the same right and the enforcement of the same relief is/are still pending, the defense of litis
pendentia in one case is a bar to the others; and, a final judgment in one would constitute res judicata and thus would
cause the dismissal of the rest.31

Thus, there is forum-shopping when there exist: a) identity of parties, or at least such parties as represent the same
interests in both actions, b) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and
c) the identity of the two preceding particulars is such that any judgment rendered in the pending case, regardless of
which party is successful would amount to res judicata in the other.32

Applying the foregoing requisites to the case before us in relation to Spec. Proc No. 00-892, the probate proceeding
brought by Catalan before RTC, Branch 48, Bacolod City, it is obvious that forum-shopping does not exist.

There is no identity of parties. HSBANK is not a party in the probate proceeding. HSBC TRUSTEE is only a party in the
probate proceeding because it is the executor and trustee named in the Hongkong will of Thomson. HSBC TRUSTEE is
representing the interest of the estate of Thomson and not its own corporate interest.

With respect to the second and third requisites, a scrutiny of the entirety of the allegations of the amended complaint in
this case reveals that the rights asserted and reliefs prayed for therein are different from those pleaded in the probate
proceeding, such that a judgment in one case would not bar the prosecution of the other case. Verily, there can be no
forum-shopping where in one proceeding a party raises a claim for damages based on tort and, in another proceeding a
party seeks the allowance of an alleged last will based on one’s claim as an heir. After all, the merits of the action for
damages is not to be determined in the probate proceeding and vice versa. Undeniably, the facts or evidence as would
support and establish the two causes of action are not the same. 33 Consequently, HSBANK’s reliance on the principle of
forum-shopping is clearly misplaced.

Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?

The Rules of Court provides that a court generally acquires jurisdiction over a person through either a valid service of
summons in the manner required by law or the person’s voluntary appearance in court.34

In holding that it acquired jurisdiction over HSBANK and HSBC TRUSTEE, the RTC held that both voluntarily submitted to
the jurisdiction of the court by setting up in their Motions to Dismiss other grounds aside from lack of jurisdiction. On the
other hand, the CA ruled that HSBANK and HSBC TRUSTEE are estopped from challenging the jurisdiction of the RTC
because they filed their respective answers before the RTC.

We find that both lower courts overlooked Section 20 of Rule 14 of the 1997 Rules of Civil Procedure which provides that
"the inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall
not be deemed a voluntary appearance." Nonetheless, such omission does not aid HSBANK’s case.

It must be noted that HSBANK initially filed a Motion for Extension of Time to File Answer or Motion to Dismiss.35HSBANK
already invoked the RTC’s jurisdiction over it by praying that its motion for extension of time to file answer or a motion to
dismiss be granted. The Court has held that the filing of motions seeking affirmative relief, such as, to admit answer, for
additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for
reconsideration, are considered voluntary submission to the jurisdiction of the court.36 Consequently, HSBANK’s
expressed reservation in its Answer ad cautelam that it filed the same "as a mere precaution against being declared in
default, and without prejudice to the Petition for Certiorari and/or Prohibition xxx now pending before the Court of
Appeals"37 to assail the jurisdiction of the RTC over it is of no moment. Having earlier invoked the jurisdiction of the RTC
to secure affirmative relief in its motion for additional time to file answer or motion to dismiss, HSBANK, effectively
submitted voluntarily to the jurisdiction of the RTC and is thereby estopped from asserting otherwise, even before this
Court.

In contrast, the filing by HSBC TRUSTEE of a motion to dismiss cannot be considered a voluntary submission to the
jurisdiction of the RTC. It was a conditional appearance, entered precisely to question the regularity of the service of
summons. It is settled that a party who makes a special appearance in court challenging the jurisdiction of said court, e.g.,
invalidity of the service of summons, cannot be considered to have submitted himself to the jurisdiction of the
court.38 HSBC TRUSTEE has been consistent in all its pleadings in assailing the service of summons and the jurisdiction
of the RTC over it. Thus, HSBC TRUSTEE cannot be declared in estoppel when it filed an Answer ad cautelam before the
RTC while its petition for certiorari was pending before the CA. Such answer did not render the petition for certiorari
55
before the CA moot and academic. The Answer of HSBC TRUSTEE was only filed to prevent any declaration that it had
by its inaction waived the right to file responsive pleadings.

Admittedly, HSBC TRUSTEE is a foreign corporation, organized and existing under the laws of the British Virgin Islands.
For proper service of summons on foreign corporations, Section 12 of Rule 14 of the Revised Rules of Court provides:

SEC. 12. Service upon foreign private juridical entity. – When the defendant is a foreign private juridical entity
which has transacted business in the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or if there be no such agent, on the government official designated by law to
that effect, or on any of its officers or agents within the Philippines.

In French Oil Mill Machinery Co., Inc. vs. Court of Appeals, 39 we had occasion to rule that it is not enough to merely allege
in the complaint that a defendant foreign corporation is doing business. For purposes of the rule on summons, the fact of
doing business must first be "established by appropriate allegations in the complaint" and the court in determining such
fact need not go beyond the allegations therein.40

The allegations in the amended complaint subject of the present cases did not sufficiently show the fact of HSBC
TRUSTEE’s doing business in the Philippines. It does not appear at all that HSBC TRUSTEE had performed any act
which would give the general public the impression that it had been engaging, or intends to engage in its ordinary and
usual business undertakings in the country. Absent from the amended complaint is an allegation that HSBC TRUSTEE
had performed any act in the country that would place it within the sphere of the court’s jurisdiction.

We have held that a general allegation, standing alone, that a party is doing business in the Philippines does not make it
so; a conclusion of fact or law cannot be derived from the unsubstantiated assertions of parties notwithstanding the
demands of convenience or dispatch in legal actions, otherwise, the Court would be guilty of sorcery; extracting substance
out of nothingness.41

Besides, there is no allegation in the amended complaint that HSBANK is the domestic agent of HSBC TRUSTEE to
warrant service of summons upon it. Thus, the summons tendered to the In House Counsel of HSBANK (Makati Branch)
for HSBC TRUSTEE was clearly improper.

There being no proper service of summons, the RTC cannot take cognizance of the case against HSBC TRUSTEE for
lack of jurisdiction over it. Any proceeding undertaken by the RTC is therefore null and void.42 Accordingly, the complaint
against HSBC TRUSTEE should have been dismissed for lack of jurisdiction over it.

WHEREFORE, the petition in G.R. No. 159590 is DENIED. The Decision of the Court of Appeals, dated August 14, 2003,
in CA-G.R. SP No. 75757 dismissing the petition for certiorari of the Hongkong and Shanghai Banking Corporation
Limited is AFFIRMED.

The petition in G.R. No. 159591 is GRANTED. The Decision of the Court of Appeals, dated August 14, 2003, in CA-G.R.
SP No. 75756 dismissing the petition for certiorari of the HSBC International Trustee Limited is REVERSEDand SET
ASIDE. The Regional Trial Court, Branch 44, Bacolod City is declared without jurisdiction to take cognizance of Civil Case
No. 01-11372 against the HSBC International Trustee Limited, and all its orders and issuances with respect to the latter
are hereby ANNULLED and SET ASIDE. The said Regional Trial Court is hereby ORDERED to DESIST from maintaining
further proceedings against the HSBC International Trustee Limited in the case aforestated.

SO ORDERED.

G.R. No. 181517               July 6, 2015

GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners, 

vs.
NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.

56
DECISION

PERALTA, J.:

For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners Green Star Express, Inc. and
Fruto Sayson, Jr. brought before the Court, assailing the Decision 1 of the Court of Appeals (CA) dated September 17,
2007 and its Resolution2 dated January 22, 2008 in CA-G.R. SP No. 86824. The CA nullified the Resolution dated May 5,
2004 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, and dismissed the
complaint for lack of jurisdiction.

The following are the antecedents of the case:

On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC) owned figured in a vehicular
accident with petitioner Green Star Express, Inc.' s (Green Star) passenger bus, resulting in the death of the van's driver.
Thus, the bus driver, petitioner Fruto Sayson, Jr., was charged with the crime of reckless imprudence resulting in
homicide.

Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation (NURC) for the repair of
its passenger bus amounting to ₱567, 070.68. NURC denied any liability therefore and argued that the criminal case shall
determine the ultimate liabilities of the parties. Thereafter, the criminal case was dismissed without prejudice, due to
insufficiency of evidence.

Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San Pedro, Laguna. Francis
Tinio, one of NURC's employees, was the one who received the summons. On February 6, 2004, NURC filed a Motion to
Dismiss claiming lack of jurisdiction due to improper service.

On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that there was substantial
compliance because there was actual receipt of the summons by NURC. The dispositive portion of said Resolution thus
reads:

WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3

Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a Petition for Certiorari. On
September 17, 2007, the CA reversed the RTC ruling, hence:

WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated May 5, 2004 and dated
July 26, 2004, of the Regional Trial Court of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, are hereby
NULLIFIED and a new one rendered granting Petitioner's Motion to Dismiss, dated February 3, 2004. Private
Respondents' Amended Complaint for Damages filed against Petitioner Nissin-Universal Robina Corporation is
accordingly dismissed for lack of jurisdiction.

SO ORDERED.4

Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied. Hence, this petition.

The lone issue is whether or not the summons was properly served on NURC, vesting the trial court with jurisdiction.

The petition is benefit of merit.

It is a well-established rule that the rules on service of summons upon a domestic private juridical entity must be strictly
complied with. Otherwise, the court cannot be said to have acquired jurisdiction over the person of the defendant.5

NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received by its cost accountant,
Francis Tinio.1âwphi1 It argues that under Section 11, Rule 14 of the 1997 Rules of Court, which provides the rule on
service of summons upon a juridical entity, in cases where the defendant is a domestic corporation like NURC, summons
may be served only through its officers.6 Thus:

57
Section 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or
association organized under the laws of the Philippines with a juridical personality, service may be made on the president,
managing partner, general manager, corporate secretary, treasurer, or in-house counsel.7

This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:

Section 13. Service upon private domestic corporation or partnership. - If the defendant is a corporation organized under
the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary,
cashier, agent, or any of its directors.8

In the past, the Court upheld service of summons upon a construction project manager, a corporation’s assistant
manager, and ordinary clerk of a corporation, private secretary of corporate executives, retained counsel, and officials
who had control over the operations of the corporation like the assistant general manager or the corporation’s Chief
Finance and Administrative Officer. The Court then considered said persons 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, 9 The
rule now likewise states "general manager" instead of "manager"; "corporate secretary" instead of merely "secretary"; and
"treasure" instead of "cashier."10 It has now become restricted, limited, and exclusive only to the persons enumerated in
the aforementioned provision, following the rule in statutory construction that the express mention of one person excludes
all others, or expression unions est exclusion alterius. Service must, therefore, be made only on the person expressly
listed in the rules.11 If the revision committee intended to liberalize the rule on service of summons, it could have easily
done so by clear and concise language.12

Here, Tinio, a, member of NURC’s accounting staff, received the summons on January 22, 2004. Green star claims that it
was received upon instruction of Junadette Avedillo. The general manager of the corporation. Such fact, however, does
not appear in the Sheriff’s Return.13 The Return did not even state whether Avedillo was present at the time the summons
was received by Tinio, the supposed assistant manager. Green Star further avers that the sheriff tendered the summons,
but Avedillo simply refused to sign and receive the same. She then allegedly instructed Tinio to just receive it in her
behalf. However, Green Star never presented said sheriff as witness during the hearing of NURC’s motion to dismiss to
attest to said claim. And while the sheriff executed an affidavit which appears to support such allegation, the same was
likewise not presented as evidence. It was only when the case was already before the CA that said affidavit first surfaced.
Since the service of summons was made on a cost accountant, which is not one of the designated persons under Section
11 of Rule 14, the trial court did not vadily acquire jurisdiction over NURC, 14 although the corporation may have actually
received the summons.15 To rule otherwise will be an outright circumvention of the rules, aggravating further the delay in
the administration of justice.16

At this juncture, it is worth emphasizing that notice to enable the other party to be heard and to present evidence is not a
mere technicality or a trivial matter in any administrative or judicial proceedings. The service of summons is a vital and
indispensable ingredient of due process. Corporations would be easily deprived of their right to present their defense in a
multi-million peso suit, if the Court would disregard the mandate of the Rules on the service of summons.17

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated September 17, 2007 and Resolution dated
January 22, 2008 in CA-G.R. SP No. 86824 are hereby AFFIRMED.

SO ORDERED.

G.R. No. 175799               November 28, 2011

NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner, 

vs.
LEPANTO CONSOLIDATED MINING COMPANY, Respondent.

DECISION

58
LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari assailing the Decision1 of the Court of Appeals dated September 8, 2006 in CA-
G.R. SP No. 94382 and its Resolution2 dated December 12, 2006, denying the Motion for Reconsideration.

On August 30, 2005, respondent Lepanto Consolidated Mining Company filed with the Regional Trial Court (RTC) of
Makati City a Complaint3 against petitioner NM Rothschild & Sons (Australia) Limited praying for a judgment declaring the
loan and hedging contracts between the parties void for being contrary to Article 2018 4 of the Civil Code of the Philippines
and for damages. The Complaint was docketed as Civil Case No. 05-782, and was raffled to Branch 150. Upon
respondent’s (plaintiff’s) motion, the trial court authorized respondent’s counsel to personally bring the summons and
Complaint to the Philippine Consulate General in Sydney, Australia for the latter office to effect service of summons on
petitioner (defendant).

On October 20, 2005, petitioner filed a Special Appearance With Motion to Dismiss 5 praying for the dismissal of the
Complaint on the following grounds: (a) the court has not acquired jurisdiction over the person of petitioner due to the
defective and improper service of summons; (b) the Complaint failed to state a cause of action and respondent does not
have any against petitioner; (c) the action is barred by estoppel; and (d) respondent did not come to court with clean
hands.

On November 29, 2005, petitioner filed two Motions: (1) a Motion for Leave to take the deposition of Mr. Paul Murray
(Director, Risk Management of petitioner) before the Philippine Consul General; and (2) a Motion for Leave to Serve
Interrogatories on respondent.

On December 9, 2005, the trial court issued an Order 6 denying the Motion to Dismiss. According to the trial court, there
was a proper service of summons through the Department of Foreign Affairs (DFA) on account of the fact that the
defendant has neither applied for a license to do business in the Philippines, nor filed with the Securities and Exchange
Commission (SEC) a Written Power of Attorney designating some person on whom summons and other legal processes
maybe served. The trial court also held that the Complaint sufficiently stated a cause of action. The other allegations in
the Motion to Dismiss were brushed aside as matters of defense which can best be ventilated during the trial.

On December 27, 2005, petitioner filed a Motion for Reconsideration.7 On March 6, 2006, the trial court issued an Order
denying the December 27, 2005 Motion for Reconsideration and disallowed the twin Motions for Leave to take deposition
and serve written interrogatories.8

On April 3, 2006, petitioner sought redress via a Petition for Certiorari9 with the Court of Appeals, alleging that the trial
court committed grave abuse of discretion in denying its Motion to Dismiss. The Petition was docketed as CA-G.R. SP No.
94382.

On September 8, 2006, the Court of Appeals rendered the assailed Decision dismissing the Petition for Certiorari. The
Court of Appeals ruled that since the denial of a Motion to Dismiss is an interlocutory order, it cannot be the subject of a
Petition for Certiorari, and may only be reviewed in the ordinary course of law by an appeal from the judgment after trial.
On December 12, 2006, the Court of Appeals rendered the assailed Resolution denying the petitioner’s Motion for
Reconsideration.

Meanwhile, on December 28, 2006, the trial court issued an Order directing respondent to answer some of the questions
in petitioner’s Interrogatories to Plaintiff dated September 7, 2006.

Notwithstanding the foregoing, petitioner filed the present petition assailing the September 8, 2006 Decision and the
December 12, 2006 Resolution of the Court of Appeals. Arguing against the ruling of the appellate court, petitioner insists
that (a) an order denying a motion to dismiss may be the proper subject of a petition for certiorari; and (b) the trial court
committed grave abuse of discretion in not finding that it had not validly acquired jurisdiction over petitioner and that the
plaintiff had no cause of action.

Respondent, on the other hand, posits that: (a) the present Petition should be dismissed for not being filed by a real party
in interest and for lack of a proper verification and certificate of non-forum shopping; (b) the Court of Appeals correctly
ruled that certiorari was not the proper remedy; and (c) the trial court correctly denied petitioner’s motion to dismiss.

Our discussion of the issues raised by the parties follows:

59
Whether petitioner is a real party in interest

Respondent argues that the present Petition should be dismissed on the ground that petitioner no longer existed as a
corporation at the time said Petition was filed on February 1, 2007. Respondent points out that as of the date of the filing
of the Petition, there is no such corporation that goes by the name NM Rothschild and Sons (Australia) Limited. Thus,
according to respondent, the present Petition was not filed by a real party in interest, citing our ruling in Philips Export B.V.
v. Court of Appeals,10 wherein we held:

A name is peculiarly important as necessary to the very existence of a corporation (American Steel Foundries vs.
Robertson, 269 US 372, 70 L ed 317, 46 S Ct 160; Lauman vs. Lebanon Valley R. Co., 30 Pa 42; First National Bank vs.
Huntington Distilling Co., 40 W Va 530, 23 SE 792). Its name is one of its attributes, an element of its existence, and
essential to its identity (6 Fletcher [Perm Ed], pp. 3-4). The general rule as to corporations is that each corporation must
have a name by which it is to sue and be sued and do all legal acts. The name of a corporation in this respect designates
the corporation in the same manner as the name of an individual designates the person (Cincinnati Cooperage Co. vs.
Bate, 96 Ky 356, 26 SW 538; Newport Mechanics Mfg. Co. vs. Starbird, 10 NH 123); and the right to use its corporate
name is as much a part of the corporate franchise as any other privilege granted (Federal Secur. Co. vs. Federal Secur.
Corp., 129 Or 375, 276 P 1100, 66 ALR 934; Paulino vs. Portuguese Beneficial Association, 18 RI 165, 26 A 36).11

In its Memorandum12 before this Court, petitioner started to refer to itself as Investec Australia Limited (formerly "NM
Rothschild & Sons [Australia] Limited") and captioned said Memorandum accordingly. Petitioner claims that NM
Rothschild and Sons (Australia) Limited still exists as a corporation under the laws of Australia under said new name. It
presented before us documents evidencing the process in the Australian Securities & Investment Commission on the
change of petitioner’s company name from NM Rothschild and Sons (Australia) Limited to Investec Australia Limited.13

We find the submissions of petitioner on the change of its corporate name satisfactory and resolve not to dismiss the
present Petition for Review on the ground of not being prosecuted under the name of the real party in interest. While we
stand by our pronouncement in Philips Export on the importance of the corporate name to the very existence of
corporations and the significance thereof in the corporation’s right to sue, we shall not go so far as to dismiss a case filed
by the proper party using its former name when adequate identification is presented. A real party in interest is the party
who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit.14 There is no
doubt in our minds that the party who filed the present Petition, having presented sufficient evidence of its identity and
being represented by the same counsel as that of the defendant in the case sought to be dismissed, is the entity that will
be benefited if this Court grants the dismissal prayed for.

Since the main objection of respondent to the verification and certification against forum shopping likewise depends on
the supposed inexistence of the corporation named therein, we give no credit to said objection in light of the foregoing
discussion.

Propriety of the Resort to a Petition for Certiorari with the Court of Appeals

We have held time and again that an order denying a Motion to Dismiss is an interlocutory order which neither terminates
nor finally disposes of a case as it leaves something to be done by the court before the case is finally decided on the
merits. The general rule, therefore, is that the denial of a Motion to Dismiss cannot be questioned in a special civil action
for Certiorari which is a remedy designed to correct errors of jurisdiction and not errors of judgment. 15 However, we have
likewise held that when the denial of the Motion to Dismiss is tainted with grave abuse of discretion, the grant of the
extraordinary remedy of Certiorari may be justified. By "grave abuse of discretion" is meant:

[S]uch capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction. The abuse of discretion
must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the
duty enjoined by or to act all in contemplation of law.16

The resolution of the present Petition therefore entails an inquiry into whether the Court of Appeals correctly ruled that the
trial court did not commit grave abuse of discretion in its denial of petitioner’s Motion to Dismiss. A mere error in judgment
on the part of the trial court would undeniably be inadequate for us to reverse the disposition by the Court of Appeals.

Issues more properly ventilated during the trial of the case

60
As previously stated, petitioner seeks the dismissal of Civil Case No. 05-782 on the following grounds: (a) lack of
jurisdiction over the person of petitioner due to the defective and improper service of summons; (b) failure of the
Complaint to state a cause of action and absence of a cause of action; (c) the action is barred by estoppel; and (d)
respondent did not come to court with clean hands.

As correctly ruled by both the trial court and the Court of Appeals, the alleged absence of a cause of action (as opposed
to the failure to state a cause of action), the alleged estoppel on the part of petitioner, and the argument that respondent is
in pari delicto in the execution of the challenged contracts, are not grounds in a Motion to Dismiss as enumerated in
Section 1, Rule 1617 of the Rules of Court. Rather, such defenses raise evidentiary issues closely related to the validity
and/or existence of respondent’s alleged cause of action and should therefore be threshed out during the trial.

As regards the allegation of failure to state a cause of action, while the same is usually available as a ground in a Motion
to Dismiss, said ground cannot be ruled upon in the present Petition without going into the very merits of the main case.

It is basic that "[a] cause of action is the act or omission by which a party violates a right of another."18 Its elements are the
following: (1) a right existing in favor of the plaintiff, (2) a duty on the part of the defendant to respect the plaintiff's right,
and (3) an act or omission of the defendant in violation of such right. 19 We have held that to sustain a Motion to Dismiss
for lack of cause of action, the complaint must show that the claim for relief does not exist and not only that the claim was
defectively stated or is ambiguous, indefinite or uncertain.20

The trial court held that the Complaint in the case at bar contains all the three elements of a cause of action, i.e., it alleges
that: (1) plaintiff has the right to ask for the declaration of nullity of the Hedging Contracts for being null and void and
contrary to Article 2018 of the Civil Code of the Philippines; (2) defendant has the corresponding obligation not to enforce
the Hedging Contracts because they are in the nature of wagering or gambling agreements and therefore the transactions
implementing those contracts are null and void under Philippine laws; and (3) defendant ignored the advice and intends to
enforce the Hedging Contracts by demanding financial payments due therefrom.21

The rule is that in a Motion to Dismiss, a defendant hypothetically admits the truth of the material allegations of the
ultimate facts contained in the plaintiff's complaint.22 However, this principle of hypothetical admission admits of
exceptions. Thus, in Tan v. Court of Appeals, 23 we held:

The flaw in this conclusion is that, while conveniently echoing the general rule that averments in the complaint are
deemed hypothetically admitted upon the filing of a motion to dismiss grounded on the failure to state a cause of action, it
did not take into account the equally established limitations to such rule, i.e., that a motion to dismiss does not
admit the truth of mere epithets of fraud; nor allegations of legal conclusions; nor an erroneous statement of law; nor
mere inferences or conclusions from facts not stated; nor mere conclusions of law; nor allegations of fact the falsity of
which is subject to judicial notice; nor matters of evidence; nor surplusage and irrelevant matter; nor scandalous matter
inserted merely to insult the opposing party; nor to legally impossible facts; nor to facts which appear unfounded by a
record incorporated in the pleading, or by a document referred to; and, nor to general averments contradicted by more
specific averments. A more judicious resolution of a motion to dismiss, therefore, necessitates that the court be not
restricted to the consideration of the facts alleged in the complaint and inferences fairly deducible therefrom. Courts may
consider other facts within the range of judicial notice as well as relevant laws and jurisprudence which the courts are
bound to take into account, and they are also fairly entitled to examine records/documents duly incorporated into
the complaint by the pleader himself in ruling on the demurrer to the complaint.24 (Emphases supplied.)

In the case at bar, respondent asserts in the Complaint that the Hedging Contracts are void for being contrary to Article
201825 of the Civil Code. Respondent claims that under the Hedging Contracts, despite the express stipulation for
deliveries of gold, the intention of the parties was allegedly merely to compel each other to pay the difference between the
value of the gold at the forward price stated in the contract and its market price at the supposed time of delivery.

Whether such an agreement is void is a mere allegation of a conclusion of law, which therefore cannot be hypothetically
admitted. Quite properly, the relevant portions of the contracts sought to be nullified, as well as a copy of the contract
itself, are incorporated in the Complaint. The determination of whether or not the Complaint stated a cause of action would
therefore involve an inquiry into whether or not the assailed contracts are void under Philippine laws. This is, precisely, the
very issue to be determined in Civil Case No. 05-782. Indeed, petitioner’s defense against the charge of nullity of the
Hedging Contracts is the purported intent of the parties that actual deliveries of gold be made pursuant thereto. Such a
defense requires the presentation of evidence on the merits of the case. An issue that "requires the contravention of the
allegations of the complaint, as well as the full ventilation, in effect, of the main merits of the case, should not be within the
province of a mere Motion to Dismiss."26 The trial court, therefore, correctly denied the Motion to Dismiss on this ground.

61
It is also settled in jurisprudence that allegations of estoppel and bad faith require proof. Thus, in Parañaque Kings
Enterprises, Inc. v. Court of Appeals,27 we ruled:

Having come to the conclusion that the complaint states a valid cause of action for breach of the right of first refusal and
that the trial court should thus not have dismissed the complaint, we find no more need to pass upon the question of
whether the complaint states a cause of action for damages or whether the complaint is barred by estoppel or laches.
As these matters require presentation and/or determination of facts, they can be best resolved after trial on the
merits.28 (Emphases supplied.)

On the proposition in the Motion to Dismiss that respondent has come to court with unclean hands, suffice it to state that
the determination of whether one acted in bad faith and whether damages may be awarded is evidentiary in nature. Thus,
we have previously held that "[a]s a matter of defense, it can be best passed upon after a full-blown trial on the merits."29

Jurisdiction over the person of petitioner

Petitioner alleges that the RTC has not acquired jurisdiction over its person on account of the improper service of
summons. Summons was served on petitioner through the DFA, with respondent’s counsel personally bringing the
summons and Complaint to the Philippine Consulate General in Sydney, Australia.

In the pleadings filed by the parties before this Court, the parties entered into a lengthy debate as to whether or not
petitioner is doing business in the Philippines. However, such discussion is completely irrelevant in the case at bar, for two
reasons. Firstly, since the Complaint was filed on August 30, 2005, the provisions of the 1997 Rules of Civil Procedure
govern the service of summons. Section 12, Rule 14 of said rules provides:

Sec. 12. Service upon foreign private juridical entity. – When the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its resident agent designated in accordance with law
for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its
officers or agents within the Philippines. (Emphasis supplied.)

This is a significant amendment of the former Section 14 of said rule which previously provided:

Sec. 14. Service upon private foreign corporations. — If the defendant is a foreign corporation, or a nonresident joint stock
company or association, doing business in the Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or if there be no such agent, on the government official designated by law to that
effect, or on any of its officers or agents within the Philippines. (Emphasis supplied.)

The coverage of the present rule is thus broader.30 Secondly, the service of summons to petitioner through the DFA by
the conveyance of the summons to the Philippine Consulate General in Sydney, Australia was clearly made not through
the above-quoted Section 12, but pursuant to Section 15 of the same rule which provides:

Sec. 15. Extraterritorial service. – When the defendant does not reside and is not found in the Philippines, and the action
affects the personal status of the plaintiff or relates to, or the subject of which is property within the Philippines, in which
the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in
part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the
Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under section 6; or by
publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a
copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or
in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which
shall not be less than sixty (60) days after notice, within which the defendant must answer.

Respondent argues31 that extraterritorial service of summons upon foreign private juridical entities is not proscribed under
the Rules of Court, and is in fact within the authority of the trial court to adopt, in accordance with Section 6, Rule 135:

Sec. 6. Means to carry jurisdiction into effect. – When by law jurisdiction is conferred on a court or judicial officer, all
auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer; and
if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules,
any suitable process or mode of proceeding may be adopted which appears comformable to the spirit of said law or rules.

62
Section 15, Rule 14, however, is the specific provision dealing precisely with the service of summons on a defendant
which does not reside and is not found in the Philippines, while Rule 135 (which is in Part V of the Rules of Court entitled
Legal Ethics) concerns the general powers and duties of courts and judicial officers.

Breaking down Section 15, Rule 14, it is apparent that there are only four instances wherein a defendant who is a non-
resident and is not found in the country may be served with summons by extraterritorial service, to wit: (1) when the action
affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is property, within the
Philippines, in which the defendant claims a lien or an interest, actual or contingent; (3) when the relief demanded in such
action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and
(4) when the defendant non-resident's property has been attached within the Philippines. In these instances, service of
summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of
court; or (c) any other manner the court may deem sufficient.32

Proceeding from this enumeration, we held in Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corporation33 that:

Undoubtedly, extraterritorial service of summons applies only where the action is in rem or quasi in rem, but not
if an action is in personam.

When the case instituted is an action in rem or quasi in rem, Philippine courts already have jurisdiction to hear and decide
the case because, in actions in rem and quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to
confer jurisdiction on the court, provided that the court acquires jurisdiction over the res. Thus, in such instance,
extraterritorial service of summons can be made upon the defendant. The said extraterritorial service of summons is not
for the purpose of vesting the court with jurisdiction, but for complying with the requirements of fair play or due process, so
that the defendant will be informed of the pendency of the action against him and the possibility that property in the
Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff, and he
can thereby take steps to protect his interest if he is so minded. On the other hand, when the defendant or respondent
does not reside and is not found in the Philippines, and the action involved is in personam, Philippine courts
cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he
voluntarily appears in court.34 (Emphases supplied.)

In Domagas v. Jensen,35 we held that:

[T]he aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or quasi in rem
for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding to
enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although
it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of
it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the
judgment of a court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to
compel a defendant to specifically perform some act or actions to fasten a pecuniary liability on him.36

It is likewise settled that "[a]n action in personam is lodged against a person based on personal liability; an action in rem is
directed against the thing itself instead of the person; while an action quasi in rem names a person as defendant, but its
object is to subject that person’s interest in a property to a corresponding lien or obligation."37

The Complaint in the case at bar is an action to declare the loan and Hedging Contracts between the parties void
with a prayer for damages. It is a suit in which the plaintiff seeks to be freed from its obligations to the defendant under a
contract and to hold said defendant pecuniarily liable to the plaintiff for entering into such contract. It is therefore an action
in personam, unless and until the plaintiff attaches a property within the Philippines belonging to the defendant, in which
case the action will be converted to one quasi in rem.

Since the action involved in the case at bar is in personam and since the defendant, petitioner Rothschild/Investec, does
not reside and is not found in the Philippines, the Philippine courts cannot try any case against it because of the
impossibility of acquiring jurisdiction over its person unless it voluntarily appears in court.38

In this regard, respondent vigorously argues that petitioner should be held to have voluntarily appeared before the trial
court when it prayed for, and was actually afforded, specific reliefs from the trial court. 39 Respondent points out that while
petitioner’s Motion to Dismiss was still pending, petitioner prayed for and was able to avail of modes of discovery against
respondent, such as written interrogatories, requests for admission, deposition, and motions for production of
documents.40
63
Petitioner counters that under this Court’s ruling in the leading case of La Naval Drug Corporation v. Court of Appeals, 41 a
party may file a Motion to Dismiss on the ground of lack of jurisdiction over its person, and at the same time raise
affirmative defenses and pray for affirmative relief, without waiving its objection to the acquisition of jurisdiction over its
person.42

It appears, however, that petitioner misunderstood our ruling in La Naval. A close reading of La Naval reveals that the
Court intended a distinction between the raising of affirmative defenses in an Answer (which would not amount to
acceptance of the jurisdiction of the court) and the prayer for affirmative reliefs (which would be considered acquiescence
to the jurisdiction of the court):

In the same manner that a plaintiff may assert two or more causes of action in a court suit, a defendant is
likewise expressly allowed, under Section 2, Rule 8, of the Rules of Court, to put up his own defenses
alternatively or even hypothetically. Indeed, under Section 2, Rule 9, of the Rules of Court, defenses and objections
not pleaded either in a motion to dismiss or in an answer, except for the failure to state a cause of action, are deemed
waived. We take this to mean that a defendant may, in fact, feel enjoined to set up, along with his objection to the court's
jurisdiction over his person, all other possible defenses. It thus appears that it is not the invocation of any of such
defenses, but the failure to so raise them, that can result in waiver or estoppel. By defenses, of course, we refer to the
grounds provided for in Rule 16 of the Rules of Court that must be asserted in a motion to dismiss or by way of
affirmative defenses in an answer.

Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals and Freuhauf Electronics Phils., Inc. (225
SCRA 737, 738), we lately ruled:

"This is not to say, however, that the petitioner's right to question the jurisdiction of the court over its person is
now to be deemed a foreclosed matter. If it is true, as Signetics claims, that its only involvement in the Philippines was
through a passive investment in Sigfil, which it even later disposed of, and that TEAM Pacific is not its agent, then it
cannot really be said to be doing business in the Philippines. It is a defense, however, that requires the contravention of
the allegations of the complaint, as well as a full ventilation, in effect, of the main merits of the case, which should not thus
be within the province of a mere motion to dismiss. So, also, the issue posed by the petitioner as to whether a foreign
corporation which has done business in the country, but which has ceased to do business at the time of the filing of a
complaint, can still be made to answer for a cause of action which accrued while it was doing business, is another matter
that would yet have to await the reception and admission of evidence. Since these points have seasonably been
raised by the petitioner, there should be no real cause for what may understandably be its apprehension, i.e., that
by its participation during the trial on the merits, it may, absent an invocation of separate or independent reliefs
of its own, be considered to have voluntarily submitted itself to the court's jurisdiction."43 (Emphases supplied.)

In order to conform to the ruling in La Naval, which was decided by this Court in 1994, the former Section 23, Rule
1444 concerning voluntary appearance was amended to include a second sentence in its equivalent provision in the 1997
Rules of Civil Procedure:

SEC. 20. Voluntary appearance. – The defendant's voluntary appearance in the action shall be equivalent to service of
summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of
the defendant shall not be deemed a voluntary appearance. (Emphasis supplied.)

The new second sentence, it can be observed, merely mentions other grounds in a Motion to Dismiss aside from lack of
jurisdiction over the person of the defendant. This clearly refers to affirmative defenses, rather than affirmative reliefs.

Thus, while mindful of our ruling in La Naval and the new Section 20, Rule 20, this Court, in several cases, ruled that
seeking affirmative relief in a court is tantamount to voluntary appearance therein.45 Thus, in Philippine Commercial
International Bank v. Dy Hong Pi,46 wherein defendants filed a "Motion for Inhibition without submitting themselves to the
jurisdiction of this Honorable Court" subsequent to their filing of a "Motion to Dismiss (for Lack of Jurisdiction)," we held:

Besides, any lingering doubts on the issue of voluntary appearance dissipate when the respondents' motion for inhibition
is considered. This motion seeks a sole relief: inhibition of Judge Napoleon Inoturan from further hearing the
case. Evidently, by seeking affirmative relief other than dismissal of the case, respondents manifested their
voluntary submission to the court's jurisdiction. It is well-settled that the active participation of a party in the
proceedings is tantamount to an invocation of the court's jurisdiction and a willingness to abide by the resolution of the
case, and will bar said party from later on impugning the court's jurisdiction.47 (Emphasis supplied.)1âwphi1

64
In view of the above, we therefore rule that petitioner, by seeking affirmative reliefs from the trial court, is deemed to have
voluntarily submitted to the jurisdiction of said court. A party cannot invoke the jurisdiction of a court to secure affirmative
relief against his opponent and after obtaining or failing to obtain such relief, repudiate or question that same
jurisdiction.48 Consequently, the trial court cannot be considered to have committed grave abuse of discretion amounting
to lack or excess of jurisdiction in the denial of the Motion to Dismiss on account of failure to acquire jurisdiction over the
person of the defendant.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision of the Court of Appeals dated September 8,
2006 and its Resolution dated December 12, 2006 in CA-G.R. SP No. 94382 are hereby AFFIRMED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 165016             June 17, 2008

DOLORES MONTEFALCON & LAURENCE MONTEFALCON, petitioners, 

vs.
RONNIE S. VASQUEZ, respondent.

DECISION

QUISUMBING, J.:

This petition for review assails the September 29, 2003 Decision 1 and the July 19, 2004 Resolution2 of the Court of
Appeals in CA-G.R. CV No. 71944, which had reversed the May 28, 2001 Decision3 of the Regional Trial Court (RTC),
Branch 19, of Naga City in Civil Case No. RTC '99-4460.

The facts culled from the records are as follows.

In 1999, petitioner Dolores P. Montefalcon filed a Complaint 4 for acknowledgment and support against respondent Ronnie
S. Vasquez before the RTC of Naga City. Alleging that her son Laurence is the illegitimate child of Vasquez, she prayed
that Vasquez be obliged to give support to co-petitioner Laurence Montefalcon, whose certificate of live birth he signed as
father.5 According to petitioners, Vasquez only gave a total of P19,000 as support for Laurence since Laurence was born
in 1993. Vasquez allegedly also refused to give him regular school allowance despite repeated demands. Petitioner
Dolores added that she and Vasquez are not legally married, and that Vasquez has his own family.

A sheriff tried to serve the summons and complaint on Vasquez in Aro-aldao, Nabua, Camarines Sur. Vasquez's
grandfather received them as Vasquez was in Manila. Vasquez's mother returned the documents to the clerk of court,
who informed the court of the non-service of summons.6

Petitioners then filed a motion to declare Vasquez in default. The court denied it for lack of proper service of summons.7

In 2000, the court issued an alias summons on Vasquez at "10 Int. President Garcia St., Zone 6, Signal Village, Taguig,
Metro Manila" upon petitioners' motion. Albeit a Taguig deputy sheriff served it by substituted service on Vasquez's
caretaker Raquel Bejer, the sheriff's return incorrectly stated "Lazaro" as Vasquez's surname.8

Another alias summons9 was issued, also received by Bejer. The second sheriff's return states:

THIS IS TO CERTIFY THAT on the 19 th day of July 2000 the undersigned sheriff caused the service of summons
issued by the court in the above-entitled case together with the copy of the complaint and annexes attached

65
 thereon upon defendant RONNIE S. VASQUEZ, by substituted service, thru his caretaker, RAQUEL BEJER, a
person of sufficient discretion, who acknowledged the receipt thereof at No. 10 Int. President Garcia St. Zone 6,
Signal Village, Taguig, Metro Manila, as evidenced by her signature appearing at the lower portion of the original
copy of summons.

WHEREFORE, said summons is hereby returned to the court of origin DULY SERVED for its records and
information.

Taguig for Naga City, July 19, 2000

(SGD.)
ERNESTO G. RAYMUNDO, JR.,
Deputy Sheriff
MTC BR 74
Taguig, Metro Manila10
On petitioners' motion, the trial court declared Vasquez in default for failure to file an answer despite the substituted
service of summons. Vasquez was furnished with court orders and notices of the proceedings at his last known address,
but these were returned as he had allegedly moved to another place and left no new address.11

In 2001, the court granted petitioners' prayers, explaining that they had no ill-motive and that Dolores gave a truthful
testimony. The court added that Vasquez admitted the truth of the allegations by his silence. It further explained that
Laurence's certificate of live birth, being a public document, is irrefutably a prima facie evidence of illegitimate filiation. The
trial court decreed:

WHEREFORE, by preponderant evidence, judgment is hereby rendered in favor of the plaintiffs Dolores
Montefalcon and her minor child Laurence Montefalcon and against defendant Ronnie S. Vasquez who is hereby
ordered to:

1. Acknowledge plaintiff Laurence Montefalcon as his illegitimate child with Dolores Montefalcon;

2. Give support to the said minor in the amount of FIVE THOUSAND (P5,000.00) PESOS monthly commencing
on June 1, 1993, the past support for eight (8) years in the amount of FOUR HUNDRED EIGHTY THOUSAND
(P480,000.00) PESOS less the amount of NINETEEN THOUSAND (P19,000.00) PESOS previously given, shall
be paid promptly and the monthly support of FIVE THOUSAND (P5,000.00) PESOS shall be paid not later than
the end of each month beginning on July 31, 2001 and every end of the month thereafter as prayed for in the
complaint; and

3. Pay the sum of TEN THOUSAND (P10,000.00) PESOS and THREE THOUSAND (P3,000.00) PESOS as
attorney's and appearance fees, respectively, and litigation expenses of ONE THOUSAND (P1,000.00) PESOS.

SO ORDERED.12

In the same year, Vasquez surfaced. He filed a notice of appeal to which petitioners opposed. Appeal was granted by the
court.13 Before the appellate court, he argued that the trial court erred in trying and deciding the case as it "never"
acquired jurisdiction over his person, as well as in awarding P5,000-per-month support, which was allegedly "excessive
and exorbitant." The appellate court noted that the service of summons on Vasquez was "defective" as there was no
explanation of impossibility of personal service and an attempt to effect personal service, and decreed as follows:

WHEREFORE, based on the foregoing premises, the instant appeal is GRANTED. The appealed May 28, 2001
Decision of the Regional Trial Court of Naga City in Civil Case No. RTC '99-4460 is hereby NULLIFIEDand SET
ASIDE. Accordingly, let this case be REMANDED to the court a quo for further proceedings.

SO ORDERED.14

Petitioners argued in their motion for reconsideration 15 that any attempt at personal service of summons was needless as
Vasquez already left for abroad. The appellate court, however, denied the motion. Hence, this petition.

66
Petitioners assign two appellate court errors:

I.

THE COURT OF APPEALS ERRED IN HOLDING THAT THE RESPONDENT IN THIS CASE WAS NOT
VALIDLY SERVED WITH THE SUMMONS AND COMPLAINT IN CIVIL CASE NO. RTC '99-4460; AND THAT

II.

THE COURT OF APPEALS ERRED IN ANNUL[L]ING AND SETTING ASIDE THE TRIAL COURT'S DECISION
(ANNEX "B") FOR LACK OF JURISDICTION.16

Petitioners justify the validity of substituted service as Vasquez had left as overseas seafarer when the sheriff served the
summons on July 19, 2000 in Taguig. Noting that Vasquez's seaman's book indicated that he left the country on January
24, 2000 and came back on October 12, 2000, they criticize the appellate court for anchoring its rulings on mere
technicality.

Vasquez counters that because he was abroad, service of summons should have been personal or by publication as
substituted service is proper only if a defendant is in the country. Vasquez also added that the sheriff's return did not state
that he exerted efforts to personally serve the summons.17

In their reply, petitioners insist that a substituted service is the normal method if one is temporarily away from the country
as personal service abroad or by publication are not ordinary means of service.18

Simply put, the issues now for resolution are: (1) whether there is a valid substituted service of summons on Vasquez to
clothe the trial court with jurisdiction over his person; and (2) whether he is obliged to give support to co-petitioner
Laurence.

To acquire jurisdiction over the person of a defendant, service of summons must be personal,19 or if this is not feasible
within a reasonable time, then by substituted service. 20 It is of judicial notice that overseas Filipino seafarers are
contractual employees. They go back to the country once their contracts expire, and wait for the signing of another
contract with the same or new manning agency and principal if they wish. It is therefore common knowledge that a Filipino
seaman often has a temporary residence in the urban areas like Metro Manila, where majority of the manning agencies
hold offices, aside from his home address in the province where he originates. In this case, respondent Vasquez hails
from Camarines Sur but he has lived in Taguig City when the complaint was filed. Notice may then be taken that he has
established a residence in either place. Residence is a place where the person named in the summons is living at the time
when the service was made, even though he was temporarily abroad at the time. As an overseas seafarer, Vasquez was
a Filipino resident temporarily out of the country. Hence, service of summons on him is governed by Rule 14, Section 16
of the Rules of Court:

SEC. 16. Residents temporarily out of the Philippines. ─ When any action is commenced against a defendant who
ordinarily resides within the Philippines, but who is temporarily out of it, service may, by leave of court,
be also effected out of the Philippines, as under the preceding section. (Emphasis supplied.)

The preceding section referred to states:

SEC. 15. Extraterritorial service.─ When the defendant does not reside and is not found in the Philippines, and
the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief
demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of court, be effected out of the
Philippines by personal service as under section 6; or by publication in a newspaper of general circulation in such
places and for such time as the court may order, in which case a copy of the summons and order of the court
shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may
deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty
(60) days after notice, within which the defendant must answer.

67
Because Section 16 of Rule 14 uses the words "may" and "also," it is not mandatory. Other methods of service of
summons allowed under the Rules may also be availed of by the serving officer on a defendant-seaman.

Ideally, Vasquez must be personally served summons. But was personal service of summons practicable? Conversely,
was substituted service of summons justified?

Obviously, personal service of summons was not practicable since the defendant was temporarily out of the country. To
proceed with personal service of summons on a defendant-seaman who went on overseas contract work ─ would not only
be impractical and futile ─ it would also be absurd.

The impossibility of prompt personal service was shown by the fact that the Naga City-based sheriff purposely went to a
barrio in Camarines Sur to serve the summons personally on Vasquez. When service of summons failed, said sheriff
ascertained the whereabouts of Vasquez. Upon being informed that Vasquez was in Manila, the Naga court
commissioned a Taguig City-based sheriff to serve the summons. Both the Naga and Taguig sheriffs inquired about
Vasquez's whereabouts, signifying that they did not immediately resort to substituted service. There was no undue haste
in effecting substituted service. The fact that the Naga court allowed a reasonable time to locate Vasquez to as far as
Taguig shows that there was indeed no precipitate haste in serving the summons.

In this case, we agree that the substituted service in Taguig was valid and justified because previous attempts were made
by the sheriffs to serve the summons, but to no avail. Diligent efforts were evidently exerted in the conduct of the
concerned sheriffs in the performance of their official duty. Also, the person who received the alias summons was of
suitable age and discretion, then residing at Vasquez's dwelling. There is no quarrel that it was really Vasquez's
residence, as evidenced by his employment contract, executed under the supervision and authority of the Philippine
Overseas Employment Administration (POEA). Vasquez cannot deny that in his contract of employment and seafarer's
information sheet, both bearing POEA's letterhead, his address in Metro Manila was what was correctly mentioned in the
alias summons that Bejer received. She must have informed Vasquez one way or another of the suit upon his return in
October 2000 after finishing his nine-month contract with Fathom Ship Management.

Thus, it is reasonable to conclude that he had enough time to have the default order set aside. The default judgment was
rendered on May 28, 2001. He also had enough time to file a motion for reconsideration. But he did nothing. The
interregnum between the first but failed attempt at personal service by the RTC of Naga City in Vasquez's place in
Camarines Sur to the final substituted service in Metro Manila by a Taguig RTC sheriff was almost eight months, a
reasonable time long enough to conclude that personal service had failed and was futile.

Montalban v. Maximo21 offers a rational and logical solution of the issue. We held in said case that the normal method of
service of summons on one temporarily absent is by substituted service because personal service abroad and service by
publication are not ordinary means of summoning defendants. Summons in a suit in personamagainst a temporarily
absent resident may be by substituted service as domiciliaries of a State are always amenable to suits in
personam therein.22

"Residence" is the place where the person named in the summons is living at the time when the service is made, even
though he may be temporarily out of the country at the time. A plaintiff is merely required to know the defendant's
residence, office or regular business place. He need not know where a resident defendant actually is at the very moment
of filing suit. He is not even duty-bound to ensure that the person upon whom service was actually made delivers the
summons to the defendant or informs him about it. The law presumes that for him. It is immaterial that defendant does not
receive actual notice.

As well said in Montalban:

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

68
 Not that he cannot be reached within a reasonable time to enable him to contest a suit against him. There are
now advanced facilities of communication. Long distance telephone calls and cablegrams make it easy for one he
left behind to communicate with him.23

Aside from, at present, various forms of texting and short message services by the ubiquitous cellular phones.

More importantly, the letter of the law must yield to its spirit. The absence in the final sheriff's return of a statement about
the impossibility of personal service does not conclusively prove that the service is invalid. Such failure should not unduly
prejudice petitioners if what was undisclosed was in fact done. Proof of prior attempts at personal service may have been
submitted by the plaintiff during the hearing of any incident assailing the validity of the substituted service 24 had Vasquez
surfaced when the case was heard. In fact, he was declared in default. It was only when a judgment against him was
rendered by the trial court that he questioned the validity of service of summons before the appellate court. Such failure to
appear, and then later to question the court's jurisdiction over his person, should not be taken against herein petitioners.

Between Vasquez's self-serving assertion that he only came to know of the case when his mother told him about the trial
court's decision and the sheriff's return on the substituted service which carries a presumption of regularity, the latter is
undoubtedly deserving of more faith and credit. The sheriff's certificate of service of summons is prima facieevidence of
the facts set out in it. Only clear and convincing evidence may overcome its presumption of regularity. Given the
circumstances in the present case, we agree that the presumption of regularity in the performance of duty on the part of
the sheriff stands.25

On the second issue, the trial court's order must also be sustained. Co-petitioner Laurence is legally entitled to support
from the respondent, and the amount of P5,000 monthly set by the trial court is neither excessive nor unreasonable.

Article 17526 of the Family Code of the Philippines mandates that illegitimate filiation may be established in the same way
and on the same evidence as legitimate children. Under Article 172, 27 the filiation of legitimate children is established by
any of the following: (1) through record of birth appearing in the civil register or a final order; or (2) by admission of filiation
in a public document or private handwritten instrument and signed by the parent concerned; or in default of these two, by
open and continuous possession of the status of a legitimate child or by any other means allowed by the Rules of Court
and special laws.

Laurence's record of birth is an authentic, relevant and admissible piece of evidence to prove paternity and filiation.
Vasquez did not deny that Laurence is his child with Dolores. He signed as father in Laurence's certificate of live birth, a
public document. He supplied the data entered in it. Thus, it is a competent evidence of filiation as he had a hand in its
preparation. In fact, if the child had been recognized by any of the modes in the first paragraph of Article 172, there is no
further need to file any action for acknowledgment because any of said modes is by itself a consummated act.28

As filiation is beyond question, support follows as matter of obligation. Petitioners were able to prove that Laurence needs
Vasquez's support and that Vasquez is capable of giving such support. Dolores testified that she spent around P200,000
for Laurence; she spends P8,000 a month for his schooling and their subsistence. She told the lower court Vasquez was
earning US$535 monthly based on his January 10, 2000 contract of employment 29 with Fathom Ship Management and his
seafarer information sheet.30 That income, if converted at the prevailing rate, would be more than sufficient to cover the
monthly support for Laurence.

Under Article 195 (4)31 of the Family Code, a parent is obliged to support his illegitimate child. The amount is variable.
There is no final judgment thereof as it shall be in proportion to the resources or means of the giver and the necessities of
the recipient.32 It may be reduced or increased proportionately according to the reduction or increase of the necessities of
the recipient and the resources or means of the person obliged to support.33 Support comprises everything indispensable
for sustenance, dwelling, clothing, medical attendance, education and transportation, in keeping with the financial capacity
of the family.34 Under the premises, the award of P5,000 monthly support to Laurence is reasonable, and not excessive
nor exorbitant.

In sum, we rule that the Court of Appeals erred in invalidating the substituted service of summons and remanding the
case. As there was valid substituted service of summons under the circumstances of this case, the lower court acquired
jurisdiction over his person and correctly ordered him to pay past and present monthly support to his illegitimate child as
well as attorney's fees and litigation expenses to petitioners.

69
WHEREFORE, the petition is GRANTED. The Decision dated September 29, 2003 and Resolution dated July 19, 2004 of
the Court of Appeals in CA-G.R. CV No. 71944 are REVERSED and SET ASIDE. The Decision dated May 28, 2001 of
the Regional Trial Court, Branch 19, Naga City in Civil Case No. RTC '99-4460 is hereby REINSTATED.

Costs against respondent.

SO ORDERED.

G.R. No. L-48375 August 13, 1986

JOSE C. CARIAGA, JR. AND MARIETA CARIAGA, petitioners, 

vs.
THE HON. ANTONIO Q. MALAYA, CAROLINA ALMONTE CARIAGA-SOON AND ANA ALMONTE
CARIAGA, respondents.

PARAS, J.:

This is a petition for certiorari to review and to set aside two orders of the respondent Judge dated January 16, 1978 and
April 11, 1978 giving validity to the service of summons by registered mail upon the defendants Jose C. Cariaga, Jr. and
Marieta Cariaga-Celis (petitioners herein), who are residing abroad. Petitioners aver that the issuance of said orders by
the respondent Judge is tantamount to grave abuse of discretion.

The antecedent facts of the case at bar are briefly summarized as follows:

On October 6, 1976, plaintiffs (private respondents herein) Ana Almonte Cariaga Soon filed in her behalf and in behalf of
her minor daughter Carolina, an action for (1) Annulment of a Deed of Extra-Judicial Partition of Real Property, (2)
Cancellation of Transfer Certificate of Title (TCT), (3) Recovery of Real Property with damages, in the Court of First
Instance (CFI) of Laguna, Branch IV, now known as the Regional Trial Court (RTC), docketed as Civil Case No. SC-1474.
All defendants in said action filed their answer with counterclaim with the exception of defendants (petitioners herein) Jose
C. Cariaga Jr. and Marieta Cariaga-Celis who were both residing abroad and were not served with summons. The lower
court upon motion of plaintiffs granted them leave to effect extra-territorial service of summons upon said defendants
pursuant to Secs. 7, 17 and 18 of Rule 14 of the New Rules of Court. (Annex "A", P. 9, Record). Accordingly, summonses
with copies of the complaint were served to the defendants by registered mail abroad (Guam and U.S.A.) by the Clerk of
Court at the instance of plaintiffs (Annex "B" and "C").

On August 30, 1977, defendants, who are residents of the Philippines filed a motion to set aside the said summons and to
declare the service of summons abroad by registered mail as null and void, it being allegedly irregular and unauthorized
under the provisions of Rule 14 of the Rules of Court (Annex D ") to which motion plaintiffs filed their opposition.

Acting on the issue the lower court ruled in this wise:

ORDER

It appearing that but for the short period of fifteen (15) days from date of receipt of summons within which
to answer given defendants Jose C. Cariaga, Jr. and Marietta C. Cariaga, who reside abroad, there was
substantial compliance with Section 17 as related to Section 7 both of Rule 14 of the New Rules of Court
in the service of said summons on said defendants, for LACK OF MERIT, the defendants' MOTION TO
SET ASIDE SUMMONSES is, as it is, hereby DENIED.

Defendants Jose C. Cariaga, Jr., and Marietta C. Cariaga, having already received copies of plaintiffs'
Complaint with the service of summons on them, said defendants are given NINETY (90) days from

70
 receipt of this Order within which to file responsive pleadings. "Let copies of this Order be served on the
said defendants by registered mail with return cards at the instance of the plaintiffs.

IT IS SO ORDERED.

Santa Cruz, Laguna, January 16, 1978.

Sgd. ANTONIO Q. MALAYA

ANTONIO Q. MALAYA
Judge

(Annex F, p. 21, Record)

On March 31, 1978, defendants (petitioner herein), residing abroad, by special appearance and thru counsel filed their
motion to consider the service of summons upon, them by registered mail as null and void. On April 11, 1978, the lower
court issued another order reading as follows:

ORDER

Finding on merit to defendants' motion filed on March 31, 1978, through counsel to consider the service of
summons to them by registered mail to be null and void because they are residing abroad, considering
the findings of this Court as expounded in its January 16, 1978 Order, said motion is, as it is, hereby
DENIED.

IT IS SO ORDERED.

Santa Cruz, Laguna, April 11, 1978.

(SGD.) IRINEO V. MENDOZA

T/IRINEO V. MENDOZA
Judge

(Annex " H ", p. 25 Record)

The main issue on appeal is whether the service of summons by registered mail upon defendants in the case at bar is one
which is contemplated within the principles laid down in the provisions of Secs. 17, 7 and 22, Rule 14 of the New Rules of
Court to wit:

Section 17. Extraterritorial service. —When the defendant does not reside and is not found in the
Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which
is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or
contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from
any interest therein, or the property of the defendant has been attached within the Philippines, service
may, by leave of court, be effected out of the Philippines by personal service as under Section 7; or by
publication in a newspaper of general circulation in such places and for such time as the court may order,
in which case a copy of the summons and order of the court shall be sent by registered mail to the last
known address of the defendant, or in any other manner the court may deem sufficient. Any order
granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer.

Sec. 7. Personal service of summons. The summons shall be served by handing a copy thereof to the
defendant in person, or if he refuses to receive it, by tendering it to him.

Sec. 22. Proof of service by registered mail-service by registered mail under this rule may be proved by a
certificate of the sheriff or affidavit of the person especially authorized by the court, showing that a copy of
the summons and papers attached thereto, inclosed in an envelope and addressed to the defendant, with
postage prepaid, has been mailed, to which certificate or affidavit the registry receipt and return card shall
be attached.
71
Questioning the validity of the aforequoted orders dated January 16, 1978 and April 11, 1978, petitioners aver that the
lower court committed an error in allowing service of summons by registered mail, arguing that such mode must be
coupled with publication in a newspaper of general circulation which was lacking in the case at bar. Petitioners' contention
holds no water.

Under Section 17, extraterritorial service of summons is proper: (1) when the action affects the personal status of the
plaintiff; (2) when the action relates to, or the subject of which is, property within the Philippines, in which the defendant
has or claims a lien or interest, actual or contingent; (3) when the relief demanded in such an action consists, wholly or in
part, in excluding the defendant from any interest in property located in the Philippines; and (4) when defendant non-
resident's property has been attached within the Philippines (Sec. 17, Rule 14, Rules of Court).

In any of such four cases, the service of summons may, with leave of court, be effected out of the Philippines in three
ways: (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as
the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the
last known address of the defendant; and (3) in any other manner which the court may deem sufficient. The third mode of
extraterritorial service of summons was substantially complied with in this case. (De Midgely v. Fernandos, 64 SCRA 23,
33, 34).

There is no question that the requirement of due process has been met as shown by the fact that defendants actually
received the summonses and copies of the complaint and as evidenced by the Registry Return Cards marked as Annex
A-1 (page 56-Record) and Annex B-1. Whatever defect there may have been in the service of summons was aptly
corrected by the court a quo in its assailed order dated January 16, 1978, which gave said defendants ninety (90) days
from receipt of order within which to file their responsive pleadings. Defendants have no reason to complain that they
were unaware of the action filed against them or claim that they were denied due process.

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

WHEREFORE, premises considered, the petition for certiorari is hereby DISMISSED with costs against the petitioners.

SO ORDERED.

G.R. No. 150656            April 29, 2003

MARGARITA ROMUALDEZ-LICAROS, petitioner, 
vs.
ABELARDO B. LICAROS, respondent.

CARPIO, J.:

The Case

This is a petition for review on certiorari1 to annul the Decision2 dated 9 August 2001 of the Court of Appeals in CA-G.R.
SP No. 58487, as well as the Resolution dated 23 October 2001 denying the motion for reconsideration. The Court of
Appeals dismissed the petition to annul the following decisions3 rendered by Branch 143 of the Regional Trial Court of
Makati:

(1) The Decision dated 27 December 19904 granting the dissolution of the conjugal partnership of gains of the
spouses Abelardo B. Licaros and Margarita Romualdez-Licaros;

72
 (2) The Decision dated 8 November 19915 declaring the marriage between the same spouses null and void.

The Facts

The antecedent facts as found by the Court of Appeals are as follows:

x x x Abelardo Licaros (Abelardo, for short) and Margarita Romualdez-Licaros (Margarita, hereafter) were
lawfully married on December 15, 1968. Out of this marital union were born Maria Concepcion and Abelardo, Jr.
Ironically, marital differences, squabbles and irreconcilable conflicts transpired between the spouses, such that
sometime in 1979, they agreed to separate from bed and board.

In 1982, Margarita left for the United States and there, to settle down with her two (2) children. In the United
States, on April 26, 1989, Margarita applied for divorce before the Superior Court of California, County of San
Mateo (Annex "1", Rejoinder, pp. 164-165) where she manifested that she does not desire counseling at that
time (Quotation, p. 166, Rollo). On August 6, 1990, Margarita was granted the decree of divorce (Annex 2,
Answer, p. 108, Rollo) together with a distribution of properties between her and Abelardo (pp. 167-168, Rollo).

Not long after, on August 17, 1990, Abelardo and Margarita executed an "Agreement of Separation of Properties"
(pp. 60-64, Rollo). This was followed-up by a petition filed on August 21, 1990 before the Regional Trial Court of
Makati for the dissolution of the conjugal partnership of gains of the spouses and for the approval of the
agreement of separation of their properties. This was docketed as Special Proceeding No. 2551. On December
27, 1990, a decision was issued granting the petition and approving the separation of property agreement.

For his part, on June 24, 1991, Abelardo commenced Civil Case No. 91-1757, for the declaration of nullity of his
marriage with Margarita, based on psychological incapacity under the New Family Code. As Margarita was then
residing at 96 Mulberry Lane, Atherton, California, U.S.A., Abelardo initially moved that summons be served
through the International Express Courier Service. The court a quo denied the motion. Instead, it ordered that
summons be served by publication in a newspaper of general circulation once a week for three (3) consecutive
weeks, at the same time furnishing respondent a copy of the order, as well as the corresponding summons and a
copy of the petition at the given address in the United States through the Department of Foreign Affairs, all at the
expense of Abelardo. Respondent was given sixty (60) days after publication to file a responsive pleading.

On July 15, 1991, Process Server, Maximo B. Dela Rosa, submitted his Officer’s Return quoted hereunder:

"OFFICER’S RETURN

THIS IS TO CERTIFY that on July 3, 1991, I have served a copy of summons and complaint with annexes
together with order dated June 28, 1991 issued by the Court in the above-entitled case upon defendant Margarita
Romualdez-Licaros c/o DFA. (sent by Mail) thru Pat G. Martines receiving Clerk of Department of Foreign Affairs
a person authorized to receive this kind of process who acknowledged the receipt thereof at ADB Bldg., Roxas
Blvd., Pasay City, Metro Manila." (p. 40, Rollo)

As required by law, the case was referred to Trial Prosecutor Bruselas, Jr. to find out any possible collusion between the
parties in the case. Thereafter, with the negative report of collusion, Abelardo was allowed to present his evidence ex-
parte. On November 8, 1991, the Decision (Annex "A", Petition) was handed down in Civil Case No. 91-1757 declaring
the marriage between Abelardo and Margarita null and void.

Almost nine (9) years later, on April 28, 2000, the petition at bench was commenced when Margarita received a letter
dated November 18, 1991 from a certain Atty. Angelo Q. Valencia informing her that she no longer has the right to use the
family name "Licaros" inasmuch as her marriage to Abelardo had already been judicially dissolved by the Regional Trial
Court of Makati on November 8, 1991. Asseverating to have immediately made some verifications and finding the
information given to be true, petitioner commenced the instant petition on the following grounds:

(A) THERE WAS EXTRINSIC FRAUD IN THE PREPARATION AND FILING BY ABELARDO OF THE PETITION
FOR DISSOLUTION OF THE CONJUGAL PARTNERSHIP OF GAINS AND ITS ANNEX, THE AGREEMENT OF
SEPARATION OF PROPERTIES.

73
 (B) THE TRIAL COURT LACKED JURISDICTION TO HEAR AND DECIDE THE PETITION FOR DECLARATION
OF NULLITY OF MARRIAGE.6

The Ruling of the Court of Appeals

The Court of Appeals debunked the claim of Margarita that there was extrinsic fraud in the preparation and filing by
Abelardo of the Petition for Dissolution of Conjugal Partnership of Gains and its annex, the Agreement of Separation of
Properties. The Court of Appeals stated:

x x x, the extrinsic fraud alluded to consists of Abelardo coercing Margarita into signing the petition to dissolve
their conjugal partnership of gains together with the agreement of separation of properties, by threatening to cut-
off all financial and material support of their children then still studying in the United States; that petitioner had no
hand directly or indirectly in the preparation of the petition and agreement of separation of properties; that
petitioner never met the counsel for the petitioner, nor the notary public who notarized the deed; and, petitioner
never received any notice of the pendency of the petition nor a copy of the decision.

Antithetically, a meticulous perusal of the controversial petition (Annex "B-1") and the agreement of separation of
properties (pp. 60-64, Rollo) readily shows that the same were signed by the petitioner on the proper space after
the prayer and on the portion for the verification of the petition. The same is true with the agreement of separation
of properties. What is striking to note is that on August 6, 1990, Margarita appeared before Amado P. Cortez,
Consul of the Republic of the Philippines at the San Francisco, California, United States Consulate Office, to
affirm and acknowledge before said official that she executed the agreement of separation of properties of her
own free will and deed, after being informed of the contents thereof. And yet, there is no showing that Abelardo
was with her at the Philippine Consulate Office in confirming the separation of property agreement. Moreover, on
page 2 of the same agreement, it is specifically stated that such property separation document shall be "subject to
approval later on by the proper court of competent jurisdiction." The clear import of this is that the agreement must
have to be submitted before the proper court for approval, which explains and confirms petitioner’s signature on
the petition filed in court.

In main, We see no indication nor showing of coercion or fraud from these facts, which could very well be
considered as extrinsic or collateral fraud to justify a petition under Rule 47. From all indications, the pretended
coerced documents were rather freely and voluntarily executed by the parties therein knowing fully well the
imports thereof. This conclusion finds more weight if We consider the fact that the separation of property was fully
implemented and enforced, when apparently both parties correspondingly received the properties respectively
assigned to each of them under the said document.7

The Court of Appeals also rejected Margarita’s claim that the trial court lacked jurisdiction to hear and decide the Petition
for Declaration of Nullity of Marriage for improper service of summons on her. The case involves the marital status of the
parties, which is an action in rem or quasi in rem. The Court of Appeals ruled that in such an action the purpose of service
of summons is not to vest the trial court with jurisdiction over the person of the defendant, but "only" to comply with due
process. The Court of Appeals concluded that any irregularity in the service of summons involves due process which does
not destroy the trial court’s jurisdiction over the res which is the parties’ marital status. Neither does such irregularity
invalidate the judgment rendered in the case. Thus, the Court of Appeals dismissed the petition for annulment of
judgment, stating that:

At bar, the case involves the personal (marital) status of the plaintiff and the defendant. This status is the resover
which the Philippine court has acquired jurisdiction. This is also the kind of action which the Supreme Court had
ruled that service of summons may be served extraterritorially under Section 15 (formerly Section 17) of Rule 14
and where such service of summons is not for the purpose of vesting the trial court with jurisdiction over the
person of the defendant but only for the purpose of complying with the requirements of fair play and due
process. A fortiori, the court a quo had properly acquired jurisdiction over the person of herein petitioner-
defendant when summons was served by publication and a copy of the summons, the complaint with annexes,
together with the Order of June 28, 1991, was served to the defendant through the Department of Foreign Affairs
by registered mail and duly received by said office to top it all. Such mode was upon instruction and lawful order
of the court and could even be treated as ‘any other manner the court may deem sufficient’.8

Hence, the instant petition.

The Issues

74
The issues raised by Margarita are restated as follows:

I. Whether Margarita was validly served with summons in the case for declaration of nullity of her marriage with
Abelardo;

II. Whether there was extrinsic fraud in the preparation and filing by Abelardo of the Petition for Dissolution of the
Conjugal Partnership of Gains and its annex, the Agreement of Separation of Properties.

The Court’s Ruling

The petition is bereft of merit.

First Issue: Validity of the Service of Summons on Margarita

Margarita insists that the trial court never acquired jurisdiction over her person in the petition for declaration of nullity of
marriage since she was never validly served with summons. Neither did she appear in court to submit voluntarily to its
jurisdiction.

On the other hand, Abelardo argues that jurisdiction over the person of a non-resident defendant in an action in
remor quasi in rem is not necessary. The trial and appellate courts made a clear factual finding that there was proper
summons by publication effected through the Department of Foreign Affairs as directed by the trial court. Thus, the trial
court acquired jurisdiction to render the decision declaring the marriage a nullity.

Summons is a writ by which the defendant is notified of the action brought against him. Service of such writ is the means
by which the court acquires jurisdiction over his person.9

As a rule, when the defendant does not reside and is not found in the Philippines, Philippine courts cannot try any case
against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court.
But when the case is one of actions in rem or quasi in rem enumerated in Section 15,10 Rule 14 of the Rules of Court,
Philippine courts have jurisdiction to hear and decide the case. In such instances, Philippine courts have jurisdiction over
the res, and jurisdiction over the person of the non-resident defendant is not essential.11

Actions in personam12 and actions in rem or quasi in rem differ in that actions in personam are directed against specific
persons and seek personal judgments. On the other hand, actions in rem or quasi in rem are directed against the thing or
property or status of a person and seek judgments with respect thereto as against the whole world.13

At the time Abelardo filed the petition for nullity of the marriage in 1991, Margarita was residing in the United States. She
left the Philippines in 1982 together with her two children. The trial court considered Margarita a non-resident defendant
who is not found in the Philippines. Since the petition affects the personal status of the plaintiff, the trial court authorized
extraterritorial service of summons under Section 15, Rule 14 of the Rules of Court. The term "personal status" includes
family relations, particularly the relations between husband and wife.14

Under Section 15 of Rule 14, a defendant who is a non-resident and is not found in the country may be served with
summons by extraterritorial service in four instances: (1) when the action affects the personal status of the plaintiff;
(2) when the action relates to, or the subject of which is property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent; (3) when the relief demanded consists, wholly or in part, in excluding the
defendant from any interest in property located in the Philippines; or (4) when the property of the defendant has been
attached within the Philippines.

In these instances, extraterritorial service of summons may be effected under any of three modes: (1) by personal service
out of the country, with leave of court; (2) by publication and sending a copy of the summons and order of the court by
registered mail to the defendant’s last known address, also with leave of court; or (3) by any other means the judge
may consider sufficient.

Applying the foregoing rule, the trial court required extraterritorial service of summons to be effected on Margarita in the
following manner:

75
 x x x, service of Summons by way of publication in a newspaper of general circulation once a week for three (3)
consecutive weeks, at the same time, furnishing respondent copy of this Order as well as the corresponding
Summons and copy of the petition at her given address at No. 96 Mulberry Lane, Atherton, California,
U.S.A., thru the Department of Foreign Affairs, all at the expense of petitioner.15 (Emphasis ours)

The trial court’s prescribed mode of extraterritorial service does not fall under the first or second mode specified in Section
15 of Rule 14, but under the third mode. This refers to "any other means that the judge may consider sufficient."

The Process Server’s Return of 15 July 1991 shows that the summons addressed to Margarita together with the
complaint and its annexes were sent by mail to the Department of Foreign Affairs with acknowledgment of receipt. The
Process Server’s certificate of service of summons is prima facie evidence of the facts as set out in the
certificate.16 Before proceeding to declare the marriage between Margarita and Abelardo null and void, the trial court
stated in its Decision dated 8 November 1991 that "compliance with the jurisdictional requirements hav(e)(sic) been
duly established." We hold that delivery to the Department of Foreign Affairs was sufficient compliance with the rule.
After all, this is exactly what the trial court required and considered as sufficient to effect service of summons under the
third mode of extraterritorial service pursuant to Section 15 of Rule 14.

Second Issue: Validity of the Judgment Dissolving the Conjugal Partnership of Gains

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

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

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

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

In the instant case, Margarita acknowledged the Agreement before Consul Cortez. The certificate of acknowledgment
signed by Consul Cortez states that Margarita personally appeared before him and "acknowledged before me that SHE
executed the same of her own free will and deed."19 Thus, there is a prima facie presumption that Margarita freely and
voluntarily executed the Agreement. Margarita has failed to rebut this prima faciepresumption with clear and convincing
proof of coercion on the part of Abelardo.

A document acknowledged before a notary public is prima facie evidence of the due and regular execution of the
document.20 A notarized document has in its favor the presumption of regularity in its execution, and to contradict the
same, there must be evidence that is clear, convincing and more than merely preponderant.21

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 58487 dismissing the petition to annul judgment
is AFFIRMED.

SO ORDERED.

76
G.R. No. L-48955

BERNARDO BUSUEGO, petitioner, 
vs.
HONORABLE COURT OF APPEALS, JOSE LAZARO, ROMEO LAZARO and VIVENCIO LOPEZ, respondents.

FELICIANO, J.:

In this petition for review on certiorari, petitioner asks us to set aside the decision of the Court of Appeals in CA-G.R. No.
SP-06556, declaring null and void the judgment by default and the orders issued by the Court of First Instance of
Pasig 1 in Civil Case No. 18860.

On 20 January 1974, petitioner Bernardo Busuego commenced action 2 before the Pasig Court of First Instance against
Jose Lazaro, Romeo Lazaro, Ernesto Lazaro, and Vivencio Lopez (three of whom are respondents herein), to recover
possession of a parcel of land and a three (3) unit apartment house standing thereon, situated at No. 260-A. Bonifacio
Avenue, Bo. Jesus de la Pena Marikina, Rizal.

Immediately thereafter, summons was issued in the name of the four defendants and per sheriff's return, was personally
served at the address given in the complaint, upon the defendants "through [defendant] Dr. Ernesto Lazaro, personally."

On 13 February 1974, defendants, through Atty. Gerardo B. Roldan, Jr., filed a motion for an extension of fifteen (15) days
to file answer, stating that "his [Atty. Roldan's] services was (sic) secured by the defendants formally only the other day,"
and that he "need[ed] sufficient time to study the case, before filing any responsive pleading or pleadings." 3 The motion
was granted by the lower court in an order dated 6 March 1974.

On 28 February 1974, defendants through Atty. Roldan asked for another extension of ten (10) days to answer, as "[Atty.
Roldan] has not yet conferred with all of [the four (4) defendants] which [was] necessary before any responsive pleading
[could be] filed by him." 4 The lower court granted this second extension in an order dated 14 March 1974.

Notwithstanding the extensions granted, no answer was filed by the defendants, for which reason, and upon motion of
plaintiff Busuego, the lower court declared the defendants in default in an order dated 20 May 1974. Subsequently,
plaintiff's case was heard and his evidence received, and on the basis of that evidence the trial court rendered its
decision 5 on 26 August 1974 in favor of the plaintiff.

Almost two years later, on 12 July 1976, plaintiff filed before the lower court an ex parte motion for execution of the default
judgment, which the lower court granted in an order dated 18 August 1976.

On 3 September 1976, Romeo Lazaro, one of the defendants and a respondent herein, "on his [own] behalf and on behalf
of other defendants," filed a motion to hold execution in abeyance praying that "for humanitarian reasons, an extension of
30 days, within which to vacate the premises [be allowed] to give them sufficient time to look for another place where the
five families composed mostly of little children, can reside. 6

On 18 September 1976, the lower court granted Romeo's motion and accordingly, the execution of the default judgment
was held in abeyance.

On 28 September 1976, the defendants through Atty. Roldan filed with the lower court a motion for reconsideration of the
judgment by default and/or to dissolve the writ of execution, solely on the ground that neither the defendants nor their
counsel were ever furnished a copy of the judgment by default. This motion was verified by Romeo Lazaro who described
himself as "one of the defendants in the-case" and as "representing them [the defendants] in the instant pleadings (sic],"
and stated that "we [the defendants] have caused the filing of this motion, have read the contents thereof and that all the
allegations [therein] are true and correct to the best of our knowledge and belief " 7(Italics and brackets supplied). Upon
opposition of petitioner, the lower court denied the motion by order of 11 October 1976, finding the above-motion to be
purely dilatory in nature and plain harassment on the part of the defendants.

77
On 3 November 1976, the respondents, through their new counsel, Atty. Oliver Lozano, filed with the same court an
omnibus motion, which included a motion to lift the order of default, a second motion for reconsideration and a motion to
quash the writ of execution issued pursuant to the default judgment, alleging for the first time that their failure to answer
was due to lack of notice.

Petitioner opposed vigorously the above motion contending that, the defendants could not pretend absence of proper
notice after they, through counsel, had filed the two motions for extension of time to answer.

On 27 December 1976, the lower court denied the omnibus motion, holding the motion for extension of time to vacate filed
by respondent Romeo Lazaro for all the defendants to be equivalent to waiver of service of summons.

On 10 January 1977, defendants, through their new counsel, filed what in effect was a third motion for reconsideration of
the judgment by default, alleging that: the lower court never acquired jurisdiction over their persons because of lack of
proper service of summons; and that the motion for extension of time to vacate the premises, filed by their co-defendant
Romeo Lazaro, after the judgment by default had become executory, was not equivalent to waiver of summons.

The third motion for reconsideration having been denied, defendants brought a petition for certiorari before the Court of
Appeals, asserting that the orders, judgment and writs complained of were all void for want of jurisdiction over their
persons.

On 13 July 1978, the Court of Appeals promulgated its decision, 8 basically upholding the respondents' contention and
providing, in its dispositive portion, as follows:

WHEREFORE, this Court hereby renders judgment as follows:

(a) insofar as the petitioner Ernesto Lazaro is concerned, dismissing the petition; and

(b) insofar as the petitioners Romeo Lazaro, Jose Lazaro and Vivencio Lopez, are concerned, granting the
petition and the writs prayed for, declaring null and void the order of default, judgment by default, order of
execution, writ of execution, notice to vacate, order of December 27, 1976, and order of March 21, 1977, issued in
Civil Case No. 18860 of the court below (Annexes B, D, E, I and M, petition, and Annexes 6-A and 9, answer),
and making permanent the restraining order heretofore issued in these proceedings.

Hence, the petition before us.

In their respective briefs, the parties posed the following issues:

1. whether or not there was a valid service of summons upon the persons of respondents Romeo Lazaro, Jose
Lazaro and Vivencio Lopez.

2. whether or not there was voluntary appearance by the respondents as defendants below, through Atty. Gerardo
B. Roldan and their co-respondent Romeo Lazaro.

The issues raised may be further simplified into whether or not jurisdiction was lawfully acquired by the court a quoover
the persons of the respondents Jose Lazaro, Romeo Lazaro and Vivencio Lazaro.

Basically, there are two (2) ways by which a court acquires jurisdiction over the person of the defendant or respondent: (a)
by service of summons upon the defendant; and (b) by voluntary appearance of the defendant in court and his submission
to its authority.

With respect to service of summons, the Revised Rules of Court prescribe that a copy of the summons be served
personally upon the defendant by "handing him a copy thereof in person or if he refuses to receive it, by tendering it to
him. 9 Personal service, however, may be dispensed with and substituted service may be availed of if the defendant
cannot be served personally "within a reasonable time." 10

In the present case, it appears that the sheriff had availed of substituted service in seeking to serve the summons upon all
the defendants by serving a copy thereof "through Dr. Ernesto Lazaro personally." Perusal, however, of the sheriff's
return 11 reveals that the sheriff failed to specify therein what prior efforts, if any, had been exerted to serve summons
78
upon the other defendants personally within a reasonable period of time, and the lack of success of such efforts, before
proceeding to substituted service. Such specification in the sheriff's return is essential for enforcement of the rule under
the Revised Rules of Court that substituted service may be resorted to only where it is not possible to serve the defendant
or defendants promptly in person. As this Court ruled in Keister vs. Navarro. 12

[T]he impossibility of prompt service in person should be shown by stating the efforts made to find the defendant
personally and the fact that such efforts failed This statement should be made in the proof of service. This is
necessary because substituted service is in derogation of the usual method of service. —

We therefore uphold the respondent appellate court's finding that, while Ernesto Lazaro was validly served, with respect to
respondents Jose Lazaro, Romeo Lazaro and Vivencio Lopez, there was no valid service of summons effected. We are,
nonetheless, unable to sustain its conclusion that the trial court never acquired jurisdiction over the persons of the said
respondents.

As earlier noted, jurisdiction over the person of the defendant can also be acquired by his voluntary appearance in court
and his submission to its authority, for voluntary appearance is equivalent to service of summons. 13

As long ago as 1918, the essence of voluntary appearance was explained by this Court through Mr. Justice Johnson
in  Flores vs. Zurbito, 14 as follows:

A voluntary appearance is a waiver of the necessity of a formal notice. An appearance in whatever form, without
explicitly objecting to the jurisdiction of the court over the person is a submission to the jurisdiction of the court
over the person. While the  formal method of entering an appearance in a cause pending in the courts is to deliver
to the clerk a written direction ordering him to enter the appearance of the person who subscribes it, an
appearance may be made by simply filing a formal motion, or plea or answer. This formal method of appearance
is not necessary. He may appear without such formal appearance and thus submit himself to the jurisdiction of
the court. He may appear by presenting a motion, for example, and unless by such appearance he specifically
objects to the jurisdiction of the court, he thereby gives his assent to the jurisdiction of the court over his
person. When the appearance is by motion objecting to the jurisdiction of the court over his person, it must be for
the sole and separate purpose of objecting to the jurisdiction of the court. If his motion is for any other purpose
than to object to the jurisdiction of the court over his person he thereby submits himself to the jurisdiction of the
court. . . .

In the case before us, the defendants appeared before the trial court a number of times without raising any objection to
the improper service of summons: (1) the defendants, through Atty. Gerardo Roldan, appeared in court and filed two
successive motions for extension of time to file an answer to the complaint; (2) more than two years after rendition of the
judgment by default by the trial court, defendants, through their co-defendant Romeo Lazaro, filed a motion for extension
of time within which to vacate the premises involved and to look for another place to live in, raising no question concerning
the jurisdiction of the trial court over the persons of the defendants; and (3) the defendants, through their counsel Atty.
Roldan, moved for reconsideration of the judgment of the trial court and for dissolution of the writ of execution, again
without contesting the jurisdiction of the court over their persons. We hold that by anyone or more of these acts, and
certainly by the whole series of acts, the defendants, respondents herein, effectively waived the initial lack of jurisdiction
over their persons and submitted to the authority of the trial court.

The respondents assert that only voluntary appearance during trial is equivalent to waiver of service, and that therefore,
the motion for extension of time within which to vacate the premises filed by Romeo Lazaro after trial and after rendition of
judgment, was not equivalent to waiver of Summons.

We are not persuaded by this argument of the respondents. In Soriano vs. Palacio, 15 this Court, speaking through Mr.
Justice J.B.L. Reyes, held that:

Assuming, arguendo, that the court below originally did not acquire jurisdiction over petitioner Soriano, the latter
certainly submitted to it when he filed his first motion for reconsideration and for annulment of previous
proceedings on 14 March 1960. Therefore, the denial of that motion, by the order of 19 March 1960, was binding
on petitioner Soriano.

The respondents also cite a joint affidavit dated 5 February 1977 executed by some of them: Jose Lazaro, Ernesto Lazaro
and Vivencio Lopez, stating that they had not authorized Atty. Roldan nor Romeo Lazaro to file any pleading on their
behalf. 16 In another joint affidavit dated 10 January 1977, Jose Lazaro and Romeo Lazaro asserted that Romeo Lazaro
79
had no authority to file the motion of 3 September 1976 seeking "for humanitarian reasons" an extension of time to vacate
the premises in question. In a third affidavit dated 5 February 1977, Atty. Roldan in effect repudiates the motion for
extension of time that he had filed on 14 February 1974 with the trial court. In his 1977 affidavit, Atty. Roldan states that
he had instructed Mr. Romeo Lazaro to secure the conformity of the other defendants to his serving as their counsel
before agreeing to represent them, that he had asked for an extension of time to file an answer without the knowledge of
the defendants to gain time to confer with them and obtain a written agreement with respect to his "proposed legal
service;" that when the defendants again failed to meet with him, he filed his second motion for extension to file an answer
to have "another opportunity to find out if the said defendants would agree that [he] represent them;" that he eventually
abandoned the Idea of representing the defendants. 17

We are unable to give the above affidavits any credence or weight. They appear to Us as very late second thoughts,
transparently devised to conform with the posture of "no voluntary appearance" adopted by the defendants' subsequent
counsel. Those affidavits were submitted too late in the day, as it were, to avoid the effect of their voluntary appearance
before the trial court. The affidavits concerning lack of authority of respondent Romeo Lazaro to file the motion pleading
"for humanitarian reasons" for an extension of time to locate an alternative residence are thoroughly unpersuasive. We
note, in this connection, that all the defendants were not only immediate neighbors residing in adjacent units of a single
apartment house but also members of the same family. Ernesto Lazaro is the father of respondents Jose Lazaro and
Romeo Lazaro. Thus, the natural tendency of Ernesto Lazaro, upon receipt of the summons issued by the trial court, must
have been to inform his children living beside him about the summons; similarly, the natural tendency of Romeo Lazaro
must have been to inform his father and brother and other relatives living in the same apartment house about the steps
taken to defer their ejectment.

The affidavit of Atty. Roldan is particularly deplorable. An attorney is presumed to be authorized by his client in a case in
which he appears. 18 Thus, Atty. Roldan was correctly presumed by the trial court to have been authorized by the
defendants below to appear on their behalf when he filed the motions for extension of time to answer and, what is more,
when he filed the first motion for reconsideration of the judgment of the trial court. Either Atty. Roldan's 1977 affidavit is
plain perjury or he was misleading and trifling with and imposing upon the trial court back in 1974. Even when an attorney
is employed by an unauthorized person to represent a client, the client will be bound where he has knowledge of the fact
that he is being represented by an attorney in a particular litigation and takes no prompt measure to repudiate the
assumed authority. The security and finality of judicial proceedings are matters of insistent public policy and require that
the evasions and tergiversations of unsuccessful litigants and their counsel be firmly rejected and not permitted to
overcome the presumption of authority on the part of an attorney. 19

WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE insofar as concerns
respondents Romeo Lazaro, Jose Lazaro and Vivencio Lopez. With respect, however, to defendant Ernesto Lazaro, same
decision is hereby AFFIRMED. This decision is immediately executory. Costs against respondents.

Furthermore, Atty. Gerardo B. Roldan, Jr. and Atty. Oliver O. Lozano are hereby required to show cause, within ten (10)
days from notice hereof, why they should not be subject to disciplinary action for abusing court proceedings.

SO ORDERED.

G.R. No. 91486       January 19, 2001

ALBERTO G. PINLAC, ATTY. ERIBERTO H. DECENA, RODOLFO F. REYES, FELIPE BRIONES, JUANITO METILLA,
JR., FELIPE A. FLORES, HERMINIO ELEVADO, NARCISO S. SIMEROS, petitioners, 
vs.
COURT OF APPEALS, ATTY. CORAZON A. MERRERA, ATTY. JEAN MAJASIAR-PUNO, SERGIO ACABAN,
represented by Atty. Ramon Gerona, ATTY. ROGELIO VELASCO, MARTINA S. NONA, OVIDEO MEJICA,
ALFREDO ITALIA, MARIANO GUEVARRA, JESUS YUJUICO, DOMINADOR RIVERA, SATURNINA SALES,
represented by Atty. Consolacion Sales-Demontano, FRED CHUA, SONIA SY CHUA, LAWRENCE CHUA,
CAROLINA C. RUBIO, represented by Tessie Sebastian, GEORGE G. GUERRERO, BEATRIZ TANTOCO,
represented by Filomena Cervantes, ATTY. MARCELA CELESTINO-GARCIA, FEDERICO GARCIA, ILDEFONSO
80
MORALES, LEONCIA VELASCO, OCRAVIO F. LINA, ANA MARIA JARAMILLO, ESTRELLA BASA, JOSE ESTEVA,
JR., CIRILO GONZALES, VILLY TOBLAS, MIGUEL DELA PAZ, RUBEN GUILLERMO, FAUSTO YADAO,
represented by Jeremias Panlilio, RICARDO YAP, ROSAURO/PATRICL MARQUWZ, represented by Emmanuel
Marquez, MODESTA FABRIG AND MAXIMINO SALCEDA, MELIA LATOMBO, TERESITA PANGILINAN-RIVERO,
ARCH. DANILO C. DE CASTRO, JOSE S. LEDESMA, JAIME P. ANG, VEICENTE P. ANG, MAURO U. GABRIEL,
ATTY. VIRGINIA GOMEZ, GIL S. BONILLA, LOURDES BLANCO, represented by Catalina Blanco, JOSEFA
SANCHEZ and ROSALINA VILLEGAS, represented by Heidi Bobis, SHIRLEY BUCAG, QUIRINA O. TUVERA,
represented by Wilfredo Orejuros, GREGORIO AVENTINO, represented by Enrico Aventino, LEONARDO L.
NICOLAS, NICOMEDES PENARANDA, FRANCISCA MEDRANO, OFELIA IGNACIO, ROSENDO ABIBO, represented
by Santos Chavez, SOLEDAD BAUTISTA DE COLUMNA, represented by Zenaida Valle, MARQUITA/SEBASTIAN
LOPEZ, represented by Emmanuel Marquez, DELIA DORION, GERARDO L. SANTIAGO, FIDEL PANGANIBA,
represented by Manuel dela Roca, MATEO and OFELIA INOVEJAS, REMEDIOS C. DOVAS, represented by Josefa
Capistrano, DOMINGO ALTAMIRANO and SPOUSES ROLANDO ALTAMIRANO and MINERVA FETALVERO,
BEATRIZ RINGPIS, ROSARIO DE MATA, RUFINA CRUZ, represented by JOSEFA MANABAT, SPOUSES ANITA
SALONGA-CAPAGCUAN and MAYNARD CAPAGCUAN, DISCORA YATCO, represented by VICTORINA Y. FIRME,
and CONSUELO YATCO, GENEROSA MEDINA VDA. DE NOGUERA, represented by ATTY. RAYMUNDO M.
NOGUERA, BEATRIZ SALANDANAN and LOURDES ALONTE-VASQUEZ, PEDRO COSIO and VICTOTINA CARINO,
RUTH C. ZAPARTE, PRECIOSISIMA V. YAPCHULAY, BASILISA B. YAPCHULAY, OFELIA B. YAPCHULAY, FELISA
B. YAPCHULAY, FE B. YAPCHULAY, WILMA B. YAPCHULAY, FELIX B. YAPCHULAY, MARIANO B. YAPCHULAY,
GEN. ALFREDO LIM, and other registered OWNERS OF VILAR-MALOLES (VILMA) SUBDIVISION, respondents.

YNARES-SANTIAGO, J.:

The instant case springs from a contentious and protracted dispute over a sizeable piece of real property situated in what
is now known as Old Balara, Sitio Veterans, Barrio Payatas and Silangan, all of Quezon City. There are numerous
claimants, titled and untitled alike, each either pressing to own a piece of it, or striving to protect one's right as a titled
owner.1âwphi1.nêt

Petitioners herein are World War II veterans, their dependents and successors-in-interest. Together, they filed a class suit
primarily for Quieting of Title before the Regional Trial Court of Quezon City, Branch 83, where it was docketed as Civil
Case No. Q-35672. In particular, petitioners claimed that the real property, which has an aggregate area of 502 hectares,
were part of forest lands belonging to the government; that they and their predecessors-in-interest have occupied said
property continuously, adversely, and exclusively for more than thirty (30) years; and that they have accordingly filed
applications for land titling in their respective names with the appropriate government agency.

While petitioners claim that the land in dispute was part of the public domain, they named as respondents several persons
and corporations who are titled owners of subdivided parcels of land within the subject property. One of those so
impleaded as a party-respondent was the Vil-Ma Maloles Subdivision (hereinafter, Vil-Ma). The individual lot owners of
the said subdivision, however, were not specifically named. Since personal service of summons could not be effected on
Vil-Ma and some of the other named respondents, petitioners moved for leave of court to serve summons by publication
which was granted. Accordingly, the summons was published in the "Metropolitan Newsweek", a periodical edited and
published in the City of Caloocan and Malolos, Bulacan.l

Some of the named respondents filed their respective responsive pleadings, while the others, including Vil-Ma, failed to
answer, and were thus declared in default. Consequently, petitioners were allowed to present evidence ex parte  against
the defaulted respondents. The court a quo found the following facts to be conclusive:

(T)hat the case involves three parcel of lands, to wit: Lot 1 & 2 situated at the Old Balara, Diliman, Quezon City
and Lot 3 situated at Sitio Veterans, Barrio Payatas and Silangan, Quezon City containing an aggregate area of
502 hectares more or less; that Lot 1 is covered by TCT No.5690 in the name of defaulted respondent Jose V.
Bagtas, which title emanated from TCT No.48546 in the name of Emiliana Vda. De Vera Cruz which contains an
actual area of only 294.6 sq. meters, but, when said TCT No.5690 was issued the same was illegally and
fraudulently expanded to cover 23.5767 hectares through fraudulent re-surveys without proper judicial
proceedings; that on said illegally expanded area of TCT No.5690 in the name of respondent Jose V. Bagtas,
more than 363 transfer certificates of title were subsequently issued including those belonging to some of the
defaulted respondents thereof; that TCT No. 5690 contains no technical description on its face; that Lot 2 is
covered by TCT No.3548 in the name of Eustacio Maloles married to Soledad Villegas and Vicente B. Vilar doing
business under the name and style of defaulted respondent Vilma Maloles Subdivision Inc., which title was
derived from TCT No.33531 in the name of Oscar L. Uy which in turn came from TCT No.26285 in the name of
Maria Lim which was immediately derived from OCT No.614 which contains no technical description on its face,
81
 that TCT No.3548 likewise contains no technical description on its face; that however, on the face of TCT
No.33531 of Oscar L. Uy from which TCT No.3548 of defaulted respondent Vilma Maloles Subdivision Inc., was
derived, it appears that said TCT No.33531 was cancelled by another title, TCT No.1713 and not by TCT
No.3548, the supposed derivative thereof, which title, from the foregoing facts, seems to have come from
nowhere considering that no document could be produced by the representative of the Register of Deeds of
Pasig, relative to the origin of the aforesaid title and which register of deeds has jurisdiction over the same; that
from this spurious and fraudulent TCT No. 3548 which contains no technical description on its face, numerous
TCTs were subsequently issued, some of which belong to the defaulted respondents hereof, that despite the
issuance has not been cancelled by the Register of Deeds of Quezon City; that Lot 3 was originally covered by
OCT No.333 from which 846 questionable TCTs emanated and issued by the Register of Deeds of Quezon City
perpetrated and made possible by the illegal expansion of the actual area thereof from 4,574 Sq. Meters, more or
less, to 407 ,3875 (sic) hectares without proper judicial proceedings; that as an example of the fraud perpetrated
by respondents, TCT No.26205 covers a lot situated at Barrio Ermitaño, San Juan del Monte, TCT No.26287
covers a lot located at Barrio Talipapa, Novaliches, TCT No.33531 covers a lot located at the District of Cubao.
TCT No.47705 covers a lot situated at Barrio San Francisco, San Juan, TCT No.133770 covers a lot located at
San Bartolome, Caloocan City, TCT No.45741 covers a lot located at San Francisco del Monte, San Juan, TCT
No.45636 covers a lot located at the municipality of San Juan, TCT No.19-6370 covers a lot located at Kamuning
District, TCT No.188447 covers a lot located at San Francisco del Monte with a different mother title, OCT
No.515, TCT No. (22092)-61850 covers a lot located at Tala Estate Caloocan City, TCT No.14645 covers lot
located at Kamuning District and TCT No.14692 covers a lot located at Bo. San Isidro, Caloocan City, yet these
TCTs were utilized by some people to claim an area located inside the litigated premises despite the fact that their
technical descriptions, as aforementioned, are different from the lands being sought to be covered therewith; that
Lots 1, 2 & 3 have been under the possession of petitioners for a continuous, public, open, & uninterrupted period
of 30 years through World War II Veterans Legionnaires of the Philippines, Inc., by the principle of tacking
possession; that the Bureau of Forest Development has certified that Lots 1, 2 & 3 are part of public forest
belonging to the government not yet certified for disposition and alienation; that the Bureau of Forest
Development knew and encouraged petitioner's occupancy and possession of said lots as in fact ordinary
residential permits were issued by said agency to some of herein petitioners and even helped in petitioners,
acquisition of electrical facilities from the MERALCO.2

Resolving the sole issue of whether or not petitioners were entitled to the land they occupy and possess, even when said
land was allegedly part of unclassified public forest land and yet covered by transfer certificates of title in the names of the
defaulted respondent, the court a quo rendered a Partial Decision in favor of petitioners, based on the following
disquisition:

First, because as established from the foregoing facts, OCT No. 614, TCT No.5690, TCT No.3548 covering Lots 1
& 2 of the disputed land, not having technical descriptions appearing on their respective face, clearly are null and
void by reason thereof. This is because "a torrens title is the certificate of ownership issued under the Register of
Deeds naming and declaring the owner in fee simple of the real property DESCRIBED therein, free from all liens
and encumbrances except such as maybe expressly noted thereon or otherwise reserved by law." (Philippine
National Bank vs. Tan Ong Zse, 51 Phil. 317). Without any technical description a title is fictitious and the mere
issuance thereof is fraudulent. Such being the case, it follows that none of the title holders subsequently issued
out of said void titles could say that he or she is an innocent purchaser for value. For in the case at bar, there are
really no rights that could be transferred to them since even the titles of those supposed owners thereof originally
are themselves fictitious. x x x Second, because although the Bureau of Forest Development maintains, as in fact,
it certified that Lots 1, 2 & 3 are part of the unclassified public forest land of the government, and therefore, are
not susceptible of private appropriation, still, due to the established fact that the lots involved are under the
present occupancy and possession of petitioners with the knowledge and tolerance of the Bureau of Forest
Development, the true and real nature of said lands as being public forest has become highly dubious and in the
opinion of this Court could not overcome the presumption that said lands are agricultural. For "the mere fact that a
tract of land has trees upon it or has mineral wealth within it, is not of itself sufficient to declare that one is forest
land and the other mineral land. There must be some proof of the extent as well as of the present or future value
of the land as forest or mineral. It must be shown that the land is more valuable for the forestry or the minerals
which it contains than it is for agricultural purposes. Land may be classified as forest or mineral today and after
the exhaustion of the timber or minerals contained therein may be classified as agricultural land tomorrow. Hence,
in case of doubt and considering that it is a matter of public knowledge that a majority of the lands in the
Philippines are agricultural lands, it was rightly held that in the absence of evidence to the contrary any land may
be presumed to be agricultural. And that being the case, it is clear that petitioners have acquired legally a title
over Lots 1, 2 & 3 of this case through extraordinary prescription of thirty (30) years of continuous, public, open
and uninterrupted possession thereof, the lands being agricultural and, thus, are susceptible of private ownership
by petitioners.
82
 WHEREFORE, premises considered, judgement is hereby rendered in favor of petitioners and against the
defaulted respondents:

1) Declaring petitioners through the principal petitioners hereof, to wit: Alberto G. Pinlac, Atty. Eriberto H. Decena,
Rodolfo T. Reyes, Felipe Briones and Juanito S. Metilla as absolute owners in fee simple title of the aforesaid
Lots 1, 2 & 3 hereof by virtue of extraordinary prescription, with the exception of the lands covered by the
respective transfer certificate of title belonging to the non-defaulted respondents;

2) Declaring Original Certificate of Title No.614, TCT No. 5690 and TCT No.3548 of the Register of Deeds of
Quezon City, and the subsequent TCTs issued therefrom, with the exception of those titles belonging to the non-
defaulted respondents, as null and void ab initio;

3) Ordering the Register of Deeds of Quezon City to cancel OCT No. 614, TCT No. 5690 and TCT No. 3548 as
well as the subsequent TCTs issued and emanating therefrom, with the exception of those titles belonging to the
non-defaulted respondents, from its record;

4) Declaring the area of TCT No.333 in excess of its true and actual area of 4,574 Sq. Meters, as well as the
TCTs subsequently issued by the Register of Deeds of Quezon City, covering the area in excess of said actual
area, with the exception of those belonging to non-defaulted respondents, as null and void ab initio;

5) Ordering the Register of Deeds of Quezon City to cancel all TCTs subsequently issued based on OCT No.333
in excess of the actual area of 4,574 Sq. Meters, with the exception of those titles belonging to the non-defaulted
respondents;

6) Declaring the writ of preliminary injunction dated August 7, 1985, in so far as those areas covered by the
cancelled OCTs and TCTs hereof are concerned, as permanent;

7) Ordering the Register of Deeds of Quezon City to issue herein petitioners the corresponding individual transfer
certificate of titles upon proper application made thereof.

SO ORDERED.3

On May 17, 1989, or exactly one (1) year and fifty-seven (57) days after the above-quoted judgement by default was
rendered, a Petition for Annulment of Judgement with Certiorari, Prohibition and Mandamus 4 was brought before the
Court of Appeals by the titled owners of the subdivided lots within Vil-Ma. They assailed the default judgement which
nullified all their titles, arguing that the court a quo  had no jurisdiction over them and their respective titled properties.
They also alleged that they only came to know of the adverse judgement when petitioners sought the execution of the
judgement by attempting to dispossess some of the titled owners of the lots and making formal demands for them to
vacate their respective properties.

They likewise claimed that the Partial Decision against the defaulted respondents was null and void on the grounds of lack
of jurisdiction and extrinsic fraud, for the reasons that:

(1) Civil Case No. Q-35672, while it was a petition to quiet title, was a collateral proceeding, not a direct action
attacking their duly registered titles. Besides, a petition for cancellation of title can only be filed by a registered
owner or a person having an interest in registered property, and must be filed in the original land registration case
in which the decree of registration was entered.1âwphi1.nêt

(2) They were never made parties to Civil Case No. Q-35672, nor were their lots described in the complaint,
published summons, and Partial Decision. Named defendant was VIL-MA, a totally separate and independent
entity which had already ceased to exist way back in January of 1976. Moreover, the summons, as well as the
Partial Decision was not published in a newspaper or periodical of general circulation. Thus, the defective service
of summons to said defendant did not place the individual lot owners under the trial court's jurisdiction, nor are
they bound by the adverse judgement.

(3) They were denied due process of law as they were not given their day in court. They should have been
included as indispensable parties-respondents in Civil Case No. Q-35672 since the petitioners therein were
seeking to annul their respective transfer certificates of title.

83
 (4) Their duly registered titles cannot be defeated by the alleged adverse, continuous and notorious possession of
the petitioners since their titles are indefeasible and cannot be acquired by prescription or adverse possession.

(5) If, indeed, the subject property is unclassified forest lands, it is not capable of private appropriation. The
court a quo is bereft of authority to declare motu proprio  that the subject property should be reclassified as
agricultural, not forest land.

(6) The trial court violated Section 3(c), Rule 10 of the Rules of Court which provides that when some of several
respondents fail to answer, "the court shall try the case against all upon the answers thus filed and render
judgement upon the evidence thus presented, "whenever a complaint states a common cause of action against
several respondents. Accordingly, the defense interposed by those who answer or appear to litigate the case
should inure to the benefit of even those who fail to appear or answer.

(7) The trial court cannot render null and void in the default judgement the mother title (OCT No.614), from which
the petitioners' transfer certificates were derived, which the Supreme Court had already declared valid and legal.

To impress upon the Court of Appeals that they have a meritorious defense and that their petition was not intended to
delay or frustrate the final disposition of the case, the titled owners cited the case of De La Cruz  v. De La Cruz,5where the
Supreme Court traced the origins of OCT 614. It was held in that case, that:

x x x. The Piedad Estate consists of a vast tract of land originally registered on March 12,1912 under Original
Certificate of Title No.614 of the Register of Deeds of the Province of Rizal in the name of the Philippine
Government.

The Piedad Estate was one of the so-called friar lands which were purchased by the government of the
Philippines pursuant to the provisions' of the Friar Lands Act, Public Act No.1120 which was enacted on April 26,
1904. x x x.

As specifically stated above, the said lands are not "public lands" in the sense in which those words are used in
the Public Land Act Numbered Nine Hundred and twenty-six and cannot be acquired or leased under the
provisions thereof. In the case of Jacinto vs. Director of Lands (1926) 49 Phil. 853, the Supreme Court held that
the so-called friar lands, to which the government of the Philippines holds title, are not public lands but private or
patrimonial property of the government.

xxx      xxx      xxx

As held in Lorenzo vs. Nicolas, No. L-4085, 30 July 1952,91 Phil. 686, from the provisions of sections 11, 12 and
16 of Act No.1120, it is apparent that the pervading legislative intent is to sell the friar lands acquired by the
government to actual settlers and occupants of the same.6

Claiming that their individual transfer certificates of title were derived from subsequent subdivisions and transfers of the
lots within the Piedad Estate, the defaulted registered owners invoked the Comments and Recommendations of the Ad
Hoc Committee created by the then Ministry of Natural Resources, tasked to investigate the historical background of the
Piedad and Payatas Estates in Quezon City, containing evidence which they would have substantiated had they been
given their day in court. The Ad Hoc Committee reported, to wit:

FINDINGS AND OBSERVATIONS

The Piedad Estate, situated in the Municipality of San Mateo and Caloocan during the time of registration in 1910,
covers an area of 3850.7226 hectares. The Registration of Title under Case No.5975 was published in the
January 21, 1910 issue of the Official Gazette.

After the Piedad Estate was registered in Original Certificate of Title No. 614 in the name of the Government in
1910 under the provisions of Act 496, the area was subdivided originally into 874 lots. As a result of subsequent
surveys executed in the course of disposition, the number of lots increased to 1,305. Disposition of these lots was
made by the Bureau of Lands thru sales, under the Friar Lands Act, as early as 1910 and records show that even
before the Second World War, all lots in the Piedad Estate have been disposed of. Owing perhaps to the scarcity
of land applicants at the time, it will be observed that a number of applicants have acquired several lots totalling

84
 several hectares. Among the vendees with several lots are the Philippine Trust Co., the Zuzuarregui's and the
Metropolitan Water District, to name a few. A list of lot holders in the Piedad Estate with the
corresponding lot  numbers, lot areas and date of purchase from the Bureau of Lands is hereto attached and
marked as ANNEX "B".

Thru a series of transfer of lots from one owner to another attended at times by subdivision into smaller lots and at
other times by consolidation of several lots into one, most of the lots of the Piedad Estate have lost their identity
both in original ownership structure and lot descriptions. Piedad Estate now embraces and includes a number of
private residential subdivisions among which are the following:

1. Villar Maloles Subdivision (owned by Villar Maloles, Psd- 21997)

2. U.P. Sites Nos. land 2

3. Sunnyville Subdivision (Owned by the Delos Santos family)

4. Sterling Meadows Subdivision (LRC) Pcs-11110

5. Dona Patrona Subdivision

6. Far Eastern University (43 has.)

7. Luis Reyes (Psd-19419)

8. Jose Yulo (PLS-336-D)

By virtue of subsequent changes in political boundaries, Piedad Estate is now within Quezon City. It is located on
both sides of Luzon Avenue and is bounded on the North by the Republic Avenue; on the East by private
residential subdivisions which includes the B.F. Homes (LRC) Psd-133236, the Villa Ligaya Subdivision (Psd-
65729), the Kapalaran Subdivision (Pcs-47850), the Kasiyahan Subdivision (LRC) Pcs-12091, Zuzuarregui
Property (Psd-34912) and the Dona Beartiz Subdivision under Psd-39351; on the South by the Don Mariano
Marcos Avenue; and on the South-West and West by the U.P. Sites Nos. 1 and 2.

COMMENTS AND RECOMMENDATION

There is no doubt that Piedad Estate has long been segregated from the mass of the public domain and have
become private lands duly registered under the Torrens System following the procedure for the confirmation of
private lands prescribed in Act 496. Thus the lands inside the Piedad Estate are no longer lands of the public
domain. Neither are these lands forest lands, in the classification of lands for forest purposes, the main criterion
prescribed in Section 15 of P .D. 705, the Forestry Code, is its slope. Those beyond 18% are to be preserved for
forest purposes while those below are to be released as not needed for forest purposes, hence, as alienable arid
disposable. By its physical nature, location and historical use, the land in question can hardly be considered and
classified as forest land. Physically, it is first, level and at most slightly rolling land. Location wise, it used to be
within the periphery and now in the heart of a metropolis. While originally it was used for agricultural purposes, it
has later become urban due to population pressure and rapid urbanization in the Metro Manila area. It is devoid of
any timber land, more so if we talk of forest of commercial value. In fact, the Composite Land Classification
Committee of the MNR composed of the Directors of BFD, BL, BF AR and BMGS, has already signed a land
classification map and recommended for its release because it has absolutely no forest value.

On the basis of existing records of the Bureau of Lands and the area of the Piedad Estate as contained in the
Technical Descriptions of the said Estate published in the January 21, 1910 issue of the Official Gazette, there is
no expansion or enlargement of the area, hence, it is recommended that existing titles within the area should be
respected and their validity upheld.

xxx      xxx      xxx

In view of all the foregoing, the committee recommends that all existing titles validly issued within the
area be respected and their validity upheld.7 (Emphasis supplied)
85
Accordingly, the defaulted titled owners prayed that judgement be rendered:

1. Declaring the aforesaid Partial Decision on defaulted private respondents as null and void;

2. Declaring all Residential Use Permits issued by the Director of Forest Management Bureau as null and void;

3. Declaring all Transfer of Certificates of Titles of the petitioners (respondents herein) emanating from OCT 614
and TCT 3548 (1713) as valid;

4. Ordering private respondents (petitioners herein), their agents or representatives and all other persons claiming
right under them to vacate the respective titled lands of the petitioners squatted by the former.

5. Ordering the dismissal of Hon. Judge Reynaldo Roura from the Regional, Trial Court, Macabebe, Pampanga
on the grounds of gross incompetence and gross ignorance of the law (Adm. Circular No.4 of the Supreme Court,
dated January 27, 1988).

6. Making the preliminary injunction as permanent; and

7. Ordering the private respondents (petitioners herein) to pay jointly and solidarily to the petitioners the sum of
P200,000.00 as moral and exemplary damages, plus the sum of P5,000.00 per lot of the petitioners as attorney's
fee, aside from cost of suit, and for any other relief just and proper .8

On June 23, 1989, the Court of Appeals granted respondents (petitioners therein) application for writ of preliminary
injunction, ruling that:

When this case was called for hearing on June 21, 1989 on the application for the issuance of a writ of preliminary
injunction, the parties and their respective counsel appeared and orally argued their respective stand on the
matter. It is admitted that the herein petitioners, indispensable parties in the case, were not individually served
with summons.

We believe and so hold that there is merit in the instant application for preliminary injunction, hence, the same is
hereby GRANTED. Upon the posting by the petitioners of a bond in the amount of One Hundred Thousand Pesos
(P100,000.00), subject to Our approval, let a writ of preliminary injunction issue enjoining the respondents
(petitioners herein), and all persons acting for and in their behalf, to desist and refrain from enforcing or
implementing, or from attempting to enforce and implement, the questioned writ of execution of the partial
judgment, dated March 21, 1988, rendered in Civil Case No. Q-35672, entitled: "Teofilo M. Gariando, et al.,
petitioners versus Gregorio Dizon, et al., respondents", until further orders from this Court.

SO ORDERED.9

On November 15, 1989, the Court of Appeals rendered a Decision10 granting the petition and annulling the Partial
Decision in Civil Case No. Q-35762 based on its finding that the trial court's lack of jurisdiction over the persons of
respondents ---

x x x becomes all the more apparent when petitioners claim or asseverate that the assailed Partial Decision can
not bind Vilar-Maloles (VILMA), the umbrella name, for the simple reason that said PARTNERSHIP was dissolved
on January 26, 1976, for it can no longer be sued as it had no more juridical personality .

xxx      xxx      xxx

Furthermore, petitioners contend that the summons and the Partial Decision were published in a local newspaper
edited in Caloocan City and Malolos, Bulacan known as "METROPOLITAN NEWSWEEK" implying that said
summons and Partial Decision were not published in a newspaper of general circulation in Quezon City as
required by PD 1079, Sec. 1 thereof. Petitioners not having been duly notified of the hearing/proceedings, the
Partial Decision being assailed is without significance to them or as far as petitioners are concerned said Partial
Decision is null and void.11

Petitioners' motion for reconsideration was denied in a Resolution dated December 21, 1989.12
86
Hence, the instant petition for certiorari which raises the following Issues:

I. WHETHER OR NOT RESPONDENT COURT OF APPEALS, QUESTIONED DECISION HAS VIOLATED

PETITIONERS' RIGHT TO DUE PROCESS BY IGNORING AND LEAVING UNDECIDED ALL THE ISSUES
RAISED IN THE ANSWER OF PETITIONERS IN CA-G.R. NO. SP-17596.

II. WHETHER OR NOT THE COURT A-QUO HAS ACQUIRED JURISDICTION OVER RESPONDENT VILMA
MALOLES SUBDIVISION BY THE PUBLICA TION OF THE SUMMONS AND PETITION AS ORDERED BY THE
COURT IN CIVIL CASE NO. Q-35672 AND SO THE PARTIAL DECISION (ANNEX "B") W AS LEGAL, VALID
AND PROPER.

III. WHETHER OR NOT PRIV ATE RESPONDENTS PER THEIR PETITION. BEFORE RESPONDENT COURT
OF APPEALS HAS A VALID CAUSE OF ACTION CONSIDERING THEY ADOPTED CONTRADICTORY
POSITIONS OR THEORIES OF THE CASE, AND THAT RESPONDENT COURT OF APPEALS DECISION
(ANNEX "G") IS VOID.13

We find no merit in the instant petition.

The case before the Court of Appeals was one for annulment of judgement, certiorari, prohibition and mandamus. In
resolving the same, the Court of Appeals need not retry the facts. An action for annulment of judgement is grounded only
on two justifications: (I) extrinsic fraud; and (2) lack of jurisdiction or denial of due process. 14 All that herein private
respondents had to prove was that the trial court had no jurisdiction; that they were prevented from having a trial or
presenting their case to the trial court by some act or conduct of petitioners; 15 or that they had been denied due process
of law. Thus, the Court of Appeals need only to resolve the issues of lack of jurisdiction, existence of extrinsic fraud, and
denial of due process of law.

The action for annulment of judgement cannot and was not a substitute for the lost remedy of appeal. The very purpose of
the action for annulment of judgement was to have the final and executory judgement set aside so that there will be a
renewal of litigation.16 Whether or not the assailed Partial Decision based solely on facts and evidence presented by the
petitioners is meritorious is irrelevant and immaterial. Thus, the Court of Appeals did not err, nor did it violate the
petitioners' right to due process of law, when it refused to consider all the factual issues raised by petitioners.

We also agree with the Court of Appeals' conclusion that the Partial Decision is null and void insofar as private
respondents are concerned since the latter were not duly served summons or notified of the proceedings against them.
The summons and the Partial Decision were published in a local newspaper edited and published in Caloocan City and
Malolos, Bulacan. However, the Court of Appeals found the publication in said newspaper, namely the "Metropolitan
Newsweek," to be invalid because the said periodical is not considered a newspaper of general circulation in Quezon City
where the subject property is located, as required by Presidential Decree No.1079, Section 1.

Petitioners, however, contend that the service of summons by publication was legal and in accordance with the
requirements of Rule 14, Section 14 of the Rules of Court. The service by publication was done pursuant to the orders of
the trial court dated May 5, 1993 and September 29, 1983.17

While the service of summons by publication may have been done with the approval of the trial court, it does not cure the
fatal defect that the "Metropolitan Newsweek" is not a newspaper of general circulation in Quezon City .The Rules strictly
require that publication must be "in a newspaper of general circulation and in such places and for such time as the court
may order."18 The court orders relied upon by petitioners did not specify the place and the length of time that the summons
was to be published. In the absence of such specification, publication in just any periodical does not satisfy the strict
requirements of the rules. The incomplete directive of the court a quo coupled with the defective publication of the
summons rendered the service by publication ineffective. The modes of service of summons should be strictly followed in
order that the court may acquire jurisdiction over the respondents,19 and failure to strictly comply with the requirements of
the rules regarding the order of its publication is a fatal defect in the service of summons. 20 It cannot be over emphasized
that the statutory requirements of service of summons, whether personally, by substituted service, or by publication, must
be followed strictly, faithfully and fully, and any mode of service other than that prescribed by the statute is considered
ineffective.21

Be that as it may, even granting that the publication strictly complied with the rules, the service of summons would still be
ineffective insofar as private respondents are concerned. At the time the complaint for Quieting of title was filed on
November 2, 1983, Vilma Maloles Subdivision no longer existed as a juridical entity. Vilma Maloles Subdivision, a
87
partnership, was dissolved more than six (6) years earlier, as evidenced by a Certificate of Dissolution issued by the SEC
dated January 26,1976.22 Consequently, it could no longer be sued having lost its juridical personality.

It was also established that all the lots within the subdivision had been disposed of to private individuals, herein
respondents. As the titled owners, they were not made respondent, neither were they informed of the adverse
proceedings that would result in the nullification of their duly registered titles. Clearly, there was a blatant disregard for
their rights as registered owners. Private respondents' titles and rights as owners have been unjustly violated. Hence, the
Court of Appeals did not err in granting private respondents' petition by annulling and setting aside the Partial Decision
rendered by the court a quo for lack of jurisdiction and for denial of due process of law.

Petitioners failed to show that they were the aggrieved parties. If ever there was denial of due process, it was private
respondents who suffered therefrom. Whether by petitioners' failure to effectively serve summons or by omitting to name
private respondents as respondents, the trial court's Partial Decision declaring private respondents' titles null and void
was clearly violative of the due process requirement of the Constitution. It is elementary that before a person can be
deprived of his right or property he should first be informed of the claim against him and the theory on which such claim is
premised.23 The courts will not countenance a denial of the fundamental right to due process, which is a cornerstone of
our legal system.24

The Partial Decision was a judgement by default, which is generally looked upon with disfavor,25 for it cannot pretend to be
based on the merits of the controversy.26 As in this case, the judgement by default may amount to a positive and
considerable injustice to private respondents. Hence, justice and equity demand that this case be litigated a new.27

It is evident that the reopening of the case would not amount to an exercise in futility nor is it intended to further delay the
final resolution of this controversy. The court a quo  should give all the necessary parties every chance to fight their case
fairly and in the open, without resort to technicalities.28

Finally, the conclusion that the Partial Decision of the court a quo  is void finds support in Rule 10, Section 5(c) of the then
Rules of Court, which provides:

"(c) Effect of partial default. -When a pleading asserting a claim states a common cause of action against several
defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon
the answers thus filed and render judgment upon the evidence presented."

In fact, the court a quo  enumerated in the Partial Decision those who filed responsive pleadings. Considering that
petitioners in their complaint stated a common cause of action against all the named respondents, the court a quo should
have heard the case as against all respondents, the defaulted respondents included. However, the trial court, unmindful of
the above-quoted rule, proceeded to receive evidence ex parte only against the defaulted respondents. The trial court's
disposition is not only violative of the rules but also a clear negation of the defaulted respondents' limited
rights.1âwphi1.nêt

Whatever defense and evidence the non-defaulted respondents may present which would be applicable to the situation of
the defaulted respondents should inure to the benefit of the latter. The nullification of OCT 614 adversely affected the
answering respondents for they all share the same mother title. In effect, the court a quo  pre-judged the case even
against the answering respondents, for how could OCT 614, the mother title, be valid for one set of respondents and null
and void for the other respondents? In fine, the Partial Decision was procedurally flawed.

WHEREFORE, in view of all the foregoing, the decision of the Court of Appeals in CA-G.R. SP No. 17596
is AFFIRMED and the instant petition is DENIED for lack of merit.

SO ORDERED.

G.R. No. 204796               February 4, 2015

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REICON REALTY BUILDERS CORPORATION, Petitioner, 
vs.
DIAMOND DRAGON REALTY AND MANAGEMENT, INC., Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari 1 are the Resolutions dated May 21, 20122 and November 21,
20123rendered by the Court of Appeals (CA) in CA-G.R. SP No. 116845 which dismissed outright petitioner Reicon Realty
Builders Corporation's (Reicon) certiorari petition on procedural grounds.

The Facts

Reicon is the owner of a parcel of land and the one-storey building erected thereon located at the comer of Aurora
Boulevard and Araneta Avenue, Sta. Mesa, Quezon City,4 covered by Transfer Certificate of Title No. 330668 (subject
property).5 On January 9, 1991, Reicon and respondent Diamond Dragon Realty and Management, Inc. (Diamond)
entered into a Contract of Lease6 (January 9, 1991 Contract), whereby Reicon leased the subject property to Diamond for
a period of twenty (20) years, from January 15, 1991 to January 15, 2011, for a monthly rental of ₱75,000.00, subject to
periodical increments.7 In tum, Diamond sublet portions of the subject property to Jollibee Foods Corporation8 (Jollibee)
and Maybunga U.K. Enterprises (Maybunga), represented by its proprietor, Andrew D. Palangdao (Andrew).9

Beginning June 2006, Diamond failed to pay the monthly rentals due, and the checks it had issued by way of payments
from June 2006 to December 2006 were all dishonored upon presentment.10 This prompted Reicon to send, through
counsel, a letter11 dated July 23, 2007 demanding the payment of the accrued rentals and terminating the January 9, 1991
Contract.12 Thereafter, it entered into separate contracts with Jollibee13 and Maybunga14 over the portions of the subject
property they respectively occupy.

On December 14, 2009, Diamond filed a complaint15 for breach of contract with damages against Reicon, Jollibee,
Maybunga, Andrew, and a certain Mary Palangdao (Mary) (defendants) before the Regional Trial Court of Pasig City,
Branch 166 (RTC), docketed as Civil Case No. 72319, alleging that the January 9, 1991 Contract did not provide for its
unilateral termination by either of the parties.16 It also alleged that the act of defendants in entering into separate contracts,
despite the existence of the January 9, 1991 Contract, constitutes unlawful interference,17for which they must be held
solidarily liable for damages. As such, Diamond prayed that the unilateral termination of the January 9, 1991 Contract
effected by Reicon, as well as the separate contracts of lease it entered into with Jollibee and Maybunga, be declared
invalid and illegal.18 Further, it sought the award of unpaid rentals from Jollibee and Maybunga starting July 23, 2007 up to
the present, moral and exemplary damages, and attorney's fees.19

By way of special appearance, Reicon filed a motion to dismiss20 the complaint on the following grounds: (a) lack of
jurisdiction over its person, c onsidering that the summons was not served upon its president, managing partner, general
manager, corporate secretary, treasurer, or in-house counsel, as required by the Rules of Court (Rules), 21but upon a
certain Fernando Noyvo, a houseboy/gardener, at a residence located at 1217 Acacia St., Dasmarifias Village, Makati
City, which is not the principal office of Reicon; 22 (b) lack of legal capacity to sue as a juridical person on the part of
Diamond, its certificate of registration having already been revoked by the Securities and Exchange Commission (SEC)
as early as September 29, 2003, per certifications23 issued by the latter;24 and ( c) lack of cause of action, in the absence
of the requisite allegations of the ultimate facts constituting bad faith and malice on the part of the defendants as would
support the cause of action of "unlawful interference. "25

Opposing Reicon's motion to dismiss, Diamond argued 26 that, even assuming that summons was not properly served
upon Reicon, improper service is not a ground to dismiss its complaint. 27 It also insisted that it has legal capacity to
sue,28 as the corporation whose certificate of registration was revoked was "Diamond Dragon Realty and Mgt. Inc.," while
its name, per its General Information Sheet29 for 2009, was "Diamond Dragon Realty & Management, Inc." Moreover, it
claimed that its legal existence cannot be attacked except in a quo warranto petition.30

In its reply,31 Reicon pointed out, inter alia, that the corporation whose certificate of registration was revoked by the SEC
on September 29, 200332 was registered under SEC No. 144830.33 Per the SEC's Certificate of Corporate
Filing/Information34 dated February 1, 2010 which referred to "Diamond Dragon Realty & Mgt. Inc. " as well as Certificate
of Corporate Filing/Information35 dated March 2, 2010 which referred to "Diamond Dragon Realty and Management, Inc.,"

89
both corporations were registered under SEC No. 144830, which can only mean that it is one and the same corporation.
Reicon also reiterated its previous arguments in its motion to dismiss.

For its part, Jollibee filed a separate motion to dismiss36 the complaint on the ground of lack of jurisdiction over its person,
the summons having been improperly served; lack of jurisdiction over the subject matter, as Diamond failed to allege the
value of the subject property, which is required in an action involving title to, or possession of, real property, as in this
case; and improper venue.37 As for Maybunga, records do not show that they filed a similar motion for the dismissal of the
complaint.

The RTC Ruling

In an Order38 dated June 9, 2010, the RTC denied Reicon's (and Jollibee's) motion to dismiss, ratiocinating that improper
service of summons is not among the grounds enumerated under Section 1, 39 Rule 16 of the Rules allowing for the
dismissal of a complaint. With regard to the legal capacity of Diamond to sue as a juridical person, the R TC cited Section
2040 of the Corporation Code,41 in relation to Sections 142 and 543 of Rule 66 of the Rules, in ruling that Diamond's legal
existence can only be impugned in a quo warranto proceeding.

Reicon moved for reconsideration44 thereof which was, however, denied in an Order45 dated September 16, 2010.

The Proceedings Before the CA

Aggrieved, Reicon elevated the matter to the CA via petition for certiorari 46 taken under Rule 65 of the Rules, ascribing
grave abuse of discretion upon Presiding Judge Rowena De Juan Quinagoran (Judge Quinagoran) of the RTC in not
dismissing Diamond's complaint on the grounds discussed in Reicon's motion to dismiss, particularly the issue respecting
Diamond's lack of legal capacity to sue.47 Reicon filed its certiorari petition on November 18, 2010, entitled "Reicon Realty
Builders Corporation v. Hon. Rowena De Juan-Quinagoran and Diamond Dragon Realty and Management, Inc.,"
docketed as CA-G.R. SP No. 116845.

In a Resolution48 dated March 28, 2011, however, the CA required Reicon to show cause as to why its petition for
certiorari should. not be dismissed for its failure to acquire jurisdiction over the person of Diamond, as private respondent,
as required under Section 4,49 Rule 46 of the Rules. It appears that the CA's earlier Resolution dated January 5, 2011
addressed to Diamond, with address at "Suite 305, AIC Burgundy Empire Tpwer, ADB Ave., cor[.] Gamet50 Road, Ortigas
Center 1605 Pasig City" was returned to it, with the notation "RTS-Moved Out."51

In its Compliance,52 Reicon stated that the address "Suite 305, AIC Burgundy Empire Tower, ADB Avenue comer Gamet
Road, Ortigas Center, Pasig City" was Diamond's address on record in Civil Case No. 72319, the civil case from which the
certiorari petition originated. From the institution thereof up to the filing of Re icon's petition before the CA, Diamond has
not submitted any paper or pleading notifying the RTC of any change in its address. As such, Reicon maintained that the
service of its petition to Diamond's address as above-indicated should be deemed effective. In the alternative, it proffered
that Diamond may be served through its counsel of record in Civil Case No. 72319, Atty. Anselmo A. Marqueda (Atty.
Marqueda) of A.A. MARQUEDA LAW OFFICES, at the latter's office address.53

Alleging that it received a copy of Reicon's Compliance, Diamond, through its counsel, Atty. Marqueda, filed a
manifestation,54 under a special appearance, averring that Reicon' s petition for certiorari must be dismissed outright for its
failure to serve a copy thereof on its counsel of record (i.e., Atty. Marqueda).55 It cited the rule that when a party is
represented by counsel, notice of proceedings must be served upon said counsel to constitute valid service.56

In a Resolution57 dated May 21, 2012, the CA dismissed Reicon's certiorari petition without passing upon its merits based
on the following grounds: (a) non-compliance with the requirements of proof of service of the petition on Diamond
pursuant to Section 3,58 Rule 46 of the Rules, and (b) non-compliance with the rule on service upon a party through
counsel under Section 2, Rule 13 of the Rules.

Reicon’s motion for reconsideration59 was denied in a Resolution60 dated November 21, 2012, hence, this petition.

The Issues Before the Court

The sole issue to resolve is whether or not Reicon's certiorari petition before the CA was properly served upon the person
of Diamond.

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The Court's Ruling

The petition is meritorious.

I.

Sections 3 and 4, Rule 46 of the Rules, which covers cases originally Filed61 before the CA, provide as follows:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. - The petition shall contain the full
names and actual addresses of all the petitioners and respondents, a concise statement of the matters involved, the
factual background of the case, and the grounds relied upon for the relief prayed for.

In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or
final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and
when notice of the denial thereof was received.

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the respondent with the original
copy intended for the court indicated as such by the petitioner, and shall be accompanied by a clearly legible duplicate
original or certified true copy of the judgment, order, resolution, or ruling subject thereof, such material portions of the
record as are referred to therein, and other documents relevant or pertinent thereto. x x x.

xxxx

The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of
the petition.

SEC. 4. Jurisdiction over the person of respondent, how acquired. - The court shall acquire jurisdiction over the person of
the respondent by the service on him of its order or resolution indicating its initial action on the petition or by his voluntary
submission to such jurisdiction. (Emphases and underscoring supplied)

A punctilious review of the records, particularly of the certiorari petition filed by Reicon before the CA, shows that it
contains the registry numbers corresponding to the registry receipts 62 as well as the affidavit of service and/or filing 63of the
person who filed and served the petition via registered mail on behalf of Reicon. These imply that a copy of Reicon' s
certiorari petition had been served to the R TC as well as to Diamond through its address at "Suite 305 AIC Burgundy
Empire Tower, ADB Avenue comer Gamet Road, Ortigas Center, Pasig City,"64 in compliance with Section 13,65 Rule 13
of the Rules on proof of service as well as with Sections 3 and 4 of Rule 46 above-quoted.66

On this score, the Court notes that Diamond declared the aforesaid address as its business address 67 in its complaint
before the RTC, and that there is dearth of evidence to show that it had since changed its address or had moved out.
Hence, Reicon cannot be faulted for adopting the said address in serving a copy of its certiorari petition to Diamond in
light of the requirement under Sections 3 and 4, Rule 46 of the Rules as above-cited, which merely entails service of the
petition upon the respondent itself, not upon his counsel.

The underlying rationale behind this rule is that a certiorari proceeding is, by nature, an original and independent action,
and, therefore not considered as part of the trial that had resulted in the rendition of the judgment or order complained
of.68 Hence, at the preliminary point of serving the certiorari petition, as in other initiatory pleadings, it cannot be said that
an appearance for respondent has been made by his counsel. Consequently, the requirement under Section 2, 69 Rule 13
of the Rules, which provides that if any party has appeared by counsel, service upon him shall be made upon his counsel,
should not apply.

Thus, the CA erred when it dismissed Reicon's certiorari petition outright for non-compliance with Section 3, Rule 46 of
the Rules as well as the rule on service upon a party through counsel under Section 2, Rule 13 of the Rules. The service
of said pleading upon the person of the respondent, and not upon his counsel, is what the rule properly requires, as in this
case.

II.

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On a related note, the Court further observes that jurisdiction over the person of Diamond had already been acquired by
the CA through its voluntary appearance by virtue of the Manifestation dated May 5, 2011, filed by its counsel, Atty.
Marqueda, who, as the records would show, had consistently represented Diamond before the proceedings in the court a
quo and even before this Court. To restate, Section 4, Rule 46 of the Rules provides:

SEC. 4. Jurisdiction over person of respondent, how acquired. -The court shall acquire jurisdiction over the person of the
respondent by the service on him of its order or resolution indicating its initial action on the petition or by his voluntary
submission to such jurisdiction. (Emphasis and underscoring supplied)

Hence, while the CA' s resolution indicating its initial action on the petition, i.e., the Resolution dated January 5, 2011
requiring Diamond to comment, was returned with the notation "RTS-Moved Out," the alternative mode of Diamond's
voluntary appearance was enough for the CA to acquire jurisdiction over its person. Diamond cannot escape this
conclusion by invoking the convenient excuse of limiting its manifestation as a mere "special appearance," considering
that it affirmatively sought therein the dismissal of the certiorari petition. Seeking an affirmative relief is inconsistent with
the position that no voluntary appearance had been made, and to ask for such relief, without the proper objection,
necessitates submission to the Court's jurisdiction. Here, Diamond's special appearance cannot be treated as a specific
objection to the CA's jurisdiction over its person for the reason that the argument it pressed on was about the alleged error
in the service of Reicon's certiorari petition, and not the CA's service of its resolution indicating its initial action on the said
pleading. Properly speaking, this argument does not have anything to do with the CA's acquisition of jurisdiction over
Diamond for it is the service of the appellate court's resolution indicating its initial action, and not of the certiorari petition
itself, which is material to this analysis.

Note that the conclusion would be different if Diamond had actually objected to the CA's service of its resolution indicating
its initial action; if such were the case, then its special appearance could then be treated as a proper conditional
appearance challenging the CA's jurisdiction over its person. To parallel, in ordinary civil cases, a conditional appearance
to object to a trial court's jurisdiction over the person of the defendant may be made when said party specifically objects to
the service of summons, which is an issuance directed by the court, not the complainant. If the defendant, however,
enters a special appearance but grounds the same on the service of the complainant's initiatory pleading to him, then that
would not be considered as an objection to the court's jurisdiction over his person. It must be underscored that the service
of the initiatory pleading has nothing to do with how courts acquire jurisdiction over the person of the defendant in an
ordinary civil action. Rather, it is the propriety of the trial court's service of summons - same as the CA's service of its
resolution indicating its initial action on the certiorari petition - which remains material to the matter of the court's
acquisition jurisdiction over the defendant's/respondents' person.

In Philippine Commercial International Bank v. Spouses Dy,70 it was ruled that "[a]s a general proposition, one who seeks
an affirmative relief is deemed to have submitted to the jurisdiction of the court.1âwphi1 It is by reason of this rule that we
have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default with motion for reconsideration, is considered voluntary
submission to the court's jurisdiction. This, however, is tempered by the concept of conditional appearance, such that a
party who makes a special appearance to challenge, among others, the court's jurisdiction over his person cannot be
considered to have submitted to its authority. Prescinding from the foregoing, it is thus clear that:

(1) Special appearance operates as an exception to the general rule on voluntary appearance;

(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant must be explicitly
made, i.e., set forth in an unequivocal manner; and

(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in instances where
a pleading or motion seeking affirmative relief is filed and submitted to the court for resolution."71

Considering that the tenor of Diamond's objection in its special appearance had actually no legal bearing on the CA's
jurisdiction over its person (that is, since it objected to the propriety of Reicon's service of its petition, and not the CA's
service of its order indicating its initial action), it cannot be said that the proper objection to the appellate court's
jurisdiction, as above-discussed, had been made by Diamond. Thus, by asking for an affirmative relief, i.e., the dismissal
of Rei con's certiorari petition, bereft of the proper jurisdictional objection, the Court therefore concludes that Diamond had
submitted itself to the jurisdiction of the appellate court.

In fine, the proper course of action would be for the CA to reinstate Reicon's certiorari petition, docketed as CA-G.R. SP
No. 116845, given that it had already acquired jurisdiction over Diamond's person. In order to ensure that Diamond's due

92
process rights are protected, Reicon should, however, be directed to submit proof that the service of its petition had
actually been completed in accordance with Rule 1372 of the Rules.73 Diamond, in the meantime, should be ordered to
furnish the CA the details of its current address and confirm whether or not Atty. Marqueda would be representing it as its
counsel of record in the main (and not only through special appearance); if Diamond will be represented by a different
counsel, it must so notify the appellate court. Henceforth, all pleadings and papers should be addressed to such counsel
and would equally bind Diamond as client. Throughout the proceedings, the CA is exhorted to bear in mind the judicial
policy to resolve the present controversy with utmost dispatch in order to avoid further delay.

WHEREFORE, the petition is GRANTED. The Resolutions dated May 21, 2012 and November 21, 2012 of the Court of
Appeals (CA) are REVERSED and SET ASIDE. Accordingly, the CA is DIRECTED to REINSTATE the petition for
certiorari, docketed as CA-G.R. SP No. 116845 under the parameters discussed in this Decision.

SO ORDERED.

93