Millenium v Tan

[G.R. 169276 June 16, 2009]

FACTS:

- Millenium Industrial Commercial Corporation, petitioner herein, executed a Deed of Real

Estate Mortgage over its real property in favor of respondent Jackson Tan. The mortgage
was executed to secure payment of petitioner's indebtedness to respondent in the amount
of P2 million, without monthly interest, but which, at maturity date on June 10, 1995, was
payable in the amount of P4 million.

PROCEDURE:
- Respondent filed against petitioner a complaint for foreclosure of mortgage, summons and
a copy of the complaint were served upon petitioner through a certain Lynverd Cinches,
described in the sheriff's return, as "a Draftsman, a person of sufficient age and (discretion)
working therein, he is the highest ranking officer or Officer-in-Charge of defendant's
Corporation, to receive processes of the Court."
- Petitioner moved for the dismissal of the complaint on the ground that (1)the Court had not
acquired jurisdiction over the person of the defendant corporation because summons was
served upon a person who is not known to or an employee of the defendant corporation.,
and (2) that it had satisfied its obligation to respondent when the latter opted to be paid in
4000 shares of stock.
- Petitioner further prayed for "other reliefs just and equitable under the premises."
- Trial court denied petitioner's Motion to Dismiss - defendant has availed of an affirmative
defense (2nd ground).
- Petitioner moved for reconsideration, but its motion was denied by the trial court for failure
of petitioner to raise any new ground.
- Petitioner then filed a petition for certiorari in the Court of Appeals.
- Court of Appeals dismissed the petition and ruled that although petitioner denied Lynverd
Cinches' authority to receive summons for it, its actual receipt of the summons could be
inferred from its filing of a motion to dismiss, hence, the purpose for issuing summons had
been substantially achieved.

ISSUE/S:
- WoN the doctrine of substantial compliance in the service of summons applies to the case
RULING:
- Summons is the means by which the defendant in a case is notified of the existence of an
action against him and, thereby, the court is conferred jurisdiction over the person of the
defendant. If the defendant is corporation, Rule 14, 13 requires that service of summons be
made upon the corporations president, manager, secretary, cashier, agent, or any of its
directors.
- General Rule: summons should be served to those enumerated in the rule but SC held that it
is settled that substantial compliance by serving summons on persons other than those
mentioned in the above rule may be justified.
- Requisites for the application of the doctrine of substantial compliance, to wit: (a) there
must be actual receipt of the summons by the person served, i.e., transferring possession of
the copy of the summons from the Sheriff to the person served;
(b) the person served must sign a receipt or the sheriff's return; and
(c) there must be actual receipt of the summons by the corporation through the person on
whom the summons was actually served
- In this case, there is no dispute that the first and second requisites were fulfilled. With
respect to the third, the appellate court held thatpetitioner's filing of a motion to dismiss
the foreclosure suit is proof that it received the copy of the summons and the complaint.
- There is, however, no direct proof of this or that Lynverd Cinches actually turned over the
summons to any of the officers of the corporation.
- No substantial compliance in this case.
- La Naval Drug Corporation v. Court of Appeals : 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. Voluntary appearance shall be deemed a waiver of this defense. The assertion,
however, of affirmative defenses shall not be construed as an estoppel or as a waiver of
such defense.
- SC ruled as to the effect of petitioner's prayer for "other reliefs" in its Motion to Dismiss;
must be deemed superseded by the ruling in La Naval that estoppel by jurisdiction must be
unequivocal and intentional.
- It would be absurd to hold that petitioner unequivocally and intentionally submitted itself to
the jurisdiction of the court by seeking other reliefs to which it might be entitled when the
only relief that it can properly ask from the trial court is the dismissal of the complaint
against it.

WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaint against
petitioner is DISMISSED.