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PEDRO T. SANTOS, JR. vs. PNOC EXPLORATION CORPORATION

G.R. No. 170943 September 23, 2008
CORONA, J

FACTS:

On December 23, 2002 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 sought
to collect the amount of P698,502.10 representing petitioner's unpaid balance of the car loan 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 Remate and an affidavit of service of respondent's employee 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 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 order. He alleged 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 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 the trial court denied petitioner's motion for reconsideration of the 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. Petitioner assailed orders of the trial court in the
Court of Appeals via a petition for certiorari. Court of Appeals affirmed Trials court decision. Hence this
petition.

ISSUE:

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1.

Whether or not there is lack of jurisdiction over the petitioner due to improper service of
summons.

2. Whether or not the rule on service by publication under Section 14, Rule 14 of the Rules of Court
applies only to actions in rem, not actions in personam.
3. Whether or not the affidavit of service of the copy of the summons should have been prepared by
the clerk of court and not respondents messenger.
4. Whether or not the order of default was valid.
5. Whether or not the trial court erred in the non-admission of the answer.

HELD:

1. No, under Section 14, Rule 14 (on Summons) of the Rules of Court provides 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. 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. Thus, petitioner was proper served
with summons by publication and that there is jurisdiction over his person.
2. No. 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.
3. No. The service of summons by publication is complemented by service of summons by registered
mail to defendants 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
for 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.
4. No. The effects of a defendants 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. SEC. 4. Effect of order of default. A party in default

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shall be entitled to notice of subsequent proceedings but not to take part in the trial.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. 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. Since no
motion to declare petitioner in default was filed, no default order should have been issued.
5. No. 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. Equity may be applied only in the absence of rules of
procedure, never in contravention thereof.

Asiavest Limited v. CA
Facts: The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras praying that said
defendant be ordered to pay to the plaintiff the amounts awarded by the Hong Kong Court Judgment. The
action filed in Hong Kong against Heras was in personam, since it was based on his personal guarantee of
the obligation of the principal debtor.
The trial court concluded that the Hong Kong court judgment should be recognized and given effect in this
jurisdiction for failure of HERAS to overcome the legal presumption in favor of the foreign judgment.
Asiavest moved for the reconsideration of the decision. It sought an award of judicial costs and an increase
in attorney's fees with interest until full payment of the said obligations. On the other hand, Heras no longer
opposed the motion and instead appealed the decision to CA.
The Court of Appeals (CA) agreed with Heras that notice sent outside the state to a non-resident is
unavailing to give jurisdiction in an action against him personally for money recovery. Summons should
have been personally served on Heras in Hong Kong.
Issue: Whether or not the judgment of the Hong Kong Court has been repelled by evidence of want of
jurisdiction due to improper notice to the party
Held: YES.
1. Asiavest cannot now claim that Heras was a resident of Hong Kong at the time since the stipulated fact
that Heras "is a resident of New Manila, Quezon City, Philippines" refers to his residence at the time
jurisdiction over his person was being sought by the Hong Kong court. Accordingly, since Heras was not a

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resident of Hong Kong and the action against him was, ne in personam, summons should have been
personally served on him in Hong Kong.
The extraterritorial service in the Philippines was therefore invalid and did not confer on the Hong Kong
court jurisdiction over his person. It follows that the Hong Kong court judgment cannot be given force and
effect here in the Philippines for having been rendered without jurisdiction.
2. On the same note, Heras was also an absentee,hence, he should have been served with summons in
the same manner as a non-resident not found in Hong Kong. Section 17, Rule 14 of the Rules of Court
providing for extraterritorial service will not apply because the suit against him was in personam. Neither
can we apply Section 18, which allows extraterritorial service on a resident defendant who is temporarily
absent from the country, because even if Heras be considered as a resident of Hong Kong, the undisputed
fact remains that he left Hong Kong not only temporarily but for good.
Perkin v. Dakila Trading
G.R. No. 172242; August 14, 2007
CHICO-NAZARIO, J.:
FACTS: Petitioner, Perkin-Elmer Instruments Asia Pte Ltd. (PEIA) is a corporation duly organized and
existing under the laws of Singapore. It is not considered as a foreign corporation doing business in
the Philippines. Herein respondent Dakila Trading Corporation is a corporation organized and existing
under Philippine laws, and engaged in the business of selling and leasing out laboratory instrumentation
and process control instrumentation, and trading of laboratory chemicals and supplies.
By virtue of the said agreement, PEIA appointed the respondent as the sole distributor of its products in
the Philippines. The respondent was likewise granted the right to purchase and sell the products of PEIA
subject to the terms and conditions set forth in the Distribution Agreement. PEIA, on the other hand, shall
give respondent a commission for the sale of its products in the Philippines.
However, PEIA unilaterally terminated the Distribution Agreement, prompting respondent to file before the
RTC of Mandaluyong City, a Complaint for Collection of Sum of Money and Damages with Prayer for
Issuance of a Writ of Attachment against PEIA and PEIP.
Thus, an Alias Summons, dated 4 September 2000, was issued by the RTC to PEIA. But the said Alias
Summons was served on 28 September 2000 and received by Perkinelmer Asia, a Singaporean based
sole proprietorship, owned by the petitioner and, allegedly, a separate and distinct entity from PEIA.
Accordingly, respondent filed an Ex-Parte Motion to Admit Amended Complaint, together with the Amended
Complaint claiming that PEIA had become a sole proprietorship owned by the petitioner, and subsequently
changed its name to Perkinelmer Asia. Being a sole proprietorship of the petitioner, a change in PEIAs
name and juridical status did not detract from the fact that all its due and outstanding obligations to third
parties were assumed by the petitioner.
Hence, in its Amended Complaint respondent sought to change the name of PEIA to that of the petitioner.
The RTC admitted the Amended Complaint filed by the respondent.

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ISSUE: whether or not there was:

1. proper service of summons and acquisition of jurisdiction by the RTC over the person of the
petitioner;
2. existence of a cause of action against petitioner in respondents Amended Complaint; and
3. proper venue for respondents civil case against petitioner.

HELD:
1. 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. Actions in
personam, are those actions brought against a person on the basis of his personal liability;
actions in rem are actions against the thing itself instead of against the person; and actions
are quasi in rem, where an individual is named as defendant and the purpose of the proceeding
is to subject his or her interest in a property to the obligation or loan burdening the property.
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.
Thus, being an action in personam, personal service of summons within the Philippines is necessary in
order for the RTC to validly acquire jurisdiction over the person of the petitioner, and this is not possible in
the present case because the petitioner is a non-resident and is not found within the Philippines.
2. Dismissal of a Complaint for failure to state a cause of action is provided for by the Rules of
Court. When a Motion to Dismiss is grounded on the failure to state a cause of action, a ruling
thereon should be based only on the facts alleged in the complaint. The court must pass upon
this issue based solely on such allegations, assuming them to be true. For it to do otherwise
would be a procedural error and a denial of plaintiffs right to due process. While, truly, there are
well-recognized exceptions to the rule that the allegations are hypothetically admitted as true
and inquiry is confined to the face of the complaint, none of the exceptions apply in this
case. Hence, the general rule applies. The defense of the petitioner that it is not the real partyin-interest is evidentiary in nature which must be proven in trial. The appellate court, then,
cannot be faulted for not granting petitioners Motion to Dismiss on the ground of failure to state
a cause of action.
3.

Despite the venue stipulation found in the Distribution Agreement stipulating that the exclusive
jurisdiction over disputes arising from the same shall lie in the courts of Singapore or of the
Territory (referring to the Philippines), whichever is elected by PEIA (or petitioner, as PEIAs
alleged successor), the RTC of the Philippines cannot be considered as an improper

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venue. Truly, the venue stipulation used the word exclusive, however, a closer look on the
Distribution Agreement would reveal that the venue stipulation was really in the alternative i.e.,
courts of Singapore or of the Territory, meaning, the Philippines; thus, the court a quo is not an
improper venue for the present case.
Manotoc vs. CA
[G.R. No. 130974. August 16, 2006.]
FACTS: Based on paragraph two of the Complaint, the trial court issued a Summons addressed to
petitioner at Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.
The Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged
caretaker of petitioner at the condominium unit mentioned earlier. When petitioner failed to file her Answer,
the trial court declared her in default. Petitioner, filed a Motion to Dismiss 6 on the ground of lack of
jurisdiction of the trial court over her person due to an invalid substituted service of summons.
Trial court rejected Manotocs Motion to Dismiss and relied on the presumption that the sheriffs substituted
service was made in the regular performance of official duty, and such presumption stood in the absence of
proof to the contrary.
ISSUE: Whether or not the Substituted service was valid.
HELD: NO. Requirements for Substituted Service, Section 8 of Rule 14 of the old Revised Rules of Court
which applies to this case can be broken down to the following requirements: (1)Impossibility of Prompt
Personal Service (2)Specific Details in the Return (3)A Person of Suitable Age and Discretion (4)A
Competent Person in Charge A meticulous scrutiny of the aforementioned Return readily reveals the
absence of material data on the serious efforts to serve the Summons on petitioner Manotoc in person.
There is no clear valid reason cited in the Return why those efforts proved inadequate, to reach the
conclusion that personal service has become impossible or unattainable outside the generally couched
phrases of on many occasions several attempts were made to serve the summons . . . personally, at
reasonable hours during the day, and to no avail for the reason that the said defendant is usually out of
her place and/or residence or premises.
Before resorting to substituted service, a plaintiff must demonstrate an effort in good faith to locate
the defendant through more direct means. Respondent Trajano failed to demonstrate that there was
strict compliance with the requirements of the then Section 8, Rule 14 (now Section 7, Rule 14 of the 1997
Rules of Civil Procedure), the proceedings held before the trial court perforce must be annulled.