CIVIL PROCEDURE CASES – Summons (Rule 14)
G.R. No. 108538 January 22, 1996
LOURDES A. VALMONTE and ALFREDO D.
VALMONTE, petitioners, vs.THE HONORABLE COURT OF APPEALS,
THIRD DIVISION and ROSITA DIMALANTA, respondents.
Petitioner Lourdes A. Valmonte is a foreign resident. The question is
whether in an action for partition filed against her and her husband, who
is also her attorney, summons intended for her may be served on her
husband, who has a law office in the Philippines. The Regional Trial
Court of Manila, Branch 48, said no and refused to declare Lourdes A.
Valmonte in default, but the Court of Appeals said yes. Hence this
petition for review on certiorari.
The facts of the case are as follows:
Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband
and wife. They are both residents of 90222 Carkeek Drive South Seattle,
Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of
the Philippine bar, however, practices his profession in the Philippines,
commuting for this purpose between his residence in the state of
Washington and Manila, where he holds office at S-304 Gedisco Centre,
1564 A. Mabini Ermita, Manila.
On March 9, 1992, private respondent Rosita Dimalanta, who is the sister
of petitioner Lourdes A. Valmonte, filed a complaint for partition of real
property and accounting of rentals against petitioners Lourdes A.
Valmonte and Alfredo D. Valmonte before the Regional Trial Court of
Manila, Branch 48. The subject of the action is a three-door apartment
located in Paco, Manila.
In her Complaint, private respondent alleged:
The plaintiff is of legal age, a widow and is at present a resident
of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the
defendants are spouses, of legal age and at present residents of
90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for
purposes of this complaint may be served with summons at
Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila
where defendant Alfredo D. Valmonte as defendant Lourdes
Arreola Valmonte's spouse holds office and where he can be
found.
Apparently, the foregoing averments were made on the basis of a letter
previously sent by petitioner Lourdes A. Valmonte to private respondent's
counsel in which, in regard to the partition of the property in question, she
referred private respondent's counsel to her husband as the party to
whom all communications intended for her should be sent. The letter
reads:
July 4, 1991
Dear Atty. Balgos:
This is in response to your letter, dated 20 June 1991, which I
received on 3 July 1991. Please address all communications to
my lawyer, Atty. Alfredo D. Valmonte, whose address, telephone
and fax numbers appear below.
c/o Prime Marine
Gedisco Center, Unit 304
1564 A. Mabini, Ermita
Metro Manila
Telephone: 521-1736
Fax: 521-2095
Service of summons was then made upon petitioner Alfredo D. Valmonte,
who at the time, was at his office in Manila. Petitioner Alfredo D.
Valmonte accepted the summons, insofar as he was concerned, but
refused to accept the summons for his wife, Lourdes A. Valmonte, on the
ground that he was not authorized to accept the process on her behalf.
Accordingly the process server left without leaving a copy of the
summons and complaint for petitioner Lourdes A. Valmonte.
Petitioner Alfredo D. Valmonte thereafter filed his Answer with
Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her
Answer. For this reason private respondent moved to declare her in
default. Petitioner Alfredo D. Valmonte entered a special appearance in
behalf of his wife and opposed the private respondent's motion.
In its Order dated July 3, 1992, the trial court, denied private respondent's
motion to declare petitioner Lourdes A. Valmonte in default. A motion for
reconsideration was similarly denied on September 23, 1992.
Whereupon, private respondent filed a petition for certiorari, prohibition
and mandamus with the Court of Appeals.
1

On December 29, 1992, the Court of Appeals rendered a decision
granting the petition and declaring Lourdes A. Valmonte in default. A
copy of the appellate court's decision was received by petitioner Alfredo
D. Valmonte on January 15, 1993 at his Manila office and on January 21,
1993 in Seattle, Washington. Hence, this petition.
The issue at bar is whether in light of the facts set forth above, petitioner
Lourdes A. Valmonte was validly served with summons. In holding that
she had been, the Court of Appeals stated:1
[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally
directed the aforementioned counsel of Dimalanta to address all
communications (evidently referring to her controversy with her sister
Mrs. Dimalanta over the Paco property, now the subject of the instant
case) to her lawyer who happens also to be her husband. Such directive
was made without any qualification just as was her choice/designation of
her husband Atty. Valmonte as her lawyer likewise made without any
qualification or reservation. Any disclaimer therefore on the part of Atty.
Valmonte as to his being his wife's attorney (at least with regard to the
dispute vis-a-vis (sic) the Paco property) would appear to be feeble or
trifling, if not incredible.
This view is bolstered by Atty. Valmonte's subsequent alleged special
appearance made on behalf of his wife. Whereas Mrs. Valmonte had
manifestly authorized her husband to serve as her lawyer relative to her
dispute with her sister over the Paco property and to receive all
communications regarding the same and subsequently to appear on her
behalf by way of a so-called special appearance, she would nonetheless
now insist that the same husband would nonetheless had absolutely no
authority to receive summons on her behalf. In effect, she is asserting
that representation by her lawyer (who is also her husband) as far as the
Paco property controversy is concerned, should only be made by him
when such representation would be favorable to her but not otherwise. It
would obviously be inequitable for this Court to allow private respondent
Lourdes A. Valmonte to hold that her husband has the authority to
represent her when an advantage is to be obtained by her and to deny
such authority when it would turn out to be her disadvantage. If this be
allowed, Our Rules of Court, instead of being an instrument to promote
justice would be made use of to thwart or frustrate the same.
xxx xxx xxx
CIVIL PROCEDURE CASES – Summons (Rule 14)
Turning to another point, it would not do for Us to overlook the
fact that the disputed summons was served not upon just an
ordinary lawyer of private respondent Lourdes A. Valmonte, but
upon her lawyer husband. But that is not all, the same
lawyer/husband happens to be also her co-defendant in the
instant case which involves real property which, according to her
lawyer/husband/co-defendant, belongs to the conjugal
partnership of the defendants (the spouses Valmonte). It is highly
inconceivable and certainly it would be contrary to human nature
for the lawyer/husband/co-defendant to keep to himself the fact
that they (the spouses Valmonte) had been sued with regard to a
property which, he claims to be conjugal. Parenthetically, there is
nothing in the records of the case before Us regarding any
manifestation by private respondent Lourdes A. Valmonte about
her lack of knowledge about the case instituted against her and
her lawyer/husband/co-defendant by her sister Rosita. . . .
PREMISES CONSIDERED, the instant petition for certiorari,
prohibition and mandamus is given due course. This Court
hereby Resolves to nullify the orders of the court a quo dated July
3, 1992 and September 23, 1992 and further declares private
respondent Lourdes Arreola Valmonte as having been properly
served with summons.
Petitioners assail the aforequoted decision, alleging that the Court of
Appeals erred (1) in refusing to apply the provisions of Rule 14, §17 of
the Revised Rules of Court and applying instead Rule 14, §8 when the
fact is that petitioner Lourdes A. Valmonte is a nonresident defendant;
and (2) because even if Rule 14, §8 is the applicable provision, there was
no valid substituted service as there was no strict compliance with the
requirement by leaving a copy of the summons and complaint with
petitioner Alfredo D. Valmonte. Private respondent, upon the other hand,
asserts that petitioners are invoking a technicality and that strict
adherence to the rules would only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes A.
Valmonte.
To provide perspective, it will be helpful to determine first the nature of
the action filed against petitioners Lourdes A. Valmonte and Alfredo D.
Valmonte by private respondent, whether it is an action in personam, in
rem or quasi in rem. This is because the rules on service of summons
2

embodied in Rule 14 apply according to whether an action is one or the
other of these actions.
In an action in personam, personal service of summons or, if this is not
possible and he cannot be personally served, substituted service, as
provided in Rule 14, §§7-82 is essential for the acquisition by the court of
jurisdiction over the person of a defendant who does not voluntarily
submit himself to the authority of the court.3 If defendant cannot be
served with summons because he is temporarily abroad, but otherwise
he is a Philippine resident, service of summons may, by leave of court, be
made by publication.4 Otherwise stated, a resident defendant in an action
in personam, who cannot be personally served with summons, may be
summoned either by means of substituted service in accordance with
Rule 14, §8 or by publication as provided in §§ 17 and 18 of the same
Rule.5
In all of these cases, it should be noted, defendant must be a resident of
the Philippines, otherwise an action in personam cannot be brought
because jurisdiction over his person is essential to make a binding
decision.
On the other hand, if the action is in rem or quasi in rem, jurisdiction over
the person of the defendant is not essential for giving the court
jurisdiction so long as the court acquires jurisdiction over the res. If the
defendant is a nonresident and he is not found in the country, summons
may be served exterritorially in accordance with Rule 14, §17, which
provides:
§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
CIVIL PROCEDURE CASES – Summons (Rule 14)
reasonable time, which shall not be less than sixty (60) days after
notice, within which the defendant must answer..
In such cases, what gives the court jurisdiction in an action in
rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal
status of the plaintiff who is domiciled in the Philippines or the property
litigated or attached.
Service of summons in the manner provided in §17 is not for the purpose
of vesting it with jurisdiction but for complying with the requirements of
fair play or due process, so that he will be informed of the pendency of
the action against him and the possibility that property in the Philippines
belonging to him or in which he has an interest may be subjected to a
judgment in favor of the plaintiff and he can thereby take steps to protect
his interest if he is so minded.6
Applying the foregoing rules to the case at bar, private respondent's
action, which is for partition and accounting under Rule 69, is in the
nature of an action quasi in rem. Such an action is essentially for the
purpose of affecting the defendant's interest in a specific property and not
to render a judgment against him. As explained in the leading case
of Banco Español Filipino v. Palanca :7
[An action quasi in rem is] an action which while not strictly speaking an
action in rem partakes of that nature and is substantially such. . . . The
action quasi in rem differs from the true action in rem in the circumstance
that in the former an individual is named as defendant and the purpose of
the proceeding is to subject his interest therein to the obligation or lien
burdening the property. All proceedings having for their sole object the
sale or other disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in a general way
thus designated. The judgment entered in these proceedings is
conclusive only between the parties.
As petitioner Lourdes A. Valmonte is a nonresident who is not found in
the Philippines, service of summons on her must be in accordance with
Rule 14, §17. Such service, to be effective outside the Philippines, must
be made either (1) by personal service; (2) by publication in a newspaper
of general circulation in such places and for such time as the court may
order, in which case a copy of the summons and order of the court
should be sent by registered mail to the last known address of the
defendant; or (3) in any other manner which the court may deem
sufficient.
3

Since in the case at bar, the service of summons upon petitioner Lourdes
A. Valmonte was not done by means of any of the first two modes, the
question is whether the service on her attorney, petitioner Alfredo D.
Valmonte, can be justified under the third mode, namely, "in any . . .
manner the court may deem sufficient."
We hold it cannot. This mode of service, like the first two, must be made
outside the Philippines, such as through the Philippine Embassy in the
foreign country where the defendant resides.8 Moreover, there are
several reasons why the service of summons on Atty. Alfredo D.
Valmonte cannot be considered a valid service of summons on petitioner
Lourdes A. Valmonte. In the first place, service of summons on petitioner
Alfredo D. Valmonte was not made upon the order of the court as
required by Rule 14, §17 and certainly was not a mode deemed sufficient
by the court which in fact refused to consider the service to be valid and
on that basis declare petitioner Lourdes A. Valmonte in default for her
failure to file an answer.
In the second place, service in the attempted manner on petitioner was
not made upon prior leave of the trial court as required also in Rule 14,
§17. As provided in §19, such leave must be applied for by motion in
writing, supported by affidavit of the plaintiff or some person on his behalf
and setting forth the grounds for the application.
Finally, and most importantly, because there was no order granting such
leave, petitioner Lourdes A. Valmonte was not given ample time to file
her Answer which, according to the rules, shall be not less than sixty (60)
days after notice. It must be noted that the period to file an Answer in an
action against a resident defendant differs from the period given in an
action filed against a nonresident defendant who is not found in the
Philippines. In the former, the period is fifteen (15) days from service of
summons, while in the latter, it is at least sixty (60) days from notice.
Strict compliance with these requirements alone can assure observance
of due process. That is why in one case,9 although the Court considered
publication in the Philippines of the summons (against the contention that
it should be made in the foreign state where defendant was residing)
sufficient, nonetheless the service was considered insufficient because
no copy of the summons was sent to the last known correct address in
the Philippines..
Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA
458,462-463 (1975), in which it was held that service of summons upon
CIVIL PROCEDURE CASES – Summons (Rule 14)
the defendant's husband was binding on her. But the ruling in that case is
justified because summons were served upon defendant's husband in
their conjugal home in Cebu City and the wife was only temporarily
absent, having gone to Dumaguete City for a vacation. The action was
for collection of a sum of money. In accordance with Rule 14, §8,
substituted service could be made on any person of sufficient discretion
in the dwelling place of the defendant, and certainly defendant's husband,
who was there, was competent to receive the summons on her behalf. In
any event, it appears that defendant in that case submitted to the
jurisdiction of the court by instructing her husband to move for the
dissolution of the writ of attachment issued in that case.
On the other hand, in the case of Gemperle v. Schenker, 10 it was held
that service on the wife of a nonresident defendant was found sufficient
because the defendant had appointed his wife as his attorney-in-fact. It
was held that although defendant Paul Schenker was a Swiss citizen and
resident of Switzerland, service of summons upon his wife Helen
Schenker who was in the Philippines was sufficient because she was her
husband's representative and attorney-in-fact in a civil case, which he
had earlier filed against William Gemperle. In fact Gemperle's action was
for damages arising from allegedly derogatory statements contained in
the complaint filed in the first case. As this Court said, "[i]n other words,
Mrs. Schenker had authority to sue, and had actually sued, on behalf of
her husband, so that she was, also, empowered to represent him in suits
filed against him, particularly in a case, like the one at bar, which is a
consequence of the action brought by her on his behalf" 11 Indeed, if
instead of filing an independent action Gemperle filed a counterclaim in
the action brought by Mr. Schenker against him, there would have been
no doubt that the trial court could have acquired jurisdiction over Mr.
Schenker through his agent and attorney-in-fact, Mrs. Schenker.
In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not
appoint her husband as her attorney-in-fact. Although she wrote private
res- pondent's attorney that "all communications" intended for her should
be addressed to her husband who is also her lawyer at the latter's
address in Manila, no power of attorney to receive summons for her can
be inferred therefrom. In fact the letter was written seven months before
the filing of this case below, and it appears that it was written in
connection with the negotiations between her and her sister, respondent
Rosita Dimalanta, concerning the partition of the property in question. As
is usual in negotiations of this kind, the exchange of correspondence was
carried on by counsel for the parties. But the authority given to
4
 CIVIL PROCEDURE CASES – Summons (Rule 14)
petitioner's husband in these negotiations certainly cannot be construed
as also including an authority to represent her in any litigation.

For the foregoing reasons, we hold that there was no valid service on
petitioner Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders

dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of
Manila, Branch 48 are REINSTATED.

SO ORDERED.

5

G.R. No. 103200 August 31, 1994
LA NAVAL DRUG CORPORATION, petitioner, vs.THE HONORABLE
COURT OF APPEALS and WILSON C. YAO, respondents.
In an effort to declog the courts of an increasing volume of work load and,
most importantly, in order to accord contending parties with expenditious
alternatives for settling disputes, the law authorities, indeed encourages,
out of court settlements or adjudications. Compromises and arbitration
are widely known and used as such acceptable methods of resolving
adversarial claims.
Arbitrations, in particular, is governed by a special law, Republic Act 876,
suppletory to which are laws and rules of general application. This case
before us concerns the jurisdiction of courts, in relation to the provisions
of Section 6 of Republic Act No. 876, and, in that respect, the applicability
of the doctrine of estoppel. The law (R.A. 876), specifically Section 6
thereof, provides:
Sec. 6. Hearing by court. — A party aggrieved by the failure,
neglect or refusal of another to perform under an agreement in
writing providing for arbitration may petition the court for an order
directing that such arbitration proceed in the manner provided for
in such agreement. Five days notice in writing of the hearing of
such application shall be served either personally or by registered
mail upon the party in default. The court shall hear the parties,
and upon being satisfied that the making of the agreement or
such failure to comply therewith is not in issue, shall make an
order directing the parties to proceed to arbitration in accordance
with the terms of the agreement. If the making of the agreement
or default be in issue the court shall proceed to summarily hear
such issue. If the finding be that no agreement in writing providing
for arbitration was made, or that there is no default in the
proceeding thereunder, the proceeding shall be dismissed. If the
finding be that a written provision for arbitration was made and
there is a default in proceeding thereunder, an order shall be
made summarily directing the parties to proceed with the
arbitration in accordance with the terms thereof.
The court shall decide all motions, petitions or application filed
under the provisions of this Act, within ten days after such
motions, petitions, or applications have been heard by it.
CIVIL PROCEDURE CASES – Summons (Rule 14)
In chronology, the events that have led to the case at bench are detailed
in the appealed decision of respondent appellate court, which we here
reproduce in toto.
Original action for Certiorari and Prohibition for Annulment of the
Orders, dated April 26, 1990 and June 22, 1990, respectively, of
Branch LXI, Regional Trial Court, Angeles City, in Special Case
No. 6024 for Enforcement of ARBITRATION Agreement with
Damages. Petitioner assails that portion of subject Order of April
26, 1990, stating as follows:
(1) Petitioner's claim for damages predicated on alleged
tortuous acts of respondents La Naval Drug corporation
such as their alleged interference and dilatory tactics, etc.
in the implementation of the Arbitration Agreement in the
Contract of Lease, thereby compelling among others the
petitioner to go to Court for redress; and respondent La
Naval Drug Corporation's counterclaim for damages may
be entertained by this Court in a hearing — not summary
— for the purpose, under the Rules of Court.
(2) A preliminary hearing of the special and affirmative
defense to show that Petitioner has not cause of action
against respondent's claim for damages is denied; a
resolution on this issue is deferred after the trial of the
case on the merits.
And challenges the Order of June 22, 1990 denying its motion for
reconsideration of the said earlier Order.
From the petition below of respondent Yao, it appears that he is
the present owner of a commercial building a portion of which is
leased to petitioner under a contract of lease executed on
December 23, 1993 with the former owner thereof, La
Proveedora, Inc., which contract expired on April 30, 1989.
However, petitioner exercised its option to lease the same
building for another five years. But petitioner and respondent Yao
disagreed on the rental rate, and to resolve the controversy, the
latter, thru written notices to the former, expressed his intention to
submit their disagreement to arbitration, in accordance with
Republic Act 876, otherwise known as the Arbitration Law, and
paragraph 7 of their lease contract, providing that:
6

7. . . . Should the parties fail to agree on the rate of
rentals, the same shall be submitted to a group of
Arbitrators composed of three (3) members, one to be
appointed by LESSOR, another by LESSEE and the third
one to be agreed upon by the two arbitrators previously
chosen and the parties hereto shall submit to the decision
of the arbitrators.
Thus, on May 6, 1989, respondent Yao appointed Domingo
Alamarez, Jr. as his arbitrator, while on June 5, 1989, petitioner
chose Atty. Casiano Sabile as its arbitrator. The confirmation of
the appointment of Aurelio Tupang, as third arbitrator, was held in
abeyance because petitioner instructed Atty. Sabile to defer the
same until its Board of Directors could convene and approve
Tupang's appointment. Respondent Yao theorizes that this was
petitioner's design to delay the arbitration proceedings, in
violation of the Arbitration Law, and the governing stipulation of
their contract of lease.
On the basis of the aforesaid allegations, respondent Yao prayed
that after summary hearing pursuant to Section 6 of the
Arbitration Law, Atty. Casiano Sabile and Domingo Alamarez be
directed to proceed with the arbitration in accordance with
Section 7 of subject Contract of Lease and the applicable
provisions of the Arbitration law, by appointing and confirming the
appointment of the Third Arbitrator; and that the Board of Three
Arbitrators be ordered to immediately convene and resolve the
controversy before it, pursuant to Section 12 and the succeeding
sections of the Arbitration Law. (Annex "A," Petition.)
In its Answer with Counterclaim (Annex "C," Petition), petitioner
here specifically denied the averments of the petition below;
theorizing that such petition is premature since respondent Yao
has not yet formally required arbitrators Alamarez and Sabile to
agree on the third arbitrator, within ten (10) days from notice, and
that the delay in the arbitration was due to respondent Yao's
failure to perform what is incumbent upon him, of notifying and
thereafter, requiring both arbitrators to appoint the third member
of the Board of Arbitrators. According to petitioner, it actually gave
arbitrators Sabile and Alamarez a free hand in choosing the third
arbitrator; and, therefore, respondent Yao has no cause of action
against it (petitioner). By way of Counterclaim, petitioner alleged
that it suffered actual damages of P100,000.00; and incurred
CIVIL PROCEDURE CASES – Summons (Rule 14)
attorney's fees of P50,000.00, plus P500.00 for every court
appearance of its counsel.
On October 20, 1989, respondent Yao filed an amended petition
for "Enforcement of Arbitration Agreement with Damages;"
praying that petitioner be ordered to pay interest on the unpaid
rents, at the prevailing rate of interest in commercial banks, and
exemplary damages of at least P250,000.00.
On October 24, 1989, despite petitioner's opposition to the motion
to admit the amended petition, the respondent court admitted the
same.
On October 31, 1989, petitioner answered the amended petition;
contending, among others, that the amended petition should be
dismissed on the ground of non-payment of the requisite filing
fees therefor; and it being in the nature of an ordinary civil action,
a full blown and regular trial, is necessary; so that respondent
Yao's proposition for a summary hearing of the arbitration issue
and separate trial for his claim for damages is procedurally
untenable and implausible.
Invoking Section 5, Rule 16 of the Rules of Court, petitioner
presented a "Motion to Set Case for Preliminary Hearing" of its
special and affirmative defenses, which are grounds fro a motion
to dismiss.
In its Order of November 14, 1989, the respondent court
announced that the two arbitrators chose Mrs. Eloisa R. Narciso
as the third arbitrator. And on November 21, 1989, it ordered the
parties to submit their position papers on the issue as to whether
or not respondent Yao's claim for damages may be litigated upon
in the summary proceeding for enforcement of arbitration
agreement. It likewise informed the parties that petitioner's Motion
to Set Case for Preliminary Hearing" of Special and Affirmative
Defenses would be resolved together with the question of
damages.
On April 26, 1990, the aforequoted assailed Order issued. In
moving for reconsideration of the said Order, petitioner argued
that in Special Case No. 6024, the respondent court sits as a
special court exercising limited jurisdiction and is not competent
to act on respondent Yao's claim for damages, which poses an
7

issue litigable in an ordinary civil action. But the respondent court
was not persuaded by petitioner's submission. On June 22, 1990,
it denied the motion for reconsideration. (Rollo, pp. 89-93).
While the appellate court has agreed with petitioner that, under Section 6
of Republic Act No. 876, a court, acting within the limits of its special
jurisdiction, may in this case solely determine the issue of whether the
litigants should proceed or not to arbitration, it, however, considered
petitioner in estoppel from questioning the competence of the court to
additionally hear and decide in the summary proceedings private
respondent's claim for damages, it (petitioner) having itself filed similarly
its own counterclaim with the court a quo.
It is hardly disputable that when a court is called upon to exercise limited
and special jurisdiction, that court cannot stray to matters outside the
area of its declared authority or beyond what has been expressly
invested by law (Elumbaring vs. Elumbaring, 12 Phil. 384, 387),
particularly, such as in this instance, where the proceedings are summary
in nature.
Prefatorily, recalling the distinctions, pertinent to the case, between the
court's lack of jurisdiction over the person of the defendant, on the one
hand, and its lack of jurisdiction over the subject matter or the nature of
the action, upon the other hand, should be useful.
The lack of jurisdiction over the person of the defendant may be waived
either expressly or impliedly. When a defendant voluntarily appears, he is
deemed to have submitted himself to the jurisdiction of the court. If he so
wishes not to waive this defense, he must do so seasonably by motion
for the purpose of objecting to the jurisdiction of the court; otherwise, he
shall be deemed to have submitted himself to that jurisdiction. The
decisions promulgated heretofore by this Court would likewise seemingly
apply estoppel to bar the defendant from pursuing that defense by
alleging in his answer any other issue for dismissing the action.
A citation of a few of our decisions might be apropos.
In Wang Laboratories, Inc., vs. Mendoza (156 SCRA 44), this Court has
ruled that if the defendant, besides setting up in a motion to dismiss his
objection to the jurisdiction of the court, alleges at the same time any
other ground for dismissing the action, he is deemed to have submitted
himself to the jurisdiction of the court. In the process, it has equated the
matter to a situation where, such as in Immaculata vs. Judge Navarro, et
CIVIL PROCEDURE CASES – Summons (Rule 14)
al. (146 SCRA 5), the defendant invokes an affirmative relief against his
opponent.
In De Midgely vs. Judge Ferandos (64 SCRA 23, 31), the Court
elaborated thusly:
We are of the opinion that the lower court has acquired
jurisdiction over the person of Mrs. Midgely by reason of her
voluntary appearance. The reservation in her motion to dismiss
that she was making a special appearance to contest the court's
jurisdiction over her person may be disregarded.
It may be disregarded because it was nullified by the fact that in
her motion to dismiss she relied not only on the ground of lack of
jurisdiction over her person but also on the ground that there was
no showing that earnest efforts were exerted to compromise the
case and because she prayed "for such other relief as" may be
deemed "appropriate and proper."
xxx xxx xxx
When the appearance is by motion for the purpose of objecting to
the jurisdiction of the court over the 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. A special appearance by
motion made for the purpose of objecting to the jurisdiction of the
court over the person will be held to be a general appearance, if
the party in said motion should, for example, ask for a dismissal
of the action upon the further ground that the court had no
jurisdiction over the subject matter. (Syllabus, Flores vs.
Zurbito, supra, at page 751. That rule was followed in Ocampo
vs. Mina and Arejola, 41 Phil. 308).
The justification for the rule was expressed in Republic vs. Ker and
Companry, Ltd. (18 SCRA 207, 213-214), in this wise:
We observed that the motion to dismiss filed on April 14, 1962,
aside from disputing the lower court's jurisdiction over defendant's
person, prayed for dismissal of the complaint on the ground that
plaintiff's cause of action had prescribed. By interposing such
8

second ground in its motion to dismiss, Ker & Co., Ltd. availed of
an affirmative defense on the basis of which it prayed the court to
resolve controversy in its favor. For the court to validly decide the
said plea of defendant Ker & Co., Ltd., it necessarily had to
acquire jurisdiction upon the latter's person, who, being the
proponent of the affirmative defense, should be deemed to have
abandoned its special appearance and voluntarily submitted itself
to the jurisdiction of the court.
Voluntary appearance cures defects of summons, if any, Such
defect, if any, was further cured when defendant filed its answer
to the complaint. A defendant can not be permitted to speculate
upon the judgment of the court by objecting to the court's
jurisdiction over its person if the judgment is adverse to it, and
acceding to jurisdiction over its person if and when the judgment
sustains its defenses.
The doctrine of estoppel is predicated on, and has its origin in, equity
which, broadly defined, is justice according to natural law and right. It is a
principle intended to avoid a clear case of injustice. The term is hardly
distinguishable from a waiver of right. Estoppel, like its said counterpart,
must be unequivocal and intentional for, when misapplied, it can easily
become a most convenient and effective means of injustice. Estoppel is
not understood to be a principle that, as a rule, should prevalently apply
but, such as it concededly is, as a mere exception from the standard
legal norms of general application that can be invoked only in highly
exceptional and justifiable cases.
Tested by the above criteria, the Court sees it propitious to re-examine
specifically the question of whether or not the submission of other issues
in a motion to dismiss, or of an affirmative defense (as distinguished from
an affirmative relief) in an answer, would necessarily foreclose, and have
the effect of a waiver of, the right of a defendant to set up the court's lack
of jurisdiction over the person of the defendant.
Not inevitably.
Section 1, Rule 16, of the Rules of Court, provides that a motion to
dismiss may be made on the following grounds:
(a) That the court has no jurisdiction over the person of the
defendant or over the subject of the action or suit;
CIVIL PROCEDURE CASES – Summons (Rule 14)
(b) That the court has no jurisdiction over the nature of the action
or suit;
(c) The venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same
parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by
statute of limitations;
(g) That the complaint states no cause of action;
(h) That the claim or demand set forth in the plaintiff's pleading
has been paid, waived, abandoned, or otherwise extinguished;
( i ) That the claim on which the action or suit is founded is
unenforceable under the provisions of the statute of frauds;
( j ) That the suit is between members of the same family and no
earnest efforts towards a compromise have been made.
Any ground for dismissal in a motion to dismiss, except improper venue,
may, as further set forth in Section 5 of the same rule, be pleaded as an
affirmative defense and a preliminary hearing may be had thereon as if a
motion to dismiss had been filed. An answer itself contains the negative,
as well as affirmative, defenses upon which the defendant may rely
(Section 4, Rule 6, Rules of Court). A negative defense denies the
material facts averred in the complaint essential to establish the plaintiff's
cause of action, while an affirmative defense in an allegation of a new
matter which, while admitting the material allegations of the complaint,
would, nevertheless, prevent or bar recovery by the plaintiff. Inclusive of
these defenses are those mentioned in Rule 16 of the Rules of Court
which would permit the filing of a motion to dismiss.
In the same manner that the 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
9

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 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.
Lack of jurisdiction over the subject matter of the suit is yet another
matter. Whenever it appears that the court has no jurisdiction over the
subject matter, the action shall be dismissed (Section 2, Rule 9, Rules of
Court). This defense may be interposed at any time, during appeal
(Roxas vs. Rafferty, 37 Phil. 957) or even after final judgment (Cruzcosa
vs. Judge Concepcion, et al., 101 Phil. 146). Such is understandable, as
CIVIL PROCEDURE CASES – Summons (Rule 14)
this kind of jurisdiction is conferred by law and not within the courts, let
alone the parties, to themselves determine or conveniently set aside. In
People vs. Casiano (111 Phil. 73 93-94), this Court, on the issue of
estoppel, held:
The operation of the principle of estoppel on the question of
jurisdiction seemingly depends upon whether the lower court
actually had jurisdiction or not. If it had no jurisdiction, but the
case was tried and decided upon the theory that it had
jurisdiction, the parties are not barred, on appeal, from assailing
such jurisdiction, for the same "must exist as a matter of law, and
may not be conferred by consent of the parties or by estoppel" (5
C.J.S., 861-863). However, if the lower court had jurisdiction, and
the case was heard and decided upon a given theory, such, for
instance, as that the court had no jurisdiction, the party who
induced it to adopt such theory will not be permitted, on appeal, to
assume an inconsistent position — that the lower court had
jurisdiction. Here, the principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not depend upon the will
of the parties, has not bearing thereon.
The rule was reiterated in Calimlim vs. Ramirez (118 SCRA 399, 406),
and quite recently, in Southeast Asian Fisheries Development Center-
Aquaculture Department vs. National Labor Relations Commission (206
SCRA 283).
Jurisdiction over the nature of the action, in concept, differs from
jurisdiction over the subject matter. Illustrated, lack of jurisdiction over the
nature of the action is the situation that arises when a court, which
ordinarily would have the authority and competence to take a case, is
rendered without it either because a special law has limited the exercise
of its normal jurisdiction on a particular matter or because the type of
action has been reposed by law in certain other courts or quasi-judicial
agencies for determination. Nevertheless, it can hardly be questioned
that the rules relating to the effects of want of jurisdiction over the subject
matter should apply with equal vigor to cases where the court is similarly
bereft of jurisdiction over the nature of the action.
In summary, it is our considered view, as we now so hereby express,
that —
(1) Jurisdiction over the person must be seasonably raised, i.e., that it is
pleaded in a motion to dismiss or by way of an affirmative defense in an
10
 CIVIL PROCEDURE CASES – Summons (Rule 14)
answer. Voluntary appearance shall be deemed a waiver of this defense.
The assertion, however, of affirmative defenses shall not be constructed
as an estoppel or as a waiver of such defense.

(2) Where the court itself clearly has no jurisdiction over the subject
matter or the nature of the action, the invocation of this defense may be
done at any time. It is neither for the courts nor the parties to violate or
disregard that rule, let alone to confer that jurisdiction, this matter being
legislative in character. Barring highly meritorious and exceptional
circumstances, such as hereinbefore exemplified, neither estoppel nor
waiver shall apply.

In the case at bench, the want of jurisdiction by the court is indisputable,

given the nature of the controversy. The arbitration law explicitly confines
the court's authority only to pass upon the issue of whether there is or
there is no agreement in writing providing for arbitration. In the
affirmative, the statute ordains that the court shall issue an order
"summarily directing the parties to proceed with the arbitration in
accordance with the terms thereof." If the court, upon the other hand,
finds that no such agreement exists, "the proceeding shall be dismissed."
The proceedings are summary in nature.

All considered, the court a quo must then refrain from taking up the
claims of the contending parties for damages, which, upon the other
hand, may be ventilated in separate regular proceedings at an opportune
time and venue. The circumstances obtaining in this case are far, we
hold, from justifying the application of estoppel against either party.

WHEREFORE, the decision of the Court of Appeals and the orders of the
trial court in question are SET ASIDE. The court a quo, in the instant
proceedings, is ordered to DESIST from further hearing private
respondent's claim, as well as petitioner's counterclaim, for damages. No
costs.SO ORDERED.

11

G.R. No. 136426 August 6, 1999
E. B. VILLAROSA & PARTNER CO., LTD., petitioner, vs.HON.
HERMINIO I. BENITO, in his capacity as Presiding Judge, RTC,
Branch 132, Makati City
and IMPERIAL DEVELOPMENT CORPORATION, respondent.
Before this Court is a petition for certiorari and prohibition with prayer for
the issuance of a temporary restraining order and/or writ of preliminary
injunction seeking to annul and set aside the Orders dated August 5,
1998 and November 20, 1998 of the public respondent Judge Herminio I.
Benito of the Regional Trial Court of Makati City, Branch 132 and praying
that the public respondent court be ordered to desist from further
proceeding with Civil Case No. 98-824.
Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with
principal office address at 102 Juan Luna St., Davao City and with branch
offices at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and
Kolambog, Lapasan, Cagayan de Oro City. Petitioner and private
respondent executed a Deed of Sale with Development Agreement
wherein the former agreed to develop certain parcels of land located at
Barrio Carmen, Cagayan de Oro belonging to the latter into a housing
subdivision for the construction of low cost housing units. They further
agreed that in case of litigation regarding any dispute arising therefrom,
the venue shall be in the proper courts of Makati.
On April 3, 1998, private respondent, as plaintiff, filed a Complaint for
Breach of Contract and Damages against petitioner, as defendant, before
the Regional Trial Court of Makati allegedly for failure of the latter to
comply with its contractual obligation in that, other than a few unfinished
low cost houses, there were no substantial developments therein.1
Summons, together with the complaint, were served upon the defendant,
through its Branch Manager Engr. Wendell Sabulbero at the stated
address at Kolambog, Lapasan, Cagayan de Oro City2 but the Sheriff's
Return of Service3 stated that the summons was duly served "upon
defendant E.B. Villarosa & Partner Co., Ltd. thru its Branch Manager
Engr. WENDELL SALBULBERO on May 5, 1998 at their new office Villa
Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the
signature on the face of the original copy of the summons. 1âwphi1.nêt
On June 9, 1998, defendant filed a Special Appearance with Motion to
Dismiss4 alleging that on May 6, 1998, "summons intended for defendant"
was served upon Engr. Wendell Sabulbero, an employee of defendant at
CIVIL PROCEDURE CASES – Summons (Rule 14)
its branch office at Cagayan de Oro City. Defendant prayed for the
dismissal of the complaint on the ground of improper service of summons
and for lack of jurisdiction over the person of the defendant. Defendant
contends that the trial court did not acquire jurisdiction over its person
since the summons was improperly served upon its employee in its
branch office at Cagayan de Oro City who is not one of those persons
named in Section 11, Rule 14 of the 1997 Rules of Civil Procedure upon
whom service of summons may be made.
Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare
Defendant in Default5 alleging that defendant has failed to file an Answer
despite its receipt allegedly on May 5, 1998 of the summons and the
complaint, as shown in the Sheriffs Return.
On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to
Dismiss6 alleging that the records show that defendant, through its
branch manager, Engr. Wendell Sabulbero actually received the
summons and the complaint on May 8, 1998 as evidenced by the
signature appearing on the copy of the summons and not on May 5, 1998
as stated in the Sheriffs Return nor on May 6, 1998 as stated in the
motion to dismiss; that defendant has transferred its office from
Kolambog, Lapasan, Cagayan de Oro to its new office address at Villa
Gonzalo, Nazareth, Cagayan de Oro; and that the purpose of the rule is
to bring home to the corporation notice of the filing of the action.
On August 5, 1998, the trial court issued an Order7 denying defendant's
Motion to Dismiss as well as plaintiffs Motion to Declare Defendant in
Default. Defendant was given ten (10) days within which to file a
responsive pleading. The trial court stated that since the summons and
copy of the complaint were in fact received by the corporation through its
branch manager Wendell Sabulbero, there was substantial compliance
with the rule on service of summons and consequently, it validly acquired
jurisdiction over the person of the defendant.
On August 19, 1998, defendant, by Special Appearance, filed a Motion
for Reconsideration8 alleging that Section 11, Rule 14 of the new Rules
did not liberalize but, on the contrary, restricted the service of summons
on persons enumerated therein; and that the new provision is very
specific and clear in that the word "manager" was changed to "general
manager", "secretary" to "corporate secretary", and excluding therefrom
agent and director.
12

On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for
Reconsideration9 alleging that defendant's branch manager "did bring
home" to the defendant-corporation the notice of the filing of the action
and by virtue of which a motion to dismiss was filed; and that it was one
(1) month after receipt of the summons and the complaint that defendant
chose to file a motion to dismiss.
On September 4, 1998, defendant, by Special Appearance, filed a
Reply10 contending that the changes in the new rules are substantial and
not just general semantics.
Defendant's Motion for Reconsideration was denied in the Order dated
November 20, 1998.11
Hence, the present petition alleging that respondent court gravely abused
its discretion tantamount to lack or in excess of jurisdiction in denying
petitioner's motions to dismiss and for reconsideration, despite the fact
that the trial court did not acquire jurisdiction over the person of petitioner
because the summons intended for it was improperly served. Petitioner
invokes Section 11 of Rule 14 of the 1997 Rules of Civil Procedure.
Private respondent filed its Comment to the petition citing the
cases Kanlaon Construction Enterprises Co., Inc. vs. NLRC12 wherein it
was held that service upon a construction project manager is valid and
in Gesulgon vs. NLRC13 which held that a corporation is bound by the
service of summons upon its assistant manager.
The only issue for resolution is whether or not the trial court acquired
jurisdiction over the person of petitioner upon service of summons on its
Branch Manager.
When the complaint was filed by Petitioner on April 3, 1998, the 1997
Rules of Civil Procedure was already in force.14
Sec. 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:
When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical
personality, service may be made on the president, managing
partner, general manager, corporate secretary, treasurer, or in-
house counsel. (emphasis supplied).
CIVIL PROCEDURE CASES – Summons (Rule 14)
This provision revised the former Section 13, Rule 14 of the Rules of
Court which provided that:
Sec. 13. Service upon private domestic corporation or
partnership. — If the defendant is a corporation organized under
the laws of the Philippines or a partnership duly registered,
service may be made on the president, manager, secretary,
cashier, agent, or any of its directors. (emphasis supplied).
Petitioner contends that the enumeration of persons to whom summons
may be served is "restricted, limited and exclusive" following the rule on
statutory construction expressio unios est exclusio alterius and argues
that if the Rules of Court Revision Committee intended to liberalize the
rule on service of summons, it could have easily done so by clear and
concise language.
We agree with petitioner.
Earlier cases have uphold service of summons upon a construction
project manager15; a corporation's assistant manager16; ordinary clerk of a
corporation17; private secretary of corporate executives18; retained
counsel19; officials who had charge or control of the operations of the
corporation, like the assistant general manager20; or the corporation's
Chief Finance and Administrative Officer21. In these cases, these persons
were considered as "agent" within the contemplation of the old
rule.22 Notably, under the new Rules, service of summons upon an agent
of the corporation is no longer authorized.
The cases cited by private respondent are therefore not in point.
In the Kanlaon case, this Court ruled that under the NLRC Rules of
Procedure, summons on the respondent shall be served personally or by
registered mail on the party himself; if the party is represented by counsel
or any other authorized representative or agent, summons shall be
served on such person. In said case, summons was served on one Engr.
Estacio who managed and supervised the construction project in Iligan
City (although the principal address of the corporation is in Quezon City)
and supervised the work of the employees. It was held that as manager,
he had sufficient responsibility and discretion to realize the importance of
the legal papers served on him and to relay the same to the president or
other responsible officer of petitioner such that summons for petitioner
was validly served on him as agent and authorized representative of
petitioner. Also in the Gesulgon case cited by private respondent, the
13

summons was received by the clerk in the office of the Assistant Manager
(at principal office address) and under Section 13 of Rule 14 (old rule),
summons may be made upon the clerk who is regarded as agent within
the contemplation of the rule.
The designation of persons or officers who are authorized to accept
summons for a domestic corporation or partnership is now limited and
more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil
Procedure. The rule now states "general manager" instead of only
"manager"; "corporate secretary" instead of "secretary"; and "treasurer"
instead of "cashier." The phrase "agent, or any of its directors" is
conspicuously deleted in the new rule.
The particular revision under Section 11 of Rule 14 was explained by
retired Supreme Court Justice Florenz Regalado, thus:23
. . . the then Sec. 13 of this Rule allowed service upon a
defendant corporation to "be made on the president, manager,
secretary, cashier, agent or any of its directors." The aforesaid
terms were obviously ambiguous and susceptible of broad and
sometimes illogical interpretations, especially the word "agent" of
the corporation. The Filoil case, involving the litigation lawyer of
the corporation who precisely appeared to challenge the validity
of service of summons but whose very appearance for that
purpose was seized upon to validate the defective service, is an
illustration of the need for this revised section with limited scope
and specific terminology. Thus the absurd result in the Filoil case
necessitated the amendment permitting service only on the in-
house counsel of the corporation who is in effect an employee of
the corporation, as distinguished from an independent
practitioner. (emphasis supplied).
Retired Justice Oscar Herrera, who is also a consultant of the Rules of
Court Revision Committee, stated that "(T)he rule must be strictly
observed. Service must be made to one named in (the) statute . . . .24
It should be noted that even prior to the effectivity of the 1997 Rules of
Civil Procedure, strict compliance with the rules has been enjoined. In the
case of Delta Motor Sales Corporation vs. Mangosing,25 the Court held:
A strict compliance with the mode of service is necessary to
confer jurisdiction of the court over a corporation. The officer
CIVIL PROCEDURE CASES – Summons (Rule 14)
upon whom service is made must be one who is named in the
statute; otherwise the service is insufficient. . . .
The purpose is to render it reasonably certain that the corporation
will receive prompt and proper notice in an action against it or to
insure that the summons be served on a representative so
integrated with the corporation that such person will know what to
do with the legal papers served on him. In other words, "to bring
home to the corporation notice of the filing of the action." . . . .
The liberal construction rule cannot be invoked and utilized as a
substitute for the plain legal requirements as to the manner in
which summons should be served on a domestic corporation. . . .
. (emphasis supplied).
Service of summons upon persons other than those mentioned in Section
13 of Rule 14 (old rule) has been held as improper.26 Even under the old
rule, service upon a general manager of a firm's branch office has been
held as improper as summons should have been served at the firm's
principal office. In First Integrated Bonding & Inc. Co., Inc. vs. Dizon,27 it
was held that the service of summons on the general manager of the
insurance firm's Cebu branch was improper; default order could have
been obviated had the summons been served at the firm's principal
office.
And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen
Bautista Ricafort, et al.28 the Court succinctly clarified that, for the
guidance of the Bench and Bar, "strictest" compliance with Section 11 of
Rule 13 of the 1997 Rules of Civil Procedure (on Priorities in modes of
service and filing) is mandated and the Court cannot rule otherwise, lest
we allow circumvention of the innovation by the 1997 Rules in order to
obviate delay in the administration of justice.
Accordingly, we rule that the service of summons upon the branch
manager of petitioner at its branch office at Cagayan de Oro, instead of
upon the general manager at its principal office at Davao City is
improper. Consequently, the trial court did not acquire jurisdiction over
the person of the petitioner.
The fact that defendant filed a belated motion to dismiss did not operate
to confer jurisdiction upon its person. There is no question that the
defendant's voluntary appearance in the action is equivalent to service of
summons.29 Before, the rule was that a party may challenge the
14
 CIVIL PROCEDURE CASES – Summons (Rule 14)
jurisdiction of the court over his person by making a special appearance
through a motion to dismiss and if in the same motion, the movant raised
other grounds or invoked affirmative relief which necessarily involves the
exercise of the jurisdiction of the court.30 This doctrine has been
abandoned in the case of La Naval Drug Corporation vs. Court of
Appeals, et al.,31 which became the basis of the adoption of a new
provision in the former Section 23, which is now Section 20 of Rule 14 of
the 1997 Rules. Section 20 now provides that "the inclusion in a motion
to dismiss of other grounds aside from lack of jurisdiction over the person
of the defendant shall not be deemed a voluntary appearance." The
emplacement of this rule clearly underscores the purpose to enforce strict
enforcement of the rules on summons. Accordingly, the filing of a motion
to dismiss, whether or not belatedly filed by the defendant, his authorized
agent or attorney, precisely objecting to the jurisdiction of the court over
the person of the defendant can by no means be deemed a submission
to the jurisdiction of the court. There being no proper service of
summons, the trial court cannot take cognizance of a case for lack of
jurisdiction over the person of the defendant. Any proceeding undertaken
by the trial court will consequently be null and void.32

WHEREFORE, the petition is hereby GRANTED. The assailed Orders of

the public respondent trial court are ANNULLED and SET ASIDE. The
public respondent Regional Trial Court of Makati, Branch 132 is declared
without jurisdiction to take cognizance of Civil Case No. 98-824, and all
its orders and issuances in connection therewith are hereby ANNULLED
and SET ASIDE. 1âw phi 1.nêt

SO ORDERED.

15

G.R. No. 91486 September 10, 2003
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 MAKASIAR-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 MORALES, LEONCIA
VELASCO, OCRAVIO F. LINA, ANA MARIA JARAMILLO, ESTRELLA
BASA, JOSE ESTEVA, JR., CIRILO GONZALES, VILLY TOBIAS,
MIGUEL DELA PAZ, RUBEN GUILLERMO, FAUSTO YADAO,
represented by Jeremias Panlilio, RICARDO YAP,
ROSAURO/PATRICK MARQUEZ, 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 ABUBO, 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 PANGANIBAN, 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 VICTORINA CARINO, RUTH C.
CIVIL PROCEDURE CASES – Summons (Rule 14)
ZARATE, 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.
REPUBLIC OF THE PHILIPPINES, intervenor.
WORLD WAR II VETERANS LEGIONARIES OF THE
PHILIPPINES, intervenor.
This resolves the Petition-In-Intervention1 filed by the Republic of the
Philippines, represented by the Land Registration Authority and the
Motion for Clarification2 filed by respondents.
The facts may be briefly restated as follows: The controversy stemmed
from a Petition for Quieting of Title filed by petitioners over 3 vast parcels
of land known as Lot Nos. 1, 2 & 3. Lot No. 1 is covered by TCT No.
5690, while Lot Nos. 2 and 3 were originally covered by OCT No. 614
and OCT No. 333, respectively. On March 21, 1988, the trial court
rendered a Partial Decision3 in favor of petitioners and against the
defendants who were declared in default, including respondent owners of
Vilmar-Maloles (Vilma) Subdivision whose properties were within Lot No.
2. The dispositive portion of which reads:
WHEREFORE, premises considered, judgment 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
extra-ordinary 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;
16

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.
On May 17, 1989, the defaulted title owners of Vilma filed with the Court
of Appeals a Petition to Annul the Partial Decision of the trial court, which
was granted in a decision4 dated November 15, 1989. The appellate court
ruled that the court a quo did not acquire jurisdiction over the person of
respondents because of defective service of summons by publication.
Petitioners’ motion for reconsideration of the said decision was denied;
hence, they filed this petition for certiorari.
On January 19, 2001, we rendered a Decision denying the petition and
affirming the Judgment of the Court of Appeals. The dispositive portion
thereof reads:
CIVIL PROCEDURE CASES – Summons (Rule 14)
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.5
Petitioners filed a Motion for Reconsideration6 contending, inter alia, that
the disposition of the trial court with respect to Lot No. 3, should not have
been annulled by the Court of Appeals because the petition for
annulment of judgment filed by the respondents concerned only Lot No.
2. They prayed that the January 19, 2001 decision of the Court which
affirmed the decision of the Court of Appeals be reconsidered insofar as
Lot No. 3 is concerned.
On November 20, 2001, the Court issued a Resolution partially granting
petitioner’s motion for reconsideration by reinstating paragraphs 4 and 5
of the dipositive portion of the trial court’s Partial Decision pertaining to
Lot No. 3, thus –
WHEREFORE, the Motion for Reconsideration is PARTIALLY
GRANTED and our Decision promulgated on January 19, 2001 is
MODIFIED as follows:
(1) reinstating paragraph (4) and (5) of the Partial
Decision of the court a quo; and
(2) affirming the Decision of the Court of Appeals in CA-
G.R. No. 17596 in all other respects.
SO ORDERED.7
On July 22, 2002, the Republic of the Philippines, represented by the
Land Registration Authority (LRA), thru the Office of the Solicitor General
(OSG), filed a motion for intervention and a Petition-In-Intervention
praying that judgment be rendered declaring:
1) That OCT No. 333 is a valid and existing title in line with the
decisions this Honorable Court had already rendered;
2) That OCT No. 333 was never expanded from its original area
of 52,949,737 square meters;
17

3) That the land occupied by petitioners is not forest land and is
covered by OCT No. 333;
4) That the proceedings conducted in Civil Case No. Q-35673
with respect to OCT No. 333 are null and void; and
5) That the proceedings conducted in Civil Case No. Q-35672 is
null and void, no notice of the hearings/proceedings having been
sent to the Republic and other interested parties.
The Republic likewise prays for such other relief as may be just
and equitable under the circumstances.8
The rule on intervention, like all other rules of procedure is intended to
make the powers of the Court fully and completely available for justice. It
is aimed to facilitate a comprehensive adjudication of rival claims
overriding technicalities on the timeliness of the filing thereof.9 Indeed, in
exceptional cases, the Court has allowed intervention notwithstanding the
rendition of judgment by the trial court. In one case, intervention was
allowed even when the petition for review of the assailed judgment was
already submitted for decision in the Supreme Court.10
In Mago v. Court of Appeals,11 intervention was granted even after the
decision became final and executory, thus –
…The permissive tenor of the provision on intervention shows the
intention of the Rules to give to the court the full measure of
discretion in permitting or disallowing the same. But needless to
say, this discretion should be exercised judiciously and only after
consideration of all the circumstances obtaining in the case.
But it is apparent that the courts a quo only considered the technicalities
of the rules on intervention and of the petition for relief from judgment.
The denial of their motion to intervene arising from the strict application of
the rule was an injustice to petitioners whose substantial interest in the
subject property cannot be disputed. It must be stressed that the trial
court granted private respondent's petition for prohibition with injunction
without petitioners being impleaded, in total disregard of their right to be
heard, when on the face of the resolution of the Community Relations
and Information Office (CRIO) sought to be enjoined, petitioners were the
ones directly to be affected. We need not belabor the point that
petitioners are indeed indispensable parties with such an interest in the
CIVIL PROCEDURE CASES – Summons (Rule 14)
controversy or subject matter that a final adjudication cannot be made in
their absence without affecting, nay injuring, such interest.
In Director of Lands v. Court of Appeals where the motions for
intervention were filed when the case had already reached this Court, it
was declared:
It is quite clear and patent that the motions for intervention filed by the
movants at this stage of the proceedings where trial had already been
concluded x x x and on appeal x x x the same was affirmed by the Court
of Appeals and the instant petition for certiorari to review said judgment is
already submitted for decision by the Supreme Court, are obviously and
manifestly late, beyond the period prescribed under x x x Section 2, Rule
12 of the Rules of Court [now Rule 19, Section 2 of the 1997 Rules on
Civil Procedure].
But Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose
and object of which is to make the powers of the Court fully and
completely available for justice. The purpose of procedure is not
to thwart justice. Its proper aim is to facilitate the application of
justice to the rival claims of contending parties. It was created not
to hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the thing itself
which courts are always striving to secure to litigants. It is
designed as the means best adopted to obtain that thing. In other
words, it is a means to an end.
In Tahanan Development Corp. v. Court of Appeals, this Court
allowed intervention almost at the end of the proceedings.
Accordingly, there should be no quibbling, much less hesitation or
circumvention, on the part of subordinate and inferior courts to
abide and conform to the rule enunciated by the Supreme
Court.12
The Solicitor General summarized the interest of the Republic in Lot No.
3 (originally covered by OCT No. 333), as follows:
On March 5, 1979, then President Marcos issued Proclamation
No. 1826 "reserving for national government center site a parcel
of land situated in the Constitution Hill, Quezon City, Metro
Manila, containing an area of four million for hundred forty
thousand FOUR HUNDRED SIXTY-SIX SQUARE METERS." In a
18

certification [Annex "F", Rollo, p. 1415] issued by the Land
Registration Authority, it attested to the fact that the National
Government Center described in Proclamation No. 1826 "is within
the area covered by GLRO Record No. 1037 (OCT-333) and
GLRO Record No. 5975 as plotted in our Municipal Index Sheet
(MIS) Nos. 2574-C, 5707-B, 5708-A, 5708-B and 3339-D."
In a letter [Annex "B-2", Rollo, p. 1330], the Housing and Urban
Development Coordinating Council certified that within the Project
site/jurisdiction of the National Government Center Housing Project
(NGCHP) and the NGC-EASTSIDE DEVELOPMENT PROJECT, the
following government buildings, offices and complexes are situated:
1) House of Representatives;
2) Civil Service Commission (CSC);
3) Department of Social Works and Development (DSWD);
4) Sandiganbayan;
5) Commission on Audit (COA);
6) Department of Public Works and Highways (DPWH) Depot;
7) Polytechnic University of the Philippines (PUP)
Commonwealth Campus;
8) TESDA Skills Training Center;
9) Several Public Elementary and High Schools, Health Centers
and Barangay Halls.
It also certified that the NGCHP under its People’s Housing
Alternative for Social Empowerment – land Acquisition
Development Program (PHASE-LADP), has already awarded
3,975 TCT’s to its beneficiaries. This program comprises the
biggest chunk of the NGCHP with about 117 hectares intended
for disposition to qualified beneficiaries. Further, in line with the
National Government’s thrust of fast-tracking the implementation
of the NGCHP, the remaining 20,696 TCT’s are about to be
awarded to qualified beneficiaries."13
CIVIL PROCEDURE CASES – Summons (Rule 14)
Clearly, the intervention of the Republic is necessary to protect public
interest as well as government properties located and projects
undertaken on Lot No. 3. The Constitutional mandate that no person shall
be deprived of life, liberty, or property without due process of law can
certainly be invoked by the Republic which is an indispensable party to
the case at bar. As correctly pointed out by the Solicitor General, while
the provision is intended as a protection of individuals against arbitrary
action of the State, it may also be invoked by the Republic to protect its
properties.14
After a thorough re-examination of the case, we find that our November
20, 2001 Resolution reinstating paragraphs 4 and 5 of the trial court’s
Partial Decision pertaining to Lot No. 3, overlooked certain aspects
which, if not corrected, will cause extreme and irreparable confusion and
prejudice. The reinstated portions of the decision states:
4) Declaring the area of [OCT] 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;15
We note that paragraph 4 does not at all specify which portions are in
excess of the 4,574 square meter area of OCT No. 333 and which areas
belong to the defaulted and non-defaulted respondents. Neither did the
body of the trial court’s decision state the metes and bounds that would
serve as basis in implementing the dispositive portion thereof. Verily, this
flaw goes into the very identity of the disputed land. Paragraphs 4 and 5
are therefore null and void for having been rendered in violation of the
constitutional mandate that "no decision shall be rendered by any court
without expressing therein clearly and distinctly the facts and the law on
which it is based."16 Hence, the November 20, 2001 Resolution
reinstating paragraphs 4 and 5 of the trial court’s Partial Decision should
be modified.
The OSG’s prayer that OCT No. 333 be held as a valid and existing title
is likewise meritorious. In Republic v. Tofemi Realty
19

Corporation (Tofemi), an action for "Cancellation of Titles & Reversion"
17
of TCT No. 55747 and TCT No. 55748, the validity of OCT No. 333 from
which said transfer certificates of title originated, has already been
settled. In dismissing the petition of the Republic, it was held therein that
OCT No. 333 is a valid title duly issued by the Land Registration Court.
The Republic did not appeal therefrom and the decision became final and
executory. Pertinent portion of which states –
Regarding the issue of nullity of OCT No. 333,
We find that the then Land Registration Court had the power,
authority and jurisdiction to issue it. It was issued after trial, or
presumptively in a fair and square trial with all the requisites of
the law (The Phil. British Co., Inc. vs. de los Angeles, 63 SCRA
52).
The Act of Congress of July 1, 1902, known in local history as the
"Philippine Bill of 1902", in its sections 13 to 18, mentions three (3)
classes of land, to wit, "public land" or public domain", "mineral lands",
and "timber land". (Ramos vs. Director of Lands, 39 Phil. 175). Early
decisions as regards classification of public lands, such as Mapa vs.
Insular Government, 10 Phil 175, Ramos vs. Director of Lands, supra,
and Ankron vs. Government of the Philippine Islands, 40 Phil. 10, which
were decided under the Philippine Bill of 1902 and the first Public Land
Act No. 926 enacted by the Philippine Commission on October 7, 1926,
or prior to the passage of Act No. 2874, had impliedly ruled that there
was no legal provision vesting in the chief Executive or President of the
Philippines the power to classify lands of the public domain into mineral,
timber and agricultural; so that the courts then were free to make
corresponding classifications in justiciable cases, or were invested with
implicit power in so doing, depending upon the preponderance of the
evidence. In Mapa vs. Insular Government, supra, Feb. 10, 1908, the
Court of Land Registration granted the application for registration after
finding that it was neither "timber" nor "mineral" and came within the
definition of "Agricultural land" under Act 926. The Attorney General
appealed. The Supreme Court affirmed the appealed judgment. In
G.L.R.O. No. 1037, the application for registration was granted and
consequently the issuance of a title was decreed in favor of the applicant
because the Land Registration Court found that the land applied for is
agricultural susceptible of private appropriation (Ramos vs. Director of
Lands, supra; Ankron vs. Government of the Philippine Islands, supra).
We repeat by way of emphasis, the record does not reveal that the
Government has always considered the lot in question as forest reserve
CIVIL PROCEDURE CASES – Summons (Rule 14)
prior to the issuance of OCT 333. To declare the land now as forest land
on the authority of LC Map 639 of Rizal approved on March 11, 1937
only, would deprive defendants of their registered property without due
process of law. It was pronounced in Ramos vs. Director of lands, supra:
"x x x Upon the other hand, the presumption should be, in lieu of
contrary evidence, that land is agricultural in nature. One very
good reason is that it is good for the Philippine Islands to have a
large public domain come under private ownership. Such is the
natural attitude of the sagacious citizen."
OCT No. 333 being legal and valid; ergo, TCTs Nos. 55747 and
55748, being derived from the said mother title, are also legal and
valid. These TCTs were in turn derived from TCTs Nos. 45832
and 45833, covering Lots Nos. 65, 76 and 81 which originally
formed parts of Parcel C of Plan Psu-32606 approved by the
Court of First Instance of Rizal on October 21, 1924. (Emphasis
supplied)18
Stare decisis et non quieta movere. Stand by the decisions and disturb
not what is settled. It is a salutary and necessary judicial practice that
when a court has laid down a principle of law applicable to a certain state
of facts, it must adhere to such principle and apply it to all future cases in
which the facts sued upon are substantially the same.19 It is beyond cavil,
therefore, that since the court had already ruled on the validity OCT No.
333, said issue must be laid to rest and must no longer be relitigated in
the present case.
With respect, however, to the area covered by OCT No. 333, the principle
of stare decisis is not applicable because the decision of the Court of
Appeals did not indicate the boundaries of the lot covered by OCT No.
333. While it was held therein that the area of OCT No. 333 is 52,949,735
square meters, the metes and bounds of the land covered by OCT No.
333 was not specified. We cannot adopt the findings as to the area of
OCT No. 333 for it might cause deprivation of property of adjacent land
owners without due process of law.
So, also, the Court cannot nullify the entire Partial Decision of the court a
quo. The defaulted defendants whose properties are located in Lot No. 1
did not question the decision of the trial court. Neither was it shown in the
Petition-In-Intervention that the OSG is an indispensable party to Lot No.
1.
20

In their Motion for Clarification and Manifestation, respondents seek the
clarification of paragraph 1 of the trial court’s Partial Decision declaring
petitioners as owners of, among others, Lot No. 2 where respondents’
properties are located. Paragraph 1, provides:
1) Declaring petitioners through the principal petitioners hereof, to
wit: Alberto G. Pinlac, Atty. Eriberto H. Decena, Rodolfo F.
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 non-
defaulted respondents.20
In view of the annulment of the trial court’s Partial Decision with respect
to Lot No. 2 originally covered by OCT No. 614, all portions of the
decision pertaining to Lot No. 2, including that in paragraph 1 declaring
petitioners as absolute owners in fee simple of Lot No. 2, is declared
void. Likewise, the declaration of nullity of paragraphs 4 and 5 of the
dispositive portion of the decision a quo concerning Lot No. 3, renders
the disposition in paragraph 1 insofar as it affects Lot No. 3, also void.
Under the 1997 Rules on Civil Procedure, specifically Rule 47, Section 7
thereof, a judgment of annulment shall set aside the questioned judgment
or final order or resolution and render the same null and void, without
prejudice to the original action being re-filed in the proper court.
CIVIL PROCEDURE CASES – Summons (Rule 14)
the case. As such, it did not contradict the Court of Appeals’ decision of
November 15, 1989 in CA-G.R. SP No. 17596 which set aside the Partial
Decision of the trial court.
WHEREFORE, in view of all the foregoing, the Petition-In-Intervention of
the Republic of the Philippines is PARTIALLY GRANTED. The Resolution
promulgated on November 20, 2001 is MODIFIED as follows: The
Decision dated March 21, 1988 of the Regional Trial Court of Quezon
City, Branch 83, in Civil Case No. Q-35762, is annulled insofar as it
concerns Lot No. 2, originally covered by OCT No. 614 and Lot No. 3
originally covered by OCT No. 333. The November 15, 1999 Decision of
the Court of Appeals in CA-G.R. No. 17596 is affirmed in all other
respects.
As clarified above, paragraph 1 of the dispositive portion of the decision
of the court a quo is void insofar as it declares petitioners as absolute
owners in fee simple of Lot Nos. 2 and 3.
The Petition-in-Intervention filed by the World War Veterans Legionaries
of the Philippines is DENIED for lack of merit.
SO ORDERED.

In the meantime, the World War II Veterans Legionaries of the

Philippines (WW II) filed a Petition-in-Intervention with prior leave of
court. It alleges that the Court of Appeals’ decision dated November 15,
1989 in CA-G.R. SP No. 17596, which is the subject of the instant
petition for review, ran counter to the June 22, 1989 decision of the same
court in CA-G.R. SP No. 17221, which merely amended the first
paragraph of the Partial Decision of the trial court in Civil Case No. Q-
35672. The latter decision of the appellate court was affirmed by this
Court in G.R. No. 90245 on April 8, 1990.

We find no conflict between the two decisions of the Court of Appeals. It

is true that both decisions affected the portion of the Partial Decision of
the trial court which declared petitioners, who are individual members of
the WW II, as absolute owners of Lot Nos. 1, 2 and 3. However, the
decision in CA-G.R. SP No. 17221 merely granted WW II’s prayer that it
be substituted for its individual members, who were declared the owners
of Lot Nos. 1, 2 and 3 in the Partial Decision. Aside from this, the
decision in CA-G.R. SP No. 17221 had nothing to do with the merits of
21

G.R. No. 152776 October 8, 2003
HENRY S. OAMINAL, petitioner, vs. PABLITO M. CASTILLO and GUIA
S. CASTILLO, respondents.
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 Decision2 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
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 P1,500,000.00 by way of liquidated damages
and P150,000.00 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.
CIVIL PROCEDURE CASES – Summons (Rule 14)
"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
22
 CIVIL PROCEDURE CASES – Summons (Rule 14)
issued by the Honorable Court reconsidering its adverse order The CA ruled that the trial court did not validly acquire jurisdiction over
dated 16 November 2000, by dismissing the case at bar on the respondents, because the summons had been improperly served on
ground of improper venue or in the alternative, that the Honorable them. It based its finding on the Sheriff's Return, which did not contain
Presiding Judge reconsider and set aside its order dated any averment that effort had been exerted to personally serve the
December 27, 2000 by inhibiting himself from the case at hand.' summons on them before substituted service was resorted to. Thus, the
appellate court set aside the trial court's Decision and dismissed, without
"On 22 May 2001, Judge [Zapatos] ruled that [respondents'] prejudice, Civil Case No. OZC-00-13.
'Omnibus Motion Ad Cautelam to Admit Motion to Dismiss and
Answer with Counterclaim' was filed outside the period to file Hence, this Petition.5
answer, hence he (1) denied the Motion to Admit Motion to
Dismiss and Answer; (2) declared [respondents] in default; and Issues
(3) ordered [petitioner] to present evidence ex-parte within ten
days from receipt of [the] order, [failing] which, the case will be Petitioner submits the following issues for our consideration:
dismissed.
"I
"On 23 August 2001, Judge [Zapatos] rendered a decision on the
merits, with the following dispositi[on]:
Whether respondents' recourse to a Petition for Certiorari [was]
appropriate when the remedy of appeal was available?
'WHEREFORE, finding by preponderance of evidence,
judgment is hereby rendered in favor of [petitioner],
"II
ordering [respondents] to pay x x x:
Whether the Decision of the trial court attained finality?
1) P1,500,000.00 by way of [l]iquidated
[d]amages;
"III
2) P20,000.00 as attorney's fees and litigation
expenses; and 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
3) x x x cost[s].'"4
there were other plain, speedy and adequate remedies in the ordinary
course of law?
On September 11, 2001, respondents filed with the CA a Petition
for certiorari, prohibition and injunction, with a prayer for a writ of
"IV
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. 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?
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. "V

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

23

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.
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:
CIVIL PROCEDURE CASES – Summons (Rule 14)
"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. It simply stated:
1a\^/phi1.net
"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.
"That this return is submitted to inform the Honorable x x x Court
that the same was duly served."10
24

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-
Claim14 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;
CIVIL PROCEDURE CASES – Summons (Rule 14)
"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.
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
25

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 P1,500,000 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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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
1ªvvphi 1.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'
26
 CIVIL PROCEDURE CASES – Summons (Rule 14)
"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.

27

G.R. No. 144662 October 13, 2003
SPOUSES EFREN MASON and DIGNA MASON, petitioners, vs. THE
HONORABLE COURT OF APPEALS and COLUMBUS PHILIPPINES
BUS CORPORATION, respondents.
This petition for review assails the decision,1 dated May 12, 2000, of the
Court of Appeals and its resolution2dated August 25, 2000 in CA-G.R. SP
No. 54649 denying petitioners’ motion for reconsideration. The decision
set aside the decision3 of the Regional Trial Court of Pasay City, Branch
112, in Civil Case No. 98-1567 and directed said court to conduct further
proceedings on the complaint for rescission of lease contract.
The antecedent facts of the case, as found by the Court of Appeals, are
as follows:
Petitioners spouses Efren and Digna Mason owned two parcels of land
located along Epifanio delos Santos Avenue in Pasay City. On March 30,
1993, petitioners and private respondent Columbus Philippines Bus
Corporation (hereafter Columbus) entered into a lease contract, under
which Columbus undertook to construct a building worth ten million pesos
(P10,000,000) at the end of the third year of the lease. Because private
respondent failed to comply with this stipulation, the petitioners on
November 13, 1998, filed a complaint for rescission of contract with
damages against private respondent before the Regional Trial Court of
Pasay City, docketed as Civil Case No. 98-1567. Summons was served
upon private respondent through a certain Ayreen Rejalde. While the
receiving copy of the summons described Rejalde as a secretary of
Columbus, the sheriff’s return described Rejalde as a secretary to the
corporate president, duly authorized to receive legal processes.
Private respondent failed to file its answer or other responsive pleading,
hence petitioners filed a motion to declare private respondent in default.
The motion was granted and petitioners were allowed to present
evidence ex-parte. Thereafter, the case was submitted for decision.
On April 22, 1999, the trial court rendered its decision whose dispositive
portion reads:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against defendant declaring the contract of
lease rescinded, terminated and cancelled, and ordering defendant:
CIVIL PROCEDURE CASES – Summons (Rule 14)
1. To pay plaintiffs the amount of P10 Million which is the value of
the building which defendant failed to construct on the leased
properties, as and by way [of] actual damages;
2. To pay plaintiffs the amount of P63,862.57 beginning
November 1998 until defendant and the sub-lessee vacate the
leased property by way of reasonable compensation for the use
of the properties;
3. and all other persons and entities claiming rights under it, to
surrender possession to plaintiffs and to vacate the leased
premises;
4. to pay plaintiffs the amount of P300,000.00 as and by way of
moral damages;
5. to pay plaintiffs the amount of P100,000.00 as and by way of
exemplary damages;
6. to pay plaintiffs attorney’s fees in the amount of P100,000.00;
and
7. to pay the cost of suit.
SO ORDERED.4
That decision became final on May 12, 1999. The following day, private
respondent filed a motion to lift order of default, which was opposed by
petitioners. The trial court ordered the parties to submit their respective
memoranda. However, without waiting for the same, the trial court on
May 26, 1999, denied the motion to lift order of default, thus:
It appearing that the decision rendered by this Court on April 27, 1999
became final and executory on May 12, 1999, defendant’s Motion to Lift
Order of Default is hereby DENIED. Concomitant thereto, plaintiffs’
Motion for Execution is hereby GRANTED.
The Order of this Court on May 21, 1999 allowing the parties to file their
respective memoranda within ten (10) days from May 21, 1999 is hereby
revoked and set aside, since the incidents can be resolved based on the
records.
28

WHEREFORE, let a writ of execution issue to enforce and implement the
final and executory decision rendered by this Court on April 27, 1999.
SO ORDERED.5
Private respondent filed a motion for reconsideration, which was denied.
Undaunted, private respondent filed a manifestation and motion to lift the
writ of execution. It suffered the same fate as the motion for
reconsideration for being dilatory. The branch sheriff was directed to
proceed with the enforcement of the decision.
Private respondent appealed to the Court of Appeals, which ruled in its
favor, thus:
WHEREFORE, the petition is GRANTED; the decision in Civil Case No.
98-1567 and all the proceedings therein, including the order of default
and writ of execution, are SET ASIDE. The court a quo is ORDERED to
require petitioner to file its answer and thereafter to conduct further
appropriate proceedings with reasonable dispatch.
SO ORDERED.6
The Court of Appeals held that the trial court erred when it denied private
respondent’s motion to lift order of default. The appellate court pointed
out that private respondent was not properly served with summons, thus
it cannot be faulted if it failed to file an Answer. Section 11, 7 Rule 14 of
the 1997 Rules of Civil Procedure requires that service of summons upon
domestic private juridical entity shall be made through its president,
managing partner, general manager, corporate secretary, treasurer or in-
house counsel. Since service upon private respondent was made through
a certain Ayreen Rejalde, a mere filing clerk in private respondent’s
office, as evidenced by the latter’s employment record, such service
cannot be considered valid. Consequently, the subsequent proceedings,
including the order of default, judgment by default and its execution, were
also invalid because the trial court did not acquire jurisdiction over private
respondent. Besides, judgments by default are not favored, especially so
when there is a prima facie showing that the defaulting party has a
meritorious defense, which in this case was grounded on the contract of
lease sued upon, said the Court of Appeals.
Petitioner filed a motion for reconsideration, but to no avail. Hence, this
petition for review averring that the Court of Appeals erred in:
CIVIL PROCEDURE CASES – Summons (Rule 14)
I. … HOLDING THAT THERE WAS NO VALID SERVICE OF SUMMONS
UPON PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS
CORPORATION
II. … NOT HOLDING THAT THERE WAS VALID SERVICE OF
SUMMONS CONFORMABLY WITH THE SUBSTANTIAL COMPLIANCE
RULE.
III. … HOLDING THAT WITH THE ADOPTION OF SECTION 11, RULE
14 OF THE 1997 RULES OF CIVIL PROCEDURE, THE SUBSTANTIAL
COMPLIANCE RULE NO LONGER APPLIES.
IV. … NOT HOLDING THAT JURISDICTION WAS ACQUIRED OVER
PRIVATE RESPONDENT COLUMBUS PHILIPPINES BUS
CORPORATION AND THAT ITS MOTION TO LIFT ORDER OF
DEFAULT LACKS MERIT.8
The issues in this case may be succinctly stated as follows:
a. Whether there was valid service of summons on private
respondent for the trial court to acquire jurisdiction, and
b. Whether private respondent’s motion to lift order of default was
in order.
On the first issue, petitioners contend that while Section 11, Rule 14 of
the 1997 Rules of Civil Procedure clearly specifies the persons
authorized to receive summons on behalf of a private juridical entity, said
provision did not abandon or render inapplicable the substantial
compliance rule. Petitioners cite Millenium Industrial Commercial
Corporation v. Tan,9 and maintain that this Court, by referring to E.B
Villarosa & Partner Co., Ltd. v. Judge Benito,10 effectively ruled that said
provision is the statement of the general rule on service of summons
upon corporation and the substantial compliance rule is the exception.
Petitioners claim that this Court, in an array of cases, upheld the
substantial compliance rule when it allowed the validity of the service of
summons on the corporation’s employee other than those mentioned in
the Rule where said summons and complaint were in fact seasonably
received by the corporation from said employee. Petitioners insist that
technicality must not defeat speedy justice.
29

Petitioners stress that even though the summons was received by a mere
filing clerk in private respondent’s corporation, there was substantial
compliance with Section 11, Rule 14 because the summons actually
reached private respondent. This can be gleaned from private
respondent’s motion to lift order of default where private respondent did
not question the validity of the service of summons but explained in
paragraph three thereof that its failure to answer the complaint was due
to its impression that the case would not be pursued by petitioners
because the corporation already made payments to them.11
From said averment, according to petitioners, private respondent in effect
admitted that it received the summons. Notwithstanding this, private
respondent did not file its answer to the complaint, said the petitioners.
This is tantamount to negligence which the court cannot tolerate,
petitioners conclude. There being valid service of summons, the Regional
Trial Court acquired jurisdiction over private respondent, according to
petitioners.
Petitioners further contend that the Court of Appeals’ reliance on E.B
Villarosa & Partner Co., Ltd. v. Judge Benito,12 in denying their motion for
reconsideration was misplaced, because the factual milieu in said case
was different from that in the instant case. In Villarosa, according to them,
there was no showing of actual receipt by the defendant corporation of
the summons while in this case, private respondent actually received the
summons.
Private respondent counters that nowhere in the Millenium case did this
Court expressly state or remotely imply that we have not abandoned the
doctrine of substantial compliance. Private respondent claims that
petitioners misquoted the portion of the Millenium decision where this
Court cited the Villarosa case, to make it appear that the Villarosa ruling,
which provides an interpretation of Section 11, Rule 14 of the 1997 Rules
of Civil Procedure, states the general rule on the service of summons
upon corporations where the substantial compliance rule is the exception.
Private respondent avers that what this Court discussed in the Millenium
case was the rule on service of summons under the old Rules of Court
prior to the promulgation and effectivity of the 1997 Rules of Civil
Procedure. The Millenium case held that as a general rule, service upon
one who is not enumerated in Section 13,13 Rule 14 of the then Rules of
Court is invalid, according to private respondent. An exception is when
the summons is actually received by the corporation, which means that
there was substantial compliance with the rule. Private respondent
stresses that since the exception referred to the old rule, it cannot be
CIVIL PROCEDURE CASES – Summons (Rule 14)
made to apply to the new rule, which clearly specifies and limits the
persons authorized to receive the summons in behalf of the corporation. 1a\^/phi 1.net
Neither can petitioners rely on Millenium to justify their theory, adds
private respondent, because at the time the complaint in this case was
filed with the trial court, the 1997 Rules of Civil Procedure were already in
effect. The case law applicable in the instant case, contends private
respondent, is Villarosa which squarely provides for the proper
interpretation of the new rule on the service of summons upon domestic
corporation, thus:
The designation of persons or officers who are authorized to accept
summons for a domestic corporation or partnership is now limited and
more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil
Procedure. The rule now states "general manager" instead of only
"manager"; "corporate secretary" instead of "secretary"; and "treasurer"
instead of "cashier." The phrase "agent, or any of its directors" is
conspicuously deleted in the new rule.14
According to private respondent, service through Ayreen Rejalde, a mere
filing clerk of private respondent and not one of those enumerated above,
is invalid.
We find private respondent’s submission on this issue meritorious.
The question of whether the substantial compliance rule is still applicable
under Section 11, Rule 14 of the 1997 Rules of Civil Procedure has been
settled in Villarosa which applies squarely to the instant case. In the said
case, petitioner E.B. Villarosa & Partner Co. Ltd. (hereafter Villarosa) with
principal office address at 102 Juan Luna St., Davao City and with
branches at 2492 Bay View Drive, Tambo, Parañaque, Metro Manila and
Kolambog, Lapasan, Cagayan de Oro City, entered into a sale with
development agreement with private respondent Imperial Development
Corporation. As Villarosa failed to comply with its contractual obligation,
private respondent initiated a suit for breach of contract and damages at
the Regional Trial Court of Makati. Summons, together with the
complaint, was served upon Villarosa through its branch manager at
Kolambog, Lapasan, Cagayan de Oro City. Villarosa filed a Special
Appearance with Motion to Dismiss on the ground of improper service of
summons and lack of jurisdiction. The trial court denied the motion and
ruled that there was substantial compliance with the rule, thus, it acquired
jurisdiction over Villarosa. The latter questioned the denial before us in its
petition for certiorari. We decided in Villarosa’s favor and declared the
30
 CIVIL PROCEDURE CASES – Summons (Rule 14)
trial court without jurisdiction to take cognizance of the case. We held
1awphi1.nét subsequent proceedings in the trial court are null and void, including the
that there was no valid service of summons on Villarosa as service was order of default. This renders the second issue now moot and academic.
made through a person not included in the enumeration in Section 11,
Rule 14 of the 1997 Rules of Civil Procedure, which revised the Section We find merit in private respondent’s submissions. Since we have ruled
13, Rule 14 of the 1964 Rules of Court. We discarded the trial court’s that service of summons upon private respondent through its filing clerk
basis for denying the motion to dismiss, namely, private respondent’s cannot be considered valid, it necessarily follows therefore that the
substantial compliance with the rule on service of summons, and fully Regional Trial Court of Pasay City did not acquire jurisdiction over private
agreed with petitioner’s assertions that the enumeration under the new respondent.18 Consequently, all the subsequent proceedings held before
rule is restricted, limited and exclusive, following the rule in statutory it, including the order of default, are null and void.19 As private respondent
construction that expressio unios est exclusio alterius. Had the Rules of points out, the second issue has become moot and academic.
Court Revision Committee intended to liberalize the rule on service of
summons, we said, it could have easily done so by clear and concise WHEREFORE, the instant petition is DENIED. The questioned decision,
language. Absent a manifest intent to liberalize the rule, we stressed as well as the resolution, of the Court of Appeals in CA-G.R. SP No.
strict compliance with Section 11, Rule 14 of the 1997 Rules of Civil 54649 are AFFIRMED. Costs against petitioners.
Procedure.
SO ORDERED.
Neither can herein petitioners invoke our ruling in Millenium to support
their position for said case is not on all fours with the instant case. We
must stress that Millenium was decided when the 1964 Rules of Court
were still in force and effect, unlike the instant case which falls under the
new rule. Hence, the cases15 cited by petitioners where we upheld the
doctrine of substantial compliance must be deemed overturned
by Villarosa, which is the later case.

At this juncture, it is worth emphasizing that notice to enable the other

party to be heard and to present evidence is not a mere technicality or a
trivial matter in any administrative or judicial proceedings. The service of
summons is a vital and indispensable ingredient of due process.16 We will
deprive private respondent of its right to present its defense in this multi-
million peso suit, if we disregard compliance with the rules on service of
summons.

On the second issue, petitioners claim that private respondent’s motion to

lift order of default was not in order for it was filed late, contrary to the
provision in sub-paragraph (b), Section 3,17 Rule 9 of the 1997 Rules of
Civil Procedure, which requires filing of the motion after notice but before
judgment. Also, the motion was (a) not under oath; (b) did not show the
fraud, accident, mistake or excusable neglect that caused private
respondents’ failure to answer; and (c) did not show private respondent’s
meritorious defense.

Private respondent, in turn, argues that since service upon it was invalid,
the trial court did not acquire jurisdiction over it. Hence, all the
31
 CIVIL PROCEDURE CASES – Summons (Rule 14)
G.R. No. 159590 October 18, 2004 On September 10, 2001, Catalan filed an Amended Complaint
HONGKONG AND SHANGHAI BANKING CORPORATION impleading petitioner HSBC TRUSTEE as co-defendant and invoking
LIMITED, petitioner, vs. CECILIA DIEZ CATALAN, respondent. Article 19 of the Civil Code as basis for her cause of action.6

x----------------------------x The Amended Complaint alleges:

G.R. No. 159591 October 18, 2004 Defendants HSBANK and HSBC TRUSTEE, doing business in
HSBC INTERNATIONAL TRUSTEE LIMITED, petitioner, vs. CECILIA the Philippines, are corporations duly organized under the laws of
DIEZ CATALAN, respondent. the British Virgin Islands with head office at 1 Grenville Street, St.
Helier Jersey, Channel Islands and with branch offices at Level
Before us are two petitions for review on certiorari under Rule 45 of the 12, 1 Queen’s Road Central, Hongkong and may be served with
Rules of Court separately filed by the Hongkong and Shanghai Banking summons and other court processes through their main office in
Corporation Limited (HSBANK) and HSBC International Trustee Limited Manila with address at HSBC, the Enterprise Center, Tower 1,
(HSBC TRUSTEE). They seek the reversal of the consolidated Ayala Avenue corner Paseo de Roxas Street, Makati City.
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 Sometime in March 1997, Thomson issued five HSBANK checks payable
certiorari of herein petitioners assailing the Order, dated May 15, 2002, of to Catalan, to wit:
the Regional Trial Court, Branch 44, Bacolod City (RTC) in Civil Case No.
01-11372 that denied their respective motions to dismiss the amended
CHECK NO. DATE AMOUNT
complaint of respondent Cecilia Diez Catalan.
807852 Mar. 15, 1997 $600,000.00
The factual antecedents are as follows:
807853 Mar. 17, 1997 800,000.00
On January 29, 2001, respondent filed before the RTC, a 807854 Mar. 17, 1997 600,000.00
complaint for a sum of money with damages against petitioner
HSBANK, docketed as Civil Case No. 01-11372, due to 807855 Mar. 22, 1997 600,000.00
HSBANK’s alleged wanton refusal to pay her the value of five 807856 Mar. 23, 1997 600,000.00
HSBANK checks issued by Frederick Arthur Thomson (Thomson)
amounting to HK$3,200,000.00.2
TOTAL $3,200,000.00
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 The checks when deposited were returned by HSBANK purportedly for
or Motion to Dismiss dated February 21, 2001.4 Then, it filed a Motion to reason of "payment stopped" pending confirmation, despite the fact that
Dismiss, dated March 8, 2001, on the grounds that (a) the RTC has no the checks were duly funded. On March 18, 1997, Thomson wrote a
jurisdiction over the subject matter of the complaint; (b) the RTC has not letter to a certain Ricky Sousa7 of HSBANK confirming the checks he
acquired jurisdiction for failure of the plaintiff to pay the correct filing or issued to Catalan and requesting that all his checks be cleared. On
docket fees; (c) the RTC has no jurisdiction over the person of HSBANK; March 20, 1997, Thomson wrote another letter to Sousa of HSBANK
(d) the complaint does not state a cause of action against HSBANK; and requesting an advice in writing to be sent to the Philippine National Bank,
(e) plaintiff engages in forum-shopping.5 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,

32

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
CIVIL PROCEDURE CASES – Summons (Rule 14)
keeping with honesty or good faith, otherwise he opens himself to liability
for abuse of right.8
Catalan prays that HSBANK and HSBC TRUSTEE be ordered to
pay P20,864,000.00 representing the value of the five checks at the rate
of P6.52 per HK$1 as of January 29, 2001 for the acts of HSBANK and
HSBC TRUSTEE in refusing to pay the amount justly due her, in addition
to moral and exemplary damages, attorney’s fees and litigation
expenses.9
On October 2, 2001, HSBANK filed a Motion to Dismiss Amended
Complaint on the grounds that: (a) the RTC has no jurisdiction over the
subject matter of the complaint since the action is a money claim for a
debt contracted by Thomson before his death which should have been
filed in the estate or intestate proceedings of Thomson; (b) Catalan
engages in forum shopping by filing the suit and at the same time filing a
claim in the probate proceeding filed with another branch of the RTC; (c)
the amended complaint states no cause of action against HSBANK since
it has no obligation to pay the checks as it has not accepted the checks
and Catalan did not re-deposit the checks or make a formal protest; (d)
the RTC has not acquired jurisdiction over the person of HSBANK for
improper service of summons; and, (e) it did not submit to the jurisdiction
of the RTC by filing a motion for extension of time to file a motion to
dismiss.10
Meanwhile, on October 17, 2001, summons for HSBC TRUSTEE was
tendered to the In House Counsel of HSBANK (Makati Branch) at the
Enterprise Center, Tower 1, Ayala Avenue corner Paseo de Roxas,
Makati. Without submitting itself to the jurisdiction of the RTC, HSBC
TRUSTEE filed a Special Appearance for Motion to Dismiss Amended
Complaint, dated October 29, 2001, questioning the jurisdiction of the
RTC over it.11 HSBC TRUSTEE alleges that tender of summons through
HSBANK Makati did not confer upon the RTC jurisdiction over it because:
(a) it is a corporation separate and distinct from HSBANK; (b) it does not
hold office at the HSBANK Makati or in any other place in the Philippines;
(c) it has not authorized HSBANK Makati to receive summons for it; and,
(d) it has no resident agent upon whom summons may be served
because it does not transact business in the Philippines.
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;
33

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
reconsideration14 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.
CIVIL PROCEDURE CASES – Summons (Rule 14)
In a consolidated Decision dated August 14, 2003, the CA dismissed the
two petitions for certiorari.19 The CA held that the filing of petitioners’
answers before the RTC rendered moot and academic the issue of the
RTC’s lack of jurisdiction over the person of the petitioners; that the RTC
has jurisdiction over the subject matter since it is one for damages under
Article 19 of the Civil Code for the alleged unjust acts of petitioners and
not a money claim against the estate of Thomson; and, that the amended
complaint states a cause of action under Article 19 of the Civil Code
which could merit a favorable judgment if found to be true. The CA noted
that Catalan may have prayed for payment of the value of the checks but
ratiocinated that she merely used the value as basis for the computation
of the damages.
Hence, the present petitions.
In G.R. No. 159590, HSBANK submits the following assigned errors:
I.
THE COURT OF APPEALS COMMITTED SERIOUS
ERROR IN HOLDING THAT THE COURT A QUO,
ACTING AS AN (SIC) REGULAR COURT, HAS
JURISDICTION OVER THE AMENDED COMPLAINT
SEEKING TO ORDER HSBC TRUSTEE, THE
EXECUTOR OF THE DECEASED FREDERICK
ARTHUR THOMSON, TO PAY SUBJECT CHECKS
ISSUED BY THE LATE FREDERICK ARTHUR
THOMSON, ADMITTEDLY IN PAYMENT OF HIS
INDEBTEDNESS TO CATALAN.
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.
34

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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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?
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.
35

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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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?
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
36

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.
CIVIL PROCEDURE CASES – Summons (Rule 14)
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 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
37

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
CIVIL PROCEDURE CASES – Summons (Rule 14)
The petition in G.R. No. 159591 is GRANTED. The Decision of the Court
of Appeals, dated August 14, 2003, in CA-G.R. SP No. 75756 dismissing
the petition for certiorari of the HSBC International Trustee Limited
is REVERSED and SET ASIDE. The Regional Trial Court, Branch 44,
Bacolod City is declared without jurisdiction to take cognizance of Civil
Case No. 01-11372 against the HSBC International Trustee Limited, and
all its orders and issuances with respect to the latter are
hereby ANNULLED and SET ASIDE. The said Regional Trial Court is
hereby ORDERED to DESIST from maintaining further proceedings
against the HSBC International Trustee Limited in the case aforestated.

The allegations in the amended complaint subject of the present cases SO ORDERED.
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.42Accordingly, 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.

38

G.R. No. 147530 June 29, 2005
PABLO B. CASIMINA, then General Manager of the Philippine
Fisheries Development Authority, petitioner, vs. HON. EMILIO B.
LEGASPI, in his capacity as Presiding Judge of RTC of Iloilo,
Branch 22 and EMMANUEL T. ILLERA, respondents.
Before us is a petition for review under Rule 45 of the Rules of Civil
Procedure for the nullification of the decision dated August 18, 2000 of
Hon. Emilio B. Legaspi, presiding judge of the Regional Trial Court of
Iloilo City, Branch 22 in Civil Case No. 00-26187, directing petitioner to
desist from giving effect to the re-assignment of private respondent from
his permanent station in Iloilo City to the Quezon City office.
The facts follow.
Private respondent Emmanuel T. Illera was the Port Manager of the Iloilo
Fishing Port Complex (IFPC) while petitioner Pablo B. Casimina was the
then General Manager of the Philippine Fisheries Development Authority
(PFDA) with offices in Quezon City.
On March 17, 2000, petitioner Casimina issued Special Order No. 821 re-
assigning private respondent from Iloilo to the central office in Quezon
City:
17 March 2000
SPECIAL ORDER
No. 82
Series of 2000
Subject: REASSIGNMENT OF PERSONNEL
In the exigency of the service, Mr. EMMANUEL T. ILLERA, Port Manager
of the Iloilo Fish Port Complex (IFPC) is hereby reassigned to the Central
Office of the General Manager effective 03 April 2000. To assume
responsibility of over-all port administration, Engr. TITO C. COSEJO, Port
Manager, Navotas Fish Port Complex (NFPC) is hereby re-assigned and
designated as Acting Port Manager of the Iloilo Fish Port Complex.
CIVIL PROCEDURE CASES – Summons (Rule 14)
Mr. Illera and Engr. Cosejo should immediately clear themselves of their
administrative accountabilities before proceeding to their new place of
assignment.
This Order shall remain effective until revoked in writing by the
undersigned.
(SGD.) PABLO B. CASIMINA
General Manager
On March 22, 2000, private respondent sent a memorandum2 to
petitioner praying for a reconsideration of the above order. He wrote –
22 March 2000
MEMORANDUM
F O R: The General Manager, PFDA
T H R U: The Asst. General Manager, PFDA
F R O M: The Port Manager, PFDA-IFPC
SUBJECT: REASSIGNMENT
In the late afternoon of 21 March 2000, S.O. no. 82 s. 2000 was faxed to
my office. I was surprised when my staff gave this communication to me
the next day because considering my transfer or any employees transfers
for that matter – would have far reaching official and personal
consequences as well, I expected that this matter should have at least
first been discussed with me. As it is I do not know for what reasons if
any I am being reassigned or even what I am supposed to be doing in
your office when I get there. The S.O. itself is silent on these matters.
My situation becomes quite ironic when we look at S.O. no. 81 s. 2000
which is dated 14 March 2000. Before this Order referring to Ms. Irma
Catain’s detail to Central Office was even prepared, Ms. Catain first
talked to you, me and Atty. Paz to whose office she will be assigned.
When we accepted her personal reasons for reassignment our offices
worked out the details of her transfer and so the Special Order was
issued. If you will recall, last 18 January 2000 an undated S.O. No. 024
was issued transferring Engr. P. Zapanta, the IFPC Acting EMD chief to
39

General Santos and no prior consultation was also done. I thought with
the procedure observed in Ms. Catain’s case all that was behind us.
In view therefore of the above I am requesting that S.O. No. 82 s.2000 be
reconsidered.
(SGD.) EMMANUEL T. ILLERA
On March 29, 2000, petitioner issued a memorandum3 to private
respondent stating therein the reason for the re-assignment. He
explained –
29 March 2000
MEMORANDUM
T O: The Port Manager, IFPC
F R O M: The General Manager
SUBJECT: Reassignment to Central Office
Your response dated 22 March 2000 to Special Order No. 82 Series of
2000 regarding your reassignment to the Central Office is noted.
While in the Central Office, you are expected to help review and
formulate credit and collection policies that would negate the
accumulation of uncollected accounts receivables, in addition to the other
duties that may be assigned to you in the interest of the service.
In this connection, you are hereby ordered to cease and desist from the
further performance of your duties as Port Manager of the Iloilo Fish Port
Complex effective 03 April 2000 and to assume duties and
responsibilities as stated.
For strict compliance.
(SGD.) PABLO B. CASIMINA
After receiving the memorandum, private respondent immediately filed a
case for injunction with prayer for temporary restraining order and a writ
CIVIL PROCEDURE CASES – Summons (Rule 14)
of preliminary injunction against petitioner in the RTC of Iloilo, Branch 22
docketed as Civil Case No. 00-26187, to restrain petitioner from
transferring him to the central office in Quezon City.
On April 14, 2000, petitioner, through counsel, filed an omnibus motion
for the dismissal of the complaint on the grounds of lack of jurisdiction
over his person and the subject matter, and lack of cause of action. He
averred that he never received any summons or copy of the complaint
against him, hence, the court never acquired jurisdiction over his person.
He further contended that the case involved personnel movement of a
government employee in the public service and should have been
appealed to the Civil Service Commission instead of the regular courts.
The trial court denied petitioner’s motion to dismiss the complaint against
him and granted the writ of preliminary injunction prayed for by private
respondent ordering petitioner to "desist from giving effect to the re-
assignment of plaintiff (herein private respondent) from his permanent
station in Iloilo City to the Quezon City office."4
Petitioner moved for a reconsideration of the above decision but it was
denied, hence, this appeal. He raises the following as the issues for our
consideration:
A. Whether or not public respondent, Hon. Emilio B. Legaspi, in
his capacity as Presiding Judge of the Regional Trial Court of
Iloilo, Branch 22, exercised grave abuse of discretion which is
tantamount to lack of or in excess of jurisdiction in deciding the
case when the said trial court has not acquired jurisdiction over
the person of the petitioner and the subject matter of the case;
B. Whether or not the instant case should be dismissed for lack of
cause of action on the ground of private respondent’s failure to
exhaust administrative remedies.5
Petitioner contends that the court a quo did not acquire jurisdiction over
his person because the summons, together with a copy of the complaint,
was not personally served on him. He argues that the summons was
served by the sheriff in the PFDA office in the Iloilo Fishing Port Complex
while his office was in Quezon City. He further contends that when
Assistant Government Corporate Counsel Reynaldo R. Tansioco,
Government Corporate Attorney Ruben S. de la Paz and Government
Corporate Attorney Mariano C. Alojado appeared in court during the
hearing of the motion for the issuance of a preliminary injunction on April
40

18, 2000, they did so only to inform the court that they had filed an
omnibus motion to dismiss the complaint against petitioner on the ground
of lack of jurisdiction over his person and over the subject matter of the
case.
We find the petition meritorious.
A court acquires jurisdiction over a person either through a valid service
of summons or the person’s voluntary appearance in court. A court must
necessarily have jurisdiction over a party for the latter to be bound by a
court decision.6
Generally accepted is the principle that no man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not
bound by judgment rendered by the court.7
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
may acquire jurisdiction over his person.8 As a rule, summons should be
personally served on the defendant.9 It is only when summons cannot be
served personally within a reasonable period of time that substituted
service may be resorted to.10 The Rules specify two modes for effecting
substituted service of summons, to wit:
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.11
Here, petitioner never received the summons against him, whether
personally or in his office. The records show that petitioner’s official
address as the General Manager of the Philippine Fisheries Development
Authority (PFDA) was in Quezon City. Yet, the summons, together with a
copy of the complaint, was served not in his Manila office but in PFDA’s
Iloilo branch office and received by the records receiving officer there.
We have held that the failure to faithfully, strictly and fully comply with the
requirements of substituted service renders the service ineffective.12
In ruling that there was a valid service of summons, respondent judge
"presumed that the said Records Receiving Officer (was) authorized to
CIVIL PROCEDURE CASES – Summons (Rule 14)
receive the communication or court processes addressed to the
defendant."13 He further surmised and held that:
One thing sure is, he forwarded it to their Manila, Quezon City Central
Office. In fact, Engr. Tito Cosejo who briefly acted as the Department
Manager of the Iloilo Fishing Port Complex, appeared in Court during the
summary hearing on the plaintiff’s prayer for the issuance of the TRO on
April 4, 2000 and informed the Court that the summons was received by
their Central Office when defendant was on his way to the province.
There was therefore substantial compliance of the rule on service of
summons.
We disagree.
The doctrine of substantial compliance requires that for there to be a
valid service of summons, actual receipt of the summons by the
defendant through the person served must be shown.14 We further
require that where there is substituted service, there should be a report
indicating that the person who received the summons in the defendant’s
behalf was one with whom petitioner had a relation of confidence
ensuring that the latter would receive or would be notified of the
summons issued in his name.15 None of these was observed in the case
at bar.
We cannot infer actual receipt of summons by petitioner from the fact that
the government corporate counsel filed a motion to dismiss the case
against him and Mr. Cosejo appeared on his behalf during the summary
hearing for the issuance of a temporary restraining order to ask for the
postponement of the case. It is well-settled that a party who makes a
special appearance in court challenging the jurisdiction of said court
based on the ground of invalidity of summons, among others, cannot be
considered to have submitted himself to the jurisdiction of the
court.16 Even the assertion of affirmative defenses, aside from lack of
jurisdiction over the person of the defendant, cannot be considered a
waiver of the defense of lack of jurisdiction over such person.17
Since the trial court did not acquire jurisdiction over the person of
petitioner, he could not have been bound by the decision of respondent
judge ordering him to desist from transferring private respondent from his
station in Iloilo City to the central office in Quezon City. Any decision
rendered without jurisdiction is a total nullity and may be struck down at
any time, even on appeal, before this Court.
41

On the issue of lack of jurisdiction over the subject matter, we agree with
petitioner that this case falls within the jurisdiction of the Civil Service
Commission (CSC) because it involves the movement of government
personnel to promote order and efficiency in public service. The 1987
Constitution specifically mandates that:
Section 3. The Civil Service Commission, as the central personnel
agency of the government, shall establish a career service and adopt
measures to promote morale, efficiency, integrity, responsiveness,
progressiveness, and courtesy in the civil service. It shall strengthen
the merits and rewards system, integrate all human resources
development programs for all levels and ranks, and institutionalize a
management climate conducive to public accountability. It shall submit to
the President and the Congress an annual report on its personnel
programs.18 (emphasis ours)
Personnel actions, i.e., appointments, promotions, transfers, re-
assignments, etc., are specifically provided for in Section 26 (3), Chapter
5, Book V, Subtitle A, of Executive Order No. 292, or the Administrative
Code of 1987. Thus,
Section 26. Personnel Actions. – xxx any action denoting the movement
or progress of personnel in the civil service shall be known as personnel
action. Such action shall include appointment through certification,
promotion, transfer, reinstatement, re-employment, detail, reassignment,
demotion, and separation. All personnel actions shall be in accordance
with such rules, standards, and regulations as may be promulgated by
the Commission.
xxx xxx xxx
(3) Transfer. A transfer is a movement from one position to another which
is of equivalent rank, level, or salary without break in service involving the
issuance of an appointment.
It shall not be considered disciplinary when made in the interest of
public service, in which case, the employee concerned shall be
informed of the reason therefore. If the employee believes that there is
no justification for the transfer, he may appeal his case to the
Commission. (emphasis ours)
xxx xxx xxx
CIVIL PROCEDURE CASES – Summons (Rule 14)
While we are aware that the power to transfer and re-assign government
employees from one office to another can be abused by some
unscrupulous government officials, not all transfers, however, amount to
removal from office.19
… (N)either does illegality attach to the transfer of an employee from his
assigned station to the main office, effected in good faith and in the
interest of the service pursuant to Sec. 32 of the Civil Service Act.20
Here, petitioner ordered the transfer of private respondent from the Iloilo
branch to the main office in Manila in the exigency of the service and in
order to
… help review and formulate credit and collection policies that would
negate the accumulation of uncollected accounts receivables, in addition
to the other duties that may be assigned to (him) in the interest of the
service.21
There is nothing to show from the facts presented to us that the order
transferring private respondent to Manila was done in bad faith or
motivated by ill will. We thus find his refusal to transfer to the main office
to be without basis.
In any event, if private respondent believed that his transfer was
unjustified, his remedy was to appeal to the Civil Service Commission.22 It
was therefore wrong for the trial court to take cognizance of the case
without private respondent first exhausting the administrative remedies
available to him.
WHEREFORE, foregoing premises considered, the petition is hereby
GRANTED. The decision in Civil Case No. 00-26187, and the order
denying the motion for its reconsideration, are hereby ANNULLED AND
SET ASIDE.SO ORDERED.
42

G.R. No. 155488 December 6, 2006
ERLINDA R. VELAYO-FONG, petitioner, vs.SPOUSES RAYMOND and
MARIA HEDY VELAYO, respondents.
Before the Court is a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure seeking the reversal of the Decision1 of the
Court of Appeals (CA) dated May 14, 2002 in CA-G.R. CV No. 54434
which affirmed the Decision of the Regional Trial Court, Branch 105,
Quezon City (RTC) in Civil Case No. Q-93-17133; and the CA
Resolution2 dated October 1, 2002 which denied petitioner's motion for
reconsideration.
The procedural antecedents and factual background of the case are as
follows:
On August 9, 1993, Raymond Velayo (Raymond) and his wife, Maria
Hedy Velayo (respondents) filed a complaint for sum of money and
damages with prayer for preliminary attachment against Erlinda R.
Velayo-Fong (petitioner), Rodolfo R. Velayo, Jr. (Rodolfo Jr.) and Roberto
R. Velayo (Roberto).3 Raymond is the half-brother of petitioner and her
co-defendants.
In their Complaint, respondents allege that petitioner, a resident of 1860
Alamoana Boulevard, Honolulu, Hawaii, USA, and her co-defendants,
who are residents of the Philippines, made it appear that their common
father, Rodolfo Velayo, Sr. (Rodolfo Sr.) and petitioner had filed a
complaint against Raymond before the National Bureau of Investigation
(NBI), accusing Raymond of the crimes of estafa and kidnapping a minor;
that petitioner and her co-defendants also requested that respondents be
included in the Hold Departure List of the Bureau of Immigration and
Deportation (BID) which was granted, thereby preventing them from
leaving the country and resulting in the cancellation of respondents' trips
abroad and caused all of respondents' business transactions and
operations to be paralyzed to their damage and prejudice; that petitioner
and her co-defendants also filed a petition before the Securities and
Exchange Commission (SEC) docketed as Case No. 4422 entitled
"Rodolfo Velayo Sr. et al. v. Raymond Velayo et al." which caused
respondents' funds to be frozen and paralyzed the latters' business
transactions and operations to their damage and prejudice. Since
petitioner was a non-resident and not found in the Philippines,
respondents prayed for a writ of preliminary attachment against
petitioner's properties located in the Philippines.
CIVIL PROCEDURE CASES – Summons (Rule 14)
Before respondents' application for a writ of preliminary attachment can
be acted upon by the RTC, respondents filed on September 10, 1993 an
Urgent Motion praying that the summons addressed to petitioner be
served to her at Suite 201, Sunset View Towers Condominium, Roxas
Boulevard, Pasay City and at No. 5040 P. Burgos Street, T. Towers
Condominium, Makati.4 In its Order dated September 13, 1993, the RTC
granted the said motion.5
The Process Server submitted the Officer's Return, to wit:
THIS IS TO CERTIFY, that after several failed attempts to serve
the copy of summons and complaint issued in the above-entitled
case at the given addresses of defendant Erlinda Velayo as
mentioned in the Order of this Court dated September 13, 1993,
finally, on the 23rd day of September, 1993, at the instance of
herein plaintiffs through counsel, undersigned was able to
SERVED (sic) personally upon defendant Erlinda Velayo the copy
of summons together with the thereto attached copy of the
complaint, not at her two (2) given addresses, but at the lobby of
Intercontinental Hotel, Makati, Metro Manila, right in the presence
of lobby counter personnel by the name of Ms. A. Zulueta, but
said defendant refused to sign in receipt thereof.
I FURTHER CERTIFY, that on the 27th day of September, 1993,
copy of the same WAS SERVED personally upon the other
defendant Rodolfo R. Velayo, Jr., at No. Block 57, Lots 17 and
19, G. Sanchez Street, BF Resort Village, Las Piñas, Metro
Manila, but who also refused to sign in receipt thereof.
WHEREFORE, original copy of the summons is now being
respectfully returned to the Honorable Court DULY SERVED.
Quezon City, Philippines, September 30, 1993.6
Upon ex-parte motions7 of respondents, the RTC in its Order dated
November 23, 1993 and January 5, 1994, declared petitioner and her co-
defendant in default for failure to file an answer and ordered the ex-parte
presentation of respondents' evidence.8
On June 15, 1994, the RTC rendered its Decision in respondents' favor,
the dispositive portion of which reads:
43

WHEREFORE, premises considered, judgment is hereby
rendered ordering the defendants to pay the plaintiffs:
1. the amount of P65,000.00 as actual damages;
2. the amount of P200,000.00 as moral damages;
3. Attorney's fees in the amount of P5,000,00 it being a judgment
by default; and
4. cost of suit.
SO ORDERED.9
On September 1, 1994, petitioner filed a Motion to Set Aside Order of
Default claiming that she was prevented from filing a responsive pleading
and defending herself against respondents' complaint because of fraud,
accident or mistake; that contrary to the Officer's Return, no summons
was served upon her; that she has valid and meritorious defenses to
refute respondents' material allegations.10 Respondents opposed said
Motion.11
In its Order dated May 29, 1995, the RTC denied petitioner's Motion
ruling that the presumption of regularity in the discharge of the function of
the Process Server was not sufficiently overcome by petitioner's
allegation to the contrary; that there was no evident reason for the
Process Server to make a false narration regarding the service of
summons to defaulting defendant in the Officer's Return.12
On September 4, 1995, respondents filed a Motion for Execution.13 On
September 22, 1995, petitioner filed an Opposition to Motion for
Execution contending that she has not yet received the Decision and it is
not yet final and executory as against her.14
In its Order dated January 3, 1996, the RTC, finding that the Decision
dated June 15, 1994 and the Order dated May 29, 1995 were indeed not
furnished or served upon petitioner, denied respondents' motion for
execution against petitioner and ordered that petitioner be furnished the
said Decision and Order.15
On March 28, 1996, the RTC issued an Order directing the issuance of
the writ of execution against petitioner's co-defendant.16
CIVIL PROCEDURE CASES – Summons (Rule 14)
On May 23, 1996, petitioner, through her counsel, finally received the
Decision dated June 15, 1994 and the Order dated May 29, 1995.17
Petitioner filed an appeal with the CA questioning the propriety and
validity of the service of summons made upon her. Respondents
opposed the appeal, arguing that the petition should be dismissed since it
raised pure questions of law, which is not within the CA's jurisdiction to
resolve under Section 2 (c) of Rule 41 of the Revised Rules of Court;
that, in any case, petitioner's reliance on the rule of extraterritorial service
is misplaced; that the judgment by default has long been final and
executory since as early as August 1994 petitioner became aware of the
judgment by default when she verified the status of the case; that
petitioner should have filed a motion for new trial or a petition for relief
from judgment and not a motion to set aside the order of default since
there was already a judgment by default.
On May 14, 2002, the CA rendered its Decision affirming the Decision
and Order of the RTC18 ruling that it (CA) has jurisdiction since the
petition raised a question of fact, that is, whether petitioner was properly
served with summons; that the judgment by default was not yet final and
executory against petitioner since the records reveal and the RTC Order
dated January 3, 1996 confirmed that she was not furnished or served a
copy of the decision; that petitioner was validly served with summons
since the complaint for damages is an action in personam and only
personal, not extraterritorial service, of summons, within the forum, is
essential for the acquisition of jurisdiction over her person; that
petitioner's allegations that
she did not know what was being served upon her and that somebody
just hurled papers at her were not substantiated by competent evidence
and cannot overcome the presumption of regularity of performance of
official functions in favor of the Officer's Return.
Petitioner filed a Motion for Reconsideration19 but the CA denied it in its
Resolution dated October 1, 2002.20
Hence, the present petition anchored on the following grounds:
I
44

THE COURT OF APPEALS PATENTLY ERRED IN NOT
RULING THAT PETITIONER WAS NOT VALIDLY SERVED
WITH SUMMONS.
II
THE COURT OF APPEALS PATENTLY ERRED IN NOT
RULING THAT PETITIONER WAS PREVENTED FROM FILING
RESPONSIVE PLEADING AND DEFENDING AGAINST
RESPONDENTS' COMPLAINT BECAUSE OF FRAUD,
ACCIDENT AND MISTAKE.21
Parties filed their respective Memoranda on September 8 and 9, 2005.
Petitioner argues that summons should have been served through
extraterritorial service since she is a non-resident; that the RTC should
have lifted the order of default since a default judgment is frowned upon
and parties should be given their day in court; that she was prevented
from filing a responsive pleading and defending against respondents'
complaint
through fraud, accident or mistake considering that the statement in the
Officer's Return that she was personally served summons is inaccurate;
that
she does not remember having been served with summons during the
said date but remembers that a man hurled some papers at her while she
was entering the elevator and, not knowing what the papers were all
about, she threw back the papers to the man before the elevator closed;
that she has a valid and meritorious defense to refute the material
allegations of respondents' complaint.
On the other hand, respondents contend that petitioner was validly
served with summons since the rules do not require that service be made
upon her at her place of residence as alleged in the complaint or stated in
the summons; that extraterritorial service applies only when the
defendant does not reside and is not found in the Philippines; that
petitioner erred in filing a motion to set aside the order of default at the
time when a default judgment was already rendered by the RTC since
the proper remedy is a motion for new trial or a petition for relief from
judgment under Rule 38; that the issue on summons is a pure question of
CIVIL PROCEDURE CASES – Summons (Rule 14)
law which the CA does not have jurisdiction to resolve under Section 2
(c) of Rule 41 of the 1997 Rules of Civil Procedure.22
The Court finds it proper to resolve first whether the issue involved in the
appeal filed with the CA is a question of law and therefore not within the
jurisdiction of the CA to resolve.
In Murillo v. Consul,23 which was later adopted by the 1997 Rules of Civil
Procedure, the Court clarified the three modes of appeal from decisions
of the RTC, namely: (a) ordinary appeal or appeal by writ of error, where
judgment was rendered in a civil or criminal action by the RTC in the
exercise of original jurisdiction; (b) petition for review, where judgment
was
rendered by the RTC in the exercise of appellate jurisdiction; and (c)
petition for review to the Supreme Court.
The first mode of appeal, governed by Rule 41, is taken to the Court of
Appeals on questions of fact or mixed questions of fact and law. The
second mode of appeal, covered by Rule 42, is brought to the Court of
Appeals on questions of fact, of law, or mixed questions of fact and law.
The third mode of appeal, provided for by Rule 45, is elevated to the
Supreme Court only on questions of law.
A question of law arises when there is doubt as to what the law is on a
certain state of facts, while there is a question of fact when the doubt
arises as to the truth or falsity of the alleged facts.24 For a question to be
one of law, the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of them.25 The
resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review
of the evidence presented, the question posed is one of fact.26 Thus, the
test of whether a question is one of law or of fact is not the appellation
given to such question by the party raising the same; rather, it is whether
the appellate court can
determine the issue raised without reviewing or evaluating the evidence,
in which case, it is a question of law; otherwise it is a question of fact.27
Respondents' claim that the issues raised by petitioner before the CA are
pure legal questions is not tenable.
45

A scrutiny of petitioner's petition before the CA reveals that it raised two
issues: (a) the propriety of the service effected on a non-resident; and (b)
the validity of the service made upon her. The first is a question of law.
There is indeed a question as to what and how the law should be applied.
The second is a question of fact. The resolution of said issue entails a
review of the factual circumstances that led the RTC to conclude that
service was validly effected upon petitioner. Therefore, petitioner properly
brought the case to the CA via the first mode of appeal under the aegis of
Rule 41.
How may service of summons be effected on a non-resident?
Section 17,28 Rule 14 of the Rules of Court provides:
Section 17. Extraterritorial service – When the defendant does
not reside and is not found in the Philippines and the action
affects the personal status of the plaintiff or relates to, or the
subject of which, is property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or
in which relief demanded consists, wholly or in part, in excluding
the defendant from any interest therein, or the property of the
defendant has been attached in 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.
Under this provision, when the defendant is a nonresident and he is not
found in the country, summons may be served extraterritorially. There are
only four instances when extraterritorial service of summons is proper,
namely: (a) when the action affects the personal status of the plaintiffs;
(b) when the action relates to, or the subject of which is property, within
the Philippines, in which the defendant claims a lien or interest, actual or
contingent; (c) 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 (d) when the defendant'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
CIVIL PROCEDURE CASES – Summons (Rule 14)
court; (b) publication, also with leave of court; or (c) any other manner the
court may deem sufficient.
Thus, extrajudicial service of summons apply only where the action is in
rem, that is, an action against the thing itself instead of against the
person, or in an action quasi in rem, where an individual is named as
defendant and the purpose of the proceeding is to subject his interest
therein to the obligation or loan burdening the property. The rationale for
this is that in in rem and quasi in rem actions, jurisdiction over the person
of the defendant is
not a prerequisite to confer jurisdiction on the court provided that the
court acquires jurisdiction over the res.29
Where the action is in personam, that is, one brought against a person on
the basis of her personal liability, jurisdiction over the person of the
defendant is necessary for the court to validly try and decide the case.
When the defendant is a non-resident, personal service of summons
within the state is essential to the acquisition of jurisdiction over the
person.30 Summons on the defendant must be served by handing a copy
thereof to the defendant in person, or, if he refuses to receive it, by
tendering it to him.31 This cannot be done, however, if the defendant is
not physically present in the country, and thus, the court cannot acquire
jurisdiction over his person and therefore cannot validly try and decide
the case against him.32
In the present case, respondents' cause of action in Civil Case No. Q-93-
17133 is anchored on the claim that petitioner and her co-defendants
maliciously instituted a criminal complaint before the NBI and a petition
before the SEC which prevented the respondents from leaving the
country and paralyzed the latters' business transactions. Respondents
pray that actual and moral damages, plus attorney's fees, be awarded in
their favor. The action instituted by respondents affect the parties alone,
not the whole world. Any judgment therein is binding only upon the
parties properly impleaded.33 Thus, it is an action in personam. As such,
personal service of summons upon the defendants is essential in order
for the court to acquire jurisdiction over their persons.34
The Court notes that the complaint filed with the RTC alleged that
petitioner is a non-resident who is not found in the Philippines for which
reason respondents initially prayed that a writ of preliminary attachment
be issued against her properties within the Philippines to confer
jurisdiction upon the RTC. However, respondents did not pursue its
46

application for said writ when petitioner was subsequently found
physically present in the Philippines and personal service of summons
was effected on her.
Was there a valid service of summons on petitioner? The answer is in the
affirmative.
Petitioner's bare allegation that the statement in the "Officer's Return that
she was personally served summons is inaccurate" is not sufficient. A
process server's certificate of service is prima facie evidence of the facts
as set out in the certificate.35 Between the claim of non-receipt of
summons by a party against the assertion of an official whose duty is to
send notices, the latter assertion is fortified by the presumption that
official duty has been regularly performed.36 To overcome the
presumption of regularity of performance of official functions in favor of
such Officer's Return, the evidence against it must be clear and
convincing. Petitioner having been unable to come forward with the
requisite quantum of proof to the contrary, the presumption of regularity
of performance on the part of the process server stands.
The Court need not make a long discussion on the propriety of the
remedy adopted by petitioner in the RTC of filing a motion to set aside
the order of default at a time when there was already a judgment by
default. As aptly held by the CA, since petitioner was not furnished or
served a copy of the judgment of default, there was no notice yet of such
judgment as against her. Thus, the remedy of filing a motion to set aside
the order of default in the RTC was proper.
Petitioner's argument that the RTC should have set aside the order of
default and applied the liberal interpretation of rules with a view of
affording parties their day in court is not tenable. While indeed default
orders are not viewed with favor, the party seeking to have the order of
default lifted must
first show that her failure to file an answer or any other responsive
pleading was due to fraud, accident, mistake, or excusable neglect and
then she must show that she has a valid and meritorious defense.37
In this case, petitioner failed to show that her failure to file an answer was
due to fraud, accident, mistake or excusable neglect. Except for her bare
unsupported allegation that the summons were only thrown to her at the
elevator, petitioner did not present any competent evidence to justify the
setting aside of the order of default.
CIVIL PROCEDURE CASES – Summons (Rule 14)
Moreover, when a party files a motion to lift order of default, she must
also show that she has a meritorious defense or that something would be
gained by having the order of default set aside.38 The term meritorious
defense implies that the applicant has the burden of proving such a
defense in order to have the judgment set aside. The cases usually do
not require such a strong showing. The test employed appears to be
essentially the same as used in considering summary judgment, that is,
whether there is enough evidence to present an issue for submission to
the trier of fact, or a showing that on the undisputed facts it is not clear
that the judgment is warranted as a matter of law. 39 The defendant must
show that she has a meritorious defense otherwise the grant of her
motion will prove to be a useless exercise. Thus, her motion must be
accompanied by a statement of the evidence which she intends to
present if the motion is granted and which is such as to warrant a
reasonable belief that the result of the case would probably be otherwise
if a new trial is granted.40
In the present case, petitioner contented herself with stating in her
affidavit of merit that the cases against respondent Raymond were filed
at the instance of her father.41 Such allegation is a conclusion rather than
a statement of facts showing a meritorious defense. The affidavit failed to
controvert the facts alleged by the respondents. Petitioner has not shown
that she has a meritorious defense.
Thus, since petitioner failed to show that her failure file an answer was
not due to fraud, accident, mistake, or excusable neglect; and that she
had a valid and meritorious defense, there is no merit to her prayer for a
liberal interpretation of procedural rules.
WHEREFORE, the instant petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals are AFFIRMED.
Costs against petitioner. SO ORDERED.
47

G.R. No. 170943 September 23, 2008
PEDRO T. SANTOS, JR, Petitioner vs. PNOC
EXPLORATIONCORPORATION, Respondent
This is a petition for review1 of the September 22, 2005 decision2 and
December 29, 2005 resolution3 of the Court of Appeals in CA-G.R. SP
No. 82482.
On December 23, 2002, respondent PNOC Exploration Corporation filed
a complaint for a sum of money against petitioner Pedro T. Santos, Jr. in
the Regional Trial Court of Pasig City, Branch 167. The complaint,
docketed as Civil Case No. 69262, sought to collect the amount
of P698,502.10 representing petitioner’s unpaid balance of the car
loan4 advanced to him by respondent when he was still a member of its
board of directors.
Personal service of summons to petitioner failed because he could not be
located in his last known address despite earnest efforts to do so.
Subsequently, on respondent’s motion, the trial court allowed service of
summons by publication.
Respondent caused the publication of the summons in Remate, a
newspaper of general circulation in the Philippines, on May 20, 2003.
Thereafter, respondent submitted the affidavit of publication of the
advertising manager of Remate5 and an affidavit of service of
respondent’s employee6 to the effect that he sent a copy of the summons
by registered mail to petitioner’s last known address.
When petitioner failed to file his answer within the prescribed period,
respondent moved that the case be set for the reception of its
evidence ex parte. The trial court granted the motion in an order dated
September 11, 2003.
Respondent proceeded with the ex parte presentation and formal offer of
its evidence. Thereafter, the case was deemed submitted for decision on
October 15, 2003.
On October 28, 2003, petitioner filed an "Omnibus Motion for
Reconsideration and to Admit Attached Answer." He sought
reconsideration of the September 11, 2003 order, alleging that the
affidavit of service submitted by respondent failed to comply with Section
19, Rule 14 of the Rules of Court as it was not executed by the clerk of
CIVIL PROCEDURE CASES – Summons (Rule 14)
court. He also claimed that he was denied due process as he was not
notified of the September 11, 2003 order. He prayed that respondent’s
evidence ex parte be stricken off the records and that his answer be
admitted.
Respondent naturally opposed the motion. It insisted that it complied with
the rules on service by publication. Moreover, pursuant to the September
11, 2003 order, petitioner was already deemed in default for failure to file
an answer within the prescribed period.
In an order dated February 6, 2004, the trial court denied petitioner’s
motion for reconsideration of the September 11, 2003 order. It held that
the rules did not require the affidavit of complementary service by
registered mail to be executed by the clerk of court. It also ruled that due
process was observed as a copy of the September 11, 2003 order was
actually mailed to petitioner at his last known address. It also denied the
motion to admit petitioner’s answer because the same was filed way
beyond the reglementary period.
Aggrieved, petitioner assailed the September 11, 2003 and February 6,
2004 orders of the trial court in the Court of Appeals via a petition for
certiorari. He contended that the orders were issued with grave abuse of
discretion. He imputed the following errors to the trial court: taking
cognizance of the case despite lack of jurisdiction due to improper
service of summons; failing to furnish him with copies of its orders and
processes, particularly the September 11, 2003 order, and upholding
technicality over equity and justice.
During the pendency of the petition in the Court of Appeals, the trial court
rendered its decision in Civil Case No. 69262. It ordered petitioner to
pay P698,502.10 plus legal interest and costs of suit.7
Meanwhile, on September 22, 2005, the Court of Appeals rendered its
decision8 sustaining the September 11, 2003 and February 6, 2004
orders of the trial court and dismissing the petition. It denied
reconsideration.9 Thus, this petition.
Petitioner essentially reiterates the grounds he raised in the Court of
Appeals, namely, lack of jurisdiction over his person due to improper
service of summons, failure of the trial court to furnish him with copies of
its orders and processes including the September 11, 2003 order and
preference for technicality rather than justice and equity. In particular, he
claims that the rule on service by publication under Section 14, Rule 14
48

of the Rules of Court applies only to actions in rem, not actions in
personam like a complaint for a sum of money. He also contends that the
affidavit of service of a copy of the summons should have been prepared
by the clerk of court, not respondent’s messenger.
The petition lacks merit.
ProprietyOf
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are
unknown. – In any action where the defendant is designated as an
unknown owner, or the like, 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
times as the court may order. (emphasis supplied)
Since petitioner could not be personally served with summons despite
diligent efforts to locate his whereabouts, respondent sought and was
granted leave of court to effect service of summons upon him by
publication in a newspaper of general circulation. Thus, petitioner was
properly served with summons by publication.
Petitioner invokes the distinction between an action in rem and an
action in personam and claims that substituted service may be availed of
only in an action in rem. Petitioner is wrong. The in rem/in
personam distinction was significant under the old rule because it was
silent as to the kind of action to which the rule was applicable.10 Because
of this silence, the Court limited the application of the old rule to in
rem actions only.11
This has been changed. The present rule expressly states that it applies
"[i]n any action where the defendant is designated as an unknown owner,
or the like, or whenever his whereabouts are unknown and cannot be
ascertained by diligent inquiry." Thus, it now applies to any action,
whether in personam, in rem or quasi in rem.12
CIVIL PROCEDURE CASES – Summons (Rule 14)
Regarding the matter of the affidavit of service, the relevant portion of
Section 19,13 Rule 14 of the Rules of Court simply speaks of the
following:
… an affidavit showing the deposit of a copy of the summons and order
for publication in the post office, postage prepaid, directed to the
defendant by registered mail to his last known address.
Service of summons by publication is proved by the affidavit of the
printer, his foreman or principal clerk, or of the editor, business or
advertising manager of the newspaper which published the summons.
The service of summons by publication is complemented by service of
summons by registered mail to the defendant’s last known address. This
complementary service is evidenced by an affidavit "showing the deposit
of a copy of the summons and order for publication in the post office,
postage prepaid, directed to the defendant by registered mail to his last
known address."
The rules, however, do not require that the affidavit of complementary
service be executed by the clerk of court. While the trial court ordinarily
does the mailing of copies of its orders and processes, the duty to make
the complementary service by registered mail is imposed on the party
who resorts to service by publication.
Moreover, even assuming that the service of summons was
defective, the trial court acquired jurisdiction over the person of
petitioner by his own voluntary appearance in the action against him.
In this connection, Section 20, Rule 14 of the Rules of Court states:
SEC. 20. Voluntary appearance. – The defendant’s voluntary
appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack of
jurisdiction over the person of the defendant shall not be deemed a
voluntary appearance. (emphasis supplied)
Petitioner voluntarily appeared in the action when he filed the "Omnibus
Motion for Reconsideration and to Admit Attached Answer."14 This was
equivalent to service of summons and vested the trial court with
jurisdiction over the person of petitioner.
EntitlementTo
49

Notice Of Proceedings
The trial court allowed respondent to present its evidence ex parte on
account of petitioner’s failure to file his answer within the prescribed
period. Petitioner assails this action on the part of the trial court as well
as the said court’s failure to furnish him with copies of orders and
processes issued in the course of the proceedings.
The effects of a defendant’s failure to file an answer within the time
allowed therefor are governed by Sections 3 and 4, Rule 9 (on Effect of
Failure to Plead) of the Rules of Court:
SEC. 3. Default; declaration of. – If the defending party fails to answer
within the time allowed therefor, the court shall, upon motion of the
claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court
shall proceed to render judgment granting the claimant such relief as his
pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be
delegated to the clerk of court.
SEC. 4. Effect of order of default. – A party in default shall be entitled
to notice of subsequent proceedings but not to take part in the trial.
(emphasis supplied)
If the defendant fails to file his answer on time, he may be declared in
default upon motion of the plaintiff with notice to the said defendant. In
case he is declared in default, the court shall proceed to render judgment
granting the plaintiff such relief as his pleading may warrant, unless the
court in its discretion requires the plaintiff to submit evidence. The
defaulting defendant may not take part in the trial but shall be entitled to
notice of subsequent proceedings.
In this case, even petitioner himself does not dispute that he failed to file
his answer on time. That was in fact why he had to file an "Omnibus
Motion for Reconsideration and to Admit Attached Answer." But
respondent moved only for the ex parte presentation of evidence, not for
the declaration of petitioner in default. In its February 6, 2004 order, the
trial court stated:
The disputed Order of September 11, 2003 allowing the presentation of
evidence ex-parte precisely ordered that "despite and notwithstanding
CIVIL PROCEDURE CASES – Summons (Rule 14)
service of summons by publication, no answer has been filed with the
Court within the required period and/or forthcoming.["] Effectively[,] that
was a finding that the defendant [that is, herein petitioner] was in
default for failure to file an answer or any responsive pleading
within the period fixed in the publication as precisely the defendant
[could not] be found and for which reason, service of summons by
publication was ordered. It is simply illogical to notify the defendant of the
Order of September 11, 2003 simply on account of the reality that he was
no longer residing and/or found on his last known address and his
whereabouts unknown – thus the publication of the summons. In other
words, it was reasonable to expect that the defendant will not receive any
notice or order in his last known address. Hence, [it was] impractical to
send any notice or order to him. Nonetheless, the record[s] will bear
out that a copy of the order of September 11, 2003 was mailed to the
defendant at his last known address but it was not claimed. (emphasis
supplied)
As is readily apparent, the September 11, 2003 order did not limit itself to
permitting respondent to present its evidence ex parte but in effect issued
an order of default. But the trial court could not validly do that as an order
of default can be made only upon motion of the claiming party.15 Since no
motion to declare petitioner in default was filed, no default order should
have been issued.
To pursue the matter to its logical conclusion, if a party declared in
default is entitled to notice of subsequent proceedings, all the more
should a party who has not been declared in default be entitled to such
notice. But what happens if the residence or whereabouts of the
defending party is not known or he cannot be located? In such a case,
there is obviously no way notice can be sent to him and the notice
requirement cannot apply to him. The law does not require that the
impossible be done.16 Nemo tenetur ad impossibile. The law obliges no
one to perform an impossibility.17 Laws and rules must be interpreted in a
way that they are in accordance with logic, common sense, reason and
practicality.18
Hence, even if petitioner was not validly declared in default, he could not
reasonably demand that copies of orders and processes be furnished
him. Be that as it may, a copy of the September 11, 2003 order was
nonetheless still mailed to petitioner at his last known address but it was
unclaimed.
CorrectnessOf
50
 CIVIL PROCEDURE CASES – Summons (Rule 14)
Non-Admission Of Answer

Petitioner failed to file his answer within the required period. Indeed, he
would not have moved for the admission of his answer had he filed it on
time. Considering that the answer was belatedly filed, the trial court did
not abuse its discretion in denying its admission.

Petitioner’s plea for equity must fail in the face of the clear and express
language of the rules of procedure and of the September 11, 2003 order
regarding the period for filing the answer. Equity is available only in the
absence of law, not as its replacement.19 Equity may be applied only in
the absence of rules of procedure, never in contravention thereof.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.

51

G.R. No. 183802 September 17, 2009
ALEXANDER TAM WONG, Petitioner, vs. CATHERINE FACTOR-
KOYAMA, Respondent.
For Review on Certiorari, under Rule 45 of the Revised Rules of Court,
are the Resolutions dated 17 January 20081 and 18 July 20082 of the
Court of Appeals dismissing outright the Petition for Certiorari, under Rule
65 of the same Rules, of Alexander Tam Wong (Wong) in CA-G.R. SP
No. 101860, for being the wrong remedy. Wong intended to assail before
the appellate court the Orders dated 25 September 20073 and 18
December 20074 of the Regional Trial Court (RTC), Branch 121 of
Caloocan City, which, respectively, declared him in default in Civil Case
No. C-21860 and denied his Motion to Dismiss the Complaint in said
case.
The present controversy originates from a Complaint5 dated 17 July
2007, for specific performance, sum of money, and damages, filed with
the RTC by private respondent Catherine Factor-Koyama (Koyama)
against Wong, docketed as Civil Case No. C-21860. Koyama alleged in
her Complaint that Wong deliberately refused to execute and deliver a
deed of absolute sale, and to surrender the condominium certificate of
title (CCT) pertaining to a condominium unit, particularly described as A3-
4B California Garden Square, with an area of 57.5 square meters and
located at Libertad Street corner Calbayog Street, Mandaluyong City,
Metro Manila (subject property), which she had already bought from him.
Koyama further averred that she had been renting out the subject
property to foreign tourists, but Wong padlocked the same while she was
in Japan attending to her business. When she requested him to open the
subject property, he reportedly mauled her, causing her physical injuries,
and also took her personal belongings.
On 24 July 2007, the RTC issued summons6 addressed to Wong at his
residence, No. 21 West Riverside Street, San Francisco Del Monte,
Quezon City. However, the original summons and the accompanying
copy of the Complaint and its Annexes were eventually returned to the
RTC by Sheriff IV Renebert B. Baloloy (Sheriff Baloloy), who indicated in
his Sheriff’s Return dated 14 August 2007 that said court process should
already be deemed "DULY SERVED." According to his Return,7 Sheriff
Baloloy had repeatedly attempted to serve the summons at Wong’s
residential address on 27 July 2007, 8 August 2007, and 10 August 2007,
but Wong was always not around according to the latter’s housemaids,
Marie Sandoval (Sandoval) and Loren Lopez (Lopez). Sheriff Baloloy
then attempted to leave the summons with Criz Mira (Mira), Wong’s
CIVIL PROCEDURE CASES – Summons (Rule 14)
caretaker, who is of legal age, and residing at the same address for two
and a half years, but Mira refused to acknowledge or receive the same.
On 25 September 2007, after the lapse of the 15-day reglementary
period8 without Wong filing an answer to the Complaint in Civil Case No.
C-21860, Koyama moved for the RTC to declare him in default, and to
allow her to present her evidence ex parte and/or to render judgment in
her favor. The RTC set Koyama’s Motion for hearing on 25 October 2007
at 8:30 in the morning or as soon as counsel and the matter may be
heard.9
On 25 September 2007, the RTC, presided by public respondent Hon.
Adoracion Angeles, issued an Order10declaring Wong in default.
Wong subsequently filed with the RTC, by registered mail sent on 5
October 2007, a Manifestation11 claiming that he did not receive any
summons from said court. According to him, he was only informed
unofficially by a tricycle driver on 27 September 2007 regarding papers
from a court in Caloocan City, which the tricycle driver returned to the
court after failing to locate Wong. This prompted Wong to file an
inquiry12 dated 28 September 2007 with the Office of the Clerk of Court of
the RTC of Caloocan City as regards any case that might have been filed
against him. In response, the Office of the Clerk of Court of the RTC of
Caloocan City issued a Certification13 dated 3 October 2007 bearing the
details of Civil Case No. C-21860, which Koyama had instituted against
him. Wong asserted that he would not hesitate to submit himself to the
jurisdiction of the RTC, should the proper procedure be observed.
In its Order14 dated 9 October 2007, the RTC stressed that, as early as
25 September 2007, Wong had been declared in default.
Wong, by special appearance of counsel, then filed with the RTC on 22
October 2007 a Motion to Dismiss15 Civil Case No. C-21860, asserting,
among other grounds, that there was no service of summons upon him,
hence, the RTC did not acquire jurisdiction over his person; and that he
was not given the opportunity to oppose Koyama’s Motion to have him
declared in default.
In her Opposition16 to the Motion to Dismiss, filed on 5 November 2007,
Koyama maintained that there was a proper substituted service of the
summons, consequently, the RTC acquired jurisdiction over the person of
Wong; and that Wong was served a copy of the Motion to have him
52

declared in default on 3 October 2007, as evidenced by the Registry
Return Card.17
Wong filed a Reply18 on 7 November 2007 to Koyama’s aforementioned
Opposition, denying that a Loren Lopez or Criz Mira resided at his home
address. Said housemaids were fictitious, as proven by the
Certificate19 issued by Junn L. Sta. Maria, Punong Barangay of San
Francisco Del Monte, Quezon City on 7 November 2007, stating that
Loren Lopez and Criz Mira were not residents of 21-B Westriverside St.,
San Francisco Del Monte, Quezon City.
The RTC denied Wong’s Motion to Dismiss for lack of merit. In its
Order20 dated 18 December 2007, the RTC declared that Sheriff Baloloy
validly resorted to a substituted service of the summons, pursuant to
Section 7, Rule 14 of the Revised Rules of Court.21 Sheriff Baloloy’s
performance of his official duty enjoyed the presumption of regularity, and
Wong failed to rebut the same by merely presenting
the Barangay Certificate, which is "not a role model of accuracy,"
especially when referring to mere transient residents in the area, such as
lessees, housemaids or caretakers.
Wong went before the Court of Appeals via a Petition
for Certiorari22 under Rule 65 of the Revised Rules of Court contending
that the RTC committed grave abuse of discretion, amounting to lack or
excess of jurisdiction, in issuing its Orders dated 25 September 2007 and
18 October 2007 in which it, respectively, declared Wong in default in
Civil Case No. C-21860 and denied his Motion to Dismiss the Complaint
in the same case. Wong insisted that there was no valid service of
summons upon him, and that he was not notified of Koyama’s Motion to
have him declared in default.
The Court of Appeals, in a Resolution23 dated 17 January 2008,
dismissed Wong’s Petition for Certiorari outright for being the improper
remedy.
According to the Court of Appeals, Wong should have availed himself of
the following remedies for RTC Order dated 25 September 2007,
declaring him in default:
As to the first assailed Order declaring [Wong] in default, the remedies
available to a party declared in default were reiterated in Cerezo v.
Tuazon, viz:
CIVIL PROCEDURE CASES – Summons (Rule 14)
a) The defendant in default may, at any time after discovery
thereof and 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 negligence, and that
he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b),
Rule 9]);
b) If the judgment has already been rendered when the defendant
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;
c) If the defendant discovered the default after the judgment has
become final and executory, he may file a petition for relief under
Section 2 [now Section 1] of Rule 38; and
d) 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 (Sec. 2,
Rule 41).
Moreover, a petition for certiorari to declare the nullity of a judgment by
default is also available if the trial court improperly declared a party in
default, or even if the trial court properly declared a party in default, if
grave abuse of discretion attended such declaration.24
As for the 18 December 2007 Order of the RTC denying Wong’s Motion
to Dismiss, the appellate court held:
As to the second assailed Order denying petitioner’s Motion to Dismiss,
the said Order is interlocutory and is not a proper subject of a petition for
certiorari. Even in the face of an error of judgment on the part of a judge
denying the motion to dismiss, certiorari will not lie. Certiorari is not a
remedy to correct errors of procedure.
Let it be stressed at this point that basic rule that when a motion to
dismiss is denied by the trial court, the remedy is not to file a petition for
certiorari, but to appeal after a decision has been rendered. An order
denying a motion to dismiss is interlocutory, and so the proper remedy in
such a case is to appeal after a decision has been rendered. A writ of
certiorari is not intended to correct every controversial interlocutory ruling;
it is resorted only to correct a grave abuse of discretion or a whimsical
53

exercise of judgment equivalent to lack of jurisdiction. Its function is
limited to keeping an inferior court within its jurisdiction and to relieve
persons from arbitrary acts—acts which courts or judges have no power
or authority in law to perform. It is not designed to correct erroneous
findings and conclusions made by the courts.25
Ultimately, the Court of Appeals decreed:
WHEREFORE, premises considered, the Petition is DISMISSED
outright.26
Wong filed a Motion for Reconsideration27 of the foregoing Resolution on
6 February 2008, but the Court of Appeals denied the same for lack of
merit in a Resolution28 dated 18 July 2008.
Hence, Wong filed the instant Petition before this Court.
In the meantime, since neither the Court of Appeals nor this Court issued
a Temporary Restraining Order (TRO) or writ of preliminary injunction
enjoining the proceedings in Civil Case No. C-21860, the RTC continued
hearing the said case. In an Order29 dated 20 November 2008, the
RTC motu proprio allowed Wong to cross-examine Koyama during the
hearing on 23 January 2009, even though it did not lift its 25 September
2007 Order, which had declared him in default. The RTC reasoned:
The Court believes that the interest of justice and fair play would be
better served if the [herein petitioner Wong] would be given the chance to
cross examine the witness, and for which reason the Court suspends the
proceedings and resets the continuation of the hearing of this case on
January 23, 2009 at 8:30 a.m.
Wong, through counsel, actively participated in the hearing held on 23
January 2009 by extensively cross-examining Koyama.30 After said
hearing, he filed before this Court, on 18 February 2009, a Motion for
Clarification31 as to the validity of the RTC Order dated 20 November
2008 allowing him to cross-examine Koyama, but without lifting the Order
of Default.
On 8 July 2009, the RTC rendered its Decision32 in Civil Case No. C-
21860, the dispositive of which reads:
CIVIL PROCEDURE CASES – Summons (Rule 14)
WHEREFORE, premises considered, the contract of sale between the
parties relative to the sale of the condominium unit is hereby
RESCINDED and the [herein petitioner Wong] is ordered to pay the
[herein respondent Koyama] the sum of TWO MILLION TWO HUNDRED
FOUR THOUSAND (Php2,204,000.00) PESOS with legal rate of interest
from the date of demand on May 25, 2007; to pay the plaintiff the sum of
TWO HUNDRED THOUSAND (Php200,000.00) PESOS as and for
attorney’s fees; to pay another sum of TWO THOUSAND FIVE
HUNDRED (Php2,500.00) PESOS per court appearance for six (6) times
and to pay the costs of suit.
Wong avers herein that the RTC did not acquire jurisdiction over his
person since he was not served the summons.
Summons is a writ by which the defendant is notified of the action
brought against him or her. In a civil action, jurisdiction over the
defendant is acquired either upon a valid service of summons or the
defendant's voluntary appearance in court. When the defendant does not
voluntarily submit to the court's jurisdiction or when there is no valid
service of summons, any judgment of the court, which has no jurisdiction
over the person of the defendant, is null and void.33
Where the action is in personam, i.e., one that seeks to impose some
responsibility or liability directly upon the person of the defendant through
the judgment of a court,34 and the defendant is in the Philippines, the
service of summons may be made through personal or substituted
service in the manner described in Sections 6 and 7, Rule 14 of the
Revised Rules of Court, which 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 the
defendant’s office or regular place of business with some competent
person in charge thereof.
It is well-established that a summons upon a respondent or a defendant
must be served by handing a copy thereof to him in person or, if he
54

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.35The essence of personal
service is the handing or tendering of a copy of the summons to the
defendant himself.36
Under our procedural rules, service of summons in person of defendants
is generally preferred over substituted service.37 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 to whom the law could only presume would
notify him of the pending proceedings.38
The Court requires that the Sheriff’s Return clearly and convincingly show
the impracticability or hopelessness of personal service.39 Proof of
service of summons must (a) indicate the impossibility of service of
summons within a reasonable time; (b) specify the efforts exerted to
locate the defendant; and (c) state that the summons was served upon a
person of sufficient age and discretion who is residing in the address, or
who is in charge of the office or regular place of business, of the
defendant. It is likewise required that the pertinent facts proving these
circumstances be stated in the proof of service or in the officer’s return.
The failure to comply faithfully, strictly and fully with all the foregoing
requirements of substituted service renders the service of summons
ineffective.40
Sheriff Baloloy’s Return dated 14 August 2007 described the
circumstances surrounding the service of the summons upon Wong as
follows:
THIS IS TO CERTIFY that on August 27, 2007, the undersigned Sheriff
IV was in receipt of a copy of summons, complaint together with annexes
in the above-entitled case issued by this Honorable Court for service,
below were the proceedings taken thereon, to wit:
That on July 27, 2007, the undersigned went to the residence of the
Defendant located at #21 West Riverside St. San Francisco Del Monte,
Quezon City to serve the said summons, complaint and its annexes but
Mr. Wong was not around. According to Ms. Marie Sandoval, housemaid,
the subject was out (sic) for office;
CIVIL PROCEDURE CASES – Summons (Rule 14)
That on August 8, 2007, the undersigned tried to serve again the said
summons, complaint and its annexes but according again to Ms.
Sandoval, the subject was out of town;
That on August 10, 2007, the undersigned went again to the said
residence to serve the same summons, complaint and its annexes but
Ms. Loren Lopez, another housemaid, said that Mr. Wong was out again
(sic) for office; and
That in the interest of justice, the undersigned left the said summons
complaint and its annexes to Mr. Wong’s caretaker, Mr. Criz Mira of legal
age who reside at the said address for almost two and a half years but he
refused to acknowledge/receive the said summons.
WHEREFORE, the original summons, complaint and its annexes is
hereby returned to this Honorable Court with the information DULY
SERVED.41 1avvphi1
The Court, after a careful study of Sheriff Baloloy’s afore-quoted Return,
finds that he improperly resorted to substituted service upon Wong of the
summons for Civil Case No. C-21860.
Apart from establishing that Sheriff Baloloy went to Wong’s residence on
three different dates, and that the latter was not around every time, there
is nothing else in the Sheriff’s Return to establish that Sheriff Baloloy
exerted extraordinary efforts to locate Wong. During his visits to Wong’s
residence on 27 July 2007 and 10 August 2007, Sheriff Baloloy was
informed by the housemaids that Wong was at his office. There is no
showing, however, that Sheriff Baloloy exerted effort to know Wong’s
office address, verify his presence thereat, and/or personally serve the
summons upon him at his office.42 Although Wong was out of town when
Sheriff Baloloy attempted to serve the summons at the former’s residence
on 8 August 2007, there was no indication that Wong’s absence was
other than temporary or that he would not soon return.
Evidently, the Return failed to relay if sufficient efforts were exerted by
Sheriff Baloloy to locate Wong, as well as the impossibility of personal
service of summons upon Wong within a reasonable time. Sheriff
Baloloy’s three visits to Wong’s residence hardly constitute effort on his
part to locate Wong; and Wong’s absence from his residence during
Sheriff Baloloy’s visits, since Wong was at the office or out-of-town, does
not connote impossibility of personal service of summons upon him. It
must be stressed that, before resorting to substituted service, a sheriff is
55
 CIVIL PROCEDURE CASES – Summons (Rule 14)
enjoined to try his best efforts to accomplish personal service on the IN VIEW WHEREOF, the Petition is DENIED. Costs against the
defendant. And since the defendant is expected to try to avoid and evade petitioner.
service of summons, the sheriff must be resourceful, persevering, canny,
and diligent in serving the process on the defendant.43 SO ORDERED.

Nevertheless, even without valid service of summons, a court may still

acquire jurisdiction over the person of the defendant, if the latter
voluntarily appears before it. Section 20, Rule 14 of the Revised Rules of
Court recognizes that:

Section 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 ours.)

The RTC acquired jurisdiction over Wong by virtue of his voluntary

appearance before it in Civil Case No. C-21860. The Court is not
referring to Wong’s filing of his Motion to Dismiss the Complaint in Civil
Case No. C-21860, on the ground of lack of jurisdiction of the RTC over
his person, because that clearly does not constitute voluntary
appearance. The Court, instead, calls attention to the RTC Order dated
20 November 2008 allowing Wong to cross-examine Koyama. Wong,
through his counsel, took advantage of the opportunity opened to him by
the said Order and aggressively questioned her during the 23 January
2009 hearing, despite his knowledge that the RTC had not yet lifted the
25 September 2007 Order declaring him in default. By actively
participating in the 23 January 2009 hearing, he effectively acknowledged
full control of the RTC over Civil Case No. C-21860 and over his person
as the defendant therein; he is, thus, deemed to have voluntarily
submitted himself to the jurisdiction of said trial court.

The Court further stresses the fact that the RTC already rendered a
Decision in Civil Case No. C-21860 on 8 July 2009. Wong filed with the
RTC a Notice of Appeal on 10 August 2009. Given these developments,
the Court deems it unnecessary to still address the issue of whether
Wong was improperly declared in default by the RTC in its Order dated
25 September 2007. Following the remedies cited in Cerezo v.
Tuazon,44 Wong could already raise and include said issue in his appeal
of the RTC Decision dated 8 July 2009 to the Court of Appeals. The
Court can no longer grant him any remedy herein without preempting the
action of the Court of Appeals on Wong’s appeal of the RTC judgment.

56

G.R. No. 175799 November 28, 2011
NM ROTHSCHILD & SONS (AUSTRALIA) LIMITED, Petitioner, vs.
LEPANTO CONSOLIDATED MINING COMPANY, Respondent.
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 20184 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 Dismiss5 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 Order6 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.
CIVIL PROCEDURE CASES – Summons (Rule 14)
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:
57

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,
CIVIL PROCEDURE CASES – Summons (Rule 14)
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.
58

Issues more properly ventilated during the trial of the case
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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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
59

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.
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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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.
60

Respondent argues that extraterritorial service of summons upon
31
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.
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 Corporation33that:
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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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
61

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
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
CIVIL PROCEDURE CASES – Summons (Rule 14)
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
62
 CIVIL PROCEDURE CASES – Summons (Rule 14)
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.)1âw phi 1

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.

63

G.R. No. 206653 February 25, 2015
YUK LING ONG, Petitioner, vs.BENJAMIN T. CO, Respondent
In court proceedings, there is no right more cherished than the right of
every litigant to be given an opportunity to be heard. This right begins at
the very moment that summons is served on the defendant. The Rules of
Court places utmost importance in ensuring that the defendant personally
grasp the weight of responsibility that will befall him. Thus, it is only in
exceptional circumstances that constructive notification, or substituted
service of summons, is allowed. If the server falls short of the rigorous
requirements for substituted service of summons, then the Court has no
other option but to strike down a void judgment, regardless of the
consequences. This is a petition for review on certiorari seeking to
reverse and set aside the June 27, 2012 Decision1 and the March 26,
2013 Resolution2 of the Court of Appeals (CA)in CA-G.R. SP No.
106271, which denied the petition for annulment of judgment.
The Facts
Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong national, and
respondent Benjamin Co (respondent), a Filipino citizen, were married on
October 3, 1982 at Ellinwood-Malate Church.3
Sometime in November 2008, petitioner received a subpoena from the
Bureau of Immigration and Deportation (BID)directing her to appear
before the said agency because her permanent residence visa was being
subjected to cancellation proceedings. Reportedly, her marriage with
respondent was nullified by the court.
When petitioner appeared before the BID, she was furnished with the
copies of the following documents: (1) petition for declaration of nullity of
marriage filed as Civil Case No. CV-01-0177; (2) petition for declaration
of nullity of marriage docketed as Civil Case No. 02-0306; (3) Decision,4
dated December 11, 2002, in Civil Case No. 02-0306 of the Regional
Trial Court, Branch 260 (RTC), Parañaque City, declaring the marriage
between petitioner and respondent as void ab initio; and (4) their
marriage contract5 with the subject decision annotated thereon.
Petitioner was perplexed that her marriage with respondent had been
declared void ab initio. The above documents showed that on April 26,
2001, respondent filed a petition for declaration of nullity6 on the ground
of psychological incapacity before the RTC, which was docketed as Civil
Case No. CV-01-0177. Respondent stated that petitioner’s address was
CIVIL PROCEDURE CASES – Summons (Rule 14)
600 Elcano St., Binondo, Manila. There was no showing of its status,
whether pending, withdrawn or terminated. On July 19, 2002, respondent
filed another petition for declaration of Nullity7 on the ground of
psychological incapacity before the RTC, docketed as Civil Case No. 02-
0306. Respondent indicated that petitioner’s address was 23 Sta. Rosa
Street, Unit B-2 Manresa Garden Homes, Quezon City. On July 29, 2002,
the RTC issued summons.8 In his Server’s Return,9 process server
Rodolfo Torres, Jr. stated that, on August 1, 2002, substituted service of
summons with the copy of the petition was effected after several futile
attempts to serve the same personally on petitioner. The said documents
were received by Mr. Roly Espinosa, a security officer.
On December 11, 2002, the RTC rendered a decision10 in Civil Case No.
02-0306 finding respondent’s marriage with petitioner as void ab initio on
the ground of psychological incapacity under Article 36 of the Family
Code. It stated that summons was served on petitioner on August 1,
2002, but she failed to file her responsive pleading within the
reglementary period. The public prosecutor also stated that there were no
indicative facts to manifest collusion. Thus, the RTC concluded that
petitioner was psychologically incapacitated to perform her essential
marital obligations.
Consequently, petitioner filed a petition for annulment of judgment11
under Rule 47 of the Rules of Court before the CA on November 24,
2008, claiming that she was never notified of the cases filed against her.
She prayed that the RTC decision, dated December 11, 2002, in Civil
Case No. 02-0306, be nullified on the grounds of extrinsic fraud and lack
of jurisdiction. Petitioner alleged that first, respondent committed extrinsic
fraud because, as seen in Civil Case No. CV-01-0177, he deliberately
indicated a wrong address to prevent her from participating in the trial;
second, jurisdiction over her person was not acquired in Civil Case No.
02-0306 because of an invalid substituted service of summons as no
sufficient explanation, showing impossibility of personal service, was
stated before resorting to substituted service of summons; third, the
alleged substituted service was made on a security guard of their
townhouse and not on a member of her household; and fourth, she was
not psychologically incapacitated to perform her marital obligations.12
Ruling of the Court of Appeals
64

On June 27, 2012, the CA rendered the assailed decision finding the
petition for annulment of judgment to be devoid of merit. It held that there
was no sufficient proof to establish that respondent employed fraud to
insure petitioner’s non-participation in the trial of Civil Case No. CV-01-
0177.
Relying on Robinson v. Miralles,13 the CA further ruled that the
substituted service of summons in Civil Case No. 02-0306 was valid. It
found that there was a customary practice in petitioner’s townhouse that
the security guard would first entertain any visitors and receive any
communication in behalf of the homeowners. With this set-up, it was
obviously impossible for the process server to personally serve the
summons upon petitioner. It also declared that the process server’s
return carries with it the presumption of regularity in the discharge of a
public officer’s duties and functions.
Petitioner moved for reconsideration, but her motion was denied by the
CA in its Resolution,14 dated March 26, 2013.
Hence, this petition, anchored on the following
ISSUES
1. Whether or not the Trial Court in Civil Case No. 02-0306 validly
acquired jurisdiction over the person of the petitioner.
2. Whether or not the facts proven by the petitioner constitute extrinsic
fraud within the purview of Rule 47 of the Rules of Court.15
Petitioner argues that there was an invalid substituted service of
summons.1âwphi1 The process server’s return only contained a general
statement that substituted service was resorted to "after several futile
attempts to serve the same personally,"16 without stating the dates and
reasons of the failed attempts. Petitioner also reiterates her argument
that extrinsic fraud was employed.
In his Comment,17 filed on July 9, 2014, respondent contended that the
server’s return satisfactorily stated the reason for the resort to a
substituted service of summons on August 1, 2002; and it was
CIVIL PROCEDURE CASES – Summons (Rule 14)
improbable that petitioner failed to receive the summons because it was
sent to the same address which she declared in this present petition.
Petitioner filed her Reply18 on October 8, 2014 reiterating her previous
arguments.
The Court’s Ruling
The Court finds merit in the petition.
Annulment of judgment is a recourse equitable in character, allowed only
in exceptional cases as where there is no available or other adequate
remedy. Rule 47 of the 1997 Rules of Civil Procedure, as amended,
governs actions for annulment of judgments or final orders and
resolutions, and Section 2 thereof explicitly provides only two grounds for
annulment of judgment, that is, extrinsic fraud and lack of jurisdiction.19
Annulment of judgment is an equitable principle not because it allows a
party-litigant another opportunity to reopen a judgment that has long
lapsed into finality but because it enables him to be discharged from the
burden of being bound to a judgment that is an absolute nullity to begin
with.20
Petitioner raises two grounds to support her claim for annulment of
judgment: (1) extrinsic fraud and (2) lack of jurisdiction. Her contention on
the existence of extrinsic fraud, however, is too unsubstantial to warrant
consideration. The discussion shall then focus on the ground of lack of
jurisdiction.
Lack of jurisdiction on the part of the trial court in rendering the judgment
or final order is either lack of jurisdiction over the subject matter or nature
of the action, or lack of jurisdiction over the person of the petitioner. The
former is a matter of substantive law because statutory law defines the
jurisdiction of the courts over the subject matter or nature of the action.
The latter is a matter of procedural law, for it involves the service of
summons or other processes on the petitioner.21
In the present case, petitioner contends that there was lack of jurisdiction
over her person because there was an invalid substituted service of
summons. Jurisdiction over the defendant is acquired either upon a valid
service of summons or the defendant's voluntary appearance in court.22
65

If the defendant does not voluntarily appear in court, jurisdiction can be
acquired by personal or substituted service of summons as laid out under
Sections 6 and 7 of Rule 14 of the Rules of Court, which state:
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.
The landmark case of Manotoc v. CA (Manotoc)23 thoroughly discussed
the rigorous requirements of a substituted service of summons, to wit: xxx
(1) Impossibility of Prompt Personal Service
xxx
For substituted service of summons to be available, there must be
several attempts by the sheriff to personally serve the summons within a
reasonable period of one month which eventually resulted in failure to
prove impossibility of prompt service. "Several attempts" means at least
three (3) tries, preferably on at least two different dates. In addition, the
sheriff must cite why such efforts were unsuccessful. It is only then that
impossibility of service can be confirmed or accepted.
(2) Specific Details in the Return
The sheriff must describe in the Return of Summons the facts and
circumstances surrounding the attempted personal service. The efforts
made to find the defendant and the reasons behind the failure must be
clearly narrated in detail in the Return. The date and time of the attempts
on personal service, the inquiries made to locate the defendant, the
name/s of the occupants of the alleged residence or house of defendant
and all other acts done, though futile, to serve the summons on
defendant must be specified in the Return to justify substituted service.
CIVIL PROCEDURE CASES – Summons (Rule 14)
(3) A Person of Suitable Age and Discretion
xxx
The sheriff must therefore determine if the person found in the alleged
dwelling or residence of defendant is of legal age, what the recipient's
relationship with the defendant is, and whether said person comprehends
the significance of the receipt of the summons and his duty to
immediately deliver it to the defendant or at least notify the defendant of
said receipt of summons. These matters must be clearly and specifically
described in the Return of Summons. (Emphases and underscoring
supplied)
The pronouncements of the Court in Manotoc have been applied to
several succeeding cases. In Pascual v. Pascual,24 the return of
summons did not show or indicate the actual exertion or positive steps
taken by the officer or process server in serving the summons personally
to the defendant. Similarly, in Spouses Afdal v. Carlos,25 the process
server’s indorsements therein failed to state that the personal service on
the defendants was rendered impossible and that efforts were made to
find them personally. In both those cases, the Court ruled that the
meticulous requirements for substituted service of summons were not
met.
There are cases, however, in which Manotoc was applied, but,
nevertheless, it was ruled that there was no lack of jurisdiction over the
person of the defendant. In Sagana v. Francisco,26 the diligent efforts
exerted by the sheriff to locate the respondent were determined, not only
based on the sheriff's return, but also on the process server's notation
and case records. In the case of Wong v. Factor-Koyama,27 on the other
hand, even if the sheriff performed an invalid substituted service of
summons, jurisdiction over the person of defendant was obtained
because the latter had actively participated in trial, amounting to a
voluntary appearance under Section 20 of Rule 14.28
In the case at bench, the summons in Civil Case No. 02-030629 was
issued on July 29, 2002. In his server’s return,30 the process server
resorted to substituted service of summons on August 1, 2002.
Surprisingly, the process server immediately opted for substituted service
of summons after only two (2) days from the issuance of the summons.
The server’s return stated the following:
SERVER’S RETURN
66

THIS IS TO CERTIFY THAT on August 1, 2002, substituted service of
summons with copy of petition, were effected to respondent, Yuk Ling H.
Ong, at the Unit B-2, No. 23 Sta. Rosa St., Manresa Garden Homes,
Manresa Garden City, Quezon City, after several futile attempts to serve
the same personally. The said documents were received by Mr. Roly
Espinosa of sufficient age and discretion, the Security Officer thereat.
Therefore, respectfully returning to Court, original copy of summons, Duly
Served, this 2nd day of August, 2002.
RODOLFO P. TORRES, JR.
Process Server
(Emphasis supplied)
The server’s return utterly lacks sufficient detail of the attempts
undertaken by the process server to personally serve the summons on
petitioner. The server simply made a general statement that summons
was effected after several futile attempts to serve the same personally.
The server did not state the specific number of attempts made to perform
the personal service of summons; the dates and the corresponding time
the attempts were made; and the underlying reason for each
unsuccessful service. He did not explain either if there were inquiries
made to locate the petitioner, who was the defendant in the case. These
important acts to serve the summons on petitioner, though futile, must be
specified in the return to justify substituted service.
The server’s return did not describe in detail the person who received the
summons, on behalf of petitioner. It simply stated that the summons was
received "by Mr. Roly Espinosa of sufficient age and discretion, the
Security Officer thereat." It did not expound on the competence of the
security officer to receive the summons.
Also, aside from the server’s return, respondent failed to indicate any
portion of the records which would describe the specific attempts to
personally serve the summons. Respondent did not even claim that
petitioner made any voluntary appearance and actively participated in
Civil Case No. 02-0306.
The case of Robinson v. Miralles, cited by the CA, is not applicable. In
that case, the return described in thorough detail how the security guard
CIVIL PROCEDURE CASES – Summons (Rule 14)
refused the sheriff’s entry despite several attempts. The defendant in the
said case specifically instructed the guard to prevent anybody to proceed
to her residence. In the present case, the attempts made by the process
server were stated in a broad and ambiguous statement.
The CA likewise erred in ruling that the presumption of regularity in the
performance of official duty could be applied in the case at bench. This p
resumption of regularity, however, was never intended to be applied even
in cases where there are no showing of substantial compliance with the
requirements of the rules of procedure. Such presumption does not apply
where it is patent that the sheriff's or server's return is defective.31 As
earlier explained, the server's return did not comply with the stringent
requirements of substituted service of summons.
Given that the meticulous requirements in Manotoc were not met, the
Court is not inclined to uphold the CA's denial of the petition for
annulment of judgment for lack of jurisdiction over the person of petitioner
because there was an invalid substituted service of summons.
Accordingly, the decision in Civil Case No. 02-0306 must be declared null
and void.
The stricter rule in substituted service of summons was meant to address
"[t]he numerous claims of irregularities in substituted service which have
spawned the filing of a great number of unnecessary special civil actions
of certiorari and appeals to higher courts, resulting in prolonged litigation
and wasteful legal expenses."32
Although the decision in Civil Case No. 02-0306 was promulgated as
early as December 11, 2002, the Court must strike it down for lack of
jurisdiction over the person of petitioner. The favorable judgment enjoyed
by respondent cannot be categorized as a genuine victory because it was
fought against an adversary, who was ignorant of the existing dispute.
Whatever prize bestowed upon the victor in such a void decision must
also be undone. Respondent, if he wishes to pursue, must start from
scratch and institute his action for declaration of nullity again; this time
with petitioner fully aware and ready for litigation.
WHEREFORE, the petition is GRANTED. The June 27, 2012 Decision
and the March 26, 2013 Resolution of the Court of Appeals in CAG.R. SP
No. 106271 are hereby REVERSED and SET ASIDE. The December 11,
2002 Decision of the Regional Trial Court, Branch 260, Parañaque City is
hereby declared VOID.
67