Asset Privatization Trust vs CA

FACTS: Galleon obtained loan accommodations from DBP

for the acquisition of 7 vessels and to secure payment, the
vessels were mortgaged to DBP. Defendants SIM, Cuenca
and Tinio as solidary debtors. Due to Galleons default, DBP
foreclosed the mortgage but the proceeds yielded a
deficiency.
Defendants lodged a complaint against DBP, NDC and Galleon
praying for the issuance of a TRO directing
defendants(DBP,etc) from pursuing any action or claim for
deficiency or enforcing any claims against the plaintiffs.
In the answer, DBP alleged the liability of the
plaintiffs(MIS,etc) to Galleons obligation was not
extinguished stating, among others, that it was enforcing its
claim against the plaintiffs upon a deed of undertaking they
had signed and not upon the deed of mortgage.
RTC issued writ of prelim injunction ordering DBP to refrain
from pursuing the deficiency claims.
Meanwhile, DBP granted SIM, Cuenca and Tinio loan
accommodations secured by a mortgage over properties of
SIM. The mortgage contract authorized DBP to take actual
possession of the mortgaged property upon breach of any of
the conditions stipulated. They failed to pay amortizations on
time, hence DBP took the initial step to foreclose the
mortgage by taking possession of the mortgaged plant site.
SIM sought to supplement the original complaint. It alleged
that DBPs taking possession of the said plant was a new
development between the parties and in violation of the writ
of prelim injunction issued by RTC, therefore warranting the
admission of the supplemental complaint pursuant to Sec 6,
Rule 10. Said supplemental complaint alleged that DBP is not
entitled to foreclose the mortgage.
RTC ordered DBP to refrain from interfering with the
possession, operation, management and administration" of
SIMs plant.
The DBP opposed alleging "that the subject matter of the
supplemental complaint is not a proper subject to be heard in
the instant case." Explaining that it "merely exercised its
power as attorney-in fact" under the mortgage contract, the
DBP argued that the supplemental complaint "introduces
another cause of action into this case". It added that the
cause of action in the original complaint could not be joined
with that alleged in the supplemental complaint "pursuant to
the provisions of Sec. 5 of Rule 2 of the Rules of Court."
RTC admitted the supplemental complaint.
DBP questioned the order before CA via petition for
Certiorari.
CA declared the order as null and void. It held the
supplemental complaint has a subject matter "distinct and
different from each other." The cause of action in the original
complaint arose from the mortgage contract executed by
Galleon while that in the supplemental complaint arose from
the mortgage contract "executed by SIM, Cuenca, Tinio."
On reconsideration, CA reversed its decision stating that the
original and amended complaint has for its purpose to declare
private respondents not liable as co-makes to petitioner in
view of LOI 1155 and to defeat petitioners right to sue
respondents deficiency claim.
ISSUE: WON there is a violation on the rule on Matters
Subject of Supplemental Pleaings
RULING: YES. At the time the supplemental complaint was
filed in Civil Case No. 10387, the pertinent provision of Rule
10 of the Rules of Court provided:
Under the rule, a supplemental pleading is meant to supply
deficiencies in aid of the original pleading and not to dispense
with or substitute the latter. It is not like an amended
pleading which is a substitute for the original one. It does not
supersede the original, but assumes that the original pleading
is to stand. The issues joined under the original pleading
remain as issues to be tried in the action.
In Leobrera v. CA, the Court ruled that when the cause of
action stated in the supplemental complaint is different from
the cause of action mentioned in the original complaint, the
court should not admit the supplemental complaint.
In the case, the original complaint sought to prevent DBPs
intention to go after private respondents for the deficiency
resulting from therein foreclosure. On the other hand, the
cause of action in the supplemental complaint was the DBPs
initial act of taking possession of the plant, in contravention
of the writ of prelim injunction. The supplemental complaint,
however, states a fact that is entirely different from
those in the original complaint. [It alleges that the DBPs
taking over the Agusan del Sur plant of SIM could not have
been in pursuance of any agreement between SIM and the
DBP because the mortgaged dated November 8, 1984 that
was entered into between those parties "does not provide
extrajudicial and forcible taking over of the mortgaged
properties by defendant DBP."]
Furthermore, if the supplemental complaint "assumes the
original pleading to stand," then there was no pint in naming
only the SIM as the plaintiff in the supplemental complaint.
That fact only proves that the other plaintiffs in the original
complaint, namely, Cuenca and Tinio, have no cause of action
against the DBP in the supplemental complaint as it is in
reality based on an entirely different subject matter.
Granting that SIMs purpose in filing the supplemental
complaint was to effect a joinder of causes of action to avoid
multiplicity of suits, it must fail just the same. The Rules of
Court provide that causes of action may be joined provided
that they arise out of the same contract, transaction or
relation between the parties or are for demands for money or
are of the same nature and character.
G.R. No. 81123 February 28, 1989
CRISOSTOMO REBOLLIDO, FERNANDO VALENCIA and
EDWIN REBOLLIDO vs.
HONORABLE COURT OF APPEALS and PEPSICO, INC.
FACTS:
The petitioners filed a case for damages against Pepsi Cola
Bottling Company of the Philippines, Inc. and Alberto Alva.
The case arose out of a vehicular accident involving a Mazda
Minibus used as a schoolbus owned and driven by petitioners
Crisostomo Rebollido and Fernando Valencia, respectively and
a truck trailer with Plate Number NRH-522 owned at that
time by Pepsi Cola and driven by Alberto Alva. (p. 37, Rollo)
The sheriff of the lower court served the summons addressed
to the defendants. It was received by one Nanette Sison who
represented herself to be the authorized person receiving
court processes as she was the secretary of the legal
department of Pepsi Cola.
Pepsi Cola failed to file an answer and was later declared in
default. The lower court heard the case ex-parte and
adjudged the defendants jointly and severally liable for
damages.
When the default judgment became final and executory, the
petitioners filed a motion for execution, a copy of which was
received no longer by the defendant Pepsi Cola but by private
respondent PEPSICO, Inc. At that time, the private
respondent was already occupying the place of business of
Pepsi Cola.. Private respondent, a foreign corporation held
offices here for the purpose, among others, of settling Pepsi
Cola's debts, liabilities and obligations which it assumed in a
written undertaking, preparatory to the expected dissolution
of Pepsi Cola.
Realizing that the judgment of the lower court would
eventually be executed against it, respondent PEPSICO, Inc.,
opposed the motion for execution and moved to vacate the
judgment on the ground of lack of jurisdiction. The private
respondent questioned the validity of the service of summons
to a mere clerk. It invoked Section 13, Rule 14 of the Rules
of Court on the manner of service upon a private domestic
corporation and Section 14 of the same rule on service upon
a private foreign corporation.
The lower court denied the motion of the private respondent.
Upon motion, the Court of Appeals granted the petition on
the ground of lack of jurisdiction ruling that there was no
valid service of summons.
ISSUE:
Whether or not there was valid service of summons through
Nanette Sison, allegedly the secretary of the legal
department of Pepsi Cola.
RULING:
At the time of the issuance and receipt of the summons,
Pepsi Cola was already dissolved. The Court is of the opinion
that service is allowed in such a situation. In the American
case of Crawford v. Refiners Cooperative Association,
Incorporation it was held that a "defendant corporation is
subject to suit and service of process even though dissolved."
The Rules of Court on service of summons upon a private
domestic corporation is applicable to a corporation which is
no longer a going concern.
Section 13, Rule 14 mandates:
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.
The case of Castle's Administrator v. Acrogen Coal Co.
(supra), is illustrative of the manner by which service can
nevertheless be made despite the death of the entity:
[W]hen an action that might have been
instituted against a foreign or domestic
corporation while it was a going concern is
instituted after its dissolution, process in the
action may be served upon the same person
upon whom the process could be served before
the dissolution.
This Court has ruled that service on a mere employee or clerk
of a corporation is not sufficient. The persons who should
receive the summons should be those named in the statute;
otherwise, those who have charge or control of the
operations of the company or who may be relied upon to
deliver the papers served upon them.
The fact that the summons was received through Miss Sison
is not disputed by the parties. For which corporation was she
actions. After the dissolution and during the pendency of the
case, private respondent PEPSICO held office at the same
address of Pepsi Cola where Miss Sison was working.
Whomsoever Miss Sison was acting for in receiving the
summons there is no question that the notice of the action
was promptly delivered either to Pepsi Cola or PEPSICO with
whom she is admittedly connected. We rule that there was
substantial compliance with Section 13, Rule 14 because the
purpose of notice was satisfied..
In view of the above, the valid service of summons upon
Pepsi Cola operated as a sufficient service of summons upon
the private respondent.

Perkin Elmer Singapore vs Dakila Trading
FACTS: Respondent entered into a Distribution Agreement
with Perkin-Elmer Instruments Asia(PEIA), a Singaporean
corporation whereby PEIA appointed respondent Dakila as the
sole distributor of its products in the Philippines. In turn, PEIA
shall give Dakila a commission for the sale. Under the
agreement, Dakila shall order either from PEIA or PEIP an
afilliate of PEIA.
However, PEIA unilaterally terminated the Distribution
Agreement, prompting respondent to file before the RTC, a
Complaint for Collection of Sum Of Money and Damages
with Writ of Attachment against PEIA and PEIP.
RTC denied the prayer for the issuance of a writ of
attachment. MR denied.
Respondent filed Ex-Parte Motion for Issuance of Summons
Outside of the Philippines, which RTC granted. Alias
Summons was issued by RTC to PEIA but the summons was
served and received by Perkinelmer Asia, a Singaporean
based sole proprietorship owned by petitioner.
Respondent filed a motion to admit amended complaint
where respondent sought to change the name of PEIA to that
of petitioner, claiming that PEIA had become a sole
proprietorship owned by the petitioner. RTC admitted the
amended complaint. Respondent filed a Motion for Issuance
of Summons and for Leave of Court to Deputize respondent
Dakilas General Manager to Serve Summons Outside of the
Philippines, which RTC granted. Respondents General
Manager went to Singapore and served summons on the
petitioner.
Petitioner filed a motion to dismiss based on the ground that,
among others, RTC did not acquire jurisdiction over the
person of the petitioner. RTC denied the motion. RTC held
that since there exists shares of stock of the petitioner in
PEIP, it follows that even though the amended complaint is
for damages, it does relate to a property of petitioner to
which the respondent has a claim which will make it fall
under one of the requisite for extraterritorial service. Thus
the summons had been validly served for RTC to acquire
jurisdiction over the petitioner. Reconsideration was denied.
CA affirmed.
ISSUE: WON extraterritorial service of summons on
petitioner was valid in order for the RTC to acquire
jurisdiction over the person of the petitioner.
RULING: NO. Extraterritorial service of summons applies
only where the action is in rem or quasi in rem, but not if an
action is in personam. A case for collection of sum of money
and damages is an action in personam.
One of the modes of acquiring jurisdiction over the person of
the defendant or respondent in a civil case is through service
of summons.
The proper service of summons differs depending on
the nature of the civil case instituted by the plaintiff or
petitioner: whether it is in personam, in rem, or quasi
in rem.
Extraterritorial service of summons applies only where the
action is in rem or quasi in rem, but not if an action is in
personam.
When the case instituted is an action in rem or quasi in rem,
Philippine courts already have jurisdiction to hear and decide
the case because, in actions in rem and quasi in rem,
jurisdiction over the person of the defendant is not a
prerequisite to confer jurisdiction on the court, provided that
the court acquires jurisdiction over the res. Thus, in such
instance, extraterritorial service of summons can be made
upon the defendant.
The said extraterritorial service of summons is not for the
purpose of vesting the court with jurisdiction, but for
complying with the requirements of fair play or due process,
so that the defendant will be informed of the pendency of the
action against him and the possibility that property in the
Philippines belonging to him or in which he has an interest
may be subjected to a judgment in favor of the plaintiff, and
he can thereby take steps to protect his interest if he is so
minded.
On the other hand, when the defendant or respondent
does not reside and is not found in the Philippines, and
the action involved is in personam, Philippine courts
cannot try any case against him because of the
impossibility of acquiring jurisdiction over his person
unless he voluntarily appears in court.
In the case at bar, this Court sustains the contention of the
petitioner that there can never be a valid extraterritorial
service of summons upon it, because the case before the
court a quo involving collection of a sum of money and
damages is, indeed, an action in personam, as it deals with
the personal liability of the petitioner to the respondent by
reason of the alleged unilateral termination by the former of
the Distribution Agreement.
REGNER vs LOGARTA
G.R. No. 168747

FACTS:
Luis Regner (Luis) had three daughters with his first
wife, Anicita C. Regner, namely, Cynthia Logarta and Teresa
Tormisthe respondents herein, and Melinda Regner-Borja.
Herein petitioner Victoria Regner (Victoria) is the
second wife of Luis.
During the lifetime of Luis, he acquired several
properties, among which is a share at Cebu Country Club Inc.
Luis executed a Deed of Donation in favor of respondents
Cynthia and Teresa covering Proprietary Ownership of the
Cebu Country Club, Inc.
Luis passed away on 11 February 1999.
Victoria filed a Complaint for Declaration of Nullity of
the Deed of Donation with Prayer for Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order
against Cynthia and Teresa with the RTC.
Victoria alleged in her complaint that: Luis made a
written declaration wherein he stated that due to his illness
and forgetfulness, he would not sign any document without
the knowledge of his lawyer, Atty. Francis Zosa; when Luis
was already very ill and no longer of sound and disposing
mind, Cynthia and Teresa , conspiring and confederating
with each other, fraudulently made or caused to be
fraudulently made a Deed of Donation whereby they made it
appear that Luis donated to them Proprietary Ownership
Certificate No. 0272; since Luis no longer had the ability to
write or affix his signature, Melinda, fraudulently manipulated
the hand of Luis so that he could affix his thumbmark on the
assailed Deed of Donation.
Sheriff Melchor A. Solon served the summonses on
Cynthia and Teresa at the Borja Family Clinic in Tagbilaran
City wherein Melinda worked as a doctor, but Melinda refused
to receive the summonses for her sisters and informed the
sheriff that their lawyer, Atty. Francis Zosa, would be the one
to receive the same.
Upon her arrival in the Philippines, Teresa was
personally served the summons at Room 304, Regency Crest
Condominium, Banilad, Cebu City.
Teresa filed a motion to dismiss because of petitioners
failure to prosecute her action for an unreasonable length of
time.
Petitioner opposed the motion, to which Teresa filed
her rejoinder on the ground that their sister, Cynthia, an
indispensable party, had not yet been served a summons.
Thus, Teresa prayed for the dismissal of petitioners
complaint, as the case would not proceed without Cynthias
presence.
The RTC issued an Order granting respondent Teresas
motion to dismiss.
Upon appeal, the Court of Appeals rendered a Decision
denying the appeal and affirming in toto the order of
dismissal of the complaint by the RTC.
ISSUE:
Whether delay in the service of summons upon one of the
defendants constitutes failure to prosecute that would
warrant dismissal of the complaint.
RULING:
As to determine whether Cynthia was properly served a
summons, it will be helpful to determine first the nature of
the action filed against Cynthia and Teresa by petitioner
Victoria, whether it is an action in personam, in rem or quasi
in rem. This is because the rules on service of summons
embodied in Rule 14 apply according to whether an action is
one or the other of these actions.
In a personal action, the plaintiff seeks the recovery of
personal property, the enforcement of a contract or the
recovery of damages. In contrast, in a real action, the
plaintiff seeks the recovery of real property; or an action
affecting title to real property or for the recovery of
possession, or for partition or condemnation of, or foreclosure
of mortgage on, real property. An action in personam is an
action against a person on the basis of his personal liability,
while an action in rem is an action against the thing itself,
instead of against the person.
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 Section 7, Rule 14 of the
Rules of Court, is essential for the acquisition by the court of
jurisdiction over the person of a defendant who does not
voluntarily submit himself to the authority of the court. If
defendant cannot be served a summons because he is
temporarily abroad, but is otherwise a Philippine resident,
service of summons may, by leave of court, be made by
publication. Otherwise stated, a resident defendant in an
action in personam, who cannot be personally served a
summons, may be summoned either by means of substituted
service in accordance with Section 7, Rule 14 of the Rules of
Court, or by publication as provided in Sections 15 and 16 of
the same Rule.
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 extraterritorially in accordance with Section
15, Rule 14 of the Rules of Court.
There are only four instances wherein a defendant
who is a non-resident and is not found in the country may be
served a summons by extraterritorial service, to wit: (1)
when the action affects the personal status of the plaintiff;
(2) when the action relates to, or the subject of which is
property within the Philippines, on 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-
residents 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.
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
Section 15, Rule 14 of the Rules of Court 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,
might 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.
In petitioners Complaint, she alleged that Cynthia is
residing at 462 West Vine No. 201, Glendale, California,
912041, U.S.A.; while Teresa is residing at 2408 South
Hacienda Boulevard, Hacienda Heights, California, but they
usually visit here in the Philippines and can be served
summonses and other processes at the Borja Family Clinic,
Bohol.
Petitioner prayed for a declaration of nullity of the deed of
donation, to restrain Cebu Country Club, Inc. from
transferring title and ownership of Proprietary Ownership
Certificate No. 0272 to Cynthia and Teresa, and for moral and
exemplary damages. This case is evidently an action against
Cynthia and Teresa on the basis of their personal liability for
the alleged fraudulent transfer of the subject Country Club
membership from Luis to their name. In this sense, petitioner
questions the participation and shares of Cynthia and Teresa
in the transferred Country Club membership. Moreover, the
membership certificate from the Cebu Country Club, Inc. is a
personal property. Thus, the action instituted by petitioner
before the RTC is in personam.
Being an action in personam, the general rule requires
the personal service of summons on Cynthia within the
Philippines, but this is not possible in the present case
because Cynthia is a non-resident and is not found within the
Philippines.
As Cynthia is a nonresident who is not found in the
Philippines, service of summons on her must be in
accordance with Section 15, Rule 14 of the Rules of Court.
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. The
third mode, like the first two, must be made outside the
Philippines, such as through the Philippine Embassy in the
foreign country where Cynthia resides.
Since in the case at bar, the service of summons upon
Cynthia was not done by any of the authorized modes, the
trial court was correct in dismissing petitioners complaint.