G.R. No. 211113 June 29, 2015 and herein respondent Atty. Honorato R. Mataban (Atty.
and herein respondent Atty. Honorato R. Mataban (Atty. Mataban)—the notary public
ADERITO Z. YUJUICO, Petitioner,
vs.
UNITED RESOURCES ASSET MANAGEMENT, INC., ATTY. RICHARD J. NETHERCOTT and ATTY.
HONORATO R. MATABAN, Respondents.
DECISION
PEREZ, J.:
This case is an appeal1 from the Decision2 dated 12 August 2013 and Resolution3 dated 29
January 2014 of the Court of Appeals in CA-G.R. SP No.117431.
The antecedents: Prelude
The Strategic Alliance Development Corporation (STRADEC) is a domestic corporation
operating as a business development and investment company.
In 2000, several stockholders4 of STRADEC executed Pledge Agreements5 whereby they
pledged a certain amount of their stocks6 in the said company in favor of the respondent
United Resources Asset Management, Inc. (URAMI).These pledges were meant to secure the
loan obligations of STRADEC to URAMI under their Loan Agreement7 of 28 December 2000.
One of the stockholders of STRADEC who so pledged his shares in STRADEC was petitioner
Aderito Z. Yujuico.
The Notice and Civil Case No. 70027
Apparently, STRADEC had not been able to comply with its payment obligations under the Loan
Agreement.
On 18 June 2004, STRADEC and its stockholders received a notice8 informing them about an
impending auction sale of the stocks pledged under the Pledge Agreements in order to satisfy
STRADEC’s outstanding obligations9 under the Loan Agreement. The notice was sent and
signed by respondent Atty. Richard J. Nethercott (Atty. Nethercott), who claimed to be the
attorney-in-fact of URAMI.
The notice stated that, pursuant to the request10 earlier filed by Atty. Nethercott before "the
notary public of Bayambang, Pangasinan," the public auction of the pledged STRADEC stocks
had been set at 8:30 in the morning of 23 June 2004 in front of the municipal building of
Bayambang, Pangasinan.11
On 21 June 2004, petitioner filed before the Regional Trial Court (RTC) of Pasig City an
injunction complaint12 seeking to enjoin the sale at public auction mentioned in Atty.
Nethercott’s notice. Impleaded as defendants in such complaint were URAMI, Atty. Nethercott
referred to in the notice as the one requested by Atty. Nethercott to conduct the auction of
the pledged stocks.
In the complaint, petitioner argued that the planned auction sale of the stocks pledged under
the Pledge Agreements is void as the same suffers from a multitude of fatal defects; one of
which is the supposed lack of authority of Atty. Nethercott to initiate such a sale on behalf of
URAMI. As petitioner elaborated:
(k) [Atty. Nethercott] has no valid authority to represent URAMI for any purpose. xxx. He is
neither the counsel nor the agent of URAMI, whose authorized representative under Section
9, paragraph 10 of the Loan Agreementis its Chief Operating Officer, Ms. Lorna P. Feliciano.
There has been no modification of this provision in accordance with paragraph 9.04 of the
same provision.13
The injunction complaint, which also contained prayers for the issuance of a temporary
restraining order and of a writ of preliminary injunction, was docketed in the RTC as Civil Case
No. 70027.
The Sale and URAMI’s Answer with Counterclaim
As the RTC did not issue a temporary restraining order in Civil Case No. 70027, the public
auction of the pledged STRADEC stocks pushed through, as scheduled, on 23 June 2004. In that
auction, URAMI emerged as the winning bidder for all of the stocks pledged under the Pledge
Agreements.
On 5 July 2004, however, the RTC issued a writ of preliminary injunction, which effectively
prevented URAMI from appropriating the stocks it had purchased during the auction sale. On
the same day, Atty. Nethercott filed his answer denying the material allegations of the
injunction complaint.
More than a year later, or on 21 April 2006, URAMI—which until then was still not able to file
an answer of its own—filed with the RTC a motion for leave to file an answer. Attached to the
motion was a copy of URAMI’s answer.14 On 5 September 2006, the RTC granted URAMI’s
motion and allowed the admission of its answer.
In its answer, URAMI agreed with the petitioner that the 23 June 2004 auction sale was void;
URAMI admitted that it never authorized Atty. Nethercott to cause the sale of the stocks
pledged under the Pledge Agreements. URAMI, however, pointed out that, since it never
sanctioned the 23 June 2004 auction sale, it similarly cannot be held liable to the petitioner for
any prejudice that may be caused by the conduct of such auction sale, viz.:
4.1 The [injunction complaint] dated 28 June 2004 fails to state a cause of action only insofar
as it seeks judgment ordering URAMI to pay [petitioner] the amounts of Five Hundred
Thousand Pesos (Php 500,000.00) as attorney’s fees and One Hundred Thousand Pesos (Php
100,000.00) as legal expenses.
 4.1.1. It bears emphasizing that the extra-judicial foreclosure of the pledged shares
conducted by [Atty. Nethercott] was without valid authority from URAMI.
Consequently, it cannot be made liable for the acts of another.
4.1.2 . URAMI never sanctioned or directed the questioned auction sale. Neither did
URAMI give its consent, explicit or otherwise, to said foreclosure or any subsequent
acts of [Atty. Nethercott] pursuant thereto. Hence, no liability whatsoever may be
imputed to URAMI.
4.1.3. If at all, the recourse of the plaintiff is solely against [Atty. Nethercott].15
Hence, overall, URAMI prayed for the dismissal of the injunction complaint against it.
Petitioner’s Motion for Summary Judgment and the Suspension of Civil Case No. 70027
On 29 May 2007, petitioner filed with the RTC a motion for summary Judgment16 arguing that,
in view of the admissions made by URAMI in its answer regarding Atty. Nethercott’s lack of
authority to cause the auction sale of pledged stocks, there was no longer any genuine issue
left to be resolved in trial.
URAMI and Atty. Nethercott both filed comments on petitioner’s motion for summary
judgment. The resolution of petitioner’s motion for summary judgment, however, was
deferred when, on 25 July 2007, this Court issued in G.R. No. 17706817 a temporary restraining
order18 calling to a halt the conduct of further proceedings in Civil Case No. 70027. This
temporary restraining order remained in effect for more than a year until it was finally lifted
by this Court on 13 October 2008.19
Thereafter, proceedings in Civil Case No. 70027 resumed.
URAMI’s Change of Counsel and Amended Answer
On 26 January 2009, URAMI changed its counsel of record for Civil Case No. 70027. The law
firm ViIllanueva, Gabionza & De Santos (VGD law firm), which hitherto had been URAMI’s
counsel of record, was thus replaced by Atty. Edward P. Chico (Atty. Chico).
Under the counsel of Atty. Chico, URAMI filed with the RTC an amended answer with
compulsory counterclaim(amended answer)20 on 23 February 2009. The amended answer
was meant to supplant URAMI’s original answer, which had been prepared by the VGD law
firm.
In its amended answer, URAMI still vouched for the dismissal of the injunction complaint but
reneged from its previous admissions under the original answer. This time, URAMI claimed
that the 23 June 2004 auction sale was valid and that it duly authorized Atty. Nethercott to
initiate such sale on its behalf.21
On 12 March 2009, petitioner filed with the RTC a motion to strike out URAMI’s amended
answer on the grounds that: (1) it was not timely filed; (2) it was filed without leave of court;
and (3) its admission would prejudice petitioner’s rights. In an order of even date, however,
the RTC denied petitioner’s motion and allowed admission of URAMI’s amended answer.
On 27 March 2009, petitioner filed with the RTC a motion for reconsideration of the order
allowing admission of URAMI’s amended answer.
On 18 August 2009, the RTC issued an order granting petitioner’s motion for reconsideration
and setting aside its earlier order allowing admission of URAMI’s amended answer. In the said
order, the RTC explained that the amended answer could not be admitted just yet as the same
had been filed by URAMI without first securing leave of court.
Thus, on 21 September 2009, URAMI filed with the RTC a motion for leave to file an amended
answer(motion for leave).22 In the said motion, URAMI formally asked permission from the
RTC to allow it to file the amended answer explaining that the original answer filed by its
previous counsel "does not bear truthful factual allegations and is indubitably not supported
by evidence on record."23
On 10 November 2009, the RTC issued an Order24 granting URAMI’s motion for leave.
Petitioner filed a motion for reconsideration against the 10 November 2009 Order, but the
same was denied by the RTC in its Order25 of 27 September 2010.
CA-G.R. SP No. 117431 and the Present Appeal
Defeated but undeterred, petitioner next challenged the Orders dated 10 November 2009 and
27 September 2010 of the RTC through a certiorari petition before the Court of Appeals. This
certiorari petition was docketed in the Court of Appeals as CA-G.R. SP No. 117431.
On 12 August 2013, the Court of Appeals rendered a Decision26 sustaining the challenged
orders of the RTC and dismissing petitioner’s certiorari petition. Petitioner moved for
reconsideration, but the Court of Appeals remained steadfast.27
Hence, the present appeal.
In the present appeal, petitioner argues that the Court of Appeals erred in sustaining the orders
of the RTC allowing URAMI to file its amended answer. Petitioner argues that URAMI should
not have been so allowed for the following reasons:28
1. URAMI had not shown that the admissions it made under the original answer were made
through "palpable mistake." Hence, pursuant to Section 4 of Rule129 of the Rules of Court,29
URAMI is barred from contradicting such admissions through the filing of its amended answer.
2. The amended answer is merely a ploy of URAMI to further delay the proceedings in Civil
Case No. 70027.
Thus, petitioner prays that we set aside the decision of the Court of Appeals, disallow URAMI’s
amended answer and direct the RTC in Civil Case No. 70027 to resolve his motion for summary
judgment with dispatch.30
OUR RULING
Our rules of procedure allow a party in a civil action to amend his pleading as a matter of right,
so long as the pleading is amended only once and before a responsive pleading is served (or,
if the pleading sought to be amended is a reply, within ten days after it is served).31 Otherwise,
a party can only amend his pleading upon prior leave of court.32
As a matter of judicial policy, courts are impelled to treat motions for leave to file amended
pleadings with liberality.33 This is especially true when a motion for leave is filed during the
early stages of proceedings or, at least, before trial.34 Our case law had long taught that bona
fide amendments to pleadings should be allowed in the interest of justice so that every case
may, so far as possible, be determined on its real facts and the multiplicity of suits thus be
prevented.35 Hence, as long as it does not appear that the motion for leave was made with
bad faith or with intent to delay the proceedings,36 courts are justified to grant leave and allow
the filing of an amended pleading. Once a court grants leave to file an amended pleading, the
same becomes binding and will not be disturbed on appeal unless it appears that the court had
abused its discretion.37
In this case, URAMI filed its motion for leave seeking the admission of its amended answer
more than two (2) years after it filed its original answer. Despite the considerable lapse of time
between the filing of the original answer and the motion for leave, the RTC still granted the
said motion. Such grant was later affirmed on appeal by the Court of Appeals.
Petitioner, however, opposes the grant of leave arguing that URAMI is precluded from filing
an amended answer by Section 4 of Rule 129 of the Rules of Court and claiming that URAMI’s
amended answer was only interposed for the purpose of delaying the proceedings in Civil Case
No. 70027.
We rule in favor of allowing URAMI’s amended answer. Hence, we deny the present appeal.
First. We cannot subscribe to petitioner’s argument that Section 4 of Rule 129 of the Rules of
Court precludes URAMI from filing its amended answer. To begin with, the said provision does
not set the be-all and end-all standard upon which amendments to pleadings may or may not
be allowed. Matters involving the amendment of pleadings are primarily governed by the
pertinent provisions of Rule10 and not by Section 4 of Rule 129 of the Rule of Court. Hence,
allegations (and admissions) in a pleading—even if not shown to be made through "palpable
mistake"—can still be corrected or amended provided that the amendment is sanctioned
under Rule 10 of the Rules of Court.
Nevertheless, even if we are to apply Section 4 of Rule 129 to the present case, we still find
the allowance of URAMI’s amended answer to be in order.1awp++i1 To our mind, a
consideration of the evidence that URAMI plans to present during trial indubitably reveals that
the admissions made by URAMI under its original answer were a product of clear and patent
mistake.
One of the key documents that URAMI plans to present during trial, which it also attached in
its amended answer as "Annex 8" thereof, is URAMI’s Board Resolution38 dated 21 June 2004
that evinces Atty. Nethercott’s authority to cause the foreclosure on the pledged stocks on
behalf of URAMI. With the existence of such board resolution, the statement in URAMI’s
original answer pertaining to the lack of authority of Atty. Nethercott to initiate the 23 June
2004 auction sale thus appears mistaken, if not entirely baseless and unfounded. Hence, we
find it only right and fair, that URAMI should be given a chance to file its amended answer in
order to rectify such mistakes in its original answer.
Second. We also cannot agree with the petitioner’s accusation that the amended answer was
only interposed to further delay the proceedings in Civil Case No. 70027. As the previous
discussion reveal, the amended answer aims to correct certain allegations of fact in the original
answer which, needless to state, are crucial to a full and proper disposition of Civil Case No.
70027. It is, therefore, in the best interest of justice and equity that URAMI should be allowed
to file the amended answer.
Third. The mere fact that URAMI filed its motion for leave years after the original answer is
also not reason enough in itself to discredit the amended answer as a sheer dilatory measure.
Readily observable from the established facts is that the perceived delay between the filing of
the motion for leave and the filing of the original answer is not purely attributable to URAMI.
It must be remembered that some time after the original answer was filed, we issued a
temporary restraining order in G.R. No. 177068 that effectively suspended the proceedings in
Civil Case No. 70027 for more than a year. Thus, even if it wanted to, URAMI really could not
have filed a motion for leave to file amended answer sooner than it already had. On this score,
we note that it only took URAMI a little over three months after the lifting of the temporary
restraining order to replace its previous counsel of record in Civil Case No. 70027 and to file its
amended answer. Fourth. All in all, we find absolutely no cause to overrule the grant of leave
granted to URAMI to file its amended answer. The said grant is consistent with our time-
honored judicial policy of affording liberal treatment to amendments to pleadings, especially
those made before the conduct of trial.
We should always remember that our rules of procedure are mere tools designed to facilitate
the attainment of justice. Their application should never be allowed to frustrate the truth and
the promotion of substantial justice.39 Were we to succumb to petitioner’s arguments today,
however, we would have sanctioned an outcome totally inconsistent with the underlying
purpose of our procedural laws. That, we simply cannot countenance.
WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated 12
August 2013 and Resolution dated 29 January 2014 of the Court of Appeals in CA-G.R. SP No.
117431 are hereby AFFIRMED.
SO ORDERED. JOSE PORTUGAL PEREZ
Associate Justice
G.R. No. 143264 April 23, 2012
LISAM ENTERPRISES, INC. represented by LOLITA A. SORIANO, and LOLITA A. SORIANO,
Petitioners,
vs.
BANCO DE ORO UNIBANK, INC. (formerly PHILIPPINE COMMERCIAL INTERNATIONAL
BANK),* LILIAN S. SORIANO, ESTATE OF LEANDRO A. SORIANO, JR., REGISTER OF DEEDS OF
LEGASPI CITY, and JESUS L. SARTE, Respondents.
Remedial Law; Civil Procedure; Amendment of Pleadings; A responsive pleading having been
filed, amendments to the complaint may, therefore, be made only by leave of court and no
longer as a matter of right.—It should be noted that respondents Lilian S. Soriano and the
Estate of Leandro A. Soriano, Jr. already filed their Answer, to petitioners’ complaint, and the
claims being asserted were made against said parties. A responsive pleading having been filed,
amendments to the complaint may, therefore, be made only by leave of court and no longer
as a matter of right.
Same; Same; Same; Amendments are generally favored.— Amendments are generally favored,
it would have been more fitting for the trial court to extend such liberality towards petitioners
by admitting the amended complaint which was filed before the order dismissing the original
complaint became final and executory. It is quite apparent that since trial proper had not yet
even begun, allowing the amendment would not have caused any delay. Moreover, doing so
would have served the higher interest of justice as this would provide the best opportunity for
the issues among all parties to be thoroughly threshed out and the rights of all parties finally
determined. Hence, the Court overrules the trial court’s denial of the motion to admit the
amended complaint, and orders the admission of the same.
Corporation Law; Derivative Suits; Requisites for Filing a Derivative Suit.—In HiYield Realty,
Incorporated v. Court of Appeals, 590 SCRA 548 (2009), the Court enumerated the requisites
for filing a derivative suit, as follows: a) the party bringing the suit should be a shareholder as
of the time of the act or transaction complained of, the number of his shares not being
material; b) he has tried to exhaust intracorporate remedies, i.e., has made a demand on the
board of directors for the appropriate relief but the latter has failed or refused to heed his
plea; and c) the cause of action actually devolves on the corporation, the wrongdoing or harm
having been, or being caused to the corporation and not to the particular stockholder bringing
the suit. A reading of the amended complaint will reveal that all the foregoing requisites had
been alleged therein. Hence, the amended complaint remedied the defect in the original
complaint and now sufficiently states a cause of action.
Remedial Law; Civil Procedure; Amendment of Pleadings; Due to the changes made by the 1997
Rules of Civil Procedure, amendments may now substantially alter the cause of action or
defense.—Respondent PCIB should not complain that admitting the amended complaint after
they pointed out a defect in the original complaint would be unfair to them. They should have
been well aware that due to the changes made by the 1997 Rules of Civil Procedure,
amendments may now substantially alter the cause of action or defense. It should not have
been a surprise to them that petitioners would redress the defect in the original complaint by
substantially amending the same, which course of action is now allowed under the new rules.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying
that the Resolution1 of the Regional Trial Court of Legaspi City (RTC), dated November 11,
1999, dismissing petitioners’ complaint, and its Order2 dated May 15, 2000, denying herein
petitioners’ Motion for Reconsideration and Motion to Admit Amended Complaint, be
reversed and set aside.
The records reveal the following antecedent facts.
On August 13, 1999, petitioners filed a Complaint against respondents for Annulment of
Mortgage with Prayer for Temporary Restraining Order & Preliminary Injunction with Damages
with the RTC of Legaspi City. Petitioner Lolita A. Soriano alleged that she is a stockholder of
petitioner Lisam Enterprises, Inc. (LEI) and a member of its Board of Directors, designated as
its Corporate Secretary. The Complaint also alleged the following:
4. Sometime in 1993, plaintiff LEI, in the course of its business operation, acquired
by purchase a parcel of residential land with improvement situated at Legaspi City,
covered by Transfer Certificate of Title No. 37866, copy attached as Annex "A," which
property is more particularly described as follows:
xxxx
5. On or about 28 March 1996, defendant Lilian S. Soriano and the late Leandro A.
Soriano, Jr., as husband and wife (hereafter "Spouses Soriano"), in their personal
capacity and for their own use and benefit, obtained a loan from defendant PCIB
(Legaspi Branch) (now known as Banco de Oro Unibank, Inc.) in the total amount of
₱20 Million;
6. That as security for the payment of the aforesaid credit accommodation, the late
Leandro A. Soriano, Jr. and defendant Lilian S. Soriano, as president and treasurer,
respectively of plaintiff LEI, but without authority and consent of the board of said
plaintiff and with the use of a falsified board resolution, executed a real estate
mortgage on 28 March 1996, over the above-described property of plaintiff LEI in
favor of defendant PCIB, and had the same registered with the Office of the Registry
of Deeds, Legaspi City, copy of the Real Estate Mortgage is hereto attached and
marked as Annex "B," and made part hereof, to the prejudice of plaintiffs;
7. That specifically, the Spouses Soriano, with intent to defraud and prejudice
plaintiff LEI and its stockholders, falsified the signatures of plaintiff Lolita A. Soriano
as corporate secretary and director of plaintiff LEI, in a document denominated as
board resolution purportedly issued by the board of plaintiff LEI on 6 November
1995, making it appear that plaintiff LEI's Board met and passed a board resolution
on said date authorizing the Spouses Soriano to mortgage or encumber all or
substantially all of the properties of plaintiff LEI, when in fact and in truth, no
resolution of that nature was ever issued by the board of plaintiff LEI, nor a meeting
was called to that effect, copy of the resolution in question is hereto attached and
marked as Annex "C," and made part hereof;
8. That plaintiff Lolita A. Soriano as Corporate Secretary of plaintiff LEI, had never
signed a board resolution nor issued a Secretary's Certificate to the effect that on 6
November 1995 a resolution was passed and approved by plaintiff LEI authorizing
the Spouses Soriano as president and treasurer, respectively, to mortgage the above-
described property of plaintiff LEI, neither did she appear personally before a notary
public on 28 March 1996 to acknowledge or attest to the issuance of a supposed
board resolution issued by plaintiff LEI on 6 November 1995;
9. That defendant PCIB, knowing fully well that the property being mortgaged by the
Spouses Soriano belongs to plaintiff LEI, a corporation, negligently and miserably
failed to exercise due care and prudence required of a banking institution.
Specifically, defendant PCIB failed to investigate and to delve into the propriety of
the issuance of or due execution of subject board resolution, which is the very
foundation of the validity of subject real estate mortgage. Further, it failed to verify
the genuineness of the signatures appearing in said board resolution nor to confirm
the fact of its issuance with plaintiff Lolita A. Soriano, as the corporate secretary of
plaintiff LEI. Furthermore, the height of its negligence was displayed when it
disregarded or failed to notice that the questioned board resolution with a
Secretary's Certificate was notarized only on 28 March 1996 or after the lapse of
more than four (4) months from its purported date of issue on 6 November 1995.
That these circumstances should have put defendant PCIB on notice of the flaws and
infirmities of the questioned board resolution. Unfortunately, it negligently failed to
exercise due care and prudence expected of a banking institution;
10. That having been executed without authority of the board of plaintiff LEI said real
estate mortgage dated 28 March 1996 executed by the Spouses Soriano, as officers
of plaintiff LEI in favor of defendant PCIB, is the null and void and has no legal effect
upon said plaintiff. Consequently, said mortgage deed cannot be used nor resorted
to by defendant PCIB against subject property of plaintiff LEI as no right or rights
whatsoever were created nor granted thereunder by reason of its nullity;
11. Worst, sometime in August 1998, in order to remedy the defects in the mortgage
transaction entered by the Spouses Soriano and defendant PCIB, the former, with
the unlawful instigation of the latter, signed a document denominated as "Deed of
Assumption of Loans and Mortgage Obligations and Amendment of Mortgage";
wherein in said document, plaintiff LEI was made to assume the ₱20 Million personal
indebtedness of the Spouses Soriano with defendant PCIB, when in fact and in truth
it never so assumed the same as no board resolution duly certified to by plaintiff
Lolita A. Soriano as corporate secretary was ever issued to that effect, copy of said
Deed is hereto attached and marked as Annex "D," and made part hereof;
12. Moreover, to make it appear that plaintiff LEI had consented to the execution of
said deed of assumption of mortgage, the Spouses Soriano again, through the
unlawful instigation and connivance of defendant PCIB, falsified the signature of
plaintiff Lolita A. Soriano as corporate secretary of plaintiff LEI in a document
denominated as "Corporate Resolution to Borrow," to make it appear that plaintiff
LEI so authorized the Spouses Soriano to perform said acts for the corporation, when
in fact and in truth no such authority or resolution was ever issued nor granted by
plaintiff LEI, nor a meeting called and held for said purpose in accordance with its By-
laws; copy of which is hereto attached and marked as Annex "E" and made part
hereof;
13. That said irregular transactions of defendant Lilian S. Soriano and her husband
Leandro A. Soriano, Jr., on one hand, and defendant PCIB, on the other, were
discovered by plaintiff Lolita A. Soriano sometime in April 1999. That immediately
upon discovery, said plaintiff, for herself and on behalf and for the benefit of plaintiff
LEI, made demands upon defendants Lilian S. Soriano and the Estate of Leandro A.
Soriano, Jr., to free subject property of plaintiff LEI from such mortgage lien, by
paying in full their personal indebtedness to defendant PCIB in the principal sum of
₱20 Million. However, said defendants, for reason only known to them, continued
and still continue to ignore said demands, to the damage and prejudice of plaintiffs;
14. Hence, on 25 June 1999, plaintiffs commenced a derivative suit against
defendants Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr., before the
Securities and Exchange Commission, docketed as SEC Case No. 06-99-6339 for
"Fraudulent Scheme and Unlawful Machination with Damages" in order to protect
and preserve the rights of plaintiffs, copy of said complaint is hereto attached as
Annex"F";
15. That plaintiffs, in order to seek complete relief from the unauthorized mortgage
transaction between the Spouses Soriano and defendant PCIB, were further
compelled to institute this instant case to seek the nullification of the real estate
mortgage dated 28 March 1999. Consequently, plaintiffs were forced to retain the
services of a lawyer with whom they contracted to pay ₱100,000.00 as and for
attorney's fee;
16. That unfortunately, the plaintiffs learned that on 30 July 1999, defendant Sarte,
in his capacity as Notary Public of Daraga, Albay and upon application of defendant
PCIB, issued a notice of Auction/Foreclosure Sale of the property subject of the
mortgage in question and has set the auction sale on 7 September 1999 x x x;
17. That by reason of the fraudulent and surreptitious schemes perpetrated by
defendant Lilian S. Soriano and her husband, the late Leandro A. Soriano, Jr., in
unlawful connivance and through the gross negligence of defendant PCIB, plaintiff
Lolita A. Soriano, as stockholder, suffered sleepless nights, moral shock, wounded
feeling, hurt pride and similar injuries, hence, should be awarded moral damages in
the amount of ₱200,000.00.
After service of summons on all defendants, the RTC issued a temporary restraining order on
August 25, 1990 and, after hearing, went on to issue a writ of preliminary injunction enjoining
respondent PCIB (now known as Banco de Oro Unibank, Inc.) from proceeding with the auction
sale of the subject property.
Respondents Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr. filed an Answer dated
September 25, 1999, stating that the Spouses Lilian and Leandro Soriano, Jr. were duly
authorized by LEI to mortgage the subject property; that proceeds of the loan from respondent
PCIB were for the use and benefit of LEI; that all notarized documents submitted to PCIB by
the Spouses Soriano bore the genuine signature of Lolita Soriano; and that although the
Spouses Soriano indeed received demands from petitioner Lolita Soriano for them to pay the
loan, they gave satisfactory explanations to the latter why her demands could not be honored.
It was, likewise, alleged in said Answer that it was respondent Lilian Soriano who should be
entitled to moral damages and attorney's fees.
On September 28, 1999, respondent PCIB filed a Motion to Dismiss the Complaint on grounds
of lack of legal capacity to sue, failure to state cause of action, and litis pendencia. Petitioners
filed an Opposition thereto, while PCIB's co-defendants filed a Motion to Suspend Action.
On November 11, 1999, the RTC issued the first assailed Resolution dismissing petitioners'
Complaint. Petitioners then filed a Motion for Reconsideration of said Resolution. While
awaiting resolution of the motion for reconsideration, petitioners also filed, on January 4,
2000, a Motion to Admit Amended Complaint, amending paragraph 13 of the original
complaint to read as follows:
13. That said irregular transactions of defendant Lilian S. Soriano and her husband Leandro A.
Soriano, Jr., on one hand, and defendant PCIB, on the other, were discovered by plaintiff Lolita
A. Soriano sometime in April 1999. That immediately upon discovery, said plaintiff, for herself
and on behalf and for the benefit of plaintiff LEI, made demands upon defendant Lilian S.
Soriano and the Estate of Leandro A. Soriano, Jr., to free subject property of plaintiff LEI from
such mortgage lien, by paying in full their personal indebtedness to defendant PCIB in the
principal sum of ₱20 Million. However, said defendants, for reason only known to them,
continued and still continue to ignore said demands, to the damage and prejudice of plaintiffs;
that plaintiff Lolita A. Soriano likewise made demands upon the Board of Directors of Lisam
Enterprises, Inc., to make legal steps to protect the interest of the corporation from said
fraudulent transaction, but unfortunately, until now, no such legal step was ever taken by the
Board, hence, this action for the benefit and in behalf of the corporation;
On May 15, 2000, the trial court issued the questioned Order denying both the Motion for
Reconsideration and the Motion to Admit Amended Complaint. The trial court held that no
new argument had been raised by petitioners in their motion for reconsideration to address
the fact of plaintiffs' failure to allege in the complaint that petitioner Lolita A. Soriano made
demands upon the Board of Directors of Lisam Enterprises, Inc. to take steps to protect the
interest of the corporation against the fraudulent acts of the Spouses Soriano and PCIB. The
trial court further ruled that the Amended Complaint can no longer be admitted, because the
same absolutely changed petitioners' cause of action.
Petitioners filed the present petition with this Court, alleging that what are involved are pure
questions of law, to wit:
FIRST, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR WHEN IT DISMISSED
THE ACTION ON THE GROUND THAT PETITIONER LOLITA A. SORIANO HAS NO LEGAL CAPACITY
TO SUE AS SHE IS NOT A REAL PARTY-IN-INTEREST;
SECOND, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR WHEN IT
DISMISSED THE ACTION ON THE GROUND THAT THERE IS ANOTHER ACTION PENDING
BETWEEN THE SAME PARTIES FOR THE SAME CAUSE;
THIRD, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR WHEN IT DISMISSED
THE ACTION ON THE GROUND THAT THE COMPLAINT STATES NO CAUSE OF ACTION;
FOURTH, WHETHER OR NOT THE COURT COMMITTED A REVERSIBLE ERROR WHEN IT DENIED
THE ADMISSION OF PETITIONERS' AMENDED COMPLAINT FILED AS A MATTER OF RIGHT,
AFTER THE ORDER OF DISMISSAL WAS ISSUED BUT BEFORE ITS FINALITY.
FIFTH, WHETHER OR NOT THE COURT ERRED IN DISMISSING THE ACTION, INSTEAD OF MERELY
SUSPENDING THE SAME FOLLOWING THE DOCTRINE LAID DOWN IN UNION GLASS. 3
The petition is impressed with merit.
The Court shall first delve into the matter of the propriety of the denial of the motion to admit
amended complaint. Pertinent provisions of Rule 10 of the Rules of Court provide as follows:
Sec. 2. Amendments as a matter of right. − A party may amend his pleadings once as a matter
of right at any time before a responsive pleading is served x x x.
Sec. 3. Amendments by leave of court. − Except as provided in the next preceding section,
substantial amendments may be made only upon leave of court. But such leave may be refused
if it appears to the court that the motion was made with intent to delay. x x x
It should be noted that respondents Lilian S. Soriano and the Estate of Leandro A. Soriano, Jr.
already filed their Answer, to petitioners' complaint, and the claims being asserted were made
against said parties. A responsive pleading having been filed, amendments to the complaint
may, therefore, be made only by leave of court and no longer as a matter of right. However,
in Tiu v. Philippine Bank of Communications,4 the Court discussed this rule at length, to wit:
x x x [A]fter petitioners have filed their answer, Section 3, Rule 10 of the Rules of Court
specifically allows amendment by leave of court. The said Section states:
SECTION 3. Amendments by leave of court. - Except as provided in the next preceding section,
substantial amendments may be made only upon leave of court. But such leave may be refused
if it appears to the court that the motion was made with intent to delay. Orders of the court
upon the matters provided in this section shall be made upon motion filed in court, and after
notice to the adverse party, and an opportunity to be heard.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure
in Valenzuela v. Court of Appeals, thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule
in such manner that the phrase "or that the cause of action or defense is substantially altered"
was stricken-off and not retained in the new rules. The clear import of such amendment in
Section 3, Rule 10 is that under the new rules, "the amendment may (now) substantially alter
the cause of action or defense." This should only be true, however, when despite a substantial
change or alteration in the cause of action or defense, the amendments sought to be made
shall serve the higher interests of substantial justice, and prevent delay and equally promote
the laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding."
The granting of leave to file amended pleading is a matter particularly addressed to the sound
discretion of the trial court; and that discretion is broad, subject only to the limitations that
the amendments should not substantially change the cause of action or alter the theory of the
case, or that it was not made to delay the action. Nevertheless, as enunciated in Valenzuela,
even if the amendment substantially alters the cause of action or defense, such amendment
could still be allowed when it is sought to serve the higher interest of substantial justice,
prevent delay, and secure a just, speedy and inexpensive disposition of actions and
proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of
suits and in order that the real controversies between the parties are presented, their rights
determined, and the case decided on the merits without unnecessary delay. This liberality is
greatest in the early stages of a lawsuit, especially in this case where the amendment was
made before the trial of the case, thereby giving the petitioners all the time allowed by law
to answer and to prepare for trial.1âwphi1
Furthermore, amendments to pleadings are generally favored and should be liberally allowed
in furtherance of justice in order that every case, may so far as possible, be determined on its
real facts and in order to speed up the trial of the case or prevent the circuitry of action and
unnecessary expense. That is, unless there are circumstances such as inexcusable delay or the
taking of the adverse party by surprise or the like, which might justify a refusal of permission
to amend.5
Since, as explained above, amendments are generally favored, it would have been more fitting
for the trial court to extend such liberality towards petitioners by admitting the amended
complaint which was filed before the order dismissing the original complaint became final and
executory. It is quite apparent that since trial proper had not yet even begun, allowing the
amendment would not have caused any delay. Moreover, doing
so would have served the higher interest of justice as this would provide the best opportunity
for the issues among all parties to be thoroughly threshed out and the rights of all parties
finally determined. Hence, the Court overrules the trial court's denial of the motion to admit
the amended complaint, and orders the admission of the same.
With the amendment stating "that plaintiff Lolita A. Soriano likewise made demands upon the
Board of Directors of Lisam Enterprises, Inc., to make legal steps to protect the interest of the
corporation from said fraudulent transaction, but unfortunately, until now, no such legal step
was ever taken by the Board, hence, this action for the benefit and in behalf of the
corporation," does the amended complaint now sufficiently state a cause of action? In Hi-Yield
Realty, Incorporated v. Court of Appeals,6 the Court enumerated the requisites for filing a
derivative suit, as follows:
a) the party bringing the suit should be a shareholder as of the time of the act or
transaction complained of, the number of his shares not being material;
b) he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the
board of directors for the appropriate relief but the latter has failed or refused to
heed his plea; and
c) the cause of action actually devolves on the corporation, the wrongdoing or harm
having been, or being caused to the corporation and not to the particular
stockholder bringing the suit.7
A reading of the amended complaint will reveal that all the foregoing requisites had been
alleged therein. Hence, the amended complaint remedied the defect in the original complaint
and now sufficiently states a cause of action.
Respondent PCIB should not complain that admitting the amended complaint after they
pointed out a defect in the original complaint would be unfair to them. They should have been
well aware that due to the changes made by the 1997 Rules of Civil Procedure, amendments
may now substantially alter the cause of action or defense. It should not have been a surprise
to them that petitioners would redress the defect in the original complaint by substantially
amending the same, which course of action is now allowed under the new rules.
The next question then is, upon admission of the amended complaint, would it still be proper
for the trial court to dismiss the complaint? The Court answers in the negative.
Saura v. Saura, Jr.8 is closely analogous to the present case. In Saura,9 the petitioners therein,
stockholders of a corporation, sold a disputed real property owned by the corporation, despite
the existence of a case in the Securities and Exchange Commission (SEC) between stockholders
for annulment of subscription, recovery of corporate assets and funds, etc. The sale was done
without the knowledge of the other stockholders, thus, said stockholders filed a separate case
for annulment of sale, declaration of nullity of deed of exchange, recovery of possession, etc.,
against the stockholders who took part in the sale, and the buyer of the property, filing said
case with the regular court (RTC). Petitioners therein also filed a motion to dismiss the
complaint for annulment of sale filed with the RTC, on the ground of forum shopping, lack of
jurisdiction, lack of cause of action, and litis pendentia among others. The Court held that the
complaint for annulment of sale was properly filed with the regular court, because the buyer
of the property had no intra-corporate relationship with the stockholders, hence, the buyer
could not be joined as party-defendant in the SEC case. To include said buyer as a party-
defendant in the case pending with the SEC would violate the then existing rule on jurisdiction
over intra-corporate disputes. The Court also struck down the argument that there was forum
shopping, ruling that the issue of recovery of corporate assets and funds pending with the SEC
is a totally different issue from the issue of the validity of the sale, so a decision in the SEC case
would not amount to res judicata in the case before the regular court. Thus, the Court merely
ordered the suspension of the proceedings before the RTC until the final outcome of the SEC
case.

The foregoing pronouncements of the Court are exactly in point with the issues in the present
case.1âwphi1 Here, the complaint is for annulment of mortgage with the mortgagee bank as
one of the defendants, thus, as held in Saura,10 jurisdiction over said complaint is lodged with
the regular courts because the mortgagee bank has no intra-corporate relationship with the
stockholders. There can also be no forum shopping, because there is no identity of issues. The
issue being threshed out in the SEC case is the due execution, authenticity or validity of board
resolutions and other documents used to facilitate the execution of the mortgage, while the
issue in the case filed by petitioners with the RTC is the validity of the mortgage itself executed
between the bank and the corporation, purportedly represented by the spouses Leandro and
Lilian Soriano, the President and Treasurer of petitioner LEI, respectively. Thus, there is no
reason to dismiss the complaint in this case.

IN VIEW OF THE FOREGOING, the Resolution of the Regional Trial Court of Legaspi City, Branch
4, dated November 11, 1999, dismissing petitioners’ complaint in Civil Case No. 9729, and its
Order dated May 15, 2000, denying herein petitioners’ Motion for Reconsideration and Motion
to Admit Amended Complaint, are hereby REVERSED and SET ASIDE. The Regional Trial Court
of Legaspi City, Branch 4, is hereby DIRECTED to ADMIT the Amended Complaint.

Considering further, that this case has been pending for some time and, under R.A. No. 8799,
it is now the regular courts which have jurisdiction over intra-corporate disputes, the Regional
Trial Court of Legaspi City, Branch 4 is hereby DIRECTED to PROCEED with dispatch in trying
Civil Case No. 9729.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
G.R. No. 151932 August 19, 2009 case, may so far as possible, be determined on its real facts and in order to speed up the trial
of the case or prevent the circuity of action and unnecessary expense. That is, unless there are
HENRY CHING TIU, CHRISTOPHER HALIN GO, and GEORGE CO, Petitioners, circumstances such as inexcusable delay or the taking of the adverse party by surprise or the
vs. like, which might justify a refusal of permission to amend.
PHILIPPINE BANK OF COMMUNICATIONS, Respondent.
Evidence; Documentary Evidence; It is a cardinal rule of evidence, not just one of technicality
but of substance, that the written document is the best evidence of its own contents.—It is a
Actionable Documents; The pertinent rule on actionable documents is found in Section 7, Rule
cardinal rule of evidence, not just one of technicality but of substance, that the written
8 of the Rules of Court, which provides that when the cause of action is anchored on a
document is the best evidence of its own contents. It is also a matter of both principle and
document, its substance must be set forth, and the original or a copy thereof “shall” be
policy that when the written contract is established as the repository of the parties’
attached to the pleading as an exhibit and deemed a part thereof.—As to the substitution of
stipulations, any other evidence is excluded, and the same cannot be used to substitute for
the earlier surety agreement that was annexed to the complaint with the original thereof, this
such contract, or even to alter or contradict the latter. The original surety agreement is the
Court finds that the RTC did not err in allowing the substitution. The pertinent rule on
best evidence that could establish the parties’ respective rights and obligations. In effect, the
actionable documents is found in Section 7, Rule 8 of the Rules of Court, which provides that
RTC merely allowed the amendment of the complaint, which consequently included the
when the cause of action is anchored on a document, its substance must be set forth, and the
substitution of the altered surety agreement with a copy of the original. Procedural Rules and
original or a copy thereof “shall” be attached to the pleading as an exhibit and deemed a part
Technicalities; It is well to remember at this point that rules of procedure are but mere tools
thereof, to wit: Section 7. Action or defense based on document.— Whenever an action or
designed to facilitate the attainment of justice—their strict and rigid application that would
defense is based upon a written instrument or document, the substance of such instrument or
result in technicalities that tend to frustrate rather than promote substantial justice must
document shall be set forth in the pleading, and the original or a copy thereof shall be attached
always be avoided.—It is well to remember at this point that rules of procedure are but mere
to the pleading as an exhibit, which shall be deemed to be a part of the pleading, or said copy
tools designed to facilitate the attainment of justice. Their strict and rigid application that
may with like effect be set forth in the pleading.
would result in technicalities that tend to frustrate rather than promote substantial justice
must always be avoided. Applied to the instant case, this not only assures that it would be
Actions; Pleadings and Practice; The granting of leave to file amended pleading is a matter
resolved based on real facts, but would also aid in the speedy disposition of the case by utilizing
particularly addressed to the sound discretion of the trial court, and that discretion is broad,
the best evidence possible to determine the rights and obligations of the party litigants.
subject only to the limitations that the amendments should not substantially change the cause
of action or alter the theory of the case, or that it was not made to delay the action.—The
Actions; Pleadings and Practice; Courts; The Regional Trial Court (RTC) committed no reversible
granting of leave to file amended pleading is a matter particularly addressed to the sound
error when it allowed the substitution of the altered surety agreement with that of the
discretion of the trial court; and that discretion is broad, subject only to the limitations that
original.—Contrary to petitioners’ contention, they could not be prejudiced by the substitution
the amendments should not substantially change the cause of action or alter the theory of the
since they can still present the substituted documents, Annexes “A” to A2,” as part of the
case, or that it was not made to delay the action. Nevertheless, as enunciated in Valenzuela,
evidence of their affirmative defenses. The substitution did not prejudice petitioners or delay
even if the amendment substantially alters the cause of action or defense, such amendment
the action. On the contrary, it tended to expedite the determination of the controversy.
could still be allowed when it is sought to serve the higher interest of substantial justice;
Besides, the petitioners are not precluded from filing the appropriate criminal action against
prevent delay; and secure a just, speedy and inexpensive disposition of actions and
PBCOM for attaching the altered copy of the surety agreement to the complaint. The
proceedings.
substitution of the documents would not, in any way, erase the existence of falsification, if
any. The case before the RTC is civil in nature, while the alleged falsification is criminal, which
Same; Same; The courts should be liberal in allowing the amendments to pleadings to avoid a
is separate and distinct from another. Thus, the RTC committed no reversible error when it
multiplicity of suits and in order that the real controversies between the parties are presented,
allowed the substitution of the altered surety agreement with that of the original.
their rights determined, and the case decided on the merits without unnecessary delay.—The
courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of suits
Certiorari; A petition for Certiorari under Rule 65 of the Rules of Court is intended for the
and in order that the real controversies between the parties are presented, their rights
correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess
determined, and the case decided on the merits without unnecessary delay. This liberality is
of jurisdiction.—A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the
greatest in the early stages of a lawsuit, especially in this case where the amendment was
correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess
made before the trial of the case, thereby giving the petitioners all the time allowed by law to
of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its
answer and to prepare for trial.
jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to
lack or excess of jurisdiction. For a petition for certiorari to prosper, the essential requisites
Same; Same; Amendments of Pleadings; Amendments to pleadings are generally favored and
that have to concur are: (1) the writ is directed against a tribunal, a board or any officer
should be liberally allowed in furtherance of justice in order to speed up the trial of the case or
exercising judicial or quasijudicial functions; (2) such tribunal, board or officer has acted
prevent the circuity of action and unnecessary expense.— Amendments to pleadings are
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
generally favored and should be liberally allowed in furtherance of justice in order that every
excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in
the ordinary course of law. Jurisdiction; The phrase without jurisdiction means that the court
acted with absolute lack of authority or want of legal power, right or authority to hear and
determine a cause or causes, considered either in general or with reference to a particular
matter.—The phrase without jurisdiction means that the court acted with absolute lack of
authority or want of legal power, right or authority to hear and determine a cause or causes,
considered either in general or with reference to a particular matter. It means lack of power
to exercise authority. Excess of jurisdiction occurs when the court transcends its power or acts
without any statutory authority; or results when an act, though within the general power of a
tribunal, board or officer (to do) is not authorized, and is invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power
in respect of it are wanting. Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply put, power is
exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal
hostility; and such exercise is so patent or so gross as to amount to an evasion of a positive
duty or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation
of law. The present case failed to comply with the abovestated requisites. In the instant case,
the soundness of the RTC’s Order allowing the substitution of the document involves a matter
of judgment and discretion, which cannot be the proper subject of a petition for certiorari
under Rule 65. This rule is only intended to correct defects of jurisdiction and not to correct
errors of procedure or matters in the trial court’s findings or conclusions.
DECISION
PERALTA, J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul
and set aside the Decision1 dated September 28, 2001, rendered by the Court of Appeals (CA)
in CA-G.R. SP No. 57732, dismissing the petition and affirming the assailed Orders of the
Regional Trial Court (RTC) of Cagayan de Oro City, Branch 21 in Civil Case No. 99-352, dated
December 14, 1999 and January 11, 2000.
The factual and procedural antecedents are as follows:
In June 1993, Asian Water Resources, Inc. (AWRI), represented by herein petitioners, applied
for a real estate loan with the Philippine Bank of Communications (PBCOM) to fund its purified
water distribution business. In support of the loan application, petitioners submitted a Board
Resolution2 dated June 7, 1993. The loan was guaranteed by collateral over the property
covered by Transfer Certificate of Title No. T-13020.3 The loan was eventually approved.4
In August 1996, AWRI applied for a bigger loan from PBCOM for additional capitalization using
the same Board Resolution, but without any additional real estate collateral. Considering that
the proposed additional loan was unsecured, PBCOM required all the members of the Board
of Directors of AWRI to become sureties. Thus, on August 16, 1996, a Surety Agreement 5 was
executed by its Directors and acknowledged by a notary public on the same date. All copies of
the Surety Agreement, except two, were kept by PBCOM. Of the two copies kept by the notary
public, one copy was retained for his notarial file and the other was sent to the Records
Management and Archives Office, through the Office of the RTC Clerk of Court.6
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to surrender and/or
assign in its favor, all the present properties of the former to apply as dacion en pago for
AWRI’s existing loan obligation to the bank.7 On January 11, 1999, PBCOM sent a reply denying
the request. On May 12, 1999, PBCOM sent a letter to petitioners demanding full payment of
its obligation to the bank.8
Its demands having remained unheeded, PBCOM instructed its counsel to file a complaint for
collection against petitioners. The case was docketed as Civil Case No. 99-352.
On July 3, 1999, petitioners filed their Answer. It alleged, among other things, that they were
not personally liable on the promissory notes, because they signed the Surety Agreement in
their capacities as officers of AWRI. They claimed that the Surety Agreement attached to the
complaint as Annexes "A" to "A-2"9 were falsified, considering that when they signed the same,
the words "In his personal capacity" did not yet appear in the document and were merely
intercalated thereon without their knowledge and consent.10
In support of their allegations, petitioners attached to their Answer a certified photocopy of
the Surety Agreement issued on March 25, 1999 by the Records Management and Archives
Office in Davao City,11 showing that the words "In his personal capacity" were not found at the
foot of page two of the document where their signatures appeared.12
Because of this development, PBCOM’s counsel searched for and retrieved the file copy of the
Surety Agreement. The notarial copy showed that the words "In his personal capacity" did not
appear on page two of the Surety Agreement.13
Petitioners’ counsel then asked PBCOM to explain the alteration appearing on the agreement.
PBCOM subsequently discovered that the insertion was ordered by the bank auditor. It alleged
that when the Surety Agreement was inspected by the bank auditor, he called the attention of
the loans clerk, Kenneth Cabahug, as to why the words "In his personal capacity" were not
indicated under the signature of each surety, in accordance with bank standard operating
procedures. The auditor then ordered Mr. Cabahug to type the words "In his personal capacity"
below the second signatures of petitioners. However, the notary public was never informed of
the insertion.14 Mr. Cabahug subsequently executed an affidavit15 attesting to the
circumstances why the insertion was made.
PBCOM then filed a Reply and Answer to Counterclaim with Motion for Leave of Court to
Substitute Annex "A" of the Complaint,16 wherein it attached the duplicate original copy
retrieved from the file of the notary public. PBCOM also admitted its mistake in making the
insertion and explained that it was made without the knowledge and consent of the notary
public. PBCOM maintained that the insertion was not a falsification, but was made only to
speak the truth of the parties’ intentions. PBCOM also contended that petitioners were already
primarily liable on the Surety Agreement whether or not the insertion was made, having
admitted in their pleadings that they voluntarily executed and signed the Surety Agreement in
the original form. PBCOM, invoking a liberal application of the Rules, emphasized that the
motion incorporated in the pleading can be treated as a motion for leave of court to amend
and admit the amended complaint pursuant to Section 3, Rule 10 of the Rules of Court.
On December 14, 1999, the RTC issued an Order17 allowing the substitution of the altered
document with the original Surety Agreement, the pertinent portion of which reads:
August 16, 1996 attached as Annexes "A" to "A-2" of the reply and answer Resolving the
Motion to Substitute Annexes "A" to "A-2" of the complaint and the opposition thereto by the
defendant, this Court, in the interest of justice, hereby allows the substitution of said Annexes
"A" to "A-2" of the complaint with the duplicate original of notarial copy of the Agreement
dated to counter-claim.
SO ORDERED.
Petitioners filed a motion for reconsideration,18 but it was denied in the Order19 dated January
11, 2000, to wit:
Resolving the motion for reconsideration and the opposition thereto, the Court finds the
motion substantially a reiteration of the opposition to plaintiff’s motion.
Additionally, the instant motion for reconsideration treats on evidentiary matter which can be
properly ventilated in the trial proper, hence, there is no cogent reason to disturb the Court’s
order of December 14, 1999.
SO ORDERED.
Aggrieved, petitioners sought recourse before the CA via a petition for certiorari under Rule
65 of the Rules of Court, docketed as CA-G.R. SP No. 57732.
Petitioners claimed that the RTC acted without or in excess of jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction in denying their motion for
reconsideration and in allowing PBCOM to substitute the altered copy of the Surety Agreement
with the duplicate original notarial copy thereof considering that the latter’s cause of action
was solely and principally founded on the falsified document marked as Annexes "A" to "A-
2."20
On September 28, 2001, the CA rendered a Decision dismissing the petition for lack of merit,
the decretal portion of which reads:
WHEREFORE, foregoing considered, the instant petition is hereby DENIED DUE COURSE and,
accordingly, DISMISSED for lack of merit. The assailed Orders dated December 14, 1999 and
January 11, 2000 of the Regional Trial Court of Cagayan de Oro City, Branch 21, are hereby
AFFIRMED in toto.
SO ORDERED.21
Hence, the petition assigning the following errors:
I
The COURT committed a reversible error in affirming in toto the order of the lower court
allowing the substitution of the falsified document by relying on the provision of section 3, rule
10 of the rules of Court.
II
Acting as the court on the petition for certiorari, the court committed a reversible error having
no jurisdiction to rule on the obligation of the petitioners based on the falsified document
III
The court erred in giving credence to the allegation of respondent bank that from August 15
to December 9, 1997 asian water resources inc. obtained several availments of new bigger and
additional loans totalLing p2,030,000.00 evidenced by 4 promissory notes marked as annexes
"B," "B-1," "B-2" and "B-3."
IV
The court failed to consider the misapplication of the principle of equity committed by the
lower court in ordering the substitution of the falsified document.22
Petitioners argue that the CA committed a reversible error in affirming the Order of the RTC
allowing the substitution of the document by relying on Section 3, Rule 10 of the Rules of Court.
Petitioners assert that the Rules do not allow the withdrawal and substitution of a "falsified
document" once discovered by the opposing party.
Petitioners maintain that PBCOM’s cause of action was solely and principally founded on the
alleged "falsified document" originally marked as
Annexes "A" to "A-2." Thus, the "withdrawal" of the document results in the automatic
withdrawal of the whole complaint on the ground that there is no more cause of action to be
maintained or enforced by plaintiff against petitioners. Also, petitioners argue that if the
substitution will be allowed, their defenses that were anchored on Annexes "A" to "A-2" would
be gravely affected. Moreover, considering that the said document was already removed,
withdrawn, and disregarded by the RTC, the withdrawal and substitution of the document
would prevent petitioners from introducing the falsified documents during the trial as part of
their evidence.23
Petitioners submit that the RTC misapplied the principle of equity when it allowed PBCOM to
substitute the document with the original agreement. Petitioners also claim that the remedy
of appeal after the termination of the case in the RTC would become ineffective and
inadequate if the Order of the RTC allowing the "withdrawal" and "substitution" of the
document would not be nullified, because the falsified document would no longer be found in
the records of the case during the appeal.24
Petitioners contend that the CA went beyond the issue raised before it when it interpreted the
provisions of the Surety Agreement, particularly paragraph 4 thereof, and then ruled on the
obligations of the parties based on
the document. Petitioners posit that the CA prematurely ruled on petitioners’ obligations,
considering that their obligations should be determined during trial on the merits, after the
parties have been given the opportunity to present their evidence in support of their
respective claims. Petitioners stress that the CA went into the merit of the case when it gave
credence to the statement of fact of PBCOM that "From August 15 to December 9, 1997, Asian
Water Resources, Inc. obtained several availments on its additional loans totalling
₱2,030,000.00 as evidenced by 4 promissory notes marked as Annexes B, B-1, B-2, and B-3.
Thus, the conclusion of the CA in declaring the petitioners liable as sureties violated their right
to due process.25
For its part, PBCOM argues that since the complaint is based on an actionable document, i.e.,
the surety agreement, the original or a copy thereof should be attached to the pleading as an
exhibit, which shall be deemed part of the pleading. Considering that the surety agreement is
annexed to the complaint, it is an integral part thereof and its substitution with another copy
is in the nature of a substantial amendment, which is allowed by the Rules, but with prior leave
of court.
Moreover, PBCOM alleges that since the Rules provides that substantial amendments may be
made upon leave of court, the authority of the RTC to allow the amendment is discretionary.
Thus, the CA correctly held that the act of granting the said substitution was within the clear
and proper discretion of the RTC.
The petition is without merit.
As to the substitution of the earlier surety agreement that was annexed to the complaint with
the original thereof, this Court finds that the RTC did not err in allowing the substitution.
The pertinent rule on actionable documents is found in Section 7, Rule 8 of the Rules of Court,
which provides that when the cause of action is anchored on a document, its substance must
be set forth, and the original or a copy thereof "shall" be attached to the pleading as an exhibit
and deemed a part thereof, to wit:
Section 7. Action or defense based on document. – Whenever an action or defense is based
upon a written instrument or document, the substance of such instrument or document shall
be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading
as an exhibit, which shall be deemed to be a part of the pleading, or said copy may with like
effect be set forth in the pleading.
With respect to PBCOM’s right to amend its complaint, including the documents annexed
thereto, after petitioners have filed their answer, Section 3, Rule 10 of the Rules of Court
specifically allows amendment by leave of court. The said Section states:
SECTION 3. Amendments by leave of court. Except as provided in the next preceding section,
substantial amendments may be made only upon leave of court. But such leave may be refused
if it appears to the court that the motion was made with intent to delay. Orders of the court
upon the matters provided in this section shall be made upon motion filed in court, and after
notice to the adverse party, and an opportunity to be heard.
This Court has emphasized the import of Section 3, Rule 10 of the 1997 Rules of Civil Procedure
in Valenzuela v. Court of Appeals,26 thus:
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule
in such manner that the phrase "or that the cause of action or defense is substantially altered"
was stricken-off and not retained in the new rules. The clear import of such amendment in
Section 3, Rule 10 is that under the new rules, "the amendment may (now) substantially alter
the cause of action or defense." This should only be true, however, when despite a substantial
change or alteration in the cause of action or defense, the amendments sought to be made
shall serve the higher interests of substantial justice, and prevent delay and equally promote
the laudable objective of the rules which is to secure a "just, speedy and inexpensive
disposition of every action and proceeding."27
The granting of leave to file amended pleading is a matter particularly addressed to the sound
discretion of the trial court; and that discretion is broad, subject only to the limitations that
the amendments should not substantially change the cause of action or alter the theory of the
case, or that it was not made to delay the action.28 Nevertheless, as enunciated in Valenzuela,
even if the amendment substantially alters the cause of action or defense, such amendment
could still be allowed when it is sought to serve the higher interest of substantial justice;
prevent delay; and secure a just, speedy and inexpensive disposition of actions and
proceedings.
The courts should be liberal in allowing amendments to pleadings to avoid a multiplicity of
suits and in order that the real controversies between the parties are presented, their rights
determined, and the case decided on the merits without unnecessary delay. This liberality is
greatest in the early stages of a lawsuit, especially in this case where the amendment was
made before the trial of the case, thereby giving the petitioners all the time allowed by law to
answer and to prepare for trial.29
Furthermore, amendments to pleadings are generally favored and should be liberally allowed
in furtherance of justice in order that every case, may so far as possible, be determined on its
real facts and in order to speed up the trial of the case or prevent the circuity of action and
unnecessary expense. That is, unless there are circumstances such as inexcusable delay or the
taking of the adverse party by surprise or the like, which might justify a refusal of permission
to amend.30
In the present case, there was no fraudulent intent on the part of PBCOM in submitting the
altered surety agreement. In fact, the bank admitted that it was a mistake on their part to have
submitted it in the first place instead of the original agreement. It also admitted that, through
inadvertence, the copy that was attached to the complaint was the copy wherein the words
"IN HIS PERSONAL CAPACITY" were inserted to conform to the bank’s standard practice. This
alteration was made without the knowledge of the notary public. PBCOM’s counsel had no
idea that what it submitted was the altered document, thereby necessitating the substitution
of the surety agreement with the original thereof, in order that the case would be judiciously
resolved.
Verily, it is a cardinal rule of evidence, not just one of technicality but of substance, that the
written document is the best evidence of its own contents. It is also a matter of both principle
and policy that when the written contract is established as the repository of the parties’
stipulations, any other evidence is excluded, and the same cannot be used to substitute for
such contract, or even to alter or contradict the latter. 31 The original surety agreement is the
best evidence that could establish the parties’ respective rights and obligations. In effect, the
RTC merely allowed the amendment of the complaint, which consequently included the
substitution of the altered surety agreement with a copy of the original.
It is well to remember at this point that rules of procedure are but mere tools designed to
facilitate the attainment of justice. Their strict and rigid application that would result in
technicalities that tend to frustrate rather than promote substantial justice must always be
avoided.32 Applied to the instant case, this not only assures that it would be resolved based on
real facts, but would also aid in the speedy disposition of the case by utilizing the best evidence
possible to determine the rights and obligations of the party- litigants.
Moreover, contrary to petitioners’ contention, they could not be prejudiced by the
substitution since they can still present the substituted documents, Annexes "A" to A-2," as
part of the evidence of their affirmative defenses. The substitution did not prejudice
petitioners or delay the action. On the contrary, it tended to expedite the determination of the
controversy. Besides, the petitioners are not precluded from filing the appropriate criminal
action against PBCOM for attaching the altered copy of the surety agreement to the complaint.
The substitution of the documents would not, in any way, erase the existence of falsification,
if any. The case before the RTC is civil in nature, while the alleged falsification is criminal, which
is separate and distinct from another. Thus, the RTC committed no reversible error when it
allowed the substitution of the altered surety agreement with that of the original.
A Petition for Certiorari under Rule 65 of the Rules of Court is intended for the correction of
errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of
jurisdiction. Its principal office is only to keep the inferior court within the parameters of its
jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to
lack or excess of jurisdiction.33
For a petition for certiorari to prosper, the essential requisites that have to concur are: (1) the
writ is directed against a tribunal, a board or any officer exercising judicial or quasi-judicial
functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no
appeal or any plain, speedy and adequate remedy in the ordinary course of law.341avvphi1
The phrase without jurisdiction means that the court acted with absolute lack of authority or
want of legal power, right or authority to hear and determine a cause or causes, considered
either in general or with reference to a particular matter. It means lack of power to exercise
authority. Excess of jurisdiction occurs when the court transcends its power or acts without
any statutory authority; or results when an act, though within the general power of a tribunal,
board or officer (to do) is not authorized, and is invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power
in respect of it are wanting. Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply put, power is
exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal
hostility; and such exercise is so patent or so gross as to amount to an evasion of a positive
duty or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation
of law.35
The present case failed to comply with the above-stated requisites. In the instant case, the
soundness of the RTC’s Order allowing the substitution of the document involves a matter of
judgment and discretion, which cannot be the proper subject of a petition for certiorari under
Rule 65. This rule is only intended to correct defects of jurisdiction and not to correct errors of
procedure or matters in the trial court’s findings or conclusions.
However, this Court agrees with the petitioners’ contention that the CA should not have made
determinations as regards the parties’ respective rights based on the surety agreement. The
CA went beyond the issues brought before it and effectively preempted the RTC in making its
own determinations. It is to be noted that the present case is still pending determination by
the RTC. The CA should have been more cautious and not have gone beyond the issues
submitted before it in the petition for certiorari; instead, it should have squarely addressed
whether or not there was grave abuse of discretion on the part of the RTC in issuing the Orders
dated December 14, 1999 and January 11, 2000.
WHEREFORE, premises considered, the petition is DENIED. Subject to the above disquisitions,
the Decision of the Court of Appeals in CA-G.R. SP No. 57732, dated September 28, 2001, and
the Orders of the Regional Trial Court of Cagayan de Oro City, Branch 21, in Civil Case No. 99-
352, dated December 14, 1999 and January 11, 2000, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
G.R. No. 133657 May 29, 2002
REMINGTON INDUSTRIAL SALES CORPORATION, petitioner,
vs.
THE COURT OF APPEALS and BRITISH STEEL (ASIA), LTD., respondents.
Actions; Pleadings and Practice; Amendment of Complaints; A complaint can still be amended
as a matter of right before an answer has been filed, even if there is a pending proceeding for
its dismissal before the higher court—before the filing of an answer, the plaintiff has the
absolute right to amend the complaint whether a new cause of action or change in theory is
introduced. —The basic issue in this case is whether or not the Court of Appeals, by granting
the extraordinary writ of certiorari, correctly ordered the dismissal of the complaint for failure
to state a cause of action, despite the fact that petitioner exercised its right to amend the
defective complaint under Section 2, Rule 10 of the Rules of Court. Stated differently, the query
posed before us is: can a complaint still be amended as a matter of right before an answer has
been filed, even if there was a pending proceeding for its dismissal before the higher court?
Section 2, Rule 10 of the Revised Rules of Court explicitly states that a pleading maybe
amended as a matter of right before a responsive pleading is served. This only means that prior
to the filing of an answer, the plaintiff has the absolute right to amend the complaint whether
a new cause of action or change in theory is introduced. The reason for this rule is implied in
the subsequent Section 3 of Rule 10. Under this provision, substantial amendment of the
complaint is not allowed without leave of court after an answer has been served, because any
material change in the allegations contained in the complaint could prejudice the rights of the
defendant who has already set up his defense in the answer.
Same; Same; Same; It cannot be said that the defendant’s rights are violated by changes made
in the complaint if he has yet to file an answer thereto.—Conversely, it cannot be said that the
defendant’s rights have been violated by changes made in the complaint if he has yet to file an
answer thereto. In such an event, the defendant has not presented any defense that can be
altered or affected by the amendment of the complaint in accordance with Section 2 of Rule
10. The defendant still retains the unqualified opportunity to address the allegations against
him by properly setting up his defense in the answer. Considerable leeway is thus given to the
plaintiff to amend his complaint once, as a matter of right, prior to the filing of an answer by
the defendant. Same; Same; Same; The right granted to the plaintiff under procedural law to
amend the complaint before an answer has been served is not precluded by the filing of a
motion to dismiss.—The right granted to the plaintiff under procedural law to amend the
complaint before an answer has been served is not precluded by the filing of a motion to
dismiss or any other proceeding contesting its sufficiency. Were we to conclude otherwise, the
right to amend a pleading under Section 2, Rule 10 will be rendered nugatory and ineffectual,
since all that a defendant has to do to foreclose this remedial right is to challenge the adequacy
of the complaint before he files an answer.
Same; Same; Same; The Court finds no practical advantage in ordering the dismissal of the
complaint and for the plaintiff to refile the same, when he can still clearly amend the complaint
as a matter of right.—In this case, the remedy espoused by the appellate court in its assailed
judgment will precisely result in multiple suits, involving the same set of facts and to which the
defendants would likely raise the same or, at least, related defenses. Plainly stated, we find no
practical advantage in ordering the dismissal of the complaint against respondent and for
petitioner to refile the same, when the latter can still clearly amend the complaint as a matter
of right. The amendment of the complaint would not prejudice respondents or delay the
action, as this would, in fact, simplify the case and expedite its disposition.
Same; Same; Same; Where some but not all the defendants have answered, the plaintiff may
still amend its complaint once, as a matter of right, in respect to claims asserted solely against
the nonanswering defendant, but not as to claims asserted against the other defendants.—The
fact that the other defendants below has filed their answers to the complaint does not bar
petitioner’s right to amend the complaint as against respondent. Indeed, where some but not
all the defendants have answered, the plaintiff may still amend its complaint once, as a matter
of right, in respect to claims asserted solely against the nonanswering defendant, but not as to
claims asserted against the other defendants.
YNARES-SANTIAGO, J.:
Before us is a petition for review under Rule 45 of the Rules of Court assailing the decision of
the Court of Appeals in CA-G.R. SP No. 44529 dated February 24, 19981, which granted the
petition for certiorari filed by respondent British Steel Asia Ltd. (British Steel) and ordered the
dismissal of petitioner Remington Industrial Sales Corporation’s (Remington) complaint for
sum of money and damages. Also assailed in this petition is the resolution 2 of the Court of
Appeals denying petitioner’s motion for reconsideration.
The facts of the case, as culled from the records, are as follows:
On August 21, 1996, petitioner filed a complaint3 for sum of money and damages arising from
breach of contract, docketed as Civil Case No. 96-79674, before the sala of Judge Marino M.
De la Cruz of the Regional Trial Court of Manila, Branch 22. Impleaded as principal defendant
therein was Industrial Steels, Ltd. (ISL), with Ferro Trading GMBH (Ferro) and respondent
British Steel as alternative defendants.
ISL and respondent British Steel separately moved for the dismissal of the complaint on the
ground that it failed to state a cause of action against them. On April 7, 1997, the RTC denied
the motions to dismiss,4 as well as the ensuing motion for reconsideration. 5 ISL then filed its
answer to the complaint.
On the other hand, respondent British Steel filed a petition for certiorari and prohibition before
the Court of Appeals,6 docketed as CA-G.R. SP No. 44529. Respondent claimed therein that the
complaint did not contain a single averment that respondent committed any act or is guilty of
any omission in violation of petitioner’s legal rights. Apart from the allegation in the
complaint’s "Jurisdictional Facts" that:
1.05. Defendants British Steel (Asia) Ltd. and Ferro Trading Gmbh, while understood
by the plaintiff as mere suppliers of goods for defendant ISL, are impleaded as party
defendants pursuant to Section 13, Rule 3 of the Revised Rules of Court.7
no other reference was made to respondent that would constitute a valid cause of action
against it. Since petitioner failed to plead any cause of action against respondent as alternative
defendant under Section 13, Rule 3,8 the trial court should have ordered the dismissal of the
complaint insofar as respondent was concerned.
Meanwhile, petitioner sought to amend its complaint by incorporating therein additional
factual allegations constitutive of its cause of action against respondent. Pursuant to Section
2, Rule 109 of the Rules of Court, petitioner maintained that it can amend the complaint as a
matter of right because respondent has not yet filed a responsive pleading thereto.10
Subsequently, petitioner filed a Manifestation and Motion11 in CA-G.R. SP No. 44529 stating
that it had filed a Motion to Admit Amended Complaint together with said Amended Complaint
before the trial court. Hence, petitioner prayed that the proceedings in the special civil action
be suspended.
On January 29, 1998, the trial court ruled on petitioner’s Motion to Admit Amended Complaint
thus:
WHEREFORE, the Amended Complaint is NOTED and further proceedings thereon
and action on the other incidents as aforementioned are hereby held in abeyance
until final resolution by the Honorable Court of Appeals (Special 6th Division) of the
petition for certiorari and prohibition of petitioner (defendant British) and/or
Manifestations and Motions of therein private respondent, herein plaintiff.
SO ORDERED.12
Thereafter, on February 24, 1998, the Court of Appeals rendered the assailed decision in CA-
G.R. SP No. 44529 as follows:
WHEREFORE, this Court grants the writ of certiorari and orders the respondent judge
to dismiss without prejudice the Complaint in Civil Case No. 96-79674 against
petitioner British Steel (Asia) Ltd. Costs against private respondent.
SO ORDERED.13
In the same decision, the Court of Appeals addressed petitioner’s prayer for suspension of
proceedings in this wise:
The incident which transpired after the filing of the instant petition for certiorari and
prohibition are immaterial in the resolution of this petition. What this Court is called
upon to resolve is whether the lower court committed grave abuse of discretion
when it denied petitioner’s motion to dismiss the complaint against it. The admission
or rejection by the lower court of said amended complaint will not, insofar as this
Court is concerned, impinge upon the issue of whether or not said court gravely
abused its discretion in denying petitioner’s motion to dismiss.14
Petitioner filed a motion for reconsideration of the appellate court’s decision, which was
denied in a resolution dated April 28, 1998. Hence, this petition, anchored on the following
grounds:
-I-
THE HON. COURT OF APPEALS ERRED IN ORDERING THE DISMISSAL OF THE
COMPLAINT AGAINST THE PRIVATE RESPONDENT FOR LACK OF CAUSE OF ACTION
UNDER THE ORIGINAL COMPLAINT EVEN AS SAID COMPLAINT WAS ALREADY
AMENDED AS A MATTER OF RIGHT AND SUFFICIENT CAUSES OF ACTION ARE
AVERRED IN THE AMENDED COMPLAINT, IN GROSS VIOLATION OF SEC. 2, RULE 10
OF THE 1997 RULES OF CIVIL PROCEDURE.
-II-
THE HON. COURT OF APPEALS ERRED IN HOLDING THAT IF THE PETITIONER WANTS
TO PURSUE ITS CASE AGAINST THE PRIVATE RESPONDENT, IT HAS TO REFILE THE
COMPLAINT, THUS PRE-EMPTING THE RIGHT OF THE LOWER COURT TO RULE ON
THE AMENDED COMPLAINT AND COMPELLING THE PETITIONER TO LITIGATE ITS
CAUSES OF ACTION AGAINST THE PRIVATE RESPONDENT AS AN ALTERNATIVE
DEFENDANT IN A SEPARATE ACTION, THEREBY ABETTING MULTIPLICITY OF SUITS. 15
The basic issue in this case is whether or not the Court of Appeals, by granting the
extraordinary writ of certiorari, correctly ordered the dismissal of the complaint for failure to
state a cause of action, despite the fact that petitioner exercised its right to amend the
defective complaint under Section 2, Rule 10 of the Rules of Court. Stated differently, the query
posed before us is: can a complaint still be amended as a matter of right before an answer has
been filed, even if there was a pending proceeding for its dismissal before the higher court?
Section 2, Rule 1016 of the Revised Rules of Court explicitly states that a pleading may be
amended as a matter of right before a responsive pleading is served. This only means that prior
to the filing of an answer, the plaintiff has the absolute right to amend the complaint whether
a new cause of action or change in theory is introduced.17 The reason for this rule is implied in
the subsequent Section 3 of Rule 1018. Under this provision, substantial amendment of the
complaint is not allowed without leave of court after an answer has been served, because any
material change in the allegations contained in the complaint could prejudice the rights of the
defendant who has already set up his defense in the answer.
Conversely, it cannot be said that the defendant’s rights have been violated by changes made
in the complaint if he has yet to file an answer thereto. In such an event, the defendant has
not presented any defense that can be altered19 or affected by the amendment of the
complaint in accordance with Section 2 of Rule 10. The defendant still retains the unqualified
opportunity to address the allegations against him by properly setting up his defense in the
answer. Considerable leeway is thus given to the plaintiff to amend his complaint once, as a
matter of right, prior to the filing of an answer by the defendant.
The right granted to the plaintiff under procedural law to amend the complaint before an
answer has been served is not precluded by the filing of a motion to dismiss 20 or any other
proceeding contesting its sufficiency. Were we to conclude otherwise, the right to amend a
pleading under Section 2, Rule 10 will be rendered nugatory and ineffectual, since all that a
defendant has to do to foreclose this remedial right is to challenge the adequacy of the
complaint before he files an answer.

Moreover, amendment of pleadings is favored and should be liberally allowed in the

furtherance of justice in order to determine every case as far as possible on its merits without
regard to technicalities. This principle is generally recognized to speed up trial and save party
litigants from incurring unnecessary expense, so that a full hearing on the merits of every case
may be had and multiplicity of suits avoided.21

In this case, the remedy espoused by the appellate court in its assailed judgment will precisely
result in multiple suits, involving the same set of facts and to which the defendants would likely
raise the same or, at least, related defenses. Plainly stated, we find no practical advantage in
ordering the dismissal of the complaint against respondent and for petitioner to re-file the
same, when the latter can still clearly amend the complaint as a matter of right. The
amendment of the complaint would not prejudice respondents or delay the action, as this
would, in fact, simplify the case and expedite its disposition.

The fact that the other defendants below has filed their answers to the complaint does not bar
petitioner’s right to amend the complaint as against respondent. Indeed, where some but not
all the defendants have answered, the plaintiff may still amend its complaint once, as a matter
of right, in respect to claims asserted solely against the non-answering defendant, but not as
to claims asserted against the other defendants.22

Furthermore, we do not agree with respondent’s claim that it will be prejudiced by the
admission of the Amended Complaint because it had spent time, money and effort to file its
petition before the appellate court.23 We cannot see how the result could be any different for
respondent, if petitioner merely re-filed the complaint instead of being allowed to amend it.
As adverted to earlier, amendment would even work to respondent’s advantage since it will
undoubtedly speed up the proceedings before the trial court. Consequently, the amendment
should be allowed in the case at bar as a matter of right in accordance with the rules.

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of
Appeals in CA-G.R. SP No. 44529 dated February 24, 1998 and April 28, 1998, respectively, are
REVERSED and SET ASIDE. The Regional Trial Court of Manila, Branch 22 is further ordered to
ADMIT petitioner’s Amended Complaint in Civil Case No. 96-79674 and to conduct further
proceedings in said case.

SO ORDERED.
G.R. No. 193650 October 8, 2014 Petitioner, versus Hon. Eddie R. Roxas (in his capacity as the former Pairing Judge), Hon.
Panambulan M Mimbisa (in his capacity as the Presiding Judge of RTC, Branch 37, General
GEORGE PIDLIP P. PALILEO and JOSE DE LA CRUZ, Petitioners, Santos City), Sheriff Marilyn P. Alano, Sheriff Ramon A. Castillo, George Philip P. Palileo, and
vs. Jose Dela Cruz, Respondents," as well as its August 23, 2010 Resolution3 denying
PLANTERS DEVELOPMENT BANK, Respondent. reconsideration of the assailed amended judgment.

Pleadings and Practice; Service of Pleadings by Courier Service; Service and filing of pleadings Factual Antecedents
by courier service is a mode not provided in the Rules.—Indeed, its filing or service of a copy
thereof to petitioners by courier service cannot be trivialized. Service and filing of pleadings by In a June 15, 2006 Decision4 rendered by the Regional Trial Court (RTC) of General Santos City,
courier service is a mode not provided in the Rules. This is not to mention that PDB sent a copy Branch 37, in an action for specific performance/sum of money with damages docketed as Civil
of its omnibus motion to an address or area which was not covered by LBC courier service at Case No. 6474 and entitled "George Philip P. Palileo and Jose Dela Cruz, Plaintiffs, versus,
the time. Realizing its mistake, PDB refiled and resent the omnibus motion by registered mail, Planters Development Bank, Engr. Edgardo R. Torcende, Arturo R. delos Reyes, Benjamin N.
which is the proper mode of service under the circumstances. By then, however, the 15day Tria, Mao Tividad and Emmanuel Tesalonia, Defendants," it was held thus:
period had expired.
Before this Court is a complaint for specific performance and/or sum of money and damages
Remedial Law; Civil Procedure; Judgments; Doctrine of Finality of Judgments; Finality of a with prayer for the issuance of writs of preliminary attachment and preliminary injunction filed
judgment or order becomes a fact upon the lapse of the reglementary period to appeal if no by Plaintiff George Philip Palileo and Jose L. Dela Cruz against Engr. Edgardo R. Torcende,
appeal is perfected, and is conclusive as to the issues actually determined and to every matter Planters Development Bank (defendant Bank), Arturo R. Delos Reyes, Benjamin N. Tria, Mao
which the parties might have litigated and have decided as incident to or essentially connected Tividad, and Emmanuel Tesalonia on 22 December 1998.
with the subject matter of the litigation, and every matter coming within the legitimate purview
of the original action both in respect to matters of claim and of defense.—Since PDB’s Omnibus
After summons together with the verified Complaint and its annexes were duly served upon
Motion for Reconsideration and for New Trial was filed late and the 15day period within which
defendants, the latter answered. During Pre-Trial conference defendant Bank manifested [its]
to appeal expired without PDB filing the requisite notice of appeal, it follows that its right to
intention of settling the case amicably and several attempts to explore the said settlement
appeal has been foreclosed; it may no longer question the trial court’s Decision in any other
[were] made as per records of this case. In the last pre-trial hearing dated 17 November 2000,
manner. “Settled is the rule that a party is barred from assailing the correctness of a judgment
only plaintiffs[,] George Philip Palileo and Jose L. Dela Cruz[,] and their counsel appeared, thus,
not appealed from by him.” The “presumption that a party who did not interject an appeal is
the latter move [sic] for the presentation of evidence ex-parte, which was granted by the Court
satisfied with the adjudication made by the lower court” applies to it. There being no appeal
with the reservation of verifying the return card [to determine] whether the order for the pre-
taken by PDB from the adverse judgment of the trial court, its Decision has become final and
trial was indeed received by defendants. Finally, [at the] 21 November 2001 hearing, x x x
can no longer be reviewed, much less reversed, by this Court. “Finality of a judgment or order
defendants [again] failed to appear and their failure to file pre-trial brief was noted; thus
becomes a fact upon the lapse of the reglementary period to appeal if no appeal is perfected,
[plaintiffs were] allowed to present evidence ex-parte before the Clerk of Court.
and is conclusive as to the issues actually determined and to every matter which the parties
might have litigated and have x x x decided as incident to or essentially connected with the
subject matter of the litigation, and every matter coming within the legitimate purview of the xxxx
original action both in respect to matters of claim and of defense.” And “[i]n this jurisdiction,
the rule is that when a judgment becomes final and executory, it is the ministerial duty of the IN LIGHT OF THE FOREGOING, defendants are hereby ORDERED to jointly and severally PAY
court to issue a writ of execution to enforce the judgment”; “execution will issue as a matter plaintiffs as follows:
of right x x x (a) when the judgment has become final and executory; (b) when the judgment
debtor has renounced or waived his right of appeal; [or] (c) when the period for appeal has i) Actual Damages;
lapsed without an appeal having been filed.

a) Plaintiff George Philip Palileo[,] the amount of Two Million Six Hundred
Five Thousand Nine [sic] Seventy Two Pesos and Ninety Two Centavos
DECISION (₱2,605,972.92), with 12% compounded interest [per annum] reckoned
from the filing of this case until full settlement thereof;
DEL CASTILLO, J.:
b) Plaintiff Jose R. Dela Cruz[,] the amount of One Million Five Hundred
This Petition for Review on Certiorari1 assails the July 28, 2009 Amended Decision2 of the Twenty Nine Thousand Five Hundred Eight Thousand [sic] and Eighty
Court of Appeals (CA) in CA-G.R. SP No. 01317-MIN, entitled "Planters Development Bank,
 Centavos (₱1,529,508.80), with 12% compounded interest [per annum]
reckoned from the filing of this case until full settlement thereof;
ii) Moral damages in the amount of Five Hundred Thousand Pesos (₱500,000.00)
each;
iii) Exemplary Damages in the amount of Five Hundred Thousand Pesos
(₱500,000.00) each;
iv) Attorney’s Fees in the amount of Five Hundred Thousand [Pesos] (₱500,000.00)
each x x x and to pay the costs.
SO ORDERED.5
Respondent Planters Development Bank (PDB) received a copy of the RTC Decision on July 17,
2006.
On July 31, 2006, PDB filed by private courier service – specifically LBC6 – an Omnibus Motion
for Reconsideration and for New Trial,7 arguing therein that the trial court’s Decision was
based on speculation and inadmissible and selfserving pieces of evidence; that it was declared
in default after its counsel failed to attend the pre-trial conference on account of the distance
involved and difficulty in booking a flight to General Santos City; that it had adequate and
sufficient defenses to the petitioners’ claims; that petitioners’ claims are only against its
codefendant, Engr. Edgardo R. Torcende [Torcende]; that the award of damages and attorney’s
fees had no basis; and that in the interest of justice, it should be given the opportunity to cross-
examine the petitioners’ witnesses, and thereafter present its evidence.
Petitioners’ copy of the Omnibus Motion for Reconsideration and for New Trial was likewise
sent on July 31, 2006 by courier service through LBC, but in their address of record – Tupi,
South Cotabato – there was no LBC service at the time.
On August 2, 2006, PDB filed with the RTC another copy of the Omnibus Motion for
Reconsideration and for New Trial via registered mail; another copy thereof was
simultaneously sent to petitioners by registered mail as well.
Meanwhile, petitioners moved for the execution of the Decision pending appeal.
In an August 30, 2006 Order,8 the RTC denied the Omnibus Motion for Reconsideration and
for New Trial, while it granted petitioners’ motion for execution pending appeal, which it
treated as a motion for the execution of a final and executory judgment. The trial court held,
as follows:
Anent the first motion, records show that the Omnibus Motion for Reconsideration and for
New Trial dated 28 July 2006 was initially filed via an LBC courier on 28 July 2006 and was
actually received by the Court on 31 July 2006, which was followed by filing of the same motion
thru registered mail on 2 August 2006. Said motion was set for hearing by the movant on 18
August 2006 or 16 days after its filing.
The motion fails to impress. Section 5, Rule 159 of the 1997 Rules of Civil Procedure as
amended is pertinent thus:
Section 5. Notice of hearing. – The notice of hearing shall be addressed to all parties concerned,
and shall specify the time and date of the hearing which must not be later than ten (10) days
after the filing of the motion. (Underscoring and italics supplied)
The aforesaid provision requires [that] every motion shall be addressed to all parties
concerned, and shall specify the time and date of the hearing NOT later than ten (10) days
after the filing of the motion. Being a litigated motion, the aforesaid rule should have been
complied [with]. Its noncompliance renders it defective.
[The] Rule is settled that a motion in violation thereof is pro forma and a mere scrap of paper.
It presents no question which the court could decide [upon]. In fact, the court has NO reason
to consider it[;] neither [does] the clerk of court [have] the right to receive the same. Palpably,
the motion is nothing but an empty formality deserving no judicial cognizance. Hence, the
motion deserves a short shrift and peremptory denial for being procedurally defective.
As such, it does not toll the running of the reglementary period thus making the assailed
decision final and executory. This supervening situation renders the Motion for Execution
pending appeal academic but at the same time it operates and could serve [as] well as a motion
for execution of the subject final and executory decision. Corollarily, it now becomes the
ministerial duty of this Court to issue a writ of execution thereon.
IN LIGHT OF THE FOREGOING, the Omnibus Motion for Reconsideration and New Trial is
hereby DENIED, and the Motion for Execution Pending Appeal (which is treated as a motion
for execution of a final and executory judgment) is also GRANTED as explained above.
Accordingly, let A WRIT OF EXECUTION be issued against herein defendants to enforce the
FINAL and EXECUTORY Decision dated 15 June 2006.
SO ORDERED.10
PDB received a copy of the above August 30, 2006 Order on September 14, 2006.11
On August 31, 2006, a Writ of Execution12 was issued. PDB filed an Urgent Motion to Quash
Writ of Execution,13 arguing that it was prematurely issued as the June 15, 2006 Decision was
not yet final and executory; that its counsel has not received a copy of the writ; and that no
entry of judgment has been made with respect to the trial court’s Decision. Later on, it filed a
Supplemental Motion to Quash Writ of Execution,14 claiming that the writ was addressed to
its General Santos branch, which had no authority to accept the writ.
On September 7, 2006, PDB filed a Notice of Appeal.15
In an October 6, 2006 Order,16 the RTC denied the motion to quash the writ of execution.
On October 9, 2006, the RTC issued a second Writ of Execution.17
Ruling of the Court of Appeals
On October 11, 2006, PDB filed with the CA an original Petition for Certiorari, which was later
amended,18 assailing 1) the trial court’s August 30, 2006 Order – which denied the omnibus
motion for reconsideration of the RTC Decision and for new trial; 2) its October 6, 2006 Order
– which denied the motion to quash the writ of execution; and 3) the August 31, 2006 and
October 9, 2006 writs of execution.
On May 31, 2007, the CA issued a Decision19 dismissing PDB’s Petition for lack of merit. It
sustained the trial court’s pronouncement, that by setting the hearing of the Omnibus Motion
for Reconsideration and for New Trial on August 18, 2006 – or 16 days after its filing on August
2, 2006 – PDB violated Section 5, Rule 15 of the Rules of Court which categorically requires
that the notice of hearing shall specify the time and date of the hearing which must not be
later than 10 days after the filing of the motion. Citing this Court’s ruling in Bacelonia v. Court
of Appeals,20 the CA declared that the 10-day period prescribed in Section 5 is mandatory,
and a motion that fails to comply therewith is pro forma and presents no question which merits
the attention and consideration of the court.
The appellate court further characterized PDB’s actions as indicative of a deliberate attempt
to delay the proceedings, noting that it did not timely move to reconsider the trial court’s
November 17, 2000 ruling21 allowing petitioners to present their evidence ex parte, nor did it
move to be allowed to present evidence in support of its defense. It was only after the RTC
rendered its June 15, 2006 Decision that PDB moved to be allowed to cross-examine
petitioners’ witnesses and to present its evidence on defense.
The CA likewise held that the RTC did not err in ruling that the omnibus motion for
reconsideration did not toll the running of the prescriptive period, which thus rendered the
June 15, 2006 Decision final and executory. It noted as well that PDB’s September 7, 2006
notice of appeal was tardy.
The CA found no irregularity with respect to the writs of execution, which contained the fallo
of the June 15, 2006 Decision of the RTC – thus itemizing the amount of the judgment
obligation. Additionally, it held that the fact that the judgment debtors are held solidarily liable
does not require that the writs should be served upon all of the defendants; that it is not true
that the sheriffs failed to make a demand for the satisfaction of judgment upon PDB, as the
mere presentation of the writ to it operated as a demand to pay; and that PDB failed to attach
the Sheriff’s Return to its Petition, which thus prevents the appellate court from resolving its
claim that the writs were not validly served.
PDB filed a Motion for Reconsideration,22 arguing that Rule 15, Section 5 of the Rules of Court
should be relaxed in view of the fact that judgment against it was based on a technicality – and
not on a trial on the merits; that there was no deliberate intention on its part to delay the
proceedings; that the court acted with partiality in declaring that the Omnibus Motion for
Reconsideration and for New Trial was pro forma; that its notice of appeal was timely; and that
the writs of execution are null and void.
On July 28, 2009, the CA made a complete turnaround and issued the assailed Amended
Decision, which decreed thus:
WHEREFORE, the motion for reconsideration is GRANTED. This Court’s May 31, 2007 Decision
is SET ASIDE and a new one is rendered GRANTING the petition for certiorari. The trial court’s
Order dated August 30, 2006 is SET ASIDE and the Writ of Execution issued by the trial court is
QUASHED. The trial court is ORDERED to hear and rule on the merits of petitioner’s "Omnibus
Motion for Reconsideration and New Trial."
SO ORDERED.23
The CA reversed its original finding that the Omnibus Motion for Reconsideration and for New
Trial was pro forma. This time, it held just the opposite, ruling that PDB’s "tacit argument" that
the "distances involved in the case at bench call for a relaxation of the application of Section
5, Rule 15 of the Rules of Court" deserved consideration. It held that Section 5 should be read
together with Section 424 of the same Rule, thus:
When a pleading is filed and served personally, there is no question that the requirements in
Sections 4 and 5 of Rule 15 of the Revised Rules of Civil Procedure pose no problem to the
party pleading. Under this mode of service and filing of pleadings, the party pleading is able to
ensure receipt by the other party of his pleading at least three days prior to the date of hearing
while at the same time setting the hearing on a date not later than ten days from the filing of
the pleading.
When, as in the case at bench, the address of the trial court as well as that of the opposing
counsel is too distant from the office of the counsel of the party pleading to personally effect
the filing and service of the pleading, the latter counsel faces a real predicament. In a perfect
world with the best postal service possible, it would be problematic enough to ensure that
both requisites are fully met: that opposing counsel receives the pleading at least three days
before the date of hearing and that the date of hearing is no more than ten days after the filing
(mailing) of the pleading. But, as a matter of fact, given the state of the postal service today –
a matter the Court takes judicial notice of – the party pleading often finds himself [locked]
between the horns of a dilemma.
The case at bench presents the Court with the novel issue of whether the same rigid
application of the cited Sections-and-Rule is warranted when the filing and service of pleadings
is by mail. The Court is of the opinion that when confronted between [sic] the demands of
sufficient notice and due process on the one hand and the requirement that the date of
hearing be set no later than ten days from filing, the stringent application of the Rules is not
warranted and a liberal posture is more in keeping with Section 6, Rule 1 of the 1997 Rules of
Civil Procedure which provides:
SECTION 6. Construction. - These Rules shall be liberally construed in order to promote their
objective of securing a just, speedy, and inexpensive disposition of every action and
proceeding.25
The CA further sustained PDB’s argument that since judgment against it was arrived at by mere
default or technicality, it is correspondingly entitled to a relaxation of the Rules, in line with
the principles of substantial justice. It likewise held that PDB counsel’s act of setting the
hearing of the Omnibus Motion for Reconsideration and for New Trial 16 days after its filing
was an excusable lapse; that no scheme to delay the case is evident from PDB’s actions; that
more telling is the trial court’s "blurring in cavalier fashion" the distinction between Sections
1 and 2 of Rule 39 of the Rules of Court,26 as well as its unequal treatment of the parties from
its strict application of Section 5, Rule 15 against respondent, while it bent backward to
accommodate petitioners by converting the latter’s motion for execution pending appeal into
a motion for execution of a final and executor judgment.
Lastly, the appellate court concluded that the trial court committed grave abuse of discretion,
which thus warrants the grant of PDB’s Petition for Certiorari.
Petitioners filed their Urgent Motion for Reconsideration,27 which the CA denied through its
assailed August 23, 2010 Resolution. Hence, the instant Petition.
Issues
Petitioners frame the issues involved in this Petition, as follows:
Being assailed herein is the refusal of the Court of Appeals, which is a patent error, for not
giving credence to petitioners-appellants’ arguments that the respondent-appellees’ special
civil action for certiorari before it is clearly devoid of merit as (i) the Decision dated June 15,
2006 of the RTC, Branch 37, General Santos City had become final and executory before the
special civil action for Certiorari was filed before it which should have been dismissed outright,
and which issue of "finality" was never ruled upon, (ii) granting arguendo that a certiorari
proceeding could still be had, the same should be filed under Rule 45 instead of Rule 65 of the
1997 Rules of Civil Procedure, (iii) the alleged attendant abuse of discretion on the part of the
public respondent judges, even granting arguendo that it exist [sic], were [sic] not grave but
on the contrary were purely errors of judgment and, (iv) the substantial and glaring defects of
the petition in the special civil action for certiorari before the Court of Appeals were
consistently and clearly called to its attention but were unjustifiably ignored by it.28
Petitioners’ Arguments
In their Petition and Reply,29 petitioners seek to reverse the assailed CA dispositions and to
reinstate the appellate court’s original May 31, 2007 Decision, arguing that the trial court’s
June 15, 2006 Decision became final and executor on account of PDB’s failure to timely file its
Omnibus Motion for Reconsideration and for New Trial, as it properly filed the same only on
August 2, 2006 – or beyond the 15-day period allowed by the Rules of Court.
Petitioners argue that PDB’s filing of its Omnibus Motion for Reconsideration and for New Trial
on July 31, 2006 by courier service through LBC was improper, since there was no LBC courier
service in Tupi, South Cotabato at the time; naturally, they did not receive a copy of the
omnibus motion. This is precisely the reason why PDB re-filed its omnibus motion on August
2, 2006 through registered mail, that is, to cure the defective service by courier; but by then,
the 15-day period within which to move for reconsideration or new trial, or to file a notice of
appeal, had already expired, as the last day thereof fell on August 1, 2006 – counting from
PDB’s receipt of the trial court’s Decision on July 17, 2006.
Petitioners add that PDB’s notice of appeal – which was filed only on September 7, 2006 – was
tardy as well; that PDB’s resort to an original Petition for Certiorari to assail the trial court’s
August 30, 2006 Order denying the Omnibus Motion for Reconsideration and for New Trial was
improper, for as provided under Section 9, Rule 37 of the Rules of Court,30 an order denying
a motion for new trial or reconsideration is not appealable, the remedy being an appeal from
the judgment or final order; that certiorari was resorted to only to revive PDB’s appeal, which
was already lost; and that it was merely a face-saving measure resorted to by PDB to recover
from its glaring blunders, as well as to delay the execution of the RTC Decision. They also assert
that certiorari is not an available remedy, since PDB did not file a motion for reconsideration
with respect to the other assailed orders of the trial court.
Petitioners maintain as well that the CA erred in relaxing the application of the Rules of Court
as to PDB, a banking institution with adequate resources to engage counsel within General
Santos City and not relegate Civil Case No. 6474 to its Manila lawyers who are thus constrained
by the distance involved.
Respondent’s Arguments
Seeking the denial of the Petition, PDB in its Comment31 maintains that the CA did not err in
declaring that its Omnibus Motion for Reconsideration and for New Trial was not pro forma;
that there are justifiable grounds to move for reconsideration and/or new trial; that it had no
intention to delay the proceedings; that it was correct for the appellate court to relax the
application of Section 5, Rule 15; and that the CA is correct in finding that the trial court
committed grave abuse of discretion in misapplying the Rules and in exhibiting partiality.
Our Ruling
The Court grants the Petition.
The proceedings in the instant case would have been greatly abbreviated if the court a quo
and the CA did not overlook the fact that PDB’s Omnibus Motion for Reconsideration and for
New Trial was filed one day too late. The bank received a copy of the trial court’s June 15, 2006
Decision on July 17, 2006; thus, it had 15 days – or up to August 1, 2006 – within which to file
a notice of appeal, motion for reconsideration, or a motion for new trial, pursuant to the Rules
of Court.32 Yet, it filed the omnibus motion for reconsideration and new trial only on August
2, 2006.
Indeed, its filing or service of a copy thereof to petitioners by courier service cannot be Fourth, instead of properly pursuing its appeal to free itself from the unfavorable effects of the
trivialized.1âwphi1 Service and filing of pleadings by courier service is a mode not provided in trial court’s denial of its notice of appeal, PDB chose with disastrous results to gamble on its
the Rules.33 (Rule 13, on Filing and Service of Pleadings, Judgments and Other Papers; Heirs Omnibus Motion for Reconsideration and for New Trial by filing an original Petition for
of Numeriano Miranda, Sr. v. Miranda, G.R. No. 179638, July 8, 2013, 700 SCRA 746, 755.) This Certiorari to assail the trial court’s denial thereof. Time and again, it has been said that
is not to mention that PDB sent a copy of its omnibus motion to an address or area which was certiorari is not a substitute for a lost appeal, especially if one’s own negligence or error in
not covered by LBC courier service at the time. Realizing its mistake, PDB re-filed and re-sent one’s choice of remedy occasioned such loss.40
the omnibus motion by registered mail, which is the proper mode of service under the
circumstances. By then, however, the 15-day period had expired. What remains relevant for this Court to resolve, then, is the issue relative to the trial court’s
October 6, 2006 Order – which denied the motion to quash the writ of execution – and the
PDB’s Notice of Appeal, which was filed only on September 7, 2006, was tardy; it had only up August 31, 2006 and October 9, 2006 writs of execution. The Court observes that the October
to August 1, 2006 within which to file the same. The trial court therefore acted regularly in 6, 2006 Order and the August 31, 2006 and October 9, 2006 writs of execution were set aside
denying PDB’s notice of appeal. and quashed merely as a necessary consequence of the CA’s directive in the Amended Decision
for the trial court to hear and rule on the merits of PDB’s Omnibus Motion for Reconsideration
Since PDB’s Omnibus Motion for Reconsideration and for New Trial was filed late and the 15- and for New Trial. Other than this singular reason, the CA would have sustained them, and this
day period within which to appeal expired without PDB filing the requisite notice of appeal, it is clear from a reading of both its original May 31, 2007 Decision and its subsequent Amended
follows that its right to appeal has been foreclosed; it may no longer question the trial court’s Decision. Now, since the Court has herein declared that PDB’s omnibus motion may not be
Decision in any other manner. "Settled is the rule that a party is barred from assailing the considered for being tardy and for having been superseded by the bank’s filing of a notice of
correctness of a judgment not appealed from by him."34 The "presumption that a party who appeal, then the CA’s original pronouncement regarding the October 6, 2006 Order and the
did not interject an appeal is satisfied with the adjudication made by the lower court"35 applies August 31, 2006 and October 9, 2006 writs of execution should necessarily be reinstated as
to it. There being no appeal taken by PDB from the adverse judgment of the trial court, its well.
Decision has become final and can no longer be reviewed, much less reversed, by this Court.
"Finality of a judgment or order becomes a fact upon the lapse of the reglementary period to In light of the above conclusions, the Court finds no need to further discuss the other issues
appeal if no appeal is perfected, and is conclusive as to the issues actually determined and to raised by the parties. They are rendered irrelevant by the above pronouncements.
every matter which the parties might have litigated and have x x x decided as incident to or
essentially connected with the subject matter of the litigation, and every matter coming within WHEREFORE, the Petition is GRANTED. The assailed July 28, 2009 Amended Decision and
the legitimate purview of the original action both in respect to matters of claim and of August 23, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 01317-MIN are REVERSED
defense."36 And "[i]n this jurisdiction, the rule is that when a judgment becomes final and and SET ASIDE. The Regional Trial Court of General Santos City, Branch 37 is ORDERED to
executory, it is the ministerial duty of the court to issue a writ of execution to enforce the proceed with the execution ofits June 15, 2006 Decision in Civil Case No. 6474.
judgment;"37 "execution will issue as a matter of right x x x (a) when the judgment has become
final and executory; (b) when the judgment debtor has renounced or waived his right of
SO ORDERED.
appeal; [or] (c) when the period for appeal has lapsed without an appeal having been filed x x
x."38
MARIANO C. DEL CASTILLO
Associate Justice
Neither can the Court lend a helping hand to extricate PDB from the effects of its mistake;
indeed, PDB erred more than once during the course of the proceedings. For one, it did not
attempt to set right its failure to appear during pre-trial, which prompted the court to allow
petitioners to present evidence ex parte and obtain a favorable default judgment. Second,
assuming for the sake of argument that it timely filed its Omnibus Motion for Reconsideration
and for New Trial, it nonetheless violated the ten-day requirement on the notice of hearing
under Section 5 of Rule 15. Third, even before it could be notified of the trial court’s resolution
of its omnibus motion on September 14, 2006 – assuming it was timely filed, it filed a notice
of appeal on September 7, 2006 – which thus implies that it abandoned its bid for
reconsideration and new trial, and instead opted to have the issues resolved by the CA through
the remedy of appeal. If so, then there is no Omnibus Motion for Reconsideration and for New
Trial that the trial court must rule upon; its August 30, 2006 Order thus became moot and
academic and irrelevant. "[W]here [an action] or issue has become moot and academic, there
is no justiciable controversy, so that a declaration thereon would be of no practical use or
value."39
G.R. No. 179638 July 8, 2013
HEIRS OF NUMERIANO MIRANDA, SR., namely: CIRILA (deceased), CORNELIO,
NUMERIANO, JR., ERLINDA, LOLITA, RUFINA, DANILO, ALEJANDRO, FELIMON, TERESITA,
ELIZABETH and ANALIZA, all surnamed MIRANDA, Petitioners,
vs.
PABLO R. MIRANDA, Respondent.
Remedial Law; Civil Procedure; Appeals; It is basic and elementary that a Notice of Appeal
should be filed “within fifteen (15) days from notice of the judgment or final order appealed
from.”―It is basic and elementary that a Notice of Appeal should be filed “within fifteen (15)
days from notice of the judgment or final order appealed from.” Under Section 3, Rule 13 of
the Rules of Court, pleadings may be filed in court either personally or by registered mail. In
the first case, the date of filing is the date of receipt. In the second case, the date of mailing is
the date of receipt. In this case, however, the counsel for petitioners filed the Notice of Appeal
via a private courier, a mode of filing not provided in the Rules. Though not prohibited by the
Rules, we cannot consider the filing of petitioners’ Notice of Appeal via LBC timely filed. It is
established jurisprudence that “the date of delivery of pleadings to a private letter forwarding
agency is not to be considered as the date of filing thereof in court”; instead, “the date of
actual receipt by the court x x x is deemed the date of filing of that pleading.” Records show
that the Notice of Appeal was mailed on the 15th day and was received by the court on the
16th day or one day beyond the reglementary period. Thus, the CA correctly ruled that the
Notice of Appeal was filed out of time.
Same; Same; Judgments; Revival of Judgments; An action for revival of judgment is a new and
independent action. It is different and distinct from the original judgment sought to be revived
or enforced.―An action for revival of judgment is a new and independent action. It is different
and distinct from the original judgment sought to be revived or enforced. As such, a party
aggrieved by a decision of a court in an action for revival of judgment may appeal the decision,
but only insofar as the merits of the action for revival is concerned. The original judgment,
which is already final and executory, may no longer be reversed, altered, or modified.
Same; Same; Same; An action for revival of judgment may be filed either “in the same court
where said judgment was rendered or in the place where the plaintiff or defendant resides, or
in any other place designated by the statutes which treat of the venue of actions in
general.”―As to whether the RTC has jurisdiction, we rule in the affirmative. An action for
revival of judgment may be filed either “in the same court where said judgment was rendered
or in the place where the plaintiff or defendant resides, or in any other place designated by
the statutes which treat of the venue of actions in general.” In this case, respondent filed the
Petition for Revival of Judgment in the same court which rendered the Decision dated August
30, 1999.
DECISION
DEL CASTILLO, J.:
An action for revival of a judgment cannot modify, alter, or reverse the original judgment,
which is already final and executory.1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the Decision3
dated June 14, 2007 and the Resolution4 dated September 11, 2007 of the Court of Appeals
(CA) in CA-G.R. SP No. 97350.
Factual Antecedents
In 1994, petitioners Cirila, Cornelio, Numeriano, Jr., Erlinda, Lolita, Rufina, Danilo, Alejandro,
Felimon, Teresita, Elizabeth, and Analiza, all surnamed Miranda, representing themselves as
the heirs of Numeriano Miranda, Sr., filed before the Regional Trial Court (RTC) of Muntinlupa
City, a Complaint5 for Annulment of Titles and Specific Performance, docketed as Civil Case No.
94-612, against the heirs of Pedro Miranda, namely: Pacita and Oscar Miranda; the heir of
Tranquilino Miranda, Rogelio Miranda; and the spouses respondent Pablo Miranda and Aida
Lorenzo.
After trial, the RTC, Branch 256, rendered a Decision6 dated August 30, 1999, the dispositive
portion of which reads:
WHEREFORE, premises considered, this court resolves:
1. To uphold and sustain the validity of TCT Nos. 186011, 186012, and 186013;
2. Ordering Pablo Miranda to indemnify all other heirs of NUMERIANO MIRANDA the amount
equivalent to 12/13 fair market value of the co-owned residential house, erected on the lot
826-A-3 covered by TCT No. 186013 corresponding to their shares, and for the said heirs to
divide among themselves the aforesaid amount as follows:
1/13 to CIRILA MIRANDA
1/13 to CORNELIO MIRANDA
1/13 to NUMERIANO MIRANDA, JR.
1/13 to ERLINDA MIRANDA
1/13 to LOLITA MIRANDA
1/13 to RUFINA MIRANDA
1/13 to DANILO MIRANDA
1/13 to ALEJANDRO MIRANDA
1/13 to FELIMON MIRANDA
1/13 to TERESITA MIRANDA
1/13 to ELIZABETH MIRANDA
1/13 to ANALIZA MIRANDA
3. Ordering Plaintiffs Lolita Miranda, Alejandro Miranda, Teresita Miranda, Rufina Miranda and
all persons claiming rights under them to immediately vacate the abovementioned residential
house and to jointly and severally pay to the spouses Pablo and Aida Miranda a monthly rental
of ₱2,000.00 from the date of notice of the promulgation of this judgment up to the time that
they have actually vacated the property;
4. Proclaiming that ROGELIO MIRANDA is not the biological son or child by nature of
TRANQUILINO MIRANDA, and therefore is not entitled to inherit from the latter;
5. Declaring CORNELIO MIRANDA, NUMERIANO MIRANDA, JR., ERLINDA MIRANDA, LOLITA
MIRANDA, RUFINA MIRANDA, DANIL[O] MIRANDA, ALEJANDRO MIRANDA, FELIMON
MIRANDA, TERESITA MIRANDA, ELIZABETH MIRANDA, ANALIZA MIRANDA, PABLO MIRANDA
and PACITA MIRANDA as the lawful legal heirs of the deceased TRANQUILINO MIRANDA and
ordering them to partition among themselves Lot 826-A-1 covered by TCT No. 186011
registered in the name of TRANQUILINO MIRANDA, containing an area of 213 square meters,
as follows:
1/13 aliquot share to Cornelio Miranda
1/13 aliquot share to Numeriano Miranda, Jr.
1/13 aliquot share to Erlinda Miranda
1/13 aliquot share to Lolita Miranda
1/13 aliquot share to Rufina Miranda
1/13 aliquot share to Danilo Miranda
1/13 aliquot share to Alejandro Miranda
1/13 aliquot share to Felimon Miranda
1/13 aliquot share to Teresita Miranda
1/13 aliquot share to Elizabeth Miranda
1/13 aliquot share to Analiza Miranda
1/13 aliquot share to Pablo Miranda
1/13 aliquot share to Pacita Miranda
6. Ordering all the abovenamed heirs to commission the survey of Lot 826-A-1 or to authorize
in writing, one of them to commission such survey, in order to avoid a chaotic situation similar
to the case at bar. Should they not agree as to what particular portion shall belong to one
another, they may agree that it be allotted to one or two or several of them, who shall
indemnify the others at a price agreed upon by all of them. Should they not agree as to whom
shall the property be allotted, to sell the property to a third person at a price agreed upon by
a majority of all of them, and to partition the proceeds of the sale in accordance with No. 5
above.
SO ORDERED.7
Petitioners did not file any appeal hence the Decision became final and executory.8
On December 11, 2001, the RTC issued a Writ of Execution,9 which was not implemented.10
On July 8, 2005, respondent filed an Ex-parte Motion11 praying that the RTC issue a "Break-
Open and Demolition Order" in order to compel the petitioners to vacate his property. 12 But
since more than five years have elapsed from the time the Writ of Execution should have been
enforced, the RTC denied the Motion in its Order13 dated August 16, 2005.
This prompted respondent to file with the RTC a Petition14 for Revival of Judgment, which was
docketed as Civil Case No. 05-131. Petitioners opposed the revival of judgment assailing,
among others, the jurisdiction of the RTC to take cognizance of the Petition for Revival of
Judgment.15
On June 20, 2006, the RTC rendered a Decision16 granting the Petition. Thus:
WHEREFORE, finding the instant petition to be meritorious, the petition is hereby GRANTED.
Pursuant to Rule 39, Section 6 of the Rules of Court, the Decision dated August 30, 1999 in Civil
Case No. 94-612 is hereby REVIVED.
SO ORDERED.17
On July 13, 2006, petitioners filed a Notice of Appeal 18 via LBC,19 which was opposed by
respondent on the ground that the Decision dated August 30, 1999 has long become final and
executory.20 Petitioners, in turn, moved for the transmittal of the original records of the case
to the CA, insisting that respondent’s opposition is without merit.21
Ruling of the Regional Trial Court
Finding the appeal barred by prescription, the RTC denied the Notice of Appeal in its Order22
dated October 10, 2006, to wit:
WHEREFORE, in view of the foregoing, the notice of appeal herein filed is hereby DENIED for
lack of merit.
SO ORDERED.23
Feeling aggrieved, petitioners filed a Petition for Mandamus24 with the CA praying that their
Notice of Appeal be given due course.25
Ruling of the Court of Appeals
On June 14, 2007, the CA denied the Petition for Mandamus on the ground that the Notice of
Appeal was filed out of time.26 The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the petition is DENIED. The appeal is hereby DISMISSED for
having been filed out of time.
SO ORDERED.27
Petitioners moved for reconsideration but the same was denied by the CA in its Resolution28
dated September 11, 2007.
Issues
Hence, this recourse, with petitioners raising the following issues:
1. WHETHER X X X THE APPEAL WAS PERFECTED ON TIME?
 2. WHETHER X X X THE LATE (ONE DAY) FILING WAS JUSTIFIED?
3. WHETHER X X X AN ACTION FOR REVIVAL OF JUDGMENT IS APPEALABLE?
4. WHETHER THE APPEAL IS MERITORIOUS?
a. Whether the RTC below has exclusive original jurisdiction over an action
for revival of judgment?
b. Whether xxx respondent herein, plaintiff therein, as one of the
judgment creditors can file the said action for revival ALONE?
c. Whether subsequent events or laws have rendered the judgment sought
to be revived modified or altered, or prevent its enforcement?
d. Whether res judicata or laches has seeped in, other judgment creditors
not suing for any such implementation of the 1999 judgment, ONLY
PLAINTIFF ALONE?
e. Whether x x x the Petitioners are entitled to damages?29
Petitioners’ Arguments
Petitioners assert that an action to revive judgment is appealable,30 and that their appeal was
perfected on time.31 They insist that the Notice of Appeal, which they filed on the 15th day via
LBC, was seasonably filed since the law does not require a specific mode of service for filing a
notice of appeal.32
Besides, even if their appeal was belatedly filed, it should still be given due course in the
interest of justice,33 considering that their counsel had to brave the storm and the floods
caused by typhoon "Florita" just to file their Notice of Appeal on time.34
Petitioners further contend that their appeal is meritorious. 35 They insist that it is the
Metropolitan Trial Court (MeTC), not the RTC, which has jurisdiction over the Petition for
Revival of Judgment since the amount in the tax declarations of the properties involved is less
than Fifty Thousand Pesos (₱50,000.00).36 They likewise assail the Decision dated August 30,
1999, claiming that the deeds and certificates of title subject of Civil Case No. 94-612 were
falsified.37
Respondent’s Arguments
Respondent, on the other hand, maintains that the Notice of Appeal was belatedly filed,38 and
that the revival of judgment is unappealable as it is barred by prescription.39
Our Ruling
The Petition lacks merit.
The Notice of Appeal was belatedly filed.
It is basic and elementary that a Notice of Appeal should be filed "within fifteen (15) days from
notice of the judgment or final order appealed from."40
Under Section 3,41 Rule 13 of the Rules of Court, pleadings may be filed in court either
personally or by registered mail. In the first case, the date of filing is the date of receipt. In the
second case, the date of mailing is the date of receipt.
In this case, however, the counsel for petitioners filed the Notice of Appeal via a private
courier, a mode of filing not provided in the Rules. Though not prohibited by the Rules, we
cannot consider the filing of petitioners’ Notice of Appeal via LBC timely filed. It is established
jurisprudence that "the date of delivery of pleadings to a private letter-forwarding agency is
not to be considered as the date of filing thereof in court;" instead, "the date of actual receipt
by the court x x x is deemed the date of filing of that pleading."42 Records show that the Notice
of Appeal was mailed on the 15th day and was received by the court on the 16th day or one
day beyond the reglementary period. Thus, the CA correctly ruled that the Notice of Appeal
was filed out of time.
Neither can petitioners use typhoon "Florita" as an excuse for the belated filing of the Notice
of Appeal because work in government offices in Metro Manila was not suspended on July 13,
2006, the day petitioners’ Notice of Appeal was mailed via LBC.43
And even if we, in the interest of justice, give due course to the appeal despite its late filing,
the result would still be the same. The appeal would still be denied for lack of merit.
The Decision dated August 30, 1999 is already final and executory.
An action for revival of judgment is a new and independent action. 44 It is different and distinct
from the original judgment sought to be revived or enforced.45 As such, a party aggrieved by a
decision of a court in an action for revival of judgment may appeal the decision, but only insofar
as the merits of the action for revival is concerned. The original judgment, which is already
final and executory, may no longer be reversed, altered, or modified.46
In this case, petitioners assail the Decision dated August 30, 1999, which is the original
judgment sought to be revived or enforced by respondent.1âwphi1 Considering that the said
Decision had already attained finality, petitioners may no longer question its correctness. As
we have said, only the merits of the action for revival may be appealed, not the merits of the
original judgment sought to be revived or enforced.
RTC has jurisdiction over the Petition for Revival of Judgment
As to whether the RTC has jurisdiction, we rule in the affirmative. An action for revival of
judgment may be filed either "in the same court where said judgment was rendered or in the
place where the plaintiff or defendant resides, or in any other place designated by the statutes
which treat of the venue of actions in general."47 In this case, respondent filed the Petition for
Revival of Judgment in the same court which rendered the Decision dated August 30, 1999.

All told, we find no error on the part of the CA in denying the Petition and dismissing the appeal
for having been filed out of time.

WHEREFORE, the Petition is hereby DENIED. The Decision dated June 14, 2007 and the
Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R. SP No. 97350 are
hereby AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice
G.R. No. 108538 January 22, 1996 Same; Same; Same; Service of summons upon a nonresident who is not found in the Philippines
must be made either (1) bypersonal service; (2) by publication in a newspaper of general
LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, circulation; or (3) in any other manner which the court may deem sufficient.—As petitioner
vs. Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons
THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, on her must be in accordance with Rule 14, §17. Such service, to be effective outside the
respondents. 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
Actions; Summons; Jurisdiction; Parties; Pleadings and Practice; A resident defendant in an
known address of the defendant; or (3) in any other manner which the court may deem
action in personam whocannot be personally served with summons may be summoned either
sufficient.
by means of substituted service in accordance with Rule 14, §8 or by publication as provided in
§§17 and 18 of the same Rule. —In an action in personam, personal service of summons or, if
Same; Same; Same; The three modes of service of summons upon a nonresident must be made
this is not possible and he cannot be personally served, substituted service, as provided in Rule
outside the Philippines, such as through the Philippine Embassy in the foreign country where
14, §§78 is essential for the acquisition by the court of jurisdiction over the person of a
the defendant resides.—Since in the case at bar, the service of summons upon petitioner
defendant who does not voluntarily submit himself to the authority of the court. If defendant
Lourdes A. Valmonte was not done by means of any of the first two modes, the question is
cannot be served with summons because he is temporarily abroad, but otherwise he is a
whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under
Philippine resident, service of summons may, by leave of court, be made by publication.
the third mode, namely, “in any . . . manner the court may deem sufficient.” We hold it cannot.
Otherwise stated, a resident defendant in an action in personam, who cannot be personally
This mode of service, like the first two, must be made outside the Philippines, such as through
served with summons, may be summoned either by means of substituted service in
the Philippine Embassy in the foreign country where the defendant resides.
accordance with Rule 14, §8 or by publication as provided in §§ 17 and 18 of the same Rule.
Same; Same; Same; The period to file an Answer in an action against a resident defendant
Same; Same; Same; Same; Same; If the action is in rem or quasi in rem, jurisdiction over the
differs from the period given in an action filed against a nonresident defendant who is not found
person of the defendant is not essential for giving the court jurisdiction so long as the court
in the Philippines.—It must be noted that the period to file an Answer in an action against a
acquires jurisdiction over the res.—On the other hand, if the action is in rem or quasi in rem,
resident defendant differs from the period given in an action filed against a nonresident
jurisdiction over the person of the defendant is not essential for giving the court jurisdiction
defendant who is not found in the Philippines. In the former, the period is fifteen (15) days
so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he
from service of summons, while in the latter, it is at least sixty (60) days from notice.
is not found in the country, summons may be served exterritorially in accordance with Rule
14, §17.
Same; Same; Same; Agency; Attorneys; The authority given by a wife to her husband to
negotiate cannot be construed as also including an authority to represent her in any
Same; Same; Same; Same; Same; Due Process; What gives the court jurisdiction in an action in
litigation.—In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her
rem or quasi in rem is that it has jurisdiction over the res, and the service of summons in the
husband as her attorneyinfact. Although she wrote private respondent’s attorney that “all
manner provided in §17 is not for the purpose of vesting it with jurisdiction but for complying
communications” intended for her should be addressed to her husband who is also her lawyer
with the requirements of fair play or due process.—In such cases, what gives the court
at the latter’s address in Manila, no power of attorney to receive summons for her can be
jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the
inferred therefrom. In fact the letter was written seven months before the filing of this case
personal status of the plaintiff who is domiciled in the Philippines or the property litigated or
below, and it appears that it was written in connection with the negotiations between her and
attached. Service of summons in the manner provided in §17 is not for the purpose of vesting
her sister, respondent Rosita Dimalanta, concerning the partition of the property in question.
it with jurisdiction but for complying with the requirements of fair play or due process, so that
As is usual in negotiations of this kind, the exchange of correspondence was carried on by
he will be informed of the pendency of the action against him and the possibility that property
counsel for the parties. But the authority given to petitioner’s husband in these negotiations
in the Philippines belonging to him or in which he has an interest may be subjected to a
certainly cannot be construed as also including an authority to represent her in any litigation.
judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is
so minded.

Same; Same; Same; Partition; An action for partition and accounting under Rule 69 is in the
nature of an action quasi in rem.—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.
DECISION
MENDOZA, J.:
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.
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
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
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 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.
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 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 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.
G.R. No. 131724 February 28, 2000 Same; Same; Same; Receipt by a defendant corporation of the summons and complaint cannot
be inferred from the fact that it filed a Motion to Dismiss the case.—Respondent casts doubt
MILLENIUM INDUSTRIAL COMMERCIAL CORPORATION, petitioner, on petitioner’s claim that it came to know about the summons and the complaint against it
vs. only after it learned that there was a pending foreclosure of its mortgage. There is nothing
JACKSON TAN, respondent. improbable about this claim. Petitioner was in default in the payment of its loan. It had
received demand letters from respondent. Thus, it had reason to believe that a foreclosure
suit would be filed against it. The appellate court was, therefore, in error in giving weight to
Actions; Pleadings and Practice; Summons; Parties; Service of summons upon a defendant
respondent’s claims. Receipt by petitioner of the summons and complaint cannot be inferred
corporation must be made on a representative so integrated with the corporation sued as to
from the fact that it filed a Motion to Dismiss the case.
make it a priori presumable that he will realize his responsibilities and know what he should do
with any legal papers received by him.—– Summons is the means by which the defendant in a
Same; Same; Same; Jurisdiction; Estoppel; Voluntary appearance is a waiver of the defense of
case is notified of the existence of an action against him and, thereby, the court is conferred
lack of jurisdiction over the person of the defendant, but the assertion of affirmative defenses
jurisdiction over the person of the defendant. If the defendant is a corporation, Rule 14, §13
shall not be construed as an estoppel or as a waiver of such defense.—–Our decision in La Naval
requires that service of summons be made upon the corporation’s president, manager,
Drug Corporation v. Court of Appeals settled this question. The rule prior to La Naval was that
secretary, cashier, agent, or any of its directors. The rationale of the rule is that service must
if a defendant, in a motion to dismiss, alleges grounds for dismissing the action other than lack
be made on a representative so integrated with the corporation sued as to make it a priori
of jurisdiction, he would be deemed to have submitted himself to the jurisdiction of the court.
presumable that he will realize his responsibilities and know what he should do with any legal
This rule no longer holds true. Noting that the doctrine of estoppel by jurisdiction must be
papers received by him.
unequivocal and intentional, we ruled in La Naval: 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
Same; Same; Same; Words and Phrases; Doctrine of Substantial Compliance; Requisites.—–In
defense. Voluntary appearance shall be deemed a waiver of this defense. The assertion,
Porac Trucking, Inc. v. Court of Appeals, this Court enumerated the requisites for the
however, of affirmative defenses shall not be construed as an estoppel or as a waiver of such
application of the doctrine of substantial compliance, to wit: (a) there must be actual receipt
defense.
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 sheriffs
Same; Same; Same; Same; Same; The rule that, in a motion to dismiss, the allegation of grounds
return; and (c) there must be actual receipt of the summons by the corporation through the
other than lack of jurisdiction over the person of the defendant, including a prayer “for such
person on whom the summons was actually served. The third requisite is the most important
other reliefs as” may be deemed “appropriate and proper” amounted to voluntary appearance
for it is through such receipt that the purpose of the rule on service of summons is attained.
must be deemed superseded by the ruling in La Naval Drug Corporation vs. Court of Appeals
(236 SCRA 78 [1994]) that estoppel by jurisdiction must be unequivocal and intentional.—–We
Same; Same; Same; It is not allowable to merely infer actual receipt of summons by the
turn to the effect of petitioner’s prayer for “other reliefs” in its Motion to Dismiss. In De
corporation through the person on whom the summons was served—for there to be substantial
Midgely v. Fernandos, it was held that, in a motion to dismiss, the allegation of grounds other
compliance, actual receipt of summons by the corporation through the person served must be
than lack of jurisdiction over the person of the defendant, including a prayer “for such other
shown.—In this case, there is no dispute that the first and second requisites were fulfilled.
reliefs as” may be deemed “appropriate and proper” amounted to voluntary appearance. This,
With respect to the third, the appellate court held that petitioner’s filing of a motion to dismiss
however, must be deemed superseded by the ruling in La Naval that estoppel by jurisdiction
the foreclosure suit is proof that it received the copy of the summons and the complaint. There
must be unequivocal and intentional. It would be absurd to hold that petitioner unequivocally
is, however, no direct proof of this or that Lynverd Cinches actually turned over the summons
and intentionally submitted itself to the jurisdiction of the court by seeking other reliefs to
to any of the officers of the corporation. In contrast, in our cases applying the substantial
which it might be entitled when the only relief that it can properly ask from the trial court is
compliance rule, there was direct evidence, such as the admission of the corporation’s officers,
the dismissal of the complaint against it.
of receipt of summons by the corporation through the person upon whom it was actually
MENDOZA, J.:
served. The question is whether it is allowable to merely infer actual receipt of summons by
the corporation through the person on whom summons was served. We hold that it cannot be
allowed. For there to be substantial compliance, actual receipt of summons by the corporation In December 1994, Millenium Industrial Commercial Corporation, petitioner herein, executed
through the person served must be shown. Where a corporation only learns of the service of a Deed of Real Estate Mortgage1 over its real property covered by TCT No. 24069 in favor of
summons and the filing of the complaint against it through some person or means other than respondent Jackson Tan. The mortgage was executed to secure payment of petitioner's
the person actually served, the service of summons becomes meaningless. This is particularly indebtedness to respondent in the amount of P2 million, without monthly interest, but which,
true in the present case where there is serious doubt if Lynverd Cinches, the person on whom at maturity date on June 10, 1995, was payable in the amount of P4 million.1âwphi1.nêt
service of summons was effected, is in fact an employee of the corporation. Except for the
sheriff’s return, there is nothing to show that Lynverd Cinches was really a draftsman employed On November 9, 1995, respondent filed against petitioner a complaint for foreclosure of
by the corporation. mortgage in the Regional Trial Court, Branch 6, Cebu City. On November 21, 1995, summons
and a copy of the complaint were served upon petitioner through a certain Lynverd Cinches,
described in the sheriff's return, dated November 23, 1995, 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."2
Petitioner moved for the dismissal of the complaint on the ground that there was no valid
service of summons upon it, as a result of which the trial court did not acquire jurisdiction over
it. Petitioner invoked Rule 14, §13 of the 1964 Rules of Court and contended that service on
Lynverd Cinches, as alleged in the sheriff's return, was invalid as he is not one of the authorized
persons on whom summons may be served and that, in fact, he was not even its employee.3
Petitioner also sought the dismissal of the complaint against it on the ground that it had
satisfied its obligation to respondent when the latter opted to be paid in shares of stock under
the following stipulation in the mortgage contract:
That in the remote possibility of failure on the part of the mortgagor to pay the
mortgage obligation and interest in cash, the MORTGAGEE at his option may demand
that payment be made in the form of shares of stock of Millenium Industrial
Commercial Corporation totaling at least 4,000,000 shares.4
Petitioner further prayed for "other reliefs just and equitable under the premises."5
On December 15, 1995, the trial court denied petitioner's Motion to Dismiss. Its order stated:
This refers to the Motion to Dismiss, dated December 4, 1995, by defendant
anchored on the following grounds:
1. That 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.
2. That the obligation sought to be collected was already paid and extinguished.
By interposing the second ground, the defendant has availed of an affirmative
defense on the basis of which the Court has to hear and receive evidence. For the
Court to validly decide the said plea of the defendant it necessarily had to acquire
jurisdiction over the person of the defendant. Thus, defendant is considered to have
then abandoned its first ground and is deemed to have voluntarily submitted itself to
the jurisdiction of the Court. It is a legal truism that voluntary appearance cures the
defect of the summons, if any. The defendant's filing of the motion to dismiss by
pleading therein the second ground amount to voluntary appearance and it indeed
cured the defeat.
Wherefore, Motion to Dismiss is hereby denied for lack of merit.6
Petitioner moved for reconsideration, but its motion was denied by the trial court in its order,
dated January 16, 1996, for failure of petitioner to raise any new ground. Petitioner then filed
a petition for certiorari in the Court of Appeals, assailing the aforesaid orders of the trial court.
On September 18, 1997, the Court of Appeals dismissed the petition.7 The appellate court 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. Moreover, it was held, by
including the affirmative defense that it had already paid its obligation and praying for other
reliefs in its Motion to Dismiss, petitioner voluntarily submitted to the jurisdiction of the court.8
Hence, this petition for review. Petitioner raises the following issues:
I. WHETHER OR NOT SERVICE OF SUMMONS UPON A MERE DRAFTSMAN WHO IS
NOT ONE OF THOSE UPON WHOM SUMMONS MAY BE SERVED IN CASE OF A
DEFENDANT CORPORATION AS MENTIONED IN THE RULES IS VALID.
II. WHETHER OR NOT THE INCLUSION OF ANOTHER AFFIRMATIVE RELIEF IN A
MOTION TO DISMISS ABANDONS AND WAIVES THE GROUND OF LACK OF
JURISDICTION OVER THE PERSON OF THE DEFENDANT THEREIN ALSO PLEADED
UNDER PREVAILING LAW AND JURISPRUDENCE.
III. WHETHER OR NOT THERE IS A LEGAL GROUND TO GRANT PETITIONER'S MOTION
TO DISMISS THE COMPLAINT BELOW.
First. Petitioner objects to the application of the doctrine of substantial compliance in the
service of summons for two reasons: (1) the enumeration of persons on whom service of
summons on a corporation may be effected in Rule 14, §13, is exclusive and mandatory; and
(2) even assuming that substantial compliance is allowed, its alleged actual receipt of the
summons is based on an unfounded speculation because there is nothing in the records to
show that Lynverd Cinches actually turned over the summons to any of the officers of the
corporation.9 Petitioner contends that it was able to file a motion to dismiss only because of
its timely discovery of the foreclosure suit against it when it checked the records of the case in
the trial court.
The contention is meritorious.
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.10 If the defendant is a corporation, Rule 14, §13 requires that service of summons
be made upon the corporation's president, manager, secretary, cashier, agent, or any of its
directors.11 The rationale of the rule is that service must be made on a representative so
integrated with the corporation sued as to make it a priori presumable that he will realize his
responsibilities and know what he should do with any legal papers received by him.12
Petitioner contends that the enumeration in Rule 14, §13 is exclusive and that service of Our decision in La Naval Drug Corporation v. Court of Appeals18 settled this question. The rule
summons upon one who is not enumerated therein is invalid. This is the general rule.13 prior to La Naval was that if a defendant, in a motion to dismiss, alleges grounds for dismissing
However, it is settled that substantial compliance by serving summons on persons other than the action other than lack of jurisdiction, he would be deemed to have submitted himself to
those mentioned in the above rule may be justified. In G & G Trading Corporation v. Court of the jurisdiction of the court.19 This rule no longer holds true. Noting that the doctrine of
Appeals,14 we ruled that although the service of summons was made on a person not estoppel by jurisdiction must be unequivocal and intentional, we ruled in La Naval:
enumerated in Rule 14, §13, if it appears that the summons and complaint were in fact
received by the corporation, there is substantial compliance with the rule as its purpose has Jurisdiction over the person must be seasonably raised, i.e., that it is pleaded in a
been attained. 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
In Porac Trucking, Inc. v. Court of Appeals,15 this Court enumerated the requisites for the shall not be construed as an estoppel or as a waiver of such defense.20
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 Third. Finally, we turn to the effect of petitioner's prayer for "other reliefs" in its Motion to
from the Sheriff to the person served; (b) the person served must sign a receipt or the sheriff's Dismiss. In De Midgely v. Fernandos,21 it was held that, in a motion to dismiss, the allegation
return; and (c) there must be actual receipt of the summons by the corporation through the of grounds other than lack of jurisdiction over the person of the defendant, including a prayer
person on whom the summons was actually served.16 The third requisite is the most important "for such other reliefs as" may be deemed "appropriate and proper" amounted to voluntary
for it is through such receipt that the purpose of the rule on the service of summons is attained. appearance. This, however, 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
In this case, there is no dispute that the first and second requisites were fulfilled. With respect petitioner unequivocally and intentionally submitted itself to the jurisdiction of the court by
to the third, the appellate court held that petitioner's filing of a motion to dismiss the seeking other reliefs to which it might be entitled when the only relief that it can properly ask
foreclosure suit is proof that it received the copy of the summons and the complaint. There is, from the trial court is the dismissal of the complaint against it.1âwphi1.nêt
however, no direct proof of this or that Lynverd Cinches actually turned over the summons to
any of the officers of the corporation. In contrast, in our cases applying the substantial WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaint against
compliance rule,17 there was direct evidence, such as the admission of the corporation's petitioner is DISMISSED. SO ORDERED.
officers, of receipt of summons by the corporation through the person upon whom it was
actually served. The question is whether it is allowable to merely infer actual receipt of
summons by the corporation through the person on whom summons was served. We hold
that it cannot be allowed. For there to be substantial compliance, actual receipt of summons
by the corporation through the person served must be shown. Where a corporation only learns
of the service of summons and the filing of the complaint against it through some person or
means other than the person actually served, the service of summons becomes meaningless.
This is particularly true in the present case where there is serious doubt if Lynverd Cinches, the
person on whom service of summons was effected, is in fact an employee of the corporation.
Except for the sheriff's return, there is nothing to show that Lynverd Cinches was really a
draftsman employed by the corporation.

Respondent casts doubt on petitioner's claim that it came to know about the summons and
the complaint against it only after it learned that there was a pending foreclosure of its
mortgage. There is nothing improbable about this claim. Petitioner was in default in the
payment of its loan. It had received demand letters from respondent. Thus, it had reason to
believe that a foreclosure suit would be filed against it. The appellate court was, therefore, in
error in giving weight to respondent's claims. Receipt by petitioner of the summons and
complaint cannot be inferred from the fact that it filed a Motion to Dismiss the case.

Second. We now turn to the issue of jurisdiction by estoppel. Both the trial court and the Court
of Appeals held that by raising the affirmative defense of payment and by praying for other
reliefs in its Motion to Dismiss, petitioner in effect waived its objection to the trial court's
jurisdiction over it. We think this is error.
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.
Remedial Law; Civil Procedure; Summons; Jurisdiction; 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 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.
Same; Same; Same; Same; Strict compliance with the rules has been enjoined; 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.–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,
the Court held: “A strict compliance with the mode of service is necessary to confer jurisdiction
of the court over a corporation. The officer upon whom service is made must be one who is
named in the statute; otherwise the service is insufficient. x x x. 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.’ x x x.
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.
x x x.– (italics supplied). Same; Same; Same; Same; Service of summons upon persons other
than those mentioned in Section 13 of Rule 14 (old rule) has been held as improper.–Service of
summons upon persons other than those mentioned in Section 13 of Rule 14 (old rule) has
been held as improper. 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 & Ins. Co., Inc. vs. Dizon, 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.
Same; Same; Same; Same; Court rules 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; Trial court did not acquire jurisdiction over the person
of the petitioner.–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.
Same; Same; Same; Same; 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.–
Before, the rule was that a party may challenge the 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, the party is deemed to have submitted himself to the
jurisdiction of the court. This doctrine has been abandoned in the case of La Naval Drug
Corporation vs. Court of Appeals, et al., 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.
GONZAGA-REYES, J.:
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 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 Reconsideration 8
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.
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).
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 manager 15; 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
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 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
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.1âwphi1.nêt

SO ORDERED.
PEDRO T. SANTOS, JR., G.R. No. 170943 Petitioner, - v e r s u s - PNOC EXPLORATION
CORPORATION, Respondent. Promulgated:September 23, 2008
Actions; Summons; Service of Summons by Publication; Where the defendant could not be
personally served with summons despite diligent efforts to locate his whereabouts, he may
properly be served with summons 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. Same; Same; Same; 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 but this has been changed —it now applies to any action,
whether in personam, in rem or quasi in rem.—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.
Because of this silence, the Court limited the application of the old rule to in rem actions only.
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.
Same; Same; Same; The service of summons by publication is complemented by service of
summons by registered mail to the defendant’s last known address; 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.—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.
Same; Default; In case a defendant 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.—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.
Same; Same; An order of default can be made only upon motion of the claiming party.—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.
Since no motion to declare petitioner in default was filed, no default order should have been
issued.
Same; Same; Statutory Construction; 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; Laws and rules must be interpreted in a way that they are in accordance
with logic, common sense, reason and practicality.—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.
Nemo tenetur ad impossibile. The law obliges no one to perform an impossibility. Laws and
rules must be interpreted in a way that they are in accordance with logic, common sense,
reason and practicality.
Same; Same; Equity; Equity is available only in the absence of law, not as its replacement—it
may be applied only in the absence of rules of procedure, never in contravention thereof.—
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.
DECISION
CORONA, J.:
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 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 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.
P r o p r i e t y O f 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
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.
E n t i t l e m e n t T o 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 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.
C o r r e c t n e s s O f 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.

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.
Remedial Law; Summons; Jurisdiction; Question of whether the substantial compliance rule is
still applicable under Section 11, rule 14 of the 1997 Rule of Civil Procedure has been settled in
Villarosa which applies squarely to the instant case.—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 trial court without jurisdiction to take cognizance of the
case. We held that there was no valid service of summons on Villarosa as service was 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 13, Rule 14 of the 1964 Rules of Court. We discarded
the trial court’s basis for denying the motion to dismiss, namely, private respondent’s
substantial compliance with the rule on service of summons, and fully agreed with petitioner’s
assertions that the enumeration under the new rule is restricted, limited and exclusive,
following the rule in statutory construction that expressio unios est exclusio alterius. Had the
Rules of Court Revision Committee intended to liberalize the rule on service of summons, we
said, it could have easily done so by clear and concise language. Absent a manifest intent to
liberalize the rule, we stressed strict compliance with Section 11, Rule 14 of the 1997 Rules of
Civil Procedure.
Same; Same; Same; Doctrine of substantial compliance must be deemed overturned by
Villarosa, which is the later case. —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 cases cited by
petitioners where we upheld the doctrine of substantial compliance must be deemed
overturned by Villarosa, which is the later case. Same; Same; Same; The service of summons is
a vital and indispensable ingredient of due process.—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. We will deprive private
respondent of its right to present its defense in this multimillion peso suit, if we disregard
compliance with the rules on service of summons.
DECISION
QUISUMBING, J.:
This petition for review assails the decision,1 dated May 12, 2000, of the Court of Appeals and
its resolution2 dated 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
(₱10,000,000) 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:
1. To pay plaintiffs the amount of ₱10 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 ₱63,862.57 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 ₱300,000.00 as and by way of moral damages;
5. to pay plaintiffs the amount of ₱100,000.00 as and by way of exemplary damages;
6. to pay plaintiffs attorney’s fees in the amount of ₱100,000.00; 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.
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:
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.
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 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\^/phi1.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 trial court without
jurisdiction to take cognizance of the case.1awphi1.nét We held that there was no valid service
of summons on Villarosa as service was 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 13, Rule 14 of the 1964 Rules of Court. We discarded the trial court’s basis for denying
the motion to dismiss, namely, private respondent’s substantial compliance with the rule on
service of summons, and fully agreed with petitioner’s assertions that the enumeration under
the new rule is restricted, limited and exclusive, following the rule in statutory construction
that expressio unios est exclusio alterius. Had the Rules of Court Revision Committee intended
to liberalize the rule on service of summons, we said, it could have easily done so by clear and
concise language. Absent a manifest intent to liberalize the rule, we stressed strict compliance
with Section 11, Rule 14 of the 1997 Rules of Civil Procedure.
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 subsequent proceedings in the trial court are null
and void, including the order of default. This renders the second issue now moot and academic.

We find merit in private respondent’s submissions. Since we have ruled that service of
summons upon private respondent through its filing clerk cannot be considered valid, it
necessarily follows therefore that the Regional Trial Court of Pasay City did not acquire
jurisdiction over private respondent.18 Consequently, all the subsequent proceedings held
before it, including the order of default, are null and void.19 As private respondent points out,
the second issue has become moot and academic.

WHEREFORE, the instant petition is DENIED. The questioned decision, as well as the resolution,
of the Court of Appeals in CA-G.R. SP No. 54649 are AFFIRMED. Costs against petitioners.

SO ORDERED.
G.R. No. 147369 October 23, 2003
Spouses PATRICK JOSE and RAFAELA JOSE, petitioners,
vs.
Spouses HELEN BOYON and ROMEO BOYON, respondents.
Remedial Law; Actions; Summons; Jurisdictions; Generally, trial courts acquire jurisdiction over
the person of the defendant by the service of summons.—In general, trial courts acquire
jurisdiction over the person of the defendant by the service of summons. Where the action is
in personam and the defendant is in the Philippines, such service may be done by personal or
substituted service, following the procedures laid out in Sections 6 and 7 of Rule 14 of the
Revised Rules of Court.
Same; Same; Same; Same; Substituted Service; Personal service of summons is preferred to
substituted service; Only if the former cannot be made promptly can the process server resort
to the latter; Circumstances which must be indicated in the proof of summons; Failure to comply
faithfully, strictly and fully with all the foregoing requirements of substituted service renders
the service of summons ineffective.—As can be gleaned from the abovequoted Sections,
personal service of summons is preferred to substituted service. Only if the former cannot be
made promptly can the process server resort to the latter. Moreover, the 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.
Same; Same; Same; Same; Same; A general statement that such efforts were made will not
suffice for purposes of complying with the rules of substituted service of summons.—The
Return of Summons shows that no effort was actually exerted and no positive step taken by
either the process server or petitioners to locate and serve the summons personally on
respondents. At best, the Return merely states the alleged whereabouts of respondents
without indicating that such information was verified from a person who had knowledge
thereof. Certainly, without specifying the details of the attendant circumstances or of the
efforts exerted to serve the summons, a general statement that such efforts were made will
not suffice for purposes of complying with the rules of substituted service of summons.
Same; Same; Same; Same; Extraterritorial Service; Extraterritorial service of summons or
summons by publication applies only when the action is in rem or quasi in rem.—It must be
noted that extraterritorial service of summons or summons by publication applies only when
the action is in rem or quasi in rem. The first is an action against the thing itself instead of
against the defendant’s person; in the latter, an individual is named as defendant, and the
purpose is to subject that individual’s interest in a piece of property to the obligation or loan
burdening it.
Same; Same; Same; Same; Same; An action for specific performance is an action in personam.—
In the instant case, what was filed before the trial court was an action for specific performance
directed against respondents. While the suit incidentally involved a piece of land, the
ownership or possession thereof was not put in issue, since they did not assert any interest or
right over it. Moreover, this Court has consistently declared that an action for specific
performance is an action in personam.
DECISION
PANGANIBAN, J.:
In general, substituted service can be availed of only after a clear showing that personal service
of summons was not legally possible. Also, service by publication is applicable in actions in rem
and quasi in rem, but not in personal suits such as the present one which is for specific
performance.
The Case
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court,
assailing the February 26, 2001 Decision2 of the Court of Appeals (CA) in CA-GR SP No. 60888.
The dispositive portion of the CA Decision is worded as follows:
"WHEREFORE, on the basis of what prescinds, the assailed resolution and orders issued by the
public respondent are perforce ANNULLED and SET ASIDE. This pronouncement is nonetheless
rendered without prejudice to the refiling of the same case by the private respondents with
the court a quo."3
The Facts
The factual antecedents of the case are narrated by the CA in this wise:
"On July 2, 1998, [petitioners] Patrick and Rafaela Jose lodged a complaint for specific
performance against [respondents] Helen and Romeo Boyon to compel them to facilitate the
transfer of ownership of a parcel of land subject of a controverted sale. The action was lodged
before the Regional Trial Court of Muntinlupa which is presided by herein public respondent
Judge N.C. Perello. On July 21, 1998, respondent judge, through the acting Branch Clerk of
Court of Branch 276 of the RTC of Muntinlupa City, issued summons to the [respondents]. As
per return of the summons, substituted service was resorted to by the process server allegedly
because efforts to serve the summons personally to the [respondents] failed. On December 9,
1998, [petitioners] filed before the trial court an Ex-parte Motion for Leave of Court to Effect
Summons by Publication. On December 28, 1998, public respondent issued an Order granting
the Ex-parte Motion for Leave of Court to Effect Summons by Publication. On July 30, 1999,
the respondent judge, sans a written motion, issued an Order declaring herein [respondents]
in default for failure to file their respective answers. As a consequence of the declaration of
default, [petitioners] were allowed to submit their evidence ex-parte. Ultimately, on December
7, 1999, respondent judge issued the assailed resolution, the dispositive portion of which reads
as follows:
‘x x x Therefore, Spouses Helen and Romeo Boyon are directed to execute the necessary
document with the effect of withdrawing the Affidavit of Loss they filed and annotated with
the Register of Deeds of Makati City so that title ‘to the parcel of land subject of the Deed of
Absolute Sale in favor of the Plaintiffs be transferred in their names. Thereafter the Register of
Deeds of Makati City or Muntinlupa City may cancel Transfer of Certificate of Title No. 149635
of the Defendants and issue another to Plaintiff under the deed of sale, clean and free of any
reported encumbrance.
‘Defendants are also directed to pay Plaintiffs actual expenses in the amount of ₱20,000 and
attorney’s fees of ₱20,000 including costs of this suit.’
xxxxxxxxx
"On January 5, 2000, [respondent] Helen Boyon, who was then residing in the United States of
America, was surprised to learn from her sister Elizabeth Boyon, of the resolution issued by
the respondent court. On January 18, 2000, [respondents] filed an Ad Cautelam motion
questioning, among others, the validity of the service of summons effected by the court a quo.
On March 17, 2000, the public respondent issued an Order denying the said motion on the
basis of the defaulted [respondents’] supposed loss of standing in court. On March 29, 2000,
the [respondents] once again raised the issue of jurisdiction of the trial court via a motion for
reconsideration. On June 22, 2000, however, an Order was issued by the public respondent
denying the said motion. The [petitioners] moved for the execution of the controverted
judgment which the respondent judge ultimately granted."4
Thereafter, respondents filed before the CA a Petition for certiorari under Rule 65 of the
Revised Rules of Civil Procedure, questioning the jurisdiction of the regional trial court (RTC).
Ruling of the Court of Appeals
The CA held that the trial court had no authority to issue the questioned Resolution and Orders.
According to the appellate court, the RTC never acquired jurisdiction over respondents
because of the invalid service of summons upon them. First, the sheriff failed to comply with
the requirements of substituted service of summons, because he did not specify in the Return
of Summons the prior efforts he had made to locate them and the impossibility of promptly
serving the summons upon them by personal service. Second, the subsequent summons by
publication was equally infirm, because the Complaint was a suit for specific performance and
therefore an action in personam. Consequently, the Resolution and the Orders were null and
void, since the RTC had never acquired jurisdiction over respondents.
Hence, this Petition.5
Issues
In their Memorandum, petitioners raise the following issues for our consideration:
"A. The Honorable Court of Appeals erred in not holding that the assailed Resolution
dated December 7, 1999 was already final and executory
"B. The Honorable Court of Appeals erred in giving due course to the Petition for
Certiorari of private respondents despite the pendency of an appeal earlier filed
"C. The Honorable Court erred in not holding that the Petition for Certiorari was time
barred
"D. The Honorable Court of Appeals erred in holding that the proceedings in the
lower court are null and void due to invalid and defective service of summons and
the court did not acquire jurisdiction over the person of the respondents."6
In sum, the main issue revolves around the validity of the service of summons on
respondents.1ªvvphi1.nét
The Court’s Ruling
The Petition has no merit.
Main Issue:
Validity of the Service of Summons
Petitioners aver that the CA erred in ruling that the service of summons on respondents was
invalid. They submit that although the case filed before the trial court was denominated as an
action for specific performance, it was actually an action quasi in rem, because it involved a
piece of real property located in the Philippines. They further argue that in actions quasi in rem
involving ownership of a parcel of land, it is sufficient that the trial court acquire jurisdiction
over the res. Thus, the summons by publication, which they effected subsequent to the
substituted service of summons, was allegedly sufficient.
On the other hand, respondents maintain that the proceedings in the trial court were null and
void because of the invalid and defective service of summons. According to them, the Return
of Summons issued by the process server of the RTC failed to state that he had exerted earnest
efforts to effect the service of summons. He allegedly tried to serve it personally on them on
July 22, 1998 at No. 32 Ariza Drive, Camella Homes, Alabang. He, however, resorted to
substituted service on that same day, supposedly because he could not find respondents in
the above address. They further allege that the person to whom he gave the summons was
not even a resident of that address.
Respondents contend that when summons is served by substituted service, the return must
show that it was impossible to serve the summons personally, and that efforts had been
exerted toward that end. They add that noncompliance with the rule on substituted service
renders invalid all proceedings relative thereto.
As to the summons by publication subsequently effected by petitioners, respondents argue
that the case filed before the trial court was an action for specific performance and, therefore,
an action in personam. As such, the summons by publication was insufficient to enable the trial
court to acquire jurisdiction over the persons of respondents.
Respondents conclude that even granting that the service of summons by publication was
permissible under the circumstances, it would still be defective and invalid because of the
failure of petitioners to observe the requirements of law, like an Affidavit attesting that the
latter deposited in the post office a copy of the summons and of the order of publication, paid
the postage, and sent the documents by registered mail to the former’s last known
address.1awphi1.nét
We agree with respondents. In general, trial courts acquire jurisdiction over the person of the
defendant by the service of summons. Where the action is in personam and the defendant is
in the Philippines, such service may be done by personal or substituted service, following the
procedures laid out in Sections 6 and 7 of Rule 14 of the Revised Rules of Court, which read:
"Section 6. Service in person on defendant. - Whenever practicable, the summons shall be
served by handing a copy thereof to the defendant in person, or, if he refuses to receive and
sign for it, by tendering it to him.
"Section 7. Substituted service. - If, for justifiable causes, the defendant cannot be served
within a reasonable time as provided in the preceding section, service may be effected (a) by
leaving copies of the summons at the defendant's residence with some person of suitable age
and discretion then residing therein, or (b) by leaving the copies at defendant’s office or regular
place of business with some competent person in charge thereof."
As can be gleaned from the above-quoted Sections, personal service of summons is preferred
to substituted service. Only if the former cannot be made promptly can the process server
resort to the latter. Moreover, the 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.7 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.8
Defective Personal Service of Summons
In the instant case, it appears that the process server hastily and capriciously resorted to
substituted service of summons without actually exerting any genuine effort to locate
respondents. A review of the records9 reveals that the only effort he exerted was to go to No.
32 Ariza Drive, Camella Homes, Alabang on July 22, 1998, to try to serve the summons
personally on respondents. While the Return of Summons states that efforts to do so were
ineffectual and unavailing because Helen Boyon was in the United States and Romeo Boyon
was in Bicol, it did not mention exactly what efforts -- if any -- were undertaken to find
respondents. Furthermore, it did not specify where or from whom the process server obtained
the information on their whereabouts. The pertinent portion of the Return of Summons is
reproduced as follows:
"That efforts to serve the said Summons personally upon defendants Sps. Helen and Romeo
Boyon were made but the same were ineffectual and unavailing for the reason that defendant
Helen Boyon is somewhere in the United States of America and defendant Romeo Boyon is in
Bicol thus substituted service was made in accordance with Section 7, Rule 14, of the Revised
Rules of Court."10
The Return of Summons shows that no effort was actually exerted and no positive step taken
by either the process server or petitioners to locate and serve the summons personally on
respondents. At best, the Return merely states the alleged whereabouts of respondents
without indicating that such information was verified from a person who had knowledge
thereof. Certainly, without specifying the details of the attendant circumstances or of the
efforts exerted to serve the summons, a general statement that such efforts were made will
not suffice for purposes of complying with the rules of substituted service of summons.
The necessity of stating in the process server’s Return or Proof of Service the material facts
and circumstances sustaining the validity of substituted service was explained by this Court in
Hamilton v. Levy,11 from which we quote:
"x x x The pertinent facts and circumstances attendant to the service of summons must be
stated in the proof of service or Officer’s Return; otherwise, any substituted service made in
lieu of personal service cannot be upheld. This is necessary because substituted service is in
derogation of the usual method of service. It is a method extraordinary in character and hence
may be used only as prescribed and in the circumstances authorized by statute. Here, no such
explanation was made. Failure to faithfully, strictly, and fully comply with the requirements of
substituted service renders said service ineffective."12
Moreover, the requirements of substituted service of summons and the effect of
noncompliance with the subsequent proceedings therefor were discussed in Madrigal v. Court
of Appeals13 as follows:
"In a long line of cases, this Court held that the impossibility of personal service justifying
availment of substituted service should be explained in the proof of service; why efforts
exerted towards personal service failed. The pertinent facts and circumstances attendant to
the service of summons must be stated in the proof of service or Officer’s Return; otherwise,
the substituted service cannot be upheld. It bears stressing that since service of summons,
especially for actions in personam, is essential for the acquisition of jurisdiction over the
person of the defendant, the resort to a substituted service must be duly justified. Failure to
do so would invalidate all subsequent proceedings on jurisdictional grounds."14
Summons by Publication Improper
It must be noted that extraterritorial service of summons or summons by publication applies
only when the action is in rem or quasi in rem. The first is an action against the thing itself
instead of against the defendant’s person; in the latter, an individual is named as defendant,
and the purpose is to subject that individual’s interest in a piece of property to the obligation
or loan burdening it.15

In the instant case, what was filed before the trial court was an action for specific performance
directed against respondents. While the suit incidentally involved a piece of land, the
ownership or possession thereof was not put in issue, since they did not assert any interest or
right over it. Moreover, this Court has consistently declared that an action for specific
performance is an action in personam.16

Having failed to serve the summons on respondents properly, the RTC did not validly acquire
jurisdiction over their persons. Consequently, due process demands that all the proceedings
conducted subsequent thereto should be deemed null and void.17

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs
against petitioners.

SO ORDERED.
G.R. No. 130974 August 16, 2006 Court, which the clerk uses in the Monthly Report of Cases to be submitted to the Office of the
Court Administrator within the first ten (10) days of the succeeding month. Thus, one month
MA. IMELDA M. MANOTOC, Petitioner, from the issuance of summons can be considered “reasonable time” with regard to personal
vs. service on the defendant.
HONORABLE COURT OF APPEALS and AGAPITA TRAJANO on behalf of the Estate of
ARCHIMEDES TRAJANO, Respondents. Same; Same; Same; Same; Sheriffs; Sheriffs are enjoined to try their best efforts to accomplish
personal service on defendant, and since the defendant is expected to try to avoid and evade
service of summons, the sheriff must be resourceful, persevering, canny, and diligent in serving
Courts; Jurisdictions; Summons; Substituted Service; While substituted service of summons is
the process on the defendant; “Several attempts” means at least three (3) tries, preferably on
permitted, since it is extraordinary in character and in derogation of the usual method of
at least two different dates.—Sheriffs are asked to discharge their duties on the service of
service, it must faithfully and strictly comply with the prescribed requirements and
summons with due care, utmost diligence, and reasonable promptness and speed so as not to
circumstances authorized by the rules.—Jurisdiction over the defendant is acquired either
prejudice the expeditious dispensation of justice. Thus, they are enjoined to try their best
upon a valid service of summons or the defendant’s voluntary appearance in court. When the
efforts to accomplish personal service on defendant. On the other hand, since the defendant
defendant does not voluntarily submit to the court’s jurisdiction or when there is no valid
is expected to try to avoid and evade service of summons, the sheriff must be resourceful,
service of summons, “any judgment of the court which has no jurisdiction over the person of
persevering, canny, and diligent in serving the process on the defendant. For substituted
the defendant is null and void.” In an action strictly in personam, personal service on the
service of summons to be available, there must be several attempts by the sheriff to personally
defendant is the preferred mode of service, that is, by handing a copy of the summons to the
serve the summons within a reasonable period [of one month] which eventually resulted in
defendant in person. If defendant, for excusable reasons, cannot be served with the summons
failure to prove impossibility of prompt service. “Several attempts” means at least three (3)
within a reasonable period, then substituted service can be resorted to. While substituted
tries, preferably on at least two different dates. In addition, the sheriff must cite why such
service of summons is permitted, “it is extraordinary in character and in derogation of the usual
efforts were unsuccessful. It is only then that impossibility of service can be confirmed or
method of service.” Hence, it must faithfully and strictly comply with the prescribed
accepted.
requirements and circumstances authorized by the rules. Indeed, “compliance with the rules
regarding the service of summons is as much important as the issue of due process as of
Same; Same; Same; Same; Same; The sheriff must describe in the Return of Summons the facts
jurisdiction.”
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.—
Same; Same; Same; Same; Words and Phrases; The party relying on substituted service or the
The sheriff must describe in the Return of Summons the facts and circumstances surrounding
sheriff must show that defendant cannot be served promptly or there is impossibility of prompt
the attempted personal service. The efforts made to find the defendant and the reasons
service; “Reasonable time” is defined as so much time as is necessary under the circumstances
behind the failure must be clearly narrated in detail in the Return. The date and time of the
for a reasonably prudent and diligent man to do, conveniently, what the contract or duty
attempts on personal service, the inquiries made to locate the defendant, the name/s of the
requires that should be done, having a regard for the rights and possibility of loss, if any, to the
occupants of the alleged residence or house of defendant and all other acts done, though
other party; One month from the issuance of summons can be considered “reasonable time”
futile, to serve the summons on defendant must be specified in the Return to justify
with regard to personal service on the defendant.—The party relying on substituted service or
substituted service. The form on Sheriff’s Return of Summons on Substituted Service
the sheriff must show that defendant cannot be served promptly or there is impossibility of
prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy requires
prompt service. Section 8, Rule 14 provides that the plaintiff or the sheriff is given a
a narration of the efforts made to find the defendant personally and the fact of failure.
“reasonable time” to serve the summons to the defendant in person, but no specific time
Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires that
frame is mentioned. “Reasonable time” is defined as “so much time as is necessary under the
“impossibility of prompt service should be shown by stating the efforts made to find the
circumstances for a reasonably prudent and diligent man to do, conveniently, what the
defendant personally and the failure of such efforts,” which should be made in the proof of
contract or duty requires that should be done, having a regard for the rights and possibility of
service.
loss, if any[,] to the other party.” Under the Rules, the service of summons has no set period.
However, when the court, clerk of court, or the plaintiff asks the sheriff to make the return of
Same; Same; Same; Same; Words and Phrases; A person of suitable age and discretion is one
the summons and the latter submits the return of summons, then the validity of the summons
who has attained the age of full legal capacity (18 years old) and is considered to have enough
lapses. The plaintiff may then ask for an alias summons if the service of summons has failed.
discernment to understand the importance of a summons; “Discretion” is defined as the ability
What then is a reasonable time for the sheriff to effect a personal service in order to
to make decisions which represent a responsible choice and for which an understanding of what
demonstrate impossibility of prompt service? To the plaintiff, “reasonable time” means no
is lawful, right or wise may be presupposed; The person upon whom substituted service is made
more than seven (7) days since an expeditious processing of a complaint is what a plaintiff
must have the “relation of confidence” to the defendant, ensuring that the latter would receive
wants. To the sheriff, “reasonable time” means 15 to 30 days because at the end of the month,
or at least be notified of the receipt of the summons.—If the substituted service will be effected
it is a practice for the branch clerk of court to require the sheriff to submit a return of the
at defendant’s house or residence, it should be left with a person of “suitable age and
summons assigned to the sheriff for service. The Sheriff’s Return provides data to the Clerk of
discretion then residing therein.” A person of suitable age and discretion is one who has
attained the age of full legal capacity (18 years old) and is considered to have enough
discernment to understand the importance of a summons. “Discretion” is defined as “the
ability to make decisions which represent a responsible choice and for which an understanding
of what is lawful, right or wise may be presupposed”. Thus, to be of sufficient discretion, such
person must know how to read and understand English to comprehend the import of the
summons, and fully realize the need to deliver the summons and complaint to the defendant
at the earliest possible time for the person to take appropriate action. Thus, the person must
have the “relation of confidence” to the defendant, ensuring that the latter would receive or
at least be notified of the receipt of the summons. 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.
Same; Same; Same; Same; If the substituted service will be done at defendant’s office or regular
place of business, then it should be served on a competent person in charge of the place.—If
the substituted service will be done at defendant’s office or regular place of business, then it
should be served on a competent person in charge of the place. Thus, the person on whom the
substituted service will be made must be the one managing the office or business of defendant,
such as the president or manager; and such individual must have sufficient knowledge to
understand the obligation of the defendant in the summons, its importance, and the
prejudicial effects arising from inaction on the summons. Again, these details must be
contained in the Return.
Same; Same; Same; Same; Given the fact that the substituted service of summons may be
assailed by a Motion to Dismiss, it is imperative that the pertinent facts and circumstances
surrounding the service of summons be described with more particularity in the Return or
Certificate of Service.—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 x x x 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.” Wanting in detailed information, the Return deviates from the ruling—in
Domagas v. Jensen, and other related cases—that the pertinent facts and circumstances on
the efforts exerted to serve the summons personally must be narrated in the Return. It cannot
be determined how many times, on what specific dates, and at what hours of the day the
attempts were made. Given the fact that the substituted service of summons may be assailed,
as in the present case, by a Motion to Dismiss, it is imperative that the pertinent facts and
circumstances surrounding the service of summons be described with more particularity in the
Return or Certificate of Service.
Same; Same; Same; Same; Before resorting to substituted service, a plaintiff must demonstrate
an effort in good faith to locate the defendant through direct means.—Apart from the
allegation of petitioner’s address in the Complaint, it has not been shown that respondent
Trajano or Sheriff Cañelas, who served such summons, exerted extraordinary efforts to locate
petitioner. Certainly, the second paragraph of the Complaint only states that respondents
were “informed, and so [they] allege” about the address and whereabouts of petitioner.
Before resorting to substituted service, a plaintiff must demonstrate an effort in good faith to
locate the defendant through more direct means. More so, in the case in hand, when the
alleged petitioner’s residence or house is doubtful or has not been clearly ascertained, it would
have been better for personal service to have been pursued persistently.
Same; Same; Same; Same; In view of the 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, the narration of the efforts made to find the defendant and the fact of failure written
in broad and imprecise words will not suffice—the facts and circumstances should be stated
with more particularity and detail on the number of attempts made at personal service, dates
and times of the attempts, inquiries to locate defendant, names of occupants of the alleged
residence, and the reasons for failure should be included in the Return to satisfactorily show
the efforts undertaken; To allow sheriffs to describe the facts and circumstances in inexact
terms would encourage routine performance of their precise duties relating to substituted
service—for it would be quite easy to shroud or conceal carelessness or laxity in such broad
terms.—In the case Umandap v. Sabio, Jr., 339 SCRA 243 (2000), it may be true that the Court
held that a Sheriff’s Return, which states that “despite efforts exerted to serve said process
personally upon the defendant on several occasions the same proved futile,” conforms to the
requirements of valid substituted service. However, in view of the 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, the Court rules in the case at bar that the
narration of the efforts made to find the defendant and the fact of failure written in broad and
imprecise words will not suffice. The facts and circumstances should be stated with more
particularity and detail on the number of attempts made at personal service, dates and times
of the attempts, inquiries to locate defendant, names of occupants of the alleged residence,
and the reasons for failure should be included in the Return to satisfactorily show the efforts
undertaken. That such efforts were made to personally serve summons on defendant, and
those resulted in failure, would prove impossibility of prompt personal service. Moreover, to
allow sheriffs to describe the facts and circumstances in inexact terms would encourage
routine performance of their precise duties relating to substituted service—for it would be
quite easy to shroud or conceal carelessness or laxity in such broad terms. Lastly, considering
that monies and properties worth millions may be lost by a defendant because of an irregular
or void substituted service, it is but only fair that the Sheriff’s Return should clearly and
convincingly show the impracticability or hopelessness of personal service.
Jurisdictions; Summons; Substituted Service; There are two requirements under the Rules
regarding leaving summons with a“ person of suitable age and discretion” residing in
defendant’s house or residence, namely, (1) recipient must be a person of suitable age and
discretion, and, (2) recipient must reside in the house or residence of defendant; To protect a
defendant’s right to due process by being accorded proper notice of a case against her, the
substituted service of summons must be shown to clearly comply with the rules.—Granting that
such a general description be considered adequate, there is still a serious nonconformity from
the requirement that the summons must be left with a “person of suitable age and discretion”
residing in defendant’s house or residence. Thus, there are two (2) requirements under the
Rules: (1) recipient must be a person of suitable age and discretion; and (2) recipient must
reside in the house or residence of defendant. Both requirements were not met. In this case,
the Sheriff’s Return lacks information as to residence, age, and discretion of Mr. Macky de la
Cruz, aside from the sheriff’s general assertion that de la Cruz is the “resident caretaker” of
petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged receptionist and telephone
operator of Alexandra Homes. It is doubtful if Mr. de la Cruz is residing with petitioner Manotoc
in the condominium unit considering that a married woman of her stature in society would
unlikely hire a male caretaker to reside in her dwelling. With the petitioner’s allegation that
Macky de la Cruz is not her employee, servant, or representative, it is necessary to have
additional information in the Return of Summons. Besides, Mr. Macky de la Cruz’s refusal to
sign the Receipt for the summons is a strong indication that he did not have the necessary
“relation of confidence” with petitioner. To protect petitioner’s right to due process by being
accorded proper notice of a case against her, the substituted service of summons must be
shown to clearly comply with the rules. It has been stated and restated that substituted service
of summons must faithfully and strictly comply with the prescribed requirements and in
thecircumstances authorized by the rules.
Same; Same; Same; Sheriffs; For the presumption of regularity in the performance of official
duty by a sheriff, the Sheriff’s Return must show that serious efforts or attempts were exerted
to personally serve the summons and that said efforts failed; The presumption of regularity in
the performance of official functions by the sheriff is not applicable where it is patent that the
sheriff’s return is defective.—The court a quo heavily relied on the presumption of regularity
in the performance of official duty. It reasons out that “[t]he certificate of service by the proper
officer is prima facie evidence of the facts set out herein, and to overcome the presumption
arising from said certificate, the evidence must be clear and convincing.” The Court
acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply,
the Sheriff’s Return must show that serious efforts or attempts were exerted to personally
serve the summons and that said efforts failed. These facts must be specifically narrated in the
Return. To reiterate, it must clearly show that the substituted service must be made on a
person of suitable age and discretion living in the dwelling or residence of defendant.
Otherwise, the Return is flawed and the presumption cannot be availed of. As previously
explained, the Return of Sheriff Cañelas did not comply with the stringent requirements of
Rule 14, Section 8 on substituted service. In the case of Venturanza v. Court of Appeals, 156
SCRA 305 (1987), it was held that “x x x the presumption of regularity in the performance of
official functions by the sheriff is not applicable in this case where it is patent that the sheriff’s
return is defective (emphasis supplied).” While the Sheriff’s Return in the Venturanza case had
no statement on the effort or attempt to personally serve the summons, the Return of Sheriff
Cañelas in the case at bar merely described the efforts or attempts in general terms lacking in
details as required by the ruling in the case of Domagas v. Jensen and other cases. It is as if
Cañelas’ Return did not mention any effort to accomplish personal service. Thus, the
substituted service is void.
Same; Same; Same; Same; Even assuming that the indicated address is defendant’s actual
residence, such fact would not make an irregular and void substituted service valid and
effective.—On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit
E2104, at No. 29 Meralco Avenue, Pasig City, our findings that the substituted service is void
has rendered the matter moot and academic. Even assuming that Alexandra Homes Room 104
is her actual residence, such fact would not make an irregular and void substituted service valid
and effective.
DECISION
VELASCO, JR., J.:
The court’s jurisdiction over a defendant is founded on a valid service of summons. Without a
valid service, the court cannot acquire jurisdiction over the defendant, unless the defendant
voluntarily submits to it. The defendant must be properly apprised of a pending action against
him and assured of the opportunity to present his defenses to the suit. Proper service of
summons is used to protect one’s right to due process.
The Case
This Petition for Review on Certiorari 1 under Rule 45 presents the core issue whether there
was a valid substituted service of summons on petitioner for the trial court to acquire
jurisdiction. Petitioner Manotoc claims the court a quo should have annulled the proceedings
in the trial court for want of jurisdiction due to irregular and ineffective service of summons.
The Facts
Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on
behalf of the Estate of Archimedes Trajano v. Imelda ‘Imee’ R. Marcos-Manotoc 2 for Filing,
Recognition and/or Enforcement of Foreign Judgment. Respondent Trajano seeks the
enforcement of a foreign court’s judgment rendered on May 1, 1991 by the United States
District Court of Honolulu, Hawaii, United States of America, in a case entitled Agapita Trajano,
et al. v. Imee Marcos-Manotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for wrongful death
of deceased Archimedes Trajano committed by military intelligence officials of the Philippines
allegedly under the command, direction, authority, supervision, tolerance, sufferance and/or
influence of defendant Manotoc, pursuant to the provisions of Rule 39 of the then Revised
Rules of Court.
Based on paragraph two of the Complaint, the trial court issued a Summons 3 on July 6, 1993
addressed to petitioner at Alexandra Condominium Corporation or Alexandra Homes, E2 Room
104, at No. 29 Meralco Avenue, Pasig City.
On July 15, 1993, 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. 4 When petitioner failed to file her Answer, the trial court declared her in default
through an Order 5 dated October 13, 1993.
On October 19, 1993, petitioner, by special appearance of counsel, 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. The grounds to support the motion were: (1) the address of
defendant indicated in the Complaint (Alexandra Homes) was not her dwelling, residence, or
regular place of business as provided in Section 8, Rule 14 of the Rules of Court; (2) the party
(de la Cruz), who was found in the unit, was neither a representative, employee, nor a resident
of the place; (3) the procedure prescribed by the Rules on personal and substituted service of
summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment
rendered in this case would be ineffective and futile.
During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales,
who testified that he saw defendant Manotoc as a visitor in Alexandra Homes only two times.
He also identified the Certification of Renato A. de Leon, which stated that Unit E-2104 was
owned by Queens Park Realty, Inc.; and at the time the Certification was issued, the unit was
not being leased by anyone. Petitioner also presented her Philippine passport and the
Disembarkation/Embarkation Card 7 issued by the Immigration Service of Singapore to show
that she was a resident of Singapore. She claimed that the person referred to in plaintiff’s
Exhibits "A" to "EEEE" as "Mrs. Manotoc" may not even be her, but the mother of Tommy
Manotoc, and granting that she was the one referred to in said exhibits, only 27 out of 109
entries referred to Mrs. Manotoc. Hence, the infrequent number of times she allegedly
entered Alexandra Homes did not at all establish plaintiff’s position that she was a resident of
said place.
On the other hand, Agapita Trajano, for plaintiffs’ estate, presented Robert Swift, lead counsel
for plaintiffs in the Estate of Ferdinand Marcos Human Rights Litigation, who testified that he
participated in the deposition taking of Ferdinand R. Marcos, Jr.; and he confirmed that Mr.
Marcos, Jr. testified that petitioner’s residence was at the Alexandra Apartment, Greenhills. 8
In addition, the entries 9 in the logbook of Alexandra Homes from August 4, 1992 to August 2,
1993, listing the name of petitioner Manotoc and the Sheriff’s Return, 10 were adduced in
evidence.
On October 11, 1994, the trial court rejected Manotoc’s Motion to Dismiss on the strength of
its findings that her residence, for purposes of the Complaint, was Alexandra Homes, Unit E-
2104, No. 29 Meralco Avenue, Pasig, Metro Manila, based on the documentary evidence of
respondent Trajano. The trial court relied on the presumption that the sheriff’s substituted
service was made in the regular performance of official duty, and such presumption stood in
the absence of proof to the contrary. 11
On December 21, 1994, the trial court discarded Manotoc’s plea for reconsideration for lack
of merit. 12
Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the Court of
Appeals (CA) on January 20, 1995, docketed as CA-G.R. SP No. 36214 seeking the annulment
of the October 11, 1994 and December 21, 1994 Orders of Judge Aurelio C. Trampe.
Ruling of the Court of Appeals
On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the Petition for
Certiorari and Prohibition. The court a quo adopted the findings of the trial court that
petitioner’s residence was at Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig,
Metro Manila, which was also the residence of her husband, as shown by the testimony of
Atty. Robert Swift and the Returns of the registered mails sent to petitioner. It ruled that the
Disembarkation/Embarkation Card and the Certification dated September 17, 1993 issued by
Renato A. De Leon, Assistant Property Administrator of Alexandra Homes, were hearsay, and
that said Certification did not refer to July 1993—the month when the substituted service was
effected.
In the same Decision, the CA also rejected petitioner’s Philippine passport as proof of her
residency in Singapore as it merely showed the dates of her departure from and arrival in the
Philippines without presenting the boilerplate’s last two (2) inside pages where petitioner’s
residence was indicated. The CA considered the withholding of those pages as suppression of
evidence. Thus, according to the CA, the trial court had acquired jurisdiction over petitioner as
there was a valid substituted service pursuant to Section 8, Rule 14 of the old Revised Rules of
Court.
On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied by the CA
in its Resolution 16 dated October 8, 1997.
Hence, petitioner has come before the Court for review on certiorari.
The Issues
Petitioner raises the following assignment of errors for the Court’s consideration:
I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE
DECISION AND RESOLUTION IN QUESTION (ANNEXES A AND B) IN DEFIANCE OF LAW AND
JURISPRUDENCE IN RULING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE
PERSON OF THE PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN
ACCORDANCE WITH SECTION 8, RULE 14 OF THE REVISED RULES OF COURT.
II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT
THERE WAS A VALID SERVICE OF SUMMONS ON AN ALLEGED CARETAKER OF PETITIONER’S
RESIDENCE IN COMPLETE DEFIANCE OF THE RULING IN CASTILLO VS. CFI OF BULACAN, BR. IV,
G.R. NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE PROPRIETY OF SUCH
SERVICE UPON MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY RESIDES.
III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT
THE RESIDENCE OF THE HUSBAND IS ALSO THE RESIDENCE OF HIS WIFE CONTRARY TO THE
RULING IN THE BANK OF THE PHILIPPINE ISLANDS VS. DE COSTER, G.R. NO. 23181, MARCH 16,
1925, 47 PHIL. 594.
IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY
THE RULE ON EXTRA-TERRITORIAL SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE
14 OF THE REVISED RULES OF COURT. 17
The assigned errors bring to the fore the crux of the disagreement—the validity of the
substituted service of summons for the trial court to acquire jurisdiction over petitioner.
The Court’s Ruling
We GRANT the petition.
Acquisition of Jurisdiction
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." 18 In an
action strictly in personam, personal service on the defendant is the preferred mode of service,
that is, by handing a copy of the summons to the defendant in person. If defendant, for
excusable reasons, cannot be served with the summons within a reasonable period, then
substituted service can be resorted to. While substituted service of summons is permitted, "it
is extraordinary in character and in derogation of the usual method of service." 19 Hence, it
must faithfully and strictly comply with the prescribed requirements and circumstances
authorized by the rules. Indeed, "compliance with the rules regarding the service of summons
is as much important as the issue of due process as of jurisdiction." 20
Requirements for Substituted Service
Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:
SEC. 8. 21 Substituted service. – If the defendant cannot be served within a reasonable time as
provided in the preceding section [personal service on defendant], 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.
We can break down this section into the following requirements to effect a valid substituted
service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that defendant cannot be
served promptly or there is impossibility of prompt service. 22 Section 8, Rule 14 provides that
the plaintiff or the sheriff is given a "reasonable time" to serve the summons to the defendant
in person, but no specific time frame is mentioned. "Reasonable time" is defined as "so much
time as is necessary under the circumstances for a reasonably prudent and diligent man to do,
conveniently, what the contract or duty requires that should be done, having a regard for the
rights and possibility of loss, if any[,] to the other party." 23 Under the Rules, the service of
summons has no set period. However, when the court, clerk of court, or the plaintiff asks the
sheriff to make the return of the summons and the latter submits the return of summons, then
the validity of the summons lapses. The plaintiff may then ask for an alias summons if the
service of summons has failed. 24 What then is a reasonable time for the sheriff to effect a
personal service in order to demonstrate impossibility of prompt service? To the plaintiff,
"reasonable time" means no more than seven (7) days since an expeditious processing of a
complaint is what a plaintiff wants. To the sheriff, "reasonable time" means 15 to 30 days
because at the end of the month, it is a practice for the branch clerk of court to require the
sheriff to submit a return of the summons assigned to the sheriff for service. The Sheriff’s
Return provides data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases
to be submitted to the Office of the Court Administrator within the first ten (10) days of the
succeeding month. Thus, one month from the issuance of summons can be considered
"reasonable time" with regard to personal service on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with due care, utmost
diligence, and reasonable promptness and speed so as not to prejudice the expeditious
dispensation of justice. Thus, they are enjoined to try their best efforts to accomplish personal
service on defendant. On the other hand, since the defendant is expected to try to avoid and
evade service of summons, the sheriff must be resourceful, persevering, canny, and diligent in
serving the process on the defendant. 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. 25 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. The form on Sheriff’s Return of Summons on Substituted Service
prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy requires
a narration of the efforts made to find the defendant personally and the fact of failure. 26
Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires that
"impossibility of prompt service should be shown by stating the efforts made to find the
defendant personally and the failure of such efforts," which should be made in the proof of
service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendant’s house or residence, it should be left
with a person of "suitable age and discretion then residing therein." 27 A person of suitable age
and discretion is one who has attained the age of full legal capacity (18 years old) and is
considered to have enough discernment to understand the importance of a summons.
"Discretion" is defined as "the ability to make decisions which represent a responsible choice
and for which an understanding of what is lawful, right or wise may be presupposed". 28 Thus,
to be of sufficient discretion, such person must know how to read and understand English to
comprehend the import of the summons, and fully realize the need to deliver the summons
and complaint to the defendant at the earliest possible time for the person to take appropriate
action. Thus, the person must have the "relation of confidence" to the defendant, ensuring
that the latter would receive or at least be notified of the receipt of the summons. 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.
(4) A Competent Person in Charge
If the substituted service will be done at defendant’s office or regular place of business, then
it should be served on a competent person in charge of the place. Thus, the person on whom
the substituted service will be made must be the one managing the office or business of
defendant, such as the president or manager; and such individual must have sufficient
knowledge to understand the obligation of the defendant in the summons, its importance, and
the prejudicial effects arising from inaction on the summons. Again, these details must be
contained in the Return.
Invalid Substituted Service in the Case at Bar
Let us examine the full text of the Sheriff’s Return, which reads:
THIS IS TO CERTIFY that on many occasions several attempts were made to serve the summons
with complaint and annexes issued by this Honorable Court in the above entitled case,
personally upon the defendant IMELDA ‘IMEE’ MARCOS-MANOTOC located at Alexandra
Condominium Corpration [sic] or Alexandra Homes E-2 Room 104 No. 29 Merlaco [sic] Ave.,
Pasig, Metro-Manila at reasonable hours of the day but to no avail for the reason that said
defendant is usually out of her place and/or residence or premises. That on the 15th day of
July, 1993, substituted service of summons was resorted to in accordance with the Rules of
Court in the Philippines leaving copy of said summons with complaint and annexes thru [sic]
(Mr) Macky de la Cruz, caretaker of the said defendant, according to (Ms) Lyn Jacinto,
Receptionist and Telephone Operator of the said building, a person of suitable age and
discretion, living with the said defendant at the given address who acknowledged the receipt
thereof of said processes but he refused to sign (emphases supplied).
WHEREFORE, said summons is hereby returned to this Honorable Court of origin, duly served
for its record and information.
Pasig, Metro-Manila July 15, 1993. 29
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 x
x x 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." Wanting in detailed
information, the Return deviates from the ruling—in Domagas v. Jensen 30 and other related
cases 31—that the pertinent facts and circumstances on the efforts exerted to serve the
summons personally must be narrated in the Return. It cannot be determined how many
times, on what specific dates, and at what hours of the day the attempts were made. Given
the fact that the substituted service of summons may be assailed, as in the present case, by a
Motion to Dismiss, it is imperative that the pertinent facts and circumstances surrounding the
service of summons be described with more particularity in the Return or Certificate of Service.
Besides, apart from the allegation of petitioner’s address in the Complaint, it has not been
shown that respondent Trajano or Sheriff Cañelas, who served such summons, exerted
extraordinary efforts to locate petitioner. Certainly, the second paragraph of the Complaint
only states that respondents were "informed, and so [they] allege" about the address and
whereabouts of petitioner. Before resorting to substituted service, a plaintiff must
demonstrate an effort in good faith to locate the defendant through more direct means. 32
More so, in the case in hand, when the alleged petitioner’s residence or house is doubtful or
has not been clearly ascertained, it would have been better for personal service to have been
pursued persistently.
In the case Umandap v. Sabio, Jr., 33 it may be true that the Court held that a Sheriff’s Return,
which states that "despite efforts exerted to serve said process personally upon the defendant
on several occasions the same proved futile," conforms to the requirements of valid
substituted service. However, in view of the 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, the Court rules in the case at bar that the narration of the efforts made to find the
defendant and the fact of failure written in broad and imprecise words will not suffice. The
facts and circumstances should be stated with more particularity and detail on the number of
attempts made at personal service, dates and times of the attempts, inquiries to locate
defendant, names of occupants of the alleged residence, and the reasons for failure should be
included in the Return to satisfactorily show the efforts undertaken. That such efforts were
made to personally serve summons on defendant, and those resulted in failure, would prove
impossibility of prompt personal service.
Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would
encourage routine performance of their precise duties relating to substituted service—for it
would be quite easy to shroud or conceal carelessness or laxity in such broad terms. Lastly,
considering that monies and properties worth millions may be lost by a defendant because of
an irregular or void substituted service, it is but only fair that the Sheriff’s Return should clearly
and convincingly show the impracticability or hopelessness of personal service.
Granting that such a general description be considered adequate, there is still a serious
nonconformity from the requirement that the summons must be left with a "person of suitable
age and discretion" residing in defendant’s house or residence. Thus, there are two (2)
requirements under the Rules: (1) recipient must be a person of suitable age and discretion;
and (2) recipient must reside in the house or residence of defendant. Both requirements were
not met. In this case, the Sheriff’s Return lacks information as to residence, age, and discretion
of Mr. Macky de la Cruz, aside from the sheriff’s general assertion that de la Cruz is the
"resident caretaker" of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged
receptionist and telephone operator of Alexandra Homes. It is doubtful if Mr. de la Cruz is
residing with petitioner Manotoc in the condominium unit considering that a married woman
of her stature in society would unlikely hire a male caretaker to reside in her dwelling. With
the petitioner’s allegation that Macky de la Cruz is not her employee, servant, or
representative, it is necessary to have additional information in the Return of Summons.
Besides, Mr. Macky de la Cruz’s refusal to sign the Receipt for the summons is a strong
indication that he did not have the necessary "relation of confidence" with petitioner. To
protect petitioner’s right to due process by being accorded proper notice of a case against her,
the substituted service of summons must be shown to clearly comply with the rules.
It has been stated and restated that substituted service of summons must faithfully and strictly
comply with the prescribed requirements and in the circumstances authorized by the rules. 34
Even American case law likewise stresses the principle of strict compliance with statute or rule
on substituted service, thus:
The procedure prescribed by a statute or rule for substituted or constructive service must be
strictly pursued. 35 There must be strict compliance with the requirements of statutes
authorizing substituted or constructive service. 36
made on a person of suitable age and discretion living in the dwelling or residence of
defendant. Otherwise, the Return is flawed and the presumption cannot be availed of. As
previously explained, the Return of Sheriff Cañelas did not comply with the stringent
requirements of Rule 14, Section 8 on substituted service.
In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the presumption of
regularity in the performance of official functions by the sheriff is not applicable in this case
where it is patent that the sheriff’s return is defective (emphasis supplied)." While the Sheriff’s
Return in the Venturanza case had no statement on the effort or attempt to personally serve
the summons, the Return of Sheriff Cañelas in the case at bar merely described the efforts or
attempts in general terms lacking in details as required by the ruling in the case of Domagas v.
Jensen and other cases. It is as if Cañelas’ Return did not mention any effort to accomplish
personal service. Thus, the substituted service is void.
On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at
No. 29 Meralco Avenue, Pasig City, our findings that the substituted service is void has
rendered the matter moot and academic. Even assuming that Alexandra Homes Room 104 is
her actual residence, such fact would not make an irregular and void substituted service valid
and effective.

Where, by the local law, substituted or constructive service is in certain situations authorized IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed
in the place of personal service when the latter is inconvenient or impossible, a strict and literal March 17, 1997 Decision and October 8, 1997 Resolution of the Court of Appeals and the
compliance with the provisions of the law must be shown in order to support the judgment October 11, 1994 and December 21, 1994 Orders of the Regional Trial Court, National Capital
based on such substituted or constructive service. 37 Jurisdiction is not to be assumed and Judicial Region, Pasig City, Branch 163 are hereby REVERSED and SET ASIDE.No costs.
exercised on the general ground that the subject matter of the suit is within the power of the
court. The inquiry must be as to whether the requisites of the statute have been complied SO ORDERED.
with, and such compliance must appear on the record. 38 The fact that the defendant had
actual knowledge of attempted service does not render the service effectual if in fact the PRESBITERO J. VELASCO, JR.
process was not served in accordance with the requirements of the statute. 39
Associate Justice
Based on the above principles, 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).

Due to non-compliance with the prerequisites for valid substituted service, the proceedings
held before the trial court perforce must be annulled.

The court a quo heavily relied on the presumption of regularity in the performance of official
duty. It reasons out that "[t]he certificate of service by the proper officer is prima facie
evidence of the facts set out herein, and to overcome the presumption arising from said
certificate, the evidence must be clear and convincing." 40

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption
to apply, the Sheriff’s Return must show that serious efforts or attempts were exerted to
personally serve the summons and that said efforts failed. These facts must be specifically
narrated in the Return. To reiterate, it must clearly show that the substituted service must be
G.R. No. 206653 February 25, 2015 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.
YUK LING ONG, Petitioner,
vs. The Facts
BENJAMIN T. CO, Respondent.
Petitioner Yuk Ling Ong (petitioner), a British-Hong Kong national, and respondent Benjamin
Remedial Law; Civil Procedure; Annulment of Judgment; Rule 47 of the 1997 Rules of Civil Co (respondent), a Filipino citizen, were married on October 3, 1982 at Ellinwood-Malate
Procedure, as amended, governs actions for annulment of judgments or final orders and Church.3
resolutions, and Section 2 thereof explicitly provides only two (2) grounds for annulment of
judgment, that is, extrinsic fraud and lack of jurisdiction.—Annulment of judgment is a Sometime in November 2008, petitioner received a subpoena from the Bureau of Immigration
recourse equitable in character, allowed only in exceptional cases as where there is no and Deportation (BID)directing her to appear before the said agency because her permanent
available or other adequate remedy. Rule 47 of the 1997 Rules of Civil Procedure, as amended, residence visa was being subjected to cancellation proceedings. Reportedly, her marriage with
governs actions for annulment of judgments or final orders and resolutions, and Section 2 respondent was nullified by the court.
thereof explicitly provides only two grounds for annulment of judgment, that is, extrinsic fraud
and lack of jurisdiction. Annulment of judgment is an equitable principle not because it allows
When petitioner appeared before the BID, she was furnished with the copies of the following
a party litigant another opportunity to reopen a judgment that has long lapsed into finality but
documents: (1) petition for declaration of nullity of marriage filed as Civil Case No. CV-01-0177;
because it enables him to be discharged from the burden of being bound to a judgment that
(2) petition for declaration of nullity of marriage docketed as Civil Case No. 02-0306; (3)
is an absolute nullity to begin with.
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
Same; Same; Same; Lack of jurisdiction on the part of the trial court in rendering the judgment
as void ab initio; and (4) their marriage contract5 with the subject decision annotated thereon.
or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack
Petitioner was perplexed that her marriage with respondent had been declared void ab initio.
of jurisdiction over the person of the petitioner.—Lack of jurisdiction on the part of the trial
The above documents showed that on April 26, 2001, respondent filed a petition for
court in rendering the judgment or final order is either lack of jurisdiction over the subject
declaration of nullity6 on the ground of psychological incapacity before the RTC, which was
matter or nature of the action, or lack of jurisdiction over the person of the petitioner. The
docketed as Civil Case No. CV-01-0177. Respondent stated that petitioner’s address was 600
former is a matter of substantive law because statutory law defines the jurisdiction of the
Elcano St., Binondo, Manila. There was no showing of its status, whether pending, withdrawn
courts over the subject matter or nature of the action. The latter is a matter of procedural law,
or terminated. On July 19, 2002, respondent filed another petition for declaration of Nullity7
for it involves the service of summons or other processes on the petitioner.
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
Same; Same; Same; Jurisdiction over the defendant is acquired either upon a valid service of
Garden Homes, Quezon City. On July 29, 2002, the RTC issued summons.8 In his Server’s
summons or the defendant’s voluntary appearance in court.—In the present case, petitioner
Return,9 process server Rodolfo Torres, Jr. stated that, on August 1, 2002, substituted service
contends that there was lack of jurisdiction over her person because there was an invalid
of summons with the copy of the petition was effected after several futile attempts to serve
substituted service of summons. Jurisdiction over the defendant is acquired either upon a valid
the same personally on petitioner. The said documents were received by Mr. Roly Espinosa, a
service of summons or the defendant’s voluntary appearance in court. If the defendant does
security officer.
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.
DECISION 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
MENDOZA, J.:
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
In court proceedings, there is no right more cherished than the right of every litigant to be manifest collusion. Thus, the RTC concluded that petitioner was psychologically incapacitated
given an opportunity to be heard. This right begins at the very moment that summons is served to perform her essential marital obligations.
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
Consequently, petitioner filed a petition for annulment of judgment11 under Rule 47 of the
circumstances that constructive notification, or substituted service of summons, is allowed. If
Rules of Court before the CA on November 24, 2008, claiming that she was never notified of
the server falls short of the rigorous requirements for substituted service of summons, then
the cases filed against her. She prayed that the RTC decision, dated December 11, 2002, in Civil
the Court has no other option but to strike down a void judgment, regardless of the
Case No. 02-0306, be nullified on the grounds of extrinsic fraud and lack of jurisdiction.
consequences. This is a petition for review on certiorari seeking to reverse and set aside the
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
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 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 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.
(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
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 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.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice
G.R. No. 158407 January 17, 2005 said Rule. If he is temporarily out of the country, any of the following modes of service may be
resorted to: (a) substituted service set forth in Section 8; (2) personal service outside the
FILOMENA DOMAGAS, petitioner, country, with leave of court; (3) service by publication, also with leave of court; or (4) any other
vs. manner the court may deem sufficient.
VIVIAN LAYNO JENSEN, respondent.
Same; Same; Same; The statutory requirement of substituted service must be followed
faithfully and strictly and any substituted service other than that authorized by the statute is
Remedial Law; Actions; Whether a proceeding is in rem or in personam or quasi in rem for that
rendered ineffective.—Strict compliance with the mode of service is required in order that the
matter, is determined by its nature and purpose and by these only; Actions for recovery of real
court may acquire jurisdiction over the person of the defendant. The statutory requirement of
property are in personam.—The settled rule is that the aim and object of an action determine
substituted service must be followed faithfully and strictly and any substituted service other
its character. Whether a proceeding is in rem, or in personam, or quasi in rem for that matter,
than that authorized by the statute is rendered ineffective.
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
Same; Same; Same; The term “dwelling house” or “residence” are generally held to refer to the
on the jurisdiction of the person, although it may involve his right to, or the exercise of
time of service, hence it is not sufficient to leave the summons at the former’s dwelling house,
ownership of, specific property, or seek to compel him to control or dispose of it in accordance
residence or place of abode, as the case may be.—In Keister v. Navarro, the Court held that the
with the mandate of the court. The purpose of a proceeding in personam is to impose, through
term “dwelling house” o “residence” are generally held to refer to the time of service; hence,
the judgment of a court, some responsibility or liability directly upon the person of the
it is not sufficient to leave the summons at the former’s dwelling house, residence or place of
defendant. Of this character are suits to compel a defendant to specifically perform some act
abode, as the case may be. Dwelling house or residence refers to the place where the person
or actions to fasten a pecuniary liability on him. An action in personam is said to be one which
named in the summons is living at the time when the service is made, even though he may be
has for its object a judgment against the person, as distinguished from a judgment against the
temporarily out of the country at the time. It is, thus, the service of the summons intended for
propriety to determine its state. It has been held that an action in personam is a proceeding to
the defendant that must be left with the person of suitable age and discretion residing in the
enforce personal rights or obligations; such action is brought against the person. As far as suits
house of the defendant. Compliance with the rules regarding the service of summons is as
for injunctive relief are concerned, it is wellsettled that it is an injunctive act in personam. In
much important as the issue of due process as of jurisdiction.
Combs v. Combs, the appellate court held that proceedings to enforce personal rights and
obligations and in which personal judgments are rendered adjusting the rights and obligations
Same; Same; Same; The service of the summons on a person at a place where he was a visitor
between the affected parties is in personam. Actions for recovery of real property are in
is not considered to have been left at the residence or place or abode, where he has another
personam. On the other hand, a proceeding quasi in rem is one brought against persons
place at which he ordinarily stays and to which he intends to return.—As gleaned from the said
seeking to subject the property of such persons to the discharge of the claims assailed. In an
return, there is no showing that as of April 5, 1999, the house where the Sheriff found Oscar
action quasi in rem, an individual is named as defendant and the purpose of the proceeding is
Layno was the latter’s residence or that of the respondent herein. Neither is there any showing
to subject his interests therein to the obligation or loan burdening the property. Actions quasi
that the Sheriff tried to ascertain where the residence of the respondent was on the said date.
in rem deal with the status, ownership or liability of a particular property but which are
It turned out that the occupant of the house was a lessor, Eduardo Gonzales, and that Oscar
intended to operate on these questions only as between the particular parties to the
Layno was in the premises only to collect the rentals from him. The service of the summons on
proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The
a person at a place where he was a visitor is not considered to have been left at the residence
judgments therein are binding only upon the parties who joined in the action.
or place or abode, where he has another place at which he ordinarily stays and to which he
intends to return.
Same; Same; An action for unlawful detainer or forcible entry is a real action and in
DECISION
personam.—From the aforementioned provisions of the Rules of Court and by its very nature
and purpose, an action for unlawful detainer or forcible entry is a real action and in personam
because the plaintiff seeks to enforce a personal obligation or liability on the defendant under CALLEJO, SR., J.:
Article 539 of the New Civil Code, for the latter to vacate the property subject of the action,
restore physical possession thereof to the plaintiff, and pay actual damages by way of This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the Decision1
reasonable compensation for his use or occupation of the property. of the Court of Appeals (CA) in CA-G.R. CV No. 73995, which affirmed the Decision2 of the
Regional Trial Court (RTC) of Dagupan City, Branch 44, in Civil Case No. 2000-0244-D, which
Same; Same; Summons; Manner of Service of Summons in an Action in Personam.—In Asiavest declared null and void the decision of the Municipal Trial Court (MTC) of Calasiao, Pangasinan
Limited v. Court of Appeals, the Court had the occasion to state: In an action in personam, in Civil Case No. 879.3
jurisdiction over the person of the defendant is necessary for the resident defendant who does
not voluntarily appear in court can be acquired by personal service of summons as provided The antecedent facts follow.
under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons
within a reasonable time, substituted service may be made in accordance with Section 8 of
On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible entry against
respondent Vivian Jensen before the MTC of Calasiao, Pangasinan. The petitioner alleged in
her complaint that she was the registered owner of a parcel of land covered by Original
Certificate of Title (OCT) No. P-30980, situated in Barangay Buenlag, Calasiao, Pangasinan, and
with an area of 827 square meters. On January 9, 1999 the respondent, by means of force,
strategy and stealth, gained entry into the petitioner’s property by excavating a portion
thereof and thereafter constructing a fence thereon. As such, the petitioner was deprived of a
68-square meter portion of her property along the boundary line. The petitioner prayed that,
after due proceedings, judgment be rendered in her favor, thus:
3. And, after trial, judgment be rendered:
a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of Preliminary
Injunction permanent;
b) ORDERING defendant, his representatives, agents and persons acting under her,
to vacate the portion of the property of the plaintiff occupied by them and to desist
from entering, excavating and constructing in the said property of the plaintiff
described in paragraph 2 hereof and/or from disturbing the peaceful ownership and
possession of the plaintiff over the said land, pending the final resolution of the
instant action;
c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND (₱5,000.00)
PESOS per month from January 9, 1999 up to the time she finally vacates and
removes all constructions made by her in the property of the plaintiff and up to the
time she finally restores the said property in the condition before her illegal entry,
excavation and construction in the property of the plaintiff;
d) ORDERING defendant to pay actual damages in the amount of TWENTY
THOUSAND (₱20,000.00) PESOS; moral damages in the amount of TWENTY
THOUSAND (₱20,000.00) PESOS; attorney’s fees of THIRTY THOUSAND (₱30,000.00)
PESOS in retainer’s fee and ONE THOUSAND FIVE HUNDRED (₱1,500.00) PESOS per
court appearance fee; exemplary damages in the amount of TWENTY THOUSAND
(₱20,000.00) PESOS, and, costs.
Plaintiff further prays for other reliefs and remedies just and equitable in the premises.4
The case was docketed as Civil Case No. 879. The summons and the complaint were not served
on the respondent because the latter was apparently out of the country. This was relayed to
the Sheriff by her (the respondent’s) brother, Oscar Layno, who was then in the respondent’s
house at No. 572 Barangay Buenlag, Calasiao, Pangasinan. The Sheriff left the summons and
complaint with Oscar Layno, who received the same.5
Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent and all
persons occupying the property for and in the latter’s behalf to vacate the disputed area and
to pay monthly rentals therefor, including actual damages, attorney’s fees, and exemplary
damages. The fallo of the decision reads:
1) Ordering the defendant, her representatives, agents and persons acting under
her, to vacate the 68-square meters which she encroached upon;
2) Ordering the defendant to pay a monthly rental of ₱1,000.00 to the plaintiff;
3) To pay plaintiff actual damages of ₱20,000.00; attorney’s fees of ₱15,000.00 and
exemplary damages in the amount of ₱20,000.00 plus the costs.
SO ORDERED.6
The respondent failed to appeal the decision. Consequently, a writ of execution was issued on
September 27, 1999.
On August 16, 2000, the respondent filed a complaint against the petitioner before the RTC of
Dagupan City for the annulment of the decision of the MTC in Civil Case No. 879, on the ground
that due to the Sheriff’s failure to serve the complaint and summons on her because she was
in Oslo, Norway, the MTC never acquired jurisdiction over her person. The respondent alleged
therein that the service of the complaint and summons through substituted service on her
brother, Oscar Layno, was improper because of the following: (a) when the complaint in Civil
Case No. 879 was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan, but
of Oslo, Norway, and although she owned the house where Oscar Layno received the summons
and the complaint, she had then leased it to Eduardo Gonzales; (b) she was in Oslo, Norway,
at the time the summons and the complaint were served; (c) her brother, Oscar Layno, was
merely visiting her house in Barangay Buenlag and was not a resident nor an occupant thereof
when he received the complaint and summons; and (d) Oscar Layno was never authorized to
receive the summons and the complaint for and in her behalf.7
The respondent further alleged that the MTC had no jurisdiction over the subject matter of the
complaint in Civil Case No. 879 because the petitioner, the plaintiff therein, failed to show prior
possession of the property. She further claimed that the alleged forcible entry was simply
based on the result of the survey conducted by Geodetic Engineer Leonardo de Vera showing
that the property of the respondent encroached on that of the petitioner.
The respondent filed a Manifestation dated August 31, 2000, and appended thereto the
following: (a) a copy8 of her passport showing that she left the country on February 17, 1999;
(b) a copy9 of the Contract of Lease dated November 24, 1997, executed by her and Eduardo
D. Gonzales over her house for a period of three (3) years or until November 24, 2000; (c) her
affidavit10 stating, inter alia, that she owned the house at Barangay Buenlag, Calasiao,
Pangasinan, which she leased to Eduardo Gonzales; that she was married to Jarl Jensen, a
citizen of Norway, on August 23, 1987 and had resided in Norway with her husband since 1993;
that she arrived in the Philippines on December 31, 1998, but left on February 17, 1999; she
returned to the Philippines on July 30, 2000 and learned, only then, of the complaint against
her and the decision of the MTC in Civil Case No. 879; her brother Oscar Layno was not a
resident of the house at Barangay Buenlag; and that she never received the complaint and
summons in said case; (d) the affidavit11 of Oscar Layno declaring that sometime in April 1999,
he was in the respondent’s house to collect rentals from Eduardo Gonzales; that the Sheriff
arrived and served him with a copy of the summons and the complaint in Civil Case No. 879;
and that he never informed the respondent of his receipt of the said summons and complaint;
(e) an affidavit12 of Eduardo Gonzales stating that he leased the house of the respondent and
resided thereat; the respondent was not a resident of the said house although he (Gonzales)
allowed the respondent to occupy a room therein whenever she returned to the Philippines
as a balikbayan; and that Oscar Layno was not residing therein but only collected the rentals.
In her answer to the complaint, the petitioner alleged that the respondent was a resident of
Barangay Buenlag, Calasiao, Pangasinan and was the owner of the subject premises where
Oscar Layno was when the Sheriff served the summons and complaint; that the service of the
complaint and summons by substituted service on the respondent, the defendant in Civil Case
No. 879, was proper since her brother Oscar Layno, a resident and registered voter of
Barangay. Buenlag, Calasiao, Pangasinan, received the complaint and summons for and in her
behalf.
The petitioner appended the following to her answer: (a) a copy13 of the Deed of Absolute Sale
executed by Jose Layno in her favor, dated August 26, 1992, showing that the respondent was
a resident of Barangay Buenlag, Calasiao, Pangasinan; (b) a Real Estate Mortgage14 executed
by the respondent, dated February 9, 1999 showing that she was a resident of Barangay
Buenlag, Calasiao, Pangasinan; (c) the Joint Affidavit15 of Vicenta Peralta and Orlando
Macalanda, both residents of Barangay Buenlag, Calasiao, Pangasinan, declaring that the
respondent and her brother Oscar Layno were their neighbors; that the respondent and her
brother had been residents of Barangay Buenlag since their childhood; that although the
respondent left the country on several occasions, she returned to the Philippines and resided
in her house at No. 572 located in the said barangay; and (d) the Voter’s Registration Record16
of Oscar Layno, approved on June 15, 1997.
After due proceedings, the trial court rendered a decision in favor of the respondent. The
dispositive portion reads:
WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and against
defendant Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case No.
879, entitled Filomena Domagas versus Vivian Layno Jensen is declared null and void,
for lack of jurisdiction over the person of the plaintiff and the subject matter.
2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:
a.) Actual damages, representing litigation expenses in the amount of
₱50,000.00;
b.) Attorney’s fees in the amount of ₱50,000.00;
c.) Moral Damages in the amount of ₱50,000.00;
d.) Exemplary Damages in the amount of ₱50,000.00; and
e.) Costs of suit.
SO ORDERED.17
The trial court declared that there was no valid service of the complaint and summons on the
respondent, the defendant in Civil Case No. 879, considering that she left the Philippines on
February 17, 1999 for Oslo, Norway, and her brother Oscar Layno was never authorized to
receive the said complaint and summons for and in her behalf.
The petitioner appealed the decision to the CA which, on May 6, 2003, rendered judgment
affirming the appealed decision with modifications. The CA ruled that the complaint in Civil
Case No. 879 was one for ejectment, which is an action quasi in rem. The appellate court ruled
that since the defendant therein was temporarily out of the country, the summons and the
complaint should have been served via extraterritorial service under Section 15 in relation to
Section 16, Rule 14 of the Rules of Court, which likewise requires prior leave of court.
Considering that there was no prior leave of court and none of the modes of service prescribed
by the Rules of Court was followed by the petitioner, the CA concluded that there was really
no valid service of summons and complaint upon the respondent, the defendant in Civil Case
No. 879.
Hence, the present petition.
The petitioner assails the decision of the CA, alleging that the appellate court erred in holding
that the respondent’s complaint for ejectment is an action quasi in rem. The petitioner insists
that the complaint for forcible entry is an action in personam; therefore, substituted service of
the summons and complaint on the respondent, in accordance with Section 7, Rule 14 of the
Rules of Court, is valid. The petitioner, likewise, asserts that Oscar Layno is a resident and a
registered voter of Barangay Buenlag, Calasiao, Pangasinan; hence, the service of the
complaint and summons on the respondent through him is valid.
The respondent, on the other hand, asserts that the action for forcible entry filed against her
was an action quasi in rem, and that the applicable provision of the Rules of Court is Section
15 of Rule 14, which calls for extraterritorial service of summons.
The sole issue is whether or not there was a valid service of the summons and complaint in
Civil Case No. 879 on the respondent herein who was the defendant in the said case. The
resolution of the matter is anchored on the issue of whether or not the action of the petitioner
in the MTC against the respondent herein is an action in personam or quasi in rem.
The ruling of the CA that the petitioner’s complaint for forcible entry of the petitioner against
the respondent in Civil Case No. 879 is an action quasi in rem, is erroneous. The action of the
petitioner for forcible entry is a real action and one in personam.
The settled rule is that the aim and object of an action determine its character. 18 Whether a A possessor deprived of his possession through forcible entry or unlawful detainer may, within
proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its five (5) days from the filing of the complaint, present a motion in the action for forcible entry
nature and purpose, and by these only.19 A proceeding in personam is a proceeding to enforce or unlawful detainer for the issuance of a writ of preliminary mandatory injunction to restore
personal rights and obligations brought against the person and is based on the jurisdiction of him in his possession. The court shall decide the motion within thirty (30) days from the filing
the person, although it may involve his right to, or the exercise of ownership of, specific thereof.
property, or seek to compel him to control or dispose of it in accordance with the mandate of
the court.20 The purpose of a proceeding in personam is to impose, through the judgment of a If, after due proceedings, the trial court finds for the plaintiff, it shall then render judgment in
court, some responsibility or liability directly upon the person of the defendant. 21 Of this his or her favor, thus:
character are suits to compel a defendant to specifically perform some act or actions to fasten
a pecuniary liability on him.22 An action in personam is said to be one which has for its object
Sec. 17. Judgment. – If, after trial, the court finds that the allegations of the complaint are true,
a judgment against the person, as distinguished from a judgment against the propriety to
it shall render judgment in favor of the plaintiff for the restitution of the premises, the sum
determine its state. It has been held that an action in personam is a proceeding to enforce
justly due as arrears of rent or as reasonable compensation for the use and occupation of the
personal rights or obligations; such action is brought against the person. As far as suits for
premises, attorney’s fees and costs. If it finds that said allegations are not true, it shall render
injunctive relief are concerned, it is well-settled that it is an injunctive act in personam.23 In
judgment for the defendant to recover his costs. If a counterclaim is established, the court
Combs v. Combs,24 the appellate court held that proceedings to enforce personal rights and
shall render judgment for the sum found in arrears from either party and award costs as justice
obligations and in which personal judgments are rendered adjusting the rights and obligations
requires.
between the affected parties is in personam. Actions for recovery of real property are in
personam.25
From the aforementioned provisions of the Rules of Court and by its very nature and purpose,
an action for unlawful detainer or forcible entry is a real action and in personam because the
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject
plaintiff seeks to enforce a personal obligation or liability on the defendant under Article 539
the property of such persons to the discharge of the claims assailed.26 In an action quasi in
of the New Civil Code,29 for the latter to vacate the property subject of the action, restore
rem, an individual is named as defendant and the purpose of the proceeding is to subject his
physical possession thereof to the plaintiff, and pay actual damages by way of reasonable
interests therein to the obligation or loan burdening the property.27 Actions quasi in rem deal
compensation for his use or occupation of the property.30
with the status, ownership or liability of a particular property but which are intended to
operate on these questions only as between the particular parties to the proceedings and not
to ascertain or cut off the rights or interests of all possible claimants. The judgments therein As gleaned from the averments of the petitioner’s complaint in the MTC, she sought a writ of
are binding only upon the parties who joined in the action.28 a preliminary injunction from the MTC and prayed that the said writ be made permanent.
Under its decision, the MTC ordered the defendant therein (the respondent in this case), to
vacate the property and pay a "monthly rental" of ₱1,000.00 to the plaintiff therein (the
Section 1, Rule 70 of the Rules of Court provides:
petitioner in this case).

Section 1. Who may institute proceedings, and when. - Subject to the provisions of the next
On the issue of whether the respondent was validly served with the summons and complaint
succeeding section, a person deprived of the possession of any land or building in force,
by the Sheriff on April 5, 1999, the petitioner asserts that since her action of forcible entry
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against
against the respondent in Civil Case No. 879 was in personam, summons may be served on the
whom the possession of any land or building is unlawfully withheld after the expiration or
respondent, by substituted service, through her brother, Oscar Layno, in accordance with
termination of the right to hold possession by virtue of any contract, express or implied, or the
Section 7, Rule 14 of the Rules of Court. The petitioner avers that Oscar Layno, a person of
legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at
suitable age and discretion, was residing in the house of the respondent on April 5, 1999. She
any time within one (1) year after such unlawful deprivation or withholding of possession,
avers that the fact that the house was leased to and occupied by Eduardo Gonzales was of no
bring an action in the proper Municipal Trial Court against the person or persons unlawfully
moment. Moreover, the Sheriff is presumed to have performed his duty of properly serving
withholding or depriving of possession, or any person or persons claiming under them, for the
the summons on the respondent by substituted service.
restitution of such possession, together with damages and costs.

The contention of the petitioner has no merit.

Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of preliminary
prohibition or mandatory injunction:
In Asiavest Limited v. Court of Appeals ,31 the Court had the occasion to state:
Sec. 15. Preliminary Injunction. – The court may grant preliminary injunction, in accordance
with the provisions of Rule 58 hereof, to prevent the defendant from committing further acts In an action in personam, jurisdiction over the person of the defendant is necessary for the
of dispossession against the plaintiff. court to validly try and decide the case. Jurisdiction over the person of a resident defendant
who does not voluntarily appear in court can be acquired by personal service of summons as
provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with
summons within a reasonable time, substituted service may be made in accordance with
Section 8 of said Rule. If he is temporarily out of the country, any of the following modes of
service may be resorted to: (a) substituted service set forth in Section 8; (2) personal service
outside the country, with leave of court; (3) service by publication, also with leave of court; or
(4) any other manner the court may deem sufficient.32
Thus, any judgment of the court which has no jurisdiction over the person of the defendant is
null and void.33
In the present case, the records show that the respondent, before and after his marriage to
Jarl Jensen on August 23, 1987, remained a resident of Barangay Buenlag, Calasiao,
Pangasinan. This can be gleaned from the Deed of Absolute Sale dated August 26, 1992 in
which she declared that she was a resident of said barangay. Moreover, in the Real Estate
Mortgage Contract dated February 9, 1999, ten days before the complaint in Civil Case No. 879
was filed, the petitioner categorically stated that she was a Filipino and a resident of Barangay
Buenlag, Calasiao, Pangasinan. Considering that the respondent was in Oslo, Norway, having
left the Philippines on February 17, 1999, the summons and complaint in Civil Case No. 879
may only be validly served on her through substituted service under Section 7, Rule 14 of the
Rules of Court, which reads:
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.
Strict compliance with the mode of service is required in order that the court may acquire
jurisdiction over the person of the defendant.34 The statutory requirement of substituted
service must be followed faithfully and strictly and any substituted service other than that
authorized by the statute is rendered ineffective.35 As the Court held in Hamilton v. Levy :36
… The pertinent facts and circumstances attendant to the service of summons must be stated
in the proof of service or Officer’s Return; otherwise, any substituted service made in lieu of
personal service cannot be upheld. This is necessary because substituted service is in
derogation of the usual method of service. It is a method extraordinary in character and hence
may be used only as prescribed and in the circumstances authorized by statute. Here, no such
explanation was made. Failure to faithfully, strictly, and fully comply with the requirements of
substituted service renders said service ineffective.37
In Keister v. Narcereo,38 the Court held that the term "dwelling house" or "residence" are
generally held to refer to the time of service; hence, it is not sufficient to leave the summons
at the former’s dwelling house, residence or place of abode, as the case may be. Dwelling
house or residence refers to the place where the person named in the summons is living at the
time when the service is made, even though he may be temporarily out of the country at the
time. It is, thus, the service of the summons intended for the defendant that must be left with
the person of suitable age and discretion residing in the house of the defendant. Compliance
with the rules regarding the service of summons is as much important as the issue of due
process as of jurisdiction.39
The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of summons reads:
Respectfully returned to the court of origin the herein summons and enclosures in the above-
entitled case, the undersigned caused the service on April 5, 1999.
Defendant Vivian Layno Jensen is out of the country as per information from her brother Oscar
Layno, however, copy of summons and enclosures was received by her brother Oscar Layno
on April 5, 1999 as evidenced by his signature appearing in the original summons.
Calasiao, Pangasinan, April 6, 1999.
(Sgd.)
EDUARDO J. ABULENCIA
Junior Process Server40
As gleaned from the said return, there is no showing that as of April 5, 1999, the house where
the Sheriff found Oscar Layno was the latter’s residence or that of the respondent herein.
Neither is there any showing that the Sheriff tried to ascertain where the residence of the
respondent was on the said date. It turned out that the occupant of the house was a lessor,
Eduardo Gonzales, and that Oscar Layno was in the premises only to collect the rentals from
him. The service of the summons on a person at a place where he was a visitor is not
considered to have been left at the residence or place or abode, where he has another place
at which he ordinarily stays and to which he intends to return.41
The Voter’s Registration Record of Oscar Layno dated June 15, 1997 wherein he declared that
he was a resident of No. 572 Barangay Buenlag, Calasiao, Pangasinan, as well as the Joint
Affidavit of Vicenta Peralta and Orlando Macasalda cannot prevail over the Contract of Lease
the respondent had executed in favor of Eduardo Gonzales showing that the latter had resided
and occupied the house of the respondent as lessee since November 24, 1997, and the affidavit
of Eduardo Gonzales that Oscar Layno was not residing in the said house on April 5, 1999.
In sum, then, the respondent was not validly served with summons and the complaint in Civil
Case No. 879 on April 5, 1999, by substituted service. Hence, the MTC failed to acquire
jurisdiction over the person of the respondent; as such, the decision of the MTC in Civil Case
No. 879 is null and void.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No costs.
SO ORDERED.
G.R. No. 168723 July 9, 2008
DOLE PHILIPPINES, INC. (TROPIFRESH DIVISION), Petitioner,
vs.
HON. REINATO G. QUILALA in his capacity as pairing judge of Branch 150, RTC-Makati City,
and ALL SEASON FARM, CORP., Respondents.
Remedial Law; Actions; Summons; Wellsettled is the rule that service of summons on a
domestic corporation is restricted, limited and exclusive to the persons enumerated in Section
11, Rule 14 of the 1997 Rules of Civil Procedure, following the rule in statutory construction
that expressio unios est exclusio alterius.—Wellsettled is the rule that service of summons on
a domestic corporation is restricted, limited and exclusive to the persons enumerated in
Section 11, Rule 14 of the 1997 Rules of Civil Procedure, following the rule in statutory
construction that expressio unios est exclusio alterius. Service must therefore be made on the
president, managing partner, general manager, corporate secretary, treasurer, or inhouse
counsel.
Same; Same; Same; A defendant’s voluntary appearance in the action is equivalent to service
of summons.—Under Section 20 of the same Rule, a defendant’s voluntary appearance in the
action is equivalent to service of summons. As held previously by this Court, 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.
DECISION
QUISUMBING, J.:
This petition for review assails the Decision1 dated May 20, 2005 of the Court of Appeals in CA-
G.R. SP No. 87723 and its Resolution2 dated June 28, 2005, denying the motion for
reconsideration. The appellate court had affirmed the Order3 dated February 6, 2004 of the
Regional Trial Court (RTC) of Makati City, Branch 150, in Civil Case No. 03-093 and its Order4
dated September 16, 2004 denying the motion for partial reconsideration.
The factual antecedents of this case are as follows.
In a complaint filed with the RTC of Makati City, presided over by Pairing Judge Reinato Quilala,
private respondent All Season Farm Corporation ("All Season") sought the recovery of a sum
of money, accounting and damages from petitioner Dole Philippines, Inc. (Tropifresh Division)
("Dole") and several of its officers. According to Dole, an alias summons was served upon it
through a certain Marifa Dela Cruz, a legal assistant employed by Dole Pacific General Services,
Ltd., which is an entity separate from Dole.
On May 20, 2003, Dole filed a motion to dismiss the complaint on the following grounds: (a)
the RTC lacked jurisdiction over the person of Dole due to improper service of summons; (b)
the complaint failed to state a cause of action; (c) All Season was not the real party in interest;
and (d) the officers of Dole cannot be sued in their personal capacities for alleged acts
performed in their official capacities as corporate officers of Dole.5 In its Order dated February
6, 2004, the RTC denied said motion. Dole moved for partial reconsideration raising the same
issues but its motion was denied.
Thereafter, Dole filed a petition for certiorari with the Court of Appeals contending that the
alias summons was not properly served. The appellate court, however, ruled otherwise. It
reasoned that Dole’s president had known of the service of the alias summons although he did
not personally receive and sign it. It also held that in today’s corporate setup, documents
addressed to corporate officers are received in their behalf by their staff. 6 Dole sought
reconsideration, but its motion was likewise denied.
Hence, this petition where petitioner raises the lone issue:
WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT
ALLOWED SUBSTITUTED SERVICE ON A PRIVATE CORPORATION WHEN IT HELD THAT DOLE
WAS VALIDLY SERVED WITH SUMMONS IN SPITE OF THE FACT THAT SUMMONS WAS NOT
SERVED ON ITS PRESIDENT, MANAGING PARTNER, GENERAL MANAGER, CORPORATE
SECRETARY, TREASURER OR IN-HOUSE COUNSEL THEREBY IGNORING THE RULE ON SERVICE
OF SUMMONS ON PRIVATE DOMESTIC CORPORATIONS.7
Simply stated, the issue in this case is whether there was a valid service of summons on
petitioner for the trial court to acquire jurisdiction over the person of the corporate defendant
below, now the petitioner herein.
Petitioner contends that for the court to validly acquire jurisdiction over a domestic
corporation, summons must be served only on the corporate officers enumerated in Section
11,8 Rule 14 of the 1997 Rules of Civil Procedure. Petitioner maintains that the alias summons
was not validly served on it since the alias summons was served on Marifa Dela Cruz, an
employee of Dole Pacific General Services, Ltd., which is an entity separate and distinct from
petitioner. It further avers that even if she were an employee of the petitioner, she is not one
of the officers enumerated under Section 11, Rule 14. Thus, the RTC, without proper service of
summons, lacks jurisdiction over petitioner as defendant below.
Private respondent All Season, for its part, contends that the trial court had acquired
jurisdiction over petitioner, since petitioner received the alias summons through its president
on April 23, 2003. According to private respondent, there was full compliance with Section 11,
Rule 14, when Marifa Dela Cruz received the summons upon instruction of petitioner’s
president as indicated in the Officer’s Return.9 More so, petitioner had admitted that it
received the alias summons in its Entry of Appearance with Motion for Time10 filed on May 5,
2003.
Well-settled is the rule that service of summons on a domestic corporation is restricted, limited
and exclusive to the persons enumerated in Section 11, Rule 14 of the 1997 Rules of Civil
Procedure, following the rule in statutory construction that expressio unios est exclusio
alterius.11 Service must therefore be made on the president, managing partner, general
manager, corporate secretary, treasurer, or in-house counsel.

In this case, it appears that on April 23, 2003, Marifa Dela Cruz, a legal assistant, received the
alias summons.12 Contrary to private respondent’s claim that it was received upon instruction
of the president of the corporation as indicated in the Officer’s Return, such fact does not
appear in the receiving copy of the alias summons which Marifa Dela Cruz signed. There was
no evidence that she was authorized to receive court processes in behalf of the president.
Considering that the service of summons was made on a legal assistant, not employed by
herein petitioner and who is not one of the designated persons under Section 11, Rule 14, the
trial court did not validly acquire jurisdiction over petitioner.

However, under Section 20 of the same Rule, a defendant’s voluntary appearance in the action
is equivalent to service of summons.13 As held previously by this Court, 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.14

Note that on May 5, 2003, petitioner filed an Entry of Appearance with Motion for Time. It was
not a conditional appearance entered to question the regularity of the service of summons,
but an appearance submitting to the jurisdiction of the court by acknowledging the receipt of
the alias summons and praying for additional time to file responsive pleading.15 Consequently,
petitioner having acknowledged the receipt of the summons and also having invoked the
jurisdiction of the RTC to secure affirmative relief in its motion for additional time, petitioner
effectively submitted voluntarily to the jurisdiction of the RTC. It is estopped now from
asserting otherwise, even before this Court.16 The RTC therefore properly took cognizance of
the case against Dole Philippines, Inc., and we agree that the trial and the appellate courts
committed no error of law when Dole’s contentions were overruled.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated May 20, 2005 of the
Court of Appeals in CA-G.R. SP No. 87723 and its Resolution dated June 28, 2005 are
AFFIRMED. Costs against petitioner.

SO ORDERED.

LEONARDO A. QUISUMBING
Associate Justice
G.R. No. 181517 July 6, 2015
GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,
vs.
NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.
DECISION
PERALTA, J.:
For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners
Green Star Express, Inc. and Fruto Sayson, Jr. brought before the Court, assailing the Decision
1 of the Court of Appeals (CA) dated September 17, 2007 and its Resolution2 dated January
22, 2008 in CA-G.R. SP No. 86824. The CA nullified the Resolution dated May 5, 2004 of the
Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, and
dismissed the complaint for lack of jurisdiction.
The following are the antecedents of the case:
On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC)
owned figured in a vehicular accident with petitioner Green Star Express, Inc.' s (Green Star)
passenger bus, resulting in the death of the van's driver. Thus, the bus driver, petitioner Fruto
Sayson, Jr., was charged with the crime of reckless imprudence resulting in homicide.
Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation
(NURC) for the repair of its passenger bus amounting to ₱567, 070.68. NURC denied any
liability therefore and argued that the criminal case shall determine the ultimate liabilities of
the parties. Thereafter, the criminal case was dismissed without prejudice, due to insufficiency
of evidence.
Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San
Pedro, Laguna. Francis Tinio, one of NURC's employees, was the one who received the
summons. On February 6, 2004, NURC filed a Motion to Dismiss claiming lack of jurisdiction
due to improper service.
On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that
there was substantial compliance because there was actual receipt of the summons by NURC.
The dispositive portion of said Resolution thus reads:
WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3
Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a
Petition for Certiorari. On September 17, 2007, the CA reversed the RTC ruling, hence:
WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated
May 5, 2004 and dated July 26, 2004, of the Regional Trial Court of San Pedro, Laguna, Branch
31, in Civil Case No. SPL-0969, are hereby NULLIFIED and a new one rendered granting
Petitioner's Motion to Dismiss, dated February 3, 2004. Private Respondents' Amended
Complaint for Damages filed against Petitioner Nissin-Universal Robina Corporation is
accordingly dismissed for lack of jurisdiction.
SO ORDERED.4
Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied.
Hence, this petition.
The lone issue is whether or not the summons was properly served on NURC, vesting the trial
court with jurisdiction.
The petition is benefit of merit.
It is a well-established rule that the rules on service of summons upon a domestic private
juridical entity must be strictly complied with. Otherwise, the court cannot be said to have
acquired jurisdiction over the person of the defendant.5
NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received
by its cost accountant, Francis Tinio.1âwphi1 It argues that under Section 11, Rule 14 of the
1997 Rules of Court, which provides the rule on service of summons upon a juridical entity, in
cases where the defendant is a domestic corporation like NURC, summons may be served only
through its officers.6 Thus:
Section 11. Service upon domestic private juridical entity. – When the defendant is a
corporation, partnership or association organized under the laws of the Philippines with a
juridical personality, service may be made on the president, managing partner, general
manager, corporate secretary, treasurer, or in-house counsel.7
This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:
Section 13. Service upon private domestic corporation or partnership. - If the defendant is a
corporation organized under the laws of the Philippines or a partnership duly registered,
service may be made on the president, manager, secretary, cashier, agent, or any of its
directors.8
In the past, the Court upheld service of summons upon a construction project manager, a
corporation’s assistant manager, and ordinary clerk of a corporation, private secretary of
corporate executives, retained counsel, and officials who had control over the operations of
the corporation like the assistant general manager or the corporation’s Chief Finance and
Administrative Officer. The Court then considered said persons as "agent" within the
contemplation of the old rule. Notably, under the new Rules, service of summons upon an
agent of the corporation is no longer authorized,9 The rule now likewise states "general
manager" instead of "manager"; "corporate secretary" instead of merely "secretary"; and
"treasure" instead of "cashier."10 It has now become restricted, limited, and exclusive only to
the persons enumerated in the aforementioned provision, following the rule in statutory
construction that the express mention of one person excludes all others, or expression unions
est exclusion alterius. Service must, therefore, be made only on the person expressly listed in
the rules.11 If the revision committee intended to liberalize the rule on service of summons, it
could have easily done so by clear and concise language.12

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

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

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

SO ORDERED.

DIOSDADO M. PERALTA**
Associate Justice
G.R. No. 205090, October 17, 2016
GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR., Petitioners, v. UNIVERSAL ROBINA
CORPORATION AND NISSIN UNIVERSAL ROBINA CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside; a) the September 26, 2012 Decision2
of the Court of Appeals (CA) in CA-G.R. CV No, 96961 affirming the April 4, 2011 Decision3 of
the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31 in Civil Case No. SPL-0969; and
b) the CA's December 28, 2012 Resolution4 denying herein petitioners' Motion for
Reconsideration.5chanrobleslaw
Factual Antecedents
Petitioner Greenstar Express, Inc. (Grepistar) is a domestic corporation engaged in the
business of public transportation, while petitioner Fruto L. Sayson, Jr. (Sayson) is one of its
bus drivers,
Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation
(NURC) are domestic corporations engaged in the food business. NURC is a subsidiary of URC.
URC is the registered owner of a Mitsubishi L-300 van with plate number WRN 403 (URC
van).6chanrobleslaw
At about 6:50 a.m. on February 25, 2003, which was then a declared national holiday,7
petitioner's bus, which was then being driven toward the direction of Manila by Sayson,
collided head-on with the URC van, which was then being driven Quezon province-bound by
NURC's Operations Manager, Renante Bicomong (Bicomong). The incident occurred along
Km. 76, Maharlika Highway, Brgy. San Agustin, Alaminos, Laguna. Bicomong died on the spot,
while the colliding vehicles sustained considerable damage.
On September 23, 2003, petitioners filed a Complaint8 against NURC to recover damages
sustained during the collision, premised on negligence. The case was docketed as Civil Case
No. SPL-0969 and assigned to Branch 31 of the RTC of San Pedro, Laguna, An Amended
Complaint9 was later filed, wherein URC was impleaded as additional defendant.
URC and NURC filed their respective Answers,10 where they particularly alleged and claimed
lack of negligence on their part and on the part of Bicomong.
After the issues were joined, trial proceeded. During trial, only Sayson was presented by
petitioners as eyewitness to the collision.
Riding of the Regional Trial Court
On April 4, 2011, the RTC issued its Decision, which decreed thus:
chanRoblesvirtualLawlibrary
During the trial on the merits, plaintiffs11 presented five witnesses namely Josephine Gadiaza,
Miguel Galvan, SPO3 Ernesto Marfori, Fruto Sayson and Lilia Morales.
xxxx
Plaintiff Fruto Sayson testified that on that fateful day, he was driving the plaintiff passenger
bus from Lucena City going to Manila at a speed of more or less 60 kilometers per hour when
he met a vehicular accident at Barangay San Agustin, Alaminos, Laguna. He saw from afar an
L-300 UV coming from the shoulder going on the opposite direction to Lucena City. Said
vehicle was already near his bus when it (UV) managed to return to ifs proper lane, then hit
and swerved his vehicle.- "He tried to prevent the collision by swerving to the right but it was
too late. As a result, the left front portion of the bus was damaged while the front portion of
the L-300 UV was totally wrecked- He and his conductor, one.Mendoza, managed to get but
of the bug by forcibly opening the automatic door which was also damaged due to the
impact After getting out of the bus, he looked for the driver of the L300 UV but he was
informed by a bystander that he was thrown in a canal arid already dead. For fear of possible
reprisals from bystanders as experienced by most drivers involved in an accident, he boarded
smother bug owned by bis employer. Before he left, he indorsed the matter to hip conductor
and line inspector. Thereafter, he reported to their office at San Pedro, Laguna. He executed
a statement on the same day x x x and submitted the same to their operations department.
He likewise testified that before the incident, he was earning P700.00 to P900,00 a day on
commission basis and he drives 25 days in a month. However, after the incident, he was not
able to drive for almost two months.
On cross-examination, it was established that the incident happened along the Maharlika
Highway along Kilometer 72. There were no structures near the site of the incident, The
highway ha§ two lanes which can accommodate the size of the bus about 3 meters wide and
a. light vehicle. He was bound for Manila and had about ten passengers. He saw the L-300 UV
on the shoulder of the opposite lane about 250 meters away from, his bus while he was
driving [at] a speed of 60 kilometers per hour. He did not sense any danger when he saw the
vehicle from afar. He cannot drive fast as there were five vehicles ahead of his bus. When the
L-300 UV managed to return to it? proper lane coming from the shoulder, it was heading
directly towards his direction, at a distance of more or less five, meters away from his bus, He
noticed that the L-300 UV was running at full speed as he saw dust clouds. "The point of
impact happened on his lane. He tried to swerve his bus to prevent the impact but lie
admitted that at his speed, it was difficult for him to maneuver his vehicle
Investigator SPO3 Ernesto Marfori of the Alaminos Police Station testified that at about 7:00
in the morning, he received a report from the Barangay Chairman of a vehicular accident that
occurred at Brgy. §an Agustin, Alaminos, Laguna. He proceeded to the site with SPO2
Rolando Alias. Upon arrival at the scene of the accident, he attended to the victim, but found
him dead inside the L- 300 UV. He came to know later that he was Renante Bicomong. He
immediately called up his office and requested that funeral services for the dead man. be
arranged. Thereafter, he photographed the damaged vehicles (Exhibits "F" and sub-markings)
and interviewed some witnesses. He made a sketch depicting the damages suffered by both
vehicles (Exhibit "D-2"), the L-300 IV at the front portion (Exhibit "D-4") while the bus at the
left side of its front portion (Exhibit "D-3"). Based on the sketch he prepared, the impact
happened almost at the right lane which was the bus lane (Exhibit "D-6"). He likewise noticed
some debris also found at the bus lane. He was able to interview the bus conductor and a
fruit store owner in [sic] the names of Apolinar Devilla and Virgilio Adao, He did not see the
driver of the bus at the scene of the accident and he was told that he had left the place.
Based on, his investigation, the possible cause of the accident was the swerving to the left
lane [by] the driver of the L-300 UV which resulted in me encroaching of the bus' lane. He
reduced bis findings into writing in a Report dated February 28, 2003 (Exhibits "D" and sub-
markings).
On cross-examination, the witness admitted that he was not present when the vehicles
collided. The entries he made in the blotter report were mainly based on the accounts of the
witnesses he was able to interview who however did not give their written statements.
When he arrived at the scene of the accident, the L-300 UV was already on the shoulder of
the road and it was totally wrecked. According to reports, the van spun around when it was
bit causing the metal scar found on the road.
On the other hand, the defendants12 presented three witnesses: its employees Alexander
Caoleng and John Legaspi and deceased Renante Bicomong's widow, Gloria Bicomgng, These
witnesses were presented to prove that deceased Bicomong was acting in his personal
capacity when the mishap happened on February 25, 2003 as that day had been declared an
official holiday and the L-300 UV he was driving had not been issued to him, among others.
Alexander Caoleng, HR. Manager of defendant NURC, testified that deceased Bicomong
worked as the Operations Manager of defendant NURC until his death as evidenced by a
Certificate of Employment dated December 9, 2008 (Exhibit "I"), His last assignment was in
First Cavite Industrial Estate (FCEB). He died in a vehicular accident in Alaminos, Laguna on
February 25, 2003 which was declared a holiday by virtue of Proclamation No. 331 (Exhibit
"2"). Despite having been issued his own service vehicle (Exhibits "3", "4" and "5"), he used
the L-300 UV which was not officially issued to him but in the name of Florante Soro-Soro,
defendant NURC's Logistics Manager at that time (Exhibits "7" and "B"). The said vehicle was
used mainly to transport items coming from their office at Pasig to Cavite and vice versa
(Exhibit "9").
John Legaspi, Project Manager of defendant NURC, testified that he was first assigned in its
Cavite Plant in 1999 with deceased Bicomaog as his immediate supervisor being the
Production Manager then. He last saw him in the afternoon of February 24, 2003 at about
6:00 pm when they had a short chat He (Bicomong) was then transferring his things from his
executive vehicle which was a Toyota Corolla to the L-300 UY which was a company vehicle.
He (Bicomong) shared that he would go home to Quezon Province the following day
(February 25) to give money to his daughter. He knew that his trip to Quezon was not work-
related as February 25, 2003 was declared a holiday. Besides, there exists no plant owned by
defendant NURC in the provinces of Quezon, Laguna or Bicol as attested to by the General
Manager of defendant NURC in a Certification to that effect (Exhibit "11").
On cross-examination, he distinguished the use of an executive vehicle assigned to an
executive officer for his personal use and the company vehicle which was supposed to be for
official use only.
Finally, Gloria Bicomong, widow of deceased Reynante Bicomong testified that she knew that
her husband was going home to Calendaria (sic), Quezon on February 25, 2003 because he
informed their daughter. He was on his way home when he met a vehicular-accident in
Alaminos. Laguna which claimed his life. She was informed about the accident involving her
husband by a high school friend who was also traveling to Quezon at that time, She filed a
criminal complaint at Alaminos, Laguna but it was dismissed for reasons unknown to her. She
likewise filed a civil complaint for damages before the Regional Trial Court of Lucena City
docketed as Civil Case No. 2.103-135.
On cross-examination, she narrated that aside from the Toyota Corolla service of her
husband, he would use the L-300 UV whenever he had to bring bulky things home. As far as
she can recall, he used the L-300 UV about 5 times.
After an evaluation of the foregoing testimonies and documentary evidence of the parties,
the court had [sic] arrived at the following findings and conclusions:
chanRoblesvirtualLawlibraryPlaintiff has no cause of action and cannot recover from the
defendants even assuming that the direct and proximate cause of the accident was the
negligence of the defendant's employee Renato Bicomong.
Pursuant to Article 2184 of the New Civil Code, the owner of a motor vehicle is solidarily
liable with his driver if at the time of the mishap, the owner was in the vehicle and by the use
of due diligence could have presented (sic) the misfortune; if the owner is not in the motor
vehicle, the provision of Article 2180 is applicable. The defendants being juridical persons,
the first paragraph of Article 2184 is obviously not applicable.
Under Article 2180, "employers shall be liable tor the damages caused by their employees
and household helpers acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry. "In other words, for the employer to be
liable for the damages caused by his employee, the latter must have caused the damage in
the course of doing his assigned tasks or in the-performance of his duties" (Yambao vs.
Zuñiga, G.R. No: 146173, December 11, 2003)
In this case, it is beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day
was a holiday; there was no work and it was not shown that he was working as indeed his
work assignment is operations manager of the company's plant m, Cavite while the accident
happened while he was in Alaminos, Laguna on his way home to Candelaria, Quezon.
Secondly, as an operations manager, he was issued an executive car for. Ms own use, a
Toyota Corolla vehicle and he merely preferred to use the L-300 UV when going home to his
family in Quezon. Even assuming that the company allowed or tolerated this, by itself, the
tolerance did not make, the employer liable in the absence of showing that he was using the
vehicle in the performance of a duty or within the scope of his assigned tasks. But as clearly
relayed by defendant's witnesses, defendants have no business or plant in Quezen. The L-300
vehicle was for the hauling of items between their Pasig and Cavite offices and was merely
borrowed by Bicomong in going to Candelaria, Quezon on that day.
The accident having occurred outside Remnte Bicomong's assigned tasks, defendant
employers cannot be held liable to the plaintiffs, even assuming that it is the fault of
defendants' employee that was the direct and proximate cause of their damages.
However, the question of whose fault or negligence was the direct and proximate cause of
the mishap is material to the resolution of defendants' counterclaim.
The rule is that the burden of proof lies on him who claims a fact (Federico Ledesina vs.
NLRC, G.R. No. 175585, October 19,2007). Therefore, to be able to recover in their
counterclaim, the defendants must prove by preponderance of evidence that the direct and
proximate cause of their losses was the fault of the plaintiff-driver.
Defendants were not able to present any witness as to how the mishap occurred Their
witnesses were limited to proving that Renante Bicomong was not in the performance of his
assigned task when the incident happened.
A reading of their answer would reveal, that their attribution of fault to the plaintiff-driver is
based only on the point of impact of the two vehicles. Thus:
chanRoblesvirtualLawlibrary
'4.3 Based on the damage sustained by the passenger bus, plaintiffs' claim that Renante
Bicomong swerved on the left lane and encroached on the path of the said bus moments before
the accident could not have been true. Such claim would have resulted to a head-on collision
between the vehicle driven by Mr. Bicomong and the bus; the latter would have sustained
damage on its front side. However, based on Annexes "B" and "C" of the Complaint, the. said
bus sustained damage on its left side. Clearly, it was the passenger bus that swerved on the left
lane, which was being traversed by Renante Bicomong, and while returning to the right lane,
said bus hit the vehicle being driven by Mr. Bicomong. Thus, explaining the damage sustained
by the said bus on its left side just below the driver's seat.'
The foregoing however is a mere interpretation or speculation and not supported by any
account, either by an eyewitness [or by] a explanation tracing the relative positions of the
two vehicles in relation to the road at the time of impact and the movements of the two
vehicles after the impact. For this reason, it will be unfair to make an interpretation of the
events based alone on the point of impact [on] the vehicles. The points of impact by
themselves cannot explain the positions of the vehicles on the road.
Defendants Memorandum attributed the cause of the mishap to the excessive speed of the
bus. In their Memorandum, the defendants content [sic] that if the driver had seen the L-3G0
UV meters away in front of him running along the shoulder and negotiating back to its lane,
the bus driver would have watched out and slackened his speed. Considering the damage to
both the vehicles and the fact that the L-300,UV span [sic] and w,as thrown 40 feet away
from the point of impact and its driver was thrown 14 feet away from his vehicle, defendant
argued that the bus could not be running at 60 kilometers only. But assuming the bus indeed
was running at high speed that alone does not mean that the negligence of the driver was
the direct and proximate cause, If it is true that the L-300 UV ran from the right shoulder,
climbed up to the right lane but overshoot [sic] it and occupied the bus' lane, the speed of
the bus cannot be considered the proximate and direct cause of the collision; But as stated
earlier, this were [sic] merely conjectures and surmises of the defendants and not proven by
competent evidence.
All told, defendants were not able to prove by their own evidence that the direct and
proximate cause of the collision was the fault of plaintiffs driver. Hence, they cannot hold
plaintiffs liable for the logs of their L-300 UV. As both parties failed to prove by their
respective evidence where the fault that occasioned their losses lie, they must bear their
respective losses.
Anent defendants' counterclaim for attorney's fees and exemplary damages, there is no
evidence to show that the filing, of this suit was motivated [by] malice. It cannot be denied
that plaintiffs suffered damages. The court mainly, dismissed the complaint for lack of cause
of action as Renante Bicomong was not performing his assigned tasks at the time of the
incident. Besides, to hold them liable to defendants for attorney's fees and exemplary
damages simply because they failed to come up with sufficient evidence will be tantamount
to putting a price on one's right to sue.
WHEREFORE, judgment is hereby rendered dismissing the complaint as well as the
counterclaim.
No costs.
SO ORDERED.13
Ruling of the Court of Appeals
Petitioners filed an appeal before the CA, docketed as CA-G.R. CV No. 96961. They argued
that Bicomong's negligence was the proximate cause of the collision, as the van he was
4rjvmg swerved to the opposite lane and hit the bus which was then traveling along its
proper lane; that Bicomong's act of occupying the bus's lane was illegal and thus constituted
a traffic violation; that respondents are liable for damages as the registered owner of the van
and failing to exercise due diligence in the selection and supervision of its employee,
Bicomong, Respondents, countered that the bus driven by Sayson was running at high speed
when the, collision occurred, thus indicating that Sayson was in violation of traffic rules; and
that Say-son had the last clear chance to avert collision but he failed to take the necessary
precaution under the circumstances, by reducing his speed and applying the brakes on time
to avoid collision.
On September 26, 2012, the CA rendered the assailed Decision containing the following
pronouncement:
chanRoblesvirtualLawlibrary
The present case involving an action for damages based on quasi-delict is governed by Articles
2176 and 2180 of the New Civil Code, pertinent provisions of which read:
chanRoblesvirtualLawlibrary
'ART. 2176, Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by
the provisions of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts An employer who loans his motor vehicle to an employee for the latter's personal use
or omission also for those of persons for whom one is responsible. outside of regular working hours is generally not liable for the employees negligent operation
of the vehicle during the period of permissive use, even where the employer contemplates
xxx xxx xxx that a regularly assigned motor vehicle will be used by the employee for personal as well as
business purposes and there is some incidental benefit to the employer. Even where the
Employers shall be liable for the damages caused by their employees and household helpers employee's personal purpose in using the vehicle has been accomplished and he has started
acting within the scope of their assigned tasks even though the former are not engaged in any the return trip to his house where the vehicle is normally kept, it has been held that he has
business or industry.' not resumed his employment, and the employer is not liable for the employees negligent
operation of the vehicle during the return trip.
Under Article 2180 of the New Civil Code, employers shall be held primarily and solidarily
liable for damages caused by their employees acting within the scope of their assigned tasks.
The foregoing principles and jurisprudence are applicable in our jurisdiction albeit based on
To hold the employer liable under this provision, it must be shown that an employer-
the doctrine of respondent superior, not on the principle of bonus pater familias as in ours.
employee relationship exists, and that the employee was acting within the scope of his
Whether the fault or negligence of the employee is conclusive on his employer as in
assigned task when the act complained of was committed.
American law or jurisprudence, or merely gives rise to the presumption juris tantum of
negligence on the part of the employer as in ours, it is indispensable that the employee was
Records bear that the vehicular collision occurred on February 25, 2003 which was declared
acting in his employer's business or within the scope of his assigned task.
by former Executive Secretary Alberto G. Romulo, by order of former President Gloria
Macapagal-Arroyo, as a special national holiday, per Proclamation No. 331 dated February
In the case at bar, it is undisputed that ABAD did some overtime work at Hie petitioner's
19, 2003. Renante Bicomong had no work on that day and at the time the accident occurred,
office, which was located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's
he was on his way home to Candelaria, Quezon. There was no showing that on that day,
Restaurant in Fuente Osmefia, Cebu City, which is about seven kilometers away from
Renante Bicomong was given by defendants-appellees14 an assigned task, much less
petitioner's place of business. A witness for the private respondents, a sidewalk vendor,
instructed to go to Quezon. As testified to by Renante Bicomong's widow Gloria Bicomong,
testified that Fuente Osmeña is a lively place even at dawn because Goldie's Restaurant and
Renante Bicomong was on the road that day because he was going home to Candelaria,
Back Street were still open and people were drinking thereat Moreover, prostitutes, pimps,
Quezon. Thus, he was then carrying out a personal purpose and not performing work for
and drug addicts littered the place.
defendants-appellees.
xxx xxx xxx
Apropos is Castilex Industrial Corp. vs. Vicente Vasquez, Jr.,15 wherein the Supreme Court
held that the mere fact that an employee was using a service vehicle at the time of the
To the mind of this Court, ABAD was engaged in affairs of his own or was carrying out a
injurious incident is not of itself sufficient to charge his employer with liability for the
personal purpose not in line with his duties at the time he figured in a vehicular accident. It
operation of said vehicle unless it appeared that he was operating the vehicle within the
was then about 2:00 a.m. of 28 August 1988, way beyond the normal working hours. ABAD's
course or scope of bis employment. Thus:ChanRoblesVirtualawlibrary
working day had ended; his overtime work had already been completed. His being at a place
xxxx
which, as petitioner put it, was known as a haven for prostitutes, pimps, and drug pushers and
addicts, had no connection to petitioner's business; neither had it any relation to his duties as
'The court a quo and the Court of Appeals were one in holding that the driving by a
a manager. Rather, using his service vehicle even for personal purposes was a form of a fringe
messenger of a company-issued vehicle is within the scope of his assigned tasks regardless of
benefit or one of the perks attached to his position.
the time and circumstances.
Since there is paucity of evidence that ABAD was acting within the scope of the functions
We do not agree. The mere fact that ABAD was using a service vehicle at the time of the
entrusted to him, petitioner CASTILEX had no duty to show that it exercised the diligence of a
injurious incident is not of itself sufficient to charge petitioner with liability for the negligent
good father of a family in providing ABAD with a service vehicle. Thus, justice and equity
operation of said vehicle unless it appears mat he was operating the vehicle within the
require that petitioner be relieved of vicarious liability for the consequences of the negligence
course or scope of his employment.
of ABAD in driving its vehicle.
The following are principles in American Jurisprudence on the employer's liability for the Accordingly, in the absence of showing that Renante Bicomong was acting within the scope of
injuries inflicted by the negligence of an employee in the use of an employer's motor vehicle. his assigned task at the time of the vehicular collision, defendants-appellees had no duty to
show that they exercised the diligence of a good father of a family in providing Renante
xxxx Bicomong with a service vehicle. Thus, the trial court did not err in holding that:

III. Use of Employer's Vehicle Outside Regular Working Hours chanRoblesvirtualLawlibrary

'Under Article 2180, 'employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry. 'In other words, for the employer to be
liable for the damages caused by his employee, the latter must have caused the damage in
the course of doing his assigned tasks or. in the performance of his duties.' (Yambao vs.
Zuñiga, G.R. No. 146173, December 11, 2003.)
In this case, it is.beyond cavil that the deceased Renante Bicong [sic] was not in the
performance of his duty on that fateful day of February 25, 2003. In the first place that day
was a holiday; there was no work and it was not shown that he was working as indeed his
work assignment [was as] operations manager of the company's plant in Cavite while the
accident happened while he was in Alaminos, Laguna on his way home to Candelaria,
Quezon. Secondly, as an operations manager, he was issued an executive car for his own use,
a Toyota Corolla vehicle and. he merely preferred to use the L-300 UV when going home to
his family in Quezon. Even assuming that the company allowed or tolerated this, by itself, the
tolerance did not make the employer liable in the absence of showing that he was using the
vehicle in the performance of a duty or within the scope of his assigned tasks. But as clearly
relayed by defendant's witnesses, defendants have no business or plant in Quezon. The L-300
vehicle was for the hauling of items between their Pasig and Cavite offices and was merely
borrowed by Bicomong in going to Candelaria, Quezon on that day.
The accident having occurred outside Renante Bicomong's assigned tasks, defendant
employers cannot be held liable to the plaintiffs, even assuming that it is the fault of
defendants' employee that was the direct and proximate cause of their damages.'
In sum, squarely applicable in this case is the well-entrenched doctrine that the assessment
of the trial judge as to the issue of credibility binds the appellate court because he is in a
better position to decide the issue, having heard the witnesses and observed their
deportment and manner of testifying during the trial, except when the trial court has plainly
overlooked certain facts of substance and value, that, if considered, might affect the result of
the case, or where the assessment is clearly shown to be arbitrary. Plaintiffs-appellants have
not shown this case to fall under the exception.
WHEREFORE, the trial court's Decision dated April 4, 2011 is affirmed.
SO ORDERED.16chanroblesvirtuallawlibrary
Petitioners filed a Motion for Reconsideration, which the CA denied in its subsequent
December 28, 2012 Resolution. Hence, the present Petition.
Issues
In a July 14, 2014 Resolution,17 this Court resolved to give due course to the Petition, which
contains the following assignment of errors:
chanRoblesvirtualLawlibrary
I.
THE HONORABLE COURT OF APPEALS ERRED IN ISSUING THE ASSAILED DECISION AND
RESOLUTION THAT RESPONDENTS ARE NOT LIABLE TO PETITIONERS FOR THE DAMAGES THEY
SUSTAINED CONSIDERING THAT THE ACCIDENT WAS ATTRIBUTED TO THE NEGLIGENCE OF
RENANTE BICOMONG.
II.
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING DEFENSES NOT PLEADED IN THE
MOTION TO DISMISS OR IN RESPONDENTS' ANSWER.18chanroblesvirtuallawlibrary
Petitioners' Arguments
Petitioners insist that respondents should be held liable for Bicomong's negligence under
Articles 2176, 2180, and 2185 of the Civil Code;19 that Bicomong's negligence was the direct
and proximate eause of the accident, in that he unduly occupied the opposite lane which the
bus was lawfully traversing, thus resulting in the collision with Greenstar's bus; that
Bicomong's driving on the opposite lane constituted a traffic violation, therefore giving rise
to the presumption of negligence on his part; that in view of this presumption, it became
incumbent upon respondents to rebut the same by proving that they exercised care and
diligence in the selection and supervision of their employees; that in their respective answers
and motion to dismiss, respondents did not allege the defense, which they tackled only
during trial, that since February 25, 2003 was a declared national holiday, then Bicomong was
not acting within the scope of his assigned tasks at the time of the collision; that for failure to
plead this defense or allegation in their respective answers and pleadings, it is deemed
waived pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure20 (1997 Rules); that
just the same, respondents failed to prove that Bicomong was not in the official performance
of his duties or that the URC van was not officially issued to him at the time of the accident -
and for this reason, the presumption of negligence was not overturned; and that URC should
be held liable as the registered owner of the van.
In their Reply,21 petitioners add that while some of the issues raised in the Petition are
factual in nature, this Court must review the case as the CA gravely erred in its appreciation
of the evidence and in concluding that respondents are not liable. Finally, they argue that
URC should be held liable for allowing "a non-employee to use for his personal use the
vehicle owned" by it.
Respondents' Arguments
Pleading affirmance, respondents argue in their Comment22 that the issues raised in the
Petition are factual in nature; that the collision occurred on a holiday and while Bicomong
was. using the URC van for a purely personal purpose, it should be. sufficient to absolve
respondents of liability as evidently, Bicomong was not performing his official duties on that
day; that the totality of the evidence indicates that it was Sayson who was negligent in the
operation of Greenstar's bus when the collision occurred; that Bicomong was not negligent in
driving the URC van; that petitioners' objection - pertaining to their defense that the collision
occurred on a holiday, when Bicomong was not considered to be at work - was belatedly
raised; and that in any case, under Section 5, Rule 10 of the 1997 Rules,23 their pleadings
should be deemed amended to conform to the evidence presented at the trial, which
includes proof that the accident occurred on a holiday and while Bicomong was not in the
performance of his official tasks and instead going home to his family in Quezon province.
Our Ruling
The Court denies the Petition.
In Caravan Travel and Tours International, Inc. v. Abejar,24 the Court made the following
relevant pronouncement:
chanRoblesvirtualLawlibrary
The resolution of this case must consider two (2) rules. First, Article 2180's specification
that '[e]mployers shall be liable for the damages caused by their employees ... acting
within the scope of their assigned tasks [.]' Second, the operation of the registered-owner
rule that registered owners are liable for death or injuries caused by the operation of their
Vehicles.
These rules appear to be in conflict when it comes to cases in which the employer is also the
registered owner of a vehicle. Article 2180 requires proof of two things: first, an employment
relationship between the driver and the owner; and second, that the driver acted within the
scope of his or her assigned tasks. On the other hand, applying the registered-owner rule
only requires the plaintiff to prove that the defendant-employer is the registered owner of
the vehicle.
The registered-owner rule was articulated as early as 1957 in Erezo, et al. v. Jepte,25cralawred
where this court explained that the registration of motor vehicles, as required by Section 5(a)
of Republic Act No. 41365 the and Transportation and Traffic Code, was necessary 'not to
make said registration the operative act by which ownership in vehicles is transferred, ... but
to permit the use and operation of the vehicle upon any public highway[.]' Its 'main aim ... is
to identify the owner so that if any accident happens, or that any damage or injury is caused
by the vehicle on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner.'
xxxx
Aguilar, Sr. v. Commercial Savings Bank26 recognized the seeming conflict between Article
2180 and the registered-owner rule and applied the latter.
xxxx
Preference for the registered-owner rule became more pronounced in Del Carmen, Jr. v.
Bacoy:27chanrobleslaw
xxxx
Filcar Transport Services v. Espinas28 stated that the registered owner of a vehicle can no
longer use the defenses found in Article 2180:
chanRoblesvirtualLawlibraryx x x x
Mendoza v. Spouses Gomez29 reiterated this doctrine.
However, Aguilar, Sr., Del Carmen, Filcar, and Mendoza should not be taken to mean that
Article 2180 of the Civil Code should be completely discarded in cases where the registered-
owner rule finds application.
As acknowledged in Filcar, there is no categorical statutory pronouncement in the Land
Transportation and Traffic Code stipulating the liability of a registered owner. The source of a
registered owner's liability is not a distinct statutory provision, but remains to be Articles
2176 and 2180 of the Civil Code:
chanRoblesvirtualLawlibrary
While Republic Act No. 4136 or the Land Transportation and Traffic Code does not contain any
provision on the liability of registered owners in case of motor vehicle mishaps, Article 2176,
in relation with Article 2180, of the Civil Code imposes an obligation upon Filcar, as registered
owner, to answer for the damages caused to Espinas' car.
Thus, it is imperative to apply the registered-owner rule in a manner that harmonizes it with
Articles 2176 and 2180 of the Civil Code. Rules must be construed in a manner that will
harmonize them with other rules so as to form a uniform and consistent system of
jurisprudence. In light of this, the words used in Del Carmen are particularly notable. There,
this court stated that Article 2180 'should defer to' the registered-owner rule. It never stated
that Article 2180 should be totally abandoned.
Therefore, the appropriate approach is that in cases where both the registered-owner rule
and Article 2180 apply, the plaintiff must first establish that the employer is the registered
owner of the vehicle in question. Once the plaintiff successfully proves ownership, there
arises a disputable presumption that the requirements of Article 2180 have been proven.
As a consequence, the burden of proof shifts to the defendant to show that no liability
under Article 2180 has arisen.
This disputable presumption, insofar as the registered owner of the vehicle in relation to the
actual driver is concerned, recognizes that between the owner and the victim, it is the former
that should carry the costs of moving forward with the evidence. The victim is, in many cases,
a hapless pedestrian or motorist with hardly any means to uncover the employment
relationship of the owner and the driver, or any act that the owner may have done in relation
to that employment.
The registration of the vehicle, on the other hand, is accessible to the public.
Here, respondent presented a copy of the Certificate of Registration of the van that hit
Reyes. The Certificate attests to petitioner's ownership of the van. Petitioner itself did not
dispute its ownership of the van. Consistent with the rule we have just stated, a presumption
that the requirements of Article 2180 have been satisfied arises. It is now up to petitioner to
establish that it incurred no liability under Article 2180. This it can do by presenting proof of
any of the following: first, that it had no employment relationship with Bautista; second,
that Bautista acted outside the scope of his assigned tasks; or third, that it exercised the
diligence of a good father of a family in the selection and supervision of Bautista. (Emphasis
supplied)
In the present case, it has been established that on the day of the collision -or on February
25, 2003 - URC was the registered owner of the URC van, although it appears that it was
designated for use by NURC, as it was officially assigned to the latter's Logistics Manager,
Florante Soro-Soro (Soro-Soro); that Bicomong was the Operations Manager of NURC and
assigned to the First Cavite Industrial Estate; that there was no work as the day was declared
a national holiday; that Bicomong was on his way home to his family in Quezon province;
that the URC van was not assigned to Bicompng as well, but solely for Soro-Soro's official use;
that the company service vehicle officially assigned to Bicomong was a Toyota Corolla, which
he left at the Cavite plant and instead, he used the URC van; and that other than the Cavite
plant, there is no other NURC plant in the provinces of Quezon, Laguna or Bicol.
Applying the above pronouncement in the Caravan Travel and Tours case, it must be said
that when by evidence the ownership of the van and Bicomong's employment were proved,
the presumption of negligence on respondents' part attached, as the registered owner of the
van. and as Bicomong's employer. Hie burden of proof then shifted to respondents to show
that no liability under Article 2180 arose. This may be done by proof of any of the following:
chanRoblesvirtualLawlibrary
1. That they had no employment relationship with Bicomong; or
2. That Bicomong acted outside the scope of his assigned tasks; or
3. That they exercised the diligence of a good father of a family in the selection and
supervision of Bicomong.
In denying liability, respondents claimed in their respective answers the defense of absence
of negligence on their part. During trial, they presented evidence to the effect that on the
day of the collision, which was a declared national non-working holiday, Bicomong was not
perforating Ms work, but was on his way home to Quezon on a personal undertaking, that is,
to give money to his daughter and spend the holiday with his family; and that the vehicle he
was driving was not an NURC vehicle, nor was it assigned to him, but was registered to URC
and assigned to its Logistics Manager, Soro-Soro, Petitioners object to this, claiming that this
defense was not alleged in the respondents' respective answers. The Court disagrees, The
failure to allege these facts in the answers does not preclude, respondents from proving
them during trial; these facts are precisely illustrative of their defense of absence of
negligence. Just the same, petitioners' failure to object to the respondents' presentation of
such evidence below is tantamount to a waiver; Section 5, Rule 10 of the 1997 Rules - on
amendments to conform to or authorize presentation of evidence - will have to apply, but
the failure to amend the pleadings does not affect the result of the trial of these issues.
The failure of a party to amend a pleading to conform to the evidence adduced during trial
does not preclude an adjudication by the court on the basis of such evidence which may
embody new issues not raised in the pleadings, or serve as a basis for a higher award of
damages. Although the pleading may not have been amended to conform to the evidence
submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the
issues alleged but also on the basis of issues discussed and the assertions of fact proved in the
course of trial. The court may treat the pleading as if it had been amended to conform to the
evidence, although it had not been actually so amended, x x x30
Respondents succeeded in overcoming the presumption of negligence, having shown that
when the collision took place, Bicomong was not in the performance of his work; that he was
in possession of a service vehicle that did not belong to his employer NURC, but to URC, and
which vehicle was not officially assigned to him, but to another employee; that his use of the
URC van was unauthorized - even if he had used the same vehicle in furtherance of a personal
undertaking in the past,31 this does not amount to implied permission; that the accident
occurred on a holiday and while Bicomong was on his way home to his family in Quezon
province; and that Bicomong had no official business whatsoever in his hometown in Quezon,
or in Laguna where the collision occurred, his area of operations being limited to the Cavite
area.
On the other hand, the evidence suggests that the collision could have been avoided if Sayson
exercised care and prudence, given the circumstances and information that he had
immediately prior to the accident. From the trial court's findings and evidence on record, it
would appear that immediately prior to the collision, which took place very early in the
morning - or at around 6:50 a.m., Sayson saw that the URC van was traveling fast Quezon-
bound on the shoulder of the opposite lane about 250 meters away from him; that at this
point, Sayson was driving the Greenstar bus Manila-bound at 60 kilometers per hour; that
Sayson knew that the URC van was traveling fast as it was creating dust clouds from traversing
the shoulder of the opposite lane; that Sayson saw the URC van get back into its proper lane
but directly toward him; that despite being apprised of the foregoing information, Sayson,
instead of slowing down, maintained his speed and tried to swerve the Greenstar bus, but
found it difficult to do so at his speed; that the collision or point of impact occurred right in the
middle of the road;32 and that Sayson absconded from the scene immediately after the
collision.
From the foregoing facts, one might think that from the way he was driving immediately before
the collision took place, Bicomong could have fallen asleep or ill at the wheel, which led him
to gradually steer the URC van toward the shoulder of the highway; and to get back to the road
after realizing his mistake, Bicomong must have overreacted, thus overcompensating or
oversteering to the left, or toward the opposite lane and right into Sayson's bus. Given the
premise of dozing off or falling ill, this explanation is not far-fetched. The collision occurred
very early in the morning in Alaminos, Laguna. Sayson himself testified that he found Bicomong
driving on the service road or shoulder of the highway 250 meters away, which must have
been unpaved, as it caused dust clouds to rise on the heels of the URC van. And these dust
clouds stole Sayson's attention, leading him to conclude that the van was running at high
speed. At any rate, the evidence places the point of impact very near the middle of the road
or just within Sayson's lane. In other words, the collision took place with Bicomong barely
encroaching on Sayson's lane. This means that prior to and at the time of collision, Sayson did
not take any defensive maneuver to prevent the accident and minimize the impending damage
to life and property, which resulted in the collision in the middle of the highway, where a
vehicle would normally be traversing. If Sayson took defensive measures, the point of impact
should have occurred further inside his lane or not at the front of the bus - but at its side, which
should have shown that Sayson either slowed down or swerved to the right to avoid a collision.
 the supervening negligence of the latter, who had the last fair chance to prevent the impending
Despite having seen Bicomong drive the URC van in a precarious manner while the same was harm by the exercise of due diligence, x x x34
still a good 250 meters away from his bus, Sayson did not take the necessary precautions, as
by reducing speed and adopting a defensive stance to avert any untoward incident that may
Petitioners might object to the treatment of their case in the foregoing manner, what with the
occur from Bicomong's manner of driving. This is precisely his testimony during trial. When the
additional finding that Sayson was negligent under the circumstances. But their
van began to swerve toward his bus, he did not reduce speed nor swerve his bus to avoid
Petition, "once accepted by this Court, throws the entire case open to review, and xxx this
collision. Instead, he maintained his current speed and course, and for this reason., the
Court has the authority to review matters not specifically raised or assigned as error by the
inevitable took place: An experienced driver who is. presented with the same facts would have
parties, if their consideration is necessary in arriving at a just resolution of the
adopted an attitude consistent with a desire to preserve life and property; for common
case."35chanrobleslaw
carriers, the diligence demanded is of the highest degree.
WHEREFORE, the Petition is DENIED. The September 26, 2012 Decision and December 28,
The law exacts from common carriers (i.e., those persons, corporations, firms, or associations 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 96961 are AFFIRMED in toto.
engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public) the highest degree of SO ORDERED.chanRoblesvirtualLawlibrary
diligence (i.e., extraordinary diligence) in ensuring the safety of its passengers. Articles 1733
and 1755 of the Civil Code state:ChanRoblesVirtualawlibrary
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary, diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all the circumstances of each case.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care arid
foresight can provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances.
In this relation, Article 1756 of the Civil Code provides that '[i]n case of death of or injuries to
passengers, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
1755. xxx'33chanroblesvirtuallawlibrary

However, Sayson took no defensive maneuver whatsoever in spite of the fact that he saw
Bicomong drive his van in a precarious manner, as far as 250 meters away - or at a point in
time and space where Sayson had all the opportunity to prepare and avert a possible collision.
The collision was certainly foreseen and avoidable but Sayson took no measures to avoid it.
Rather than exhibit concern for the welfare of his passengers and the driver of the oncoming
vehicle, who might have fallen asleep or suddenly fallen ill at the wheel, Sayson coldly and
uncaringly stood his ground^ closed his eyes, and left everything to fate, without due regard
for the consequences. Such a suicidal mindset cannot be tolerated, for the grave danger it
poses to the public and passengers availing of petitioners' services. To add insult to injury,
Sayson hastily fled the scene of the collision instead of rendering assistance to the victims -
thus exhibiting a selfish, cold-blooded attitude and utter lack of concern motivated by the self-
centered desire to escape liability, inconvenience, and possible detention by the authorities,
rather than secure the well-being of the victims of his own negligent act.

x x x The doctrine of last clear chance provides that where both parties are negligent but the
negligent act of one is appreciably later in point of time than that of the other, or where it is
impossible to determine whose fault or negligence brought about the occurrence of the
incident, the one who had the last clear opportunity to avoid the impending harm but failed
to do so, is chargeable with the consequences arising therefrom. Stated differently, the rule is
that the antecedent negligence of a person does not preclude recovery of damages caused by
January 13, 2016
G.R. No. 206147
MICHAEL C. GUY, Petitioner,
vs.
ATTY. GLENN C. GACOTT, Respondent.
DECISION
MENDOZA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed
by petitioner Michael C. Guy (Guy), assailing the June 25, 2012 Decision1 and the March 5,
2013 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 94816, which affirmed the
June 28, 20093 and February 19, 20104 Orders of the Regional Trial Court, Branch 52, Puerto
Princesa City, Palawan (RTC), in Civil Case No. 3108, a case for damages. The assailed RTC
orders denied Guy's Motion to Lift Attachment Upon Personalty5 on the ground that he was
not a judgment debtor.
The Facts
It appears from the records that on March 3, 1997, Atty. Glenn Gacott (Gacott) from Palawan
purchased two (2) brand new transreceivers from Quantech Systems Corporation (QSC) in
Manila through its employee Rey Medestomas (Medestomas), amounting to a total of
P18,000.00. On May 10, 1997, due to major defects, Gacott personally returned the
transreceivers to QSC and requested that they be replaced. Medestomas received the
returned transreceivers and promised to send him the replacement units within two (2) weeks
from May 10, 1997.
Time passed and Gacott did not receive the replacement units as promised. QSC informed him
that there were no available units and that it could not refund the purchased price. Despite
several demands, both oral and written, Gacott was never given a replacement or a refund.
The demands caused Gacott to incur expenses in the total amount of P40,936.44. Thus, Gacott
filed a complaint for damages. Summons was served upon QSC and Medestomas, afterwhich
they filed their Answer, verified by Medestomas himself and a certain Elton Ong (Ong). QSC
and Medestomas did not present any evidence during the trial.6
In a Decision,7 dated March 16, 2007, the RTC found that the two (2) transreceivers were
defective and that QSC and Medestomas failed to replace the same or return Gacott's money.
The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff, ordering the defendants to
jointly and severally pay plaintiff the following:
1. Purchase price plus 6% per annum from March 3, 1997 up to and P
until fully paid ------------ 18,000.00
2. Actual Damages ----------------------------------- 40,000.00
3. Moral Damages ----------------------------------- 75,000.00
4. Corrective Damages ------------------------------- 100,000.00
5. Attorney’s Fees ------------------------------------ 60,000.00
6. Costs.
SO ORDERED.
The decision became final as QSC and Medestomas did not interpose an appeal. Gacott then
secured a Writ of Execution,8 dated September 26, 2007.
During the execution stage, Gacott learned that QSC was not a corporation, but was in fact a
general partnership registered with the Securities and Exchange Commission (SEC). In the
articles of partnership,9 Guy was appointed as General Manager of QSC.
To execute the judgment, Branch Sheriff Ronnie L. Felizarte (Sheriff Felizarte) went to the main
office of the Department of Transportation and Communications, Land Transportation Office
(DOTC-LTO), Quezon City, and verified whether Medestomas, QSC and Guy had personal
properties registered therein.10 Upon learning that Guy had vehicles registered in his name,
Gacott instructed the sheriff to proceed with the attachment of one of the motor vehicles of
Guy based on the certification issued by the DOTC-LTO.11
On March 3, 2009, Sheriff Felizarte attached Guy’s vehicle by virtue of the Notice of
Attachment/Levy upon Personalty12 served upon the record custodian of the DOTC-LTO of
Mandaluyong City. A similar notice was served to Guy through his housemaid at his residence.
Thereafter, Guy filed his Motion to Lift Attachment Upon Personalty, arguing that he was not
a judgment debtor and, therefore, his vehicle could not be attached.13 Gacott filed an
opposition to the motion.
The RTC Order
On June 28, 2009, the RTC issued an order denying Guy’s motion. It explained that considering
QSC was not a corporation, but a registered partnership, Guy should be treated as a general
partner pursuant to Section 21 of the Corporation Code, and he may be held jointly and
severally liable with QSC and Medestomas. The trial court wrote:
All persons who assume to act as a corporation knowing it to be without authority to do so
shall be liable as general partners for all debts, liabilities and damages incurred or arising as a
result thereof x x x. Where, by any wrongful act or omission of any partner acting in the
ordinary course of the business of the partnership x x x, loss or injury is caused to any person,
not being a partner in the partnership, or any penalty is incurred, the partnership is liable
therefore to the same extent as the partner so acting or omitting to act. All partners are liable
solidarily with the partnership for everything chargeable to the partnership under Article 1822
and 1823.14
Accordingly, it disposed:
WHEREFORE, with the ample discussion of the matter, this Court finds and so holds that the
property of movant Michael Guy may be validly attached in satisfaction of the liabilities
adjudged by this Court against Quantech Co., the latter being an ostensible Corporation and
the movant being considered by this Court as a general partner therein in accordance with the
order of this court impressed in its decision to this case imposing joint and several liability to
the defendants. The Motion to Lift Attachment Upon Personalty submitted by the movant is
therefore DENIED for lack of merit.
SO ORDERED.15
Not satisfied, Guy moved for reconsideration of the denial of his motion. He argued that he
was neither impleaded as a defendant nor validly served with summons and, thus, the trial
court did not acquire jurisdiction over his person; that under Article 1824 of the Civil Code, the
partners were only solidarily liable for the partnership liability under exceptional
circumstances; and that in order for a partner to be liable for the debts of the partnership, it
must be shown that all partnership assets had first been exhausted.16
On February 19, 2010, the RTC issued an order17denying his motion.
The denial prompted Guy to seek relief before the CA.
The CA Ruling
On June 25, 2012, the CA rendered the assailed decision dismissing Guy’s appeal for the same
reasons given by the trial court. In addition thereto, the appellate court stated:
We hold that Michael Guy, being listed as a general partner of QSC during that time, cannot
feign ignorance of the existence of the court summons. The verified Answer filed by one of the
partners, Elton Ong, binds him as a partner because the Rules of Court does not require that
summons be served on all the partners. It is sufficient that service be made on the "president,
managing partner, general manager, corporate secretary, treasurer or in-house counsel." To
Our mind, it is immaterial whether the summons to QSC was served on the theory that it was
a corporation. What is important is that the summons was served on QSC’s authorized officer
xxx.18
The CA stressed that Guy, being a partner in QSC, was bound by the summons served upon
QSC based on Article 1821 of the Civil Code. The CA further opined that the law did not require
a partner to be actually involved in a suit in order for him to be made liable. He remained
“solidarily liable whether he participated or not, whether he ratified it or not, or whether he
had knowledge of the act or omission.”19
Aggrieved, Guy filed a motion for reconsideration but it was denied by the CA in its assailed
resolution, dated March 5, 2013.
Hence, the present petition raising the following
ISSUE
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT
PETITIONER GUY IS SOLIDARILY LIABLE WITH THE PARTNERSHIP FOR DAMAGES ARISING
FROM THE BREACH OF THE CONTRACT OF SALE WITH RESPONDENT GACOTT.20
Guy argues that he is not solidarily liable with the partnership because the solidary liability of
the partners under Articles 1822, 1823 and 1824 of the Civil Code only applies when it
stemmed from the act of a partner. In this case, the alleged lapses were not attributable to
any of the partners. Guy further invokes Article 1816 of the Civil Code which states that the
liability of the partners to the partnership is merely joint and subsidiary in nature.
In his Comment,21 Gacott countered, among others, that because Guy was a general and
managing partner of QSC, he could not feign ignorance of the transactions undertaken by QSC.
Gacott insisted that notice to one partner must be considered as notice to the whole
partnership, which included the pendency of the civil suit against it.
In his Reply,22 Guy contended that jurisdiction over the person of the partnership was not
acquired because the summons was never served upon it or through any of its authorized
office. He also reiterated that a partner’s liability was joint and subsidiary, and not solidary.
The Court’s Ruling
The petition is meritorious.
The service of summons was flawed; voluntary appearance cured the defect
Jurisdiction over the person, or jurisdiction in personam – the power of the court to render a
personal judgment or to subject the parties in a particular action to the judgment and other
rulings rendered in the action – is an element of due process that is essential in all actions, civil
as well as criminal, except in actions in rem or quasi in rem.23 Jurisdiction over the person of
the plaintiff is acquired by the mere filing of the complaint in court. As the initiating party, the
plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court. As to the
defendant, the court acquires jurisdiction over his person either by the proper service of the
summons, or by his voluntary appearance in the action.24
Under Section 11, Rule 14 of the 1997 Revised Rules of Civil Procedure, when the defendant is
a corporation, partnership or association organized under the laws of the Philippines with a
juridical personality, the service of summons may be made on the president, managing
partner, general manager, corporate secretary, treasurer, or in-house counsel. Jurisprudence
is replete with pronouncements that such provision provides an exclusive enumeration of the
persons authorized to receive summons for juridical entities.25
The records of this case reveal that QSC was never shown to have been served with the
summons through any of the enumerated authorized persons to receive such, namely:
president, managing partner, general manager, corporate secretary, treasurer or in-house
counsel. Service of summons upon persons other than those officers enumerated in Section
11 is invalid. Even substantial compliance is not sufficient service of summons.26 The CA was
obviously mistaken when it opined that it was immaterial whether the summons to QSC was
served on the theory that it was a corporation.27
Nevertheless, while proper service of summons is necessary to vest the court jurisdiction over
the defendant, the same is merely procedural in nature and the lack of or defect in the service
of summons may be cured by the defendant’s subsequent voluntary submission to the court’s
jurisdiction through his filing a responsive pleading such as an answer. In this case, it is not
disputed that QSC filed its Answer despite the defective summons. Thus, jurisdiction over its
person was acquired through voluntary appearance.
A partner must be separately and distinctly impleaded before he can be bound by a judgment
The next question posed is whether the trial court’s jurisdiction over QSC extended to the
person of Guy insofar as holding him solidarily liable with the partnership. After a thorough
study of the relevant laws and jurisprudence, the Court answers in the negative.
Although a partnership is based on delectus personae or mutual agency, whereby any partner
can generally represent the partnership in its business affairs, it is non sequitur that a suit
against the partnership is necessarily a suit impleading each and every partner. It must be
remembered that a partnership is a juridical entity that has a distinct and separate personality
from the persons composing it.28
In relation to the rules of civil procedure, it is elementary that a judgment of a court is
conclusive and binding only upon the parties and their successors-in-interest after the
commencement of the action in court.29 A decision rendered on a complaint in a civil action
or proceeding does not bind or prejudice a person not impleaded therein, for no person shall
be adversely affected by the outcome of a civil action or proceeding in which he is not a
party.30 The principle that a person cannot be prejudiced by a ruling rendered in an action or
proceeding in which he has not been made a party conforms to the constitutional guarantee
of due process of law.31
In Muñoz v. Yabut, Jr.,32 the Court declared that a person not impleaded and given the
opportunity to take part in the proceedings was not bound by the decision declaring as null
and void the title from which his title to the property had been derived. The effect of a
judgment could not be extended to non-parties by simply issuing an alias writ of execution
against them, for no man should be prejudiced by any proceeding to which he was a stranger.
In Aguila v. Court of Appeals,33 the complainant had a cause of action against the partnership.
Nevertheless, it was the partners themselves that were impleaded in the complaint. The Court
dismissed the complaint and held that it was the partnership, not its partners, officers or
agents, which should be impleaded for a cause of action against the partnership itself. The
Court added that the partners could not be held liable for the obligations of the partnership
unless it was shown that the legal fiction of a different juridical personality was being used for
fraudulent, unfair, or illegal purposes.34
Here, Guy was never made a party to the case. He did not have any participation in the entire
proceeding until his vehicle was levied upon and he suddenly became QSC’s “co-defendant
debtor” during the judgment execution stage. It is a basic principle of law that money
judgments are enforceable only against the property incontrovertibly belonging to the
judgment debtor.35 Indeed, the power of the court in executing judgments extends only to
properties unquestionably belonging to the judgment debtor alone. An execution can be
issued only against a party and not against one who did not have his day in court. The duty of
the sheriff is to levy the property of the judgment debtor not that of a third person. For, as the
saying goes, one man's goods shall not be sold for another man's debts.36
In the spirit of fair play, it is a better rule that a partner must first be impleaded before he could
be prejudiced by the judgment against the partnership. As will be discussed later, a partner
may raise several defenses during the trial to avoid or mitigate his obligation to the partnership
liability. Necessarily, before he could present evidence during the trial, he must first be
impleaded and informed of the case against him. It would be the height of injustice to rob an
innocent partner of his hard-earned personal belongings without giving him an opportunity to
be heard. Without any showing that Guy himself acted maliciously on behalf of the company,
causing damage or injury to the complainant, then he and his personal properties cannot be
made directly and solely accountable for the liability of QSC, the judgment debtor, because he
was not a party to the case.
Further, Article 1821 of the Civil Code does not state that there is no need to implead a
partner in order to be bound by the partnership liability. It provides that:
Notice to any partner of any matter relating to partnership affairs, and the knowledge of the
partner acting in the particular matter, acquired while a partner or then present to his mind,
and the knowledge of any other partner who reasonably could and should have communicated
it to the acting partner, operate as notice to or knowledge of the partnership, except in the
case of fraud on the partnership, committed by or with the consent of that partner.
[Emphases and Underscoring Supplied]
A careful reading of the provision shows that notice to any partner, under certain
circumstances, operates as notice to or knowledge to the partnership only. Evidently, it does
not provide for the reverse situation, or that notice to the partnership is notice to the partners.
Unless there is an unequivocal law which states that a partner is automatically charged in a
complaint against the partnership, the constitutional right to due process takes precedence
and a partner must first be impleaded before he can be considered as a judgment debtor. To
rule otherwise would be a dangerous precedent, harping in favor of the deprivation of
property without ample notice and hearing, which the Court certainly cannot countenance.
Partners’ liability is subsidiary and generally joint; immediate levy upon the property of a
partner cannot be made
Granting that Guy was properly impleaded in the complaint, the execution of judgment would
be improper. Article 1816 of the Civil Code governs the liability of the partners to third persons,
which states that:
Article 1816. All partners, including industrial ones, shall be liable pro rata with all their
property and after all the partnership assets have been exhausted, for the contracts which
may be entered into in the name and for the account of the partnership, under its signature
and by a person authorized to act for the partnership. However, any partner may enter into a
separate obligation to perform a partnership contract.
[Emphasis Supplied]
This provision clearly states that, first, the partners’ obligation with respect to the partnership
liabilities is subsidiary in nature. It provides that the partners shall only be liable with their
property after all the partnership assets have been exhausted. To say that one’s liability is
subsidiary means that it merely becomes secondary and only arises if the one primarily liable
fails to sufficiently satisfy the obligation. Resort to the properties of a partner may be made
only after efforts in exhausting partnership assets have failed or that such partnership assets
are insufficient to cover the entire obligation. The subsidiary nature of the partners’ liability
with the partnership is one of the valid defenses against a premature execution of judgment
directed to a partner.
In this case, had he been properly impleaded, Guy’s liability would only arise after the
properties of QSC would have been exhausted. The records, however, miserably failed to show
that the partnership’s properties were exhausted. The report37 of the sheriff showed that the
latter went to the main office of the DOTC-LTO in Quezon City and verified whether
Medestomas, QSC and Guy had personal properties registered therein. Gacott then instructed
the sheriff to proceed with the attachment of one of the motor vehicles of Guy.38 The sheriff
then served the Notice of Attachment/Levy upon Personalty to the record custodian of the
DOTC-LTO of Mandaluyong City. A similar notice was served to Guy through his housemaid at
his residence.
Clearly, no genuine efforts were made to locate the properties of QSC that could have been
attached to satisfy the judgment − contrary to the clear mandate of Article 1816. Being
subsidiarily liable, Guy could only be held personally liable if properly impleaded and after all
partnership assets had been exhausted.
Second, Article 1816 provides that the partners’ obligation to third persons with respect to the
partnership liability is pro rata or joint.1âwphi1 Liability is joint when a debtor is liable only for
the payment of only a proportionate part of the debt. In contrast, a solidary liability makes a
debtor liable for the payment of the entire debt. In the same vein, Article 1207 does not
presume solidary liability unless: 1) the obligation expressly so states; or 2) the law or nature
requires solidarity. With regard to partnerships, ordinarily, the liability of the partners is not
solidary.39 The joint liability of the partners is a defense that can be raised by a partner
impleaded in a complaint against the partnership.
In other words, only in exceptional circumstances shall the partners’ liability be solidary in
nature. Articles 1822, 1823 and 1824 of the Civil Code provide for these exceptional conditions,
to wit:
Article 1822. Where, by any wrongful act or omission of any partner acting in the ordinary
course of the business of the partnership or with the authority of his co-partners, loss or injury
is caused to any person, not being a partner in the partnership, or any penalty is incurred, the
partnership is liable therefor to the same extent as the partner so acting or omitting to act.
Article 1823. The partnership is bound to make good the loss:
(1) Where one partner acting within the scope of his apparent authority receives
money or property of a third person and misapplies it; and
(2) Where the partnership in the course of its business receives money or property
of a third person and the money or property so received is misapplied by any partner
while it is in the custody of the partnership.
Article 1824. All partners are liable solidarily with the partnership for everything chargeable
to the partnership under Articles 1822 and 1823.
[Emphases Supplied]
In essence, these provisions articulate that it is the act of a partner which caused loss or injury
to a third person that makes all other partners solidarily liable with the partnership because of
the words "any wrongful act or omission of any partner acting in the ordinary course of the
business," "one partner acting within the scope of his apparent authority" and "misapplied by
any partner while it is in the custody of the partnership." The obligation is solidary because the
law protects the third person, who in good faith relied upon the authority of a partner, whether
such authority is real or apparent.40
In the case at bench, it was not shown that Guy or the other partners did a wrongful act or
misapplied the money or property he or the partnership received from Gacott. A third person
who transacted with said partnership can hold the partners solidarily liable for the whole
obligation if the case of the third person falls under Articles 1822 or 1823.41 Gacott’s claim
stemmed from the alleged defective transreceivers he bought from QSC, through the latter's
employee, Medestomas. It was for a breach of warranty in a contractual obligation entered
into in the name and for the account of QSC, not due to the acts of any of the partners. For
said reason, it is the general rule under Article 1816 that governs the joint liability of such
breach, and not the exceptions under Articles 1822 to 1824. Thus, it was improper to hold Guy
solidarily liable for the obligation of the partnership.

Finally, Section 21 of the Corporation Code,42 as invoked by the RTC, cannot be applied to
sustain Guy's liability. The said provision states that a general partner shall be liable for all
debts, liabilities and damages incurred by an ostensible corporation. It must be read, however,
in conjunction with Article 1816 of the Civil Code, which governs the liabilities of partners
against third persons. Accordingly, whether QSC was an alleged ostensible corporation or a
duly registered partnership, the liability of Guy, if any, would remain to be joint and subsidiary
because, as previously stated, all partners shall be liable pro rata with all their property and
after all the partnership assets have been exhausted for the contracts which may be entered
into in the name and for the account of the partnership.

WHEREFORE, the petition is GRANTED. The June 25, 2012 Decision and the March 5, 2013
Resolution of the Court of Appeals in CA-G.R. CV No. 94816 are hereby REVERSED and SET
ASIDE. Accordingly, the Regional Trial Court, Branch 52, Puerto Princesa City, is ORDERED TO
RELEASE Michael C. Guy's Suzuki Grand Vitara subject of the Notice of Levy/ Attachment upon
Personalty.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice
SECOND DIVISION
G.R. No. 158836, September 30, 2015
SUNRISE GARDEN CORPORATION, Petitioner, v. COURT OF APPEALS AND FIRST ALLIANCE
REAL ESTATE DEVELOPMENT, INC., Respondents.
G.R. No. 158967
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY ANTIPOLO CITY, Petitioner, v. COURT OF
APPEALS AND FIRST ALLIANCE REAL ESTATE DEVELOPMENT, INC., Respondents.
G.R. No. 160726
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY ANTIPOLO CITY, Petitioner, v. FIRST
ALLIANCE REAL ESTATE DEVELOPMENT, INC., Respondents.
G.R. No. 160778
SUNRISE GARDEN CORPORATION, Petitioner, v. FIRST ALLIANCE REAL ESTATE
DEVELOPMENT, INC., Respondent.
DECISION
LEONEN, J.:
A person who is not a party in the main action cannot be the subject of the ancillary writ of
preliminary injunction. These consolidated petitions arose out of a pending case between
Sunrise Garden Corporation and Hardrock Aggregates, Inc. First Alliance Real Estate
Development, Inc. was not a party to that case.
In 1998, the Sangguniang Panlungsod of Antipolo City passed City Ordinance No. 08-981
entitled "An Ordinance Creating a Technical Committee to Conduct a Feasibility Study,
Preliminary and Parcellary Survey for the Proposed Construction of a City Road Connecting
Four (4) Barangays in Antipolo City (Barangay Cupang, Mayamot, Mabugan and Munting
Dilao) Starting From the Boundary of Cupang and Rancho Estate Subdivision in Marikina City
Traversing Marcos Highway and Sumulong Highway Up to Barangay Munting Dilao, Antipolo
City Exiting or Egressing to Imelda Avenue, Cainta, Rizal and Appropriating the Amount of
Five Million (P5,000,000.00) Pesos Therefore."2
In 1999, the Sangguniang Barangay of Cupang requested the Sangguniang Panlungsod of
Antipolo City to construct a city road to connect Barangay Cupang and Marcos Highway.3 The
request was approved through the enactment of Resolusyon Big. 027-99.4
The Technical Committee created by City Ordinance No. 08-98 posted notices to property
owners that would be affected by the construction of the city road.5 The notices
stated:chanRoblesvirtualLawlibrary
NOTICE TO THE PUBLIC
PURSUANT TO CITY ORDINANCE NO. 08-98 DATED: NOVEMBER 11, 1998 AND BARANGAY
RESOLUTION NO. 027-99 OF CUPANG BARANGAY COUNCIL, DATED SEPTEMBER 10, 1999,
CITY ROAD (PHASE I), THE GENERAL PUBLIC IS HEREBY NOTIFIED THAT THE CITY
GOVERNMENT OF ANTIPOLO IS GOING TO CONSTRUCT THE 20.00 METERS WIDE CITY ROAD,
LINKING MARCOS HIGHWAY TO ANTIPOLO-SAN MATEO NATIONAL ROAD (C-6), ALL
PROPERTY OWNERS AFFECTED ARE ENJOINED TO SEE THE PLANNING OFFICER OF ANTIPOLO
CITY FOR DETAILS OF THE PROGRAM.6ChanRoblesVirtualawlibrary
In 2002, Engr. Eligio Cruz, Project Coordinator, submitted a report7 to the City Mayor,8 a
portion of which states:chanRoblesvirtualLawlibrary
3. Pilot Road had been determined and property owners had been appraised [sic] like M[r].
Armando Carpio who owns majority of the affected lots[,] Mr. Alonzo Espanola of Hard Rock,
Heavens Gate, Josefma Santos through Mr. Manuel Santos, Jr., Heirs of Crispulo Zapanta
through Vice Mayor Lorenzo Zapanta, Gaudencio Caluma, RCR Realty, Maxima Matias, Heirs
of Gabriel Martinez through Sec. Martinez an[d] several actual occupants in the course
traversed by the Pilot Road[.]9ChanRoblesVirtualawlibrary
Sunrise Garden Corporation was an affected landowner. Its property was located in Barangay
Cupang, which Sunrise Garden Corporation planned to develop into a memorial park.10
Sunrise Garden Corporation, through Cesar T. Guy, Chair of the Board of Directors, executed
an Undertaking11 where Sunrise Garden Corporation would construct the city road at its own
expense, subject to reimbursement through tax credits.12 A portion of the Undertaking
states:chanRoblesvirtualLawlibrary
That I am the owner in fee simple of several parcels of land situated at Cupang, Antipolo,
Rizal with a consolidated area of 116 Hectares, more or less;cralawlawlibrary
....
That I have applied for the development of the aforestated consolidated lots into a memorial
park known as "SUNRISE GARDEN["];cralawlawlibrary
That setting aside of and/or providing a 6 hectares City Park is among the conditions set forth
by the Antipolo, [sic] City council in the approval of the said project;cralawlawlibrary
....
That I am willing to undertake and finance development of the City Park and City Road
connecting Marcos Highway to Marikina - San Mateo - Antipolo National Highway which cost
shall be applied to our [t]axes and other fees payable to the City
Government;cralawlawlibrary
That I am willing to sign and execute all legal instrument necessary to transfer ownership of
the same to the City government[.]13ChanRoblesVirtualawlibrary
The city road project, thus, became a joint project of the Sangguniang Panlungsod of
Antipolo, Barangay Cupang, Barangay Mayamot, and Sunrise Garden Corporation.14
Sunrise Garden Corporation's contractor15 began to position its construction equipment.16
However, armed guards,17 allegedly hired by Hardrock Aggregates, Inc., prevented Sunrise
Garden Corporation's contractor from using an access road to move the construction
equipment.18
On January 24, 2002, Sunrise Garden Corporation filed a Complaint19 for damages with
prayer for temporary restraining order and writ of preliminary injunction against Hardrock
Aggregates, Inc.20
Hardrock Aggregates, Inc. filed its Answer to the Complaint.21
The trial court issued a temporary restraining order on February 15, 2002, "directing
Hardrock to cease and desist from preventing/blocking the contractor in moving its
equipments to the site of the proposed city road."22
Undaunted by the temporary restraining order, Hardrock Aggregates, Inc. continued to block
the movement of the construction equipment.23
On March 19, 2002, the trial court ordered the issuance of a Writ of Preliminary Injunction,
subject to the posting of a bond by Sunrise Garden Corporation.24 On March 22, 2002, the
Writ of Preliminary Injunction was issued.25cralawred
While the Complaint was pending, informal settlers started to encroach on the area of the
proposed city road.26
Sunrise Garden Corporation, thus, filed a Motion and Manifestation on May 16, 2002,27
praying for the amendment of the Writ of Preliminary Injunction "to include any and all
persons or group of persons from interfering, preventing or obstructing all of petitioner's
contractors, equipment personnel and representatives in proceeding with the construction
of the city road as authorized by Ordinance No. 08-98 of Antipolo City."28
The trial court granted Sunrise Garden Corporation's Motion and Manifestation and issued
an Amended Writ of Preliminary Injunction29 on May 22, 2002,30
stating:chanRoblesvirtualLawlibrary
IT IS HEREBY ORDERED by the undersigned Judge of this Court, that, until further orders, you,
the said defendant and all your attorneys, representatives, agents and any other persons
assisting you including any and all persons or groups of persons from interfering, preventing
or obstructing all of plaintiff's contractors, equipment personnel and representatives in
proceeding with the construction of a new access road as authorized by the Antipolo City
Government and Barangay Cupang, leading to its memorial project site. As necessary, the
services of Deputy Sheriff Rolando P. Palmares can be sought to enforce this Writ.
Antipolo City, this 22nd day of May 2002.31ChanRoblesVirtualawlibrary
In compliance with the Amended Writ of Preliminary Injunction, the informal settlers allowed
the construction equipment passage to the city road project. The construction of the city
road then continued.32
Thereafter, armed guards of K-9 Security Agency, allegedly hired by First Alliance Real Estate
Development, Inc.,33 blocked Sunrise Garden Corporation's contractor's employees and
prevented them from proceeding with the construction.34
First Alliance Real Estate Development, Inc., through its representative Mr. Boy Pineda,
requested to have a dialogue with Sunrise Garden Corporation.35 It was agreed that the
meeting would be between the representatives of First Alliance Real Estate Development,
Inc. and Sunrise Garden Corporation.36 A meeting was scheduled on October 8, 2002 to be
held at the Office of the City Planning.37 On the day of the meeting, First Alliance Real Estate
Development, Inc.'s representative, however, did not arrive.38
A verification with the Business Permit, License and Franchising Office of the City Mayor39
revealed that First Alliance Real Estate Development, Inc. had no business record, and K-9
Security Agency had no permit to post guards.40
A Motion to cite K-9 Security Agency in contempt was filed on October 11, 200241 by Sunrise
Garden Corporation.42
On November 11, 2002, K-9 Security Agency, joined by First Alliance Real Estate
Development, Inc. and represented by the same counsel,43 opposed the Motion to cite them
in contempt, raising the defense of lack of jurisdiction over their persons, since they were not
bound by the Amended Writ of Preliminary Injunction.44 The Opposition45 stated
that:chanRoblesvirtualLawlibrary
1.3 The purpose of the Writ of Injunction is to preserve the relation between the parties
during the pendency of the suit. This cannot be applied to K-9 and the Security Guards who
are not parties in the case. Neither did they claim authority from the defendant, for which
reason this Honorable Court did not acquire jurisdiction over them and could not validly
enforce the Amended Writ of Injunction against them . . . .
....
1.5 Moreover, insofar as the K-9 and the Security Guards are concerned, the amended Writ
of Injunction is void, for lack of notice to them, in accordance with Sec. 5, Rule 58, Rules of
Civil Procedure quoted in part as follows:chanRoblesvirtualLawlibrary
"Section 5. Preliminary Injunction not granted without notice; exception - no preliminary
injunction shall be granted without hearing and prior notice to the party or person sought to
be enjoined xxx."46 (Emphasis supplied, citation omitted)ChanRoblesVirtualawlibrary
It was further alleged in the Opposition that Sunrise Garden Corporation was intruding into
First Alliance Real Estate Development, Inc.'s titled properties.47
On November 15, 2002, Sunrise Garden Corporation filed an Ex-parte Motion to require K-9
Security Agency and First Alliance Real Estate Development, Inc. to comply with the May 22,
2002 Amended Writ of Preliminary Injunction.48
The trial court granted Sunrise Garden Corporation's Motion and issued an Order dated
November 22, 2002 requiring K-9 Security Agency to comply with the Amended Writ of
Preliminary Injunction.49
Despite the issuance of the Order to comply, security guards dressed in civilian clothes still
allegedly prevented the workers from proceeding to the construction site on November 28,
2002.50
Engr. Eligio Cruz, the Project Coordinator, spoke to the guards of K-9 Security Agency on the
site and showed them a copy of the Order issued by the trial court.51 A copy of the Order
shown to the guards was allegedly already served by Sheriff Roland Palmares and received by
K-9 Security Agency's Bagong Nayon Office and First Alliance Real Estate Development, Inc.52
However, the guards replied that they were under Forefront Security Agency, not K-9
Security Agency.53 The guards informed Engr. Eligio Cruz that First Alliance Real Estate
Development, Inc. ordered them not to allow the city road construction.54
On November 29, 2002, Engr. Eligio Cruz wrote a letter-report55 to Hon. Mauricio M. Rivera,
Executive Judge of the Regional Trial Court of Antipolo City,56 as
follows:chanRoblesvirtualLawlibrary
Relative to the Order dated November 22, 2002, I wish to inform this Honorable Court that
on November 28, 2002 at about 1:30 P.M. several K-9 Security Guards dressed in civilian
clothes armed with shotguns, scattered and deployed in ambush position on the mountain
slope of the property of Armando Carpio, blocked the buldozer [sic] clearing the City Road
which had barely began [sic].
The undersigned explained to the four guards who approached the contents of the Order and
showed to the team leader (who refused to give his name) the copy served by Sheriff Roland
Palmares and received by their Bagong Nayon Office as well as their principal First Alliance
Realty Corp.
That the aforestated team leader answered back that they are now under FOREFRONT
SECURITY AGENCY and have nothing to do with K-9 SECURITY subject of the order. Further
the same guards are under the control of Officer-in-Charge ROLAND TOMINES, and have
instructions from their principal FIRST ALLIANCE REALTY not to allow the construction of the
City Road.
IN VIEW of the foregoing incident, which constitute [sic] a clear defiance of the order, I am
constrained to report the matters to this Honorable Court for
disposition.57ChanRoblesVirtualawlibrary
On November 29, 2002, Sunrise Garden Corporation filed a Motion to cite Forefront Security
Agency and First Alliance Real Estate Development, Inc. in contempt.58 Sunrise Garden
Corporation alleged that First Alliance Real Estate Development, Inc. was notified and
voluntarily submitted to the jurisdiction of the court.59 Sunrise Garden Corporation also
alleged that First Alliance Real Estate Development, Inc. adopted K-9 Security Agency's
Opposition.60
On December 4, 2002, K-9 Security Agency filed a Motion for Reconsideration of the
November 22, 2002 Order.61 Allegedly attached to the Motion were photocopies of TCT Nos.
342073-76 and 337784 to show that First Alliance Real Estate Development, Inc. was the
registered owner of the parcel of land where the pieces of construction equipment were
being placed.62
Apparently, to resolve the issue of ownership raised by First Alliance Real Estate
Development, Inc., the trial court ordered on December 9, 2002 the City Planning and
Development Office to conduct a table survey of the affected properties. 63 The Order64
states:chanRoblesvirtualLawlibrary
When this case was called for hearing today, counsel for First Alliance Realty Corporation
submitted the xerox copies of titles of the Property which according to him are inside the
area being built as city road. Plaintiff's counsel also argued that the tiles [sic] of First Alliance
are outside the area where the road will traverse....
Now, each of the parties are authorized to send a representative for the purpose of table
survey and whatever the result of the table survey, City Planning and Development Office
shall submit a report before this Court within five (5) days from the termination of table
survey. The table survey would contain the signatures of each representative, the
representative of the [sic] Sunrise and the representative of First
Alliance.65ChanRoblesVirtualawlibrary
On December 27, 2002, P/Supt. Jose Fenix Dayao of Antipolo City dispatched SPO4 Conrado
Abren Soza and other police officers to inspect the construction site.66 Upon arrival, the
police officers were fired at by the security guards of Forefront Security Agency.67
On January 15, 2003, the City Planning and Development Office, through Edgardo T. Cruz,
reported68 to the court that it could not accomplish the table survey, as required by the trial
court in its Order dated December 9, 2002, because the Register of Deeds could not provide
copies of First Alliance Real Estate Development, Inc.'s transfer certificates of title.69 Attached
to the City Planning and Development Office's report was a letter70 from the Register of
Deeds of Marikina City, stating that a certain Arty. Benjamin A. Flestado had filed a similar
request in 2001, which request was forwarded to the Land Registration Authority.71
Allegedly, the existing request for verification shows that First Alliance Real Estate
Development, Inc. could not acquire a favorable report from the Land Registration Authority
proving ownership over the property.72
On January 29, 2003, the trial court issued an Order stating that since First Alliance Real
Estate Development, Inc. could not prove ownership over the properties, then First Alliance
Real Estate Development, Inc. or any of its hired security agencies must comply with the
Amended Writ of Preliminary Injunction.73 Portions of the January 29, 2003 Order74
read:chanRoblesvirtualLawlibrary
Considering the fact that the First Alliance Realty Corporation could not prove that the titles
of their land will be traversed or affected in the road construction being made by Sunrise
Garden Corporation[,] it is incumbent [upon] the former to produce the certified copies of
the Certificate of Titles of the First Alliance Realty Corporation to this Court so that the same
will be sent to the CPDC of Antipolo City for the compliance of the Court order to make a
table survey. As it is now, the First Alliance Realty Corporation is bound to comply with the
amended injunction order of this Court dated November 22, 2002 wherein it is ordered that
IT IS HEREBY ORDERED by the undersigned Judge of this Court, that, until further orders, you,
the said defendant and all your attorneys, representatives, agents and any other persons
assisting you including any and all persons or groups of persons from interfering, preventing
or obstructing all plaintiff's contractors, equipment personnel and representatives in
proceeding with the construction of a new access road as authorized by the Antipolo City
Government and Barangay Cupang, leading to its memorial project site. . . .
WHEREFORE, the First Alliance Realty Corporation or any of its Security Agencies acting as
guard assigned in the Land must comply with the amended writ of preliminary injunction, as
above mentioned.75ChanRoblesVirtualawlibrary
K-9 Security Agency and First Alliance Real Estate Development, Inc. filed a Motion for
Reconsideration76 reiterating their arguments that since the trial court did not acquire
jurisdiction over them, the Writ of Preliminary Injunction could not be enforced against
them.77 First Alliance Real Estate Development, Inc. and K-9 Security Agency's Motion for
Reconsideration was denied.78
First Alliance Real Estate Development, Inc. thus filed a Petition for Certiorari with prayer for
preliminary injunction and temporary restraining order before the Court of Appeals.79 This
was docketed as CA-G.R. SP No. 75758.80
In a Resolution dated March 7, 2003, the Court of Appeals issued ex-parte a temporary
restraining order valid for 60 days.81
In the same Resolution, the Court of Appeals required the Office of the Solicitor General to
comment on the Petition for Certiorari .82 The Office of the Solicitor General then entered its
appearance and filed its Comment.83
The Court of Appeals held two hearings with regard to the prayer for the issuance of a Writ
of Preliminary Injunction.84 During the hearing on April 24, 2003, Justice Sabio requested
counsels85 of the parties to maintain the status quo even after the lapse of the effectivity of
the temporary restraining order, as follows:86
J. SABIO:
If we can have a word of honor among gentlemen that until the case would be decided there
should be no, [sic] if we maintain the status quo. A gentleman's agreement. With the
assurance that the court will resolve the incident at the earliest possible time.87
On June 20, 2003, the Court of Appeals issued a Writ of Preliminary Injunction.88 The
Resolution89 stated:chanRoblesvirtualLawlibrary
It will be recalled that in the hearing of the prayer for injunctive relief sought in this case last
April 24, 2003, there was a gentleman's agreement among counsels of parties that status quo
be maintained until such time that the main case will be resolved by this Court.
Petitioner, however, through a motion informed this Court that private respondents are
threatening to bulldoze the property subject matter of this litigation. Petitioner further
stated that such act of private respondent will render judgment hereon moot and academic.
Under such circumstances, we are left with no choice but to issue the injunctive relief sought,
considering further that the issuance thereof is warranted.
WHEREFORE, let a writ of Preliminary Injunction be issued conditioned upon petitioner's
posting of a cash or surety bond in the amount of P200,000.00 to answer for the damages
which may be sustained by private respondent by reason of this injunction or if the court
should finally decide that the applicant is not entitled thereto. After which, the Division Clerk
of Court is directed to issue the writ of preliminary injunction enjoining respondents, its
agents or representatives from implementing public respondent's amended writ of injunction
dated May 22, 2002, January 29, 2003 and February 24, 2003 Orders.90 (Citation
omitted)ChanRoblesVirtualawlibrary
Sunrise Garden Corporation and the Republic of the Philippines, through the Office of the
Solicitor General, separately filed Petitions for Certiorari and Prohibition, with prayer for
temporary restraining order and writ of preliminary injunction assailing the Writ of
Preliminary Injunction issued by the Court of Appeals. Sunrise Garden Corporation's
Petition91 was docketed as G.R. No. 158836, and the Republic of the Philippines' Petition 92
was docketed as G.R. No. 158967.
Sunrise Garden Corporation offered93 to post a bond as provided under Rule 58, Section 694
of the Rules of Court and prayed that this court issue a temporary restraining order to
prevent the Court of Appeals from implementing the Writ of Preliminary Injunction.95
Republic of the Philippines subsequently filed a Supplemental Petition96 for Certiorari on
August 21, 2003 informing this court that the Court of Appeals allegedly issued a second Writ
of Preliminary Injunction dated August 13, 2003, which states:chanRoblesvirtualLawlibrary
WHEREAS, in the Resolution promulgated August 13, 2003, the Division Clerk of Court is
directed to issue the Writ of Preliminary Injunction pursuant to the June 20, 2003 Resolution
of this Court.
NOW, THEREFORE, YOU RESPONDENT JUDGE OF THE REGIONAL TRIAL COURT OF ANTIPOLO
CITY, BRANCH 73, YOUR AGENTS, EMPLOYEES, REPRESENTATIVES OR SUCH OTHER PERSON
OR PERSONS ACTING IN YOUR BEHALF ARE ENJOINED FROM IMPLEMENTING THE AMENDED
WRIT OF INJUNCTION DATED MAY 22, 2002, JANUARY 29, 2003 AND FEBRUARY 24, 2003
ORDERS.
GIVEN BY THE AUTHORITY OF THE HONORABLE COURT OF APPEALS, Mme. Justice BENNIE
ADEFUN-DE LA CRUZ [sic], Chairman, Mr. Justice JOSE L. SABIO, JR. and Mr. Justice HAKIM S.
ABDULWAHID, Members, this 13th day of August 2003, Manila,
Philippines.97ChanRoblesVirtualawlibrary
Republic of the Philippines prayed that the second Writ of Preliminary Injunction dated
August 13, 2003 be dissolved.98
While the Petitions for Certiorari and Prohibition were pending before this court, the Court of
Appeals, on November 5, 2003, granted First Alliance Real Estate Development, Inc.'s Petition
for Certiorari and annulled the Amended Writ of Preliminary Injunction issued by the trial
court,99 reasoning as follows:chanRoblesvirtualLawlibrary
Indeed, public respondent court acted with grave abuse of discretion and without jurisdiction
when it sought the enforcement of its amended writ of preliminary injunction against
petitioner, who was never a party to the pending case. Worse, it threatened petitioner with
contempt of court for not following an unlawful order.
Sec. 5, Rule 58, 1st sentence provides, thus: "No preliminary injunction shall be granted
without hearing and prior notice to the party or person sought to be enjoined" (underscoring
for emphasis). In the case at bench, petitioner was not only not impleaded as party to the
case, but that it was never given prior notice regarding the writ of injunction.
Public respondents' assertion that notice was already made to Hardrock Aggregates, Inc. is
specious. There is no showing at all as to the relationship between Hardrock Aggregates, Inc.
and petitioner. Since there is nothing to prove and establish that Hardrock, Inc. and
petitioner are one and the same, then they should be treated as separate and distinct
personalities.
....
WHEREFORE, foregoing premises considered, the petition having merit, in fact and in law is
hereby GIVEN DUE COURSE. Resultantly, the assailed ordered [sic] are hereby ANNULLED
and SET ASIDE for having been issued with grave abuse of discretion and without jurisdiction.
No costs.
SO ORDERED.100 (Emphasis and underscoring in the original)ChanRoblesVirtualawlibrary
Republic of the Philippines then questioned the Court of Appeals' Decision and filed a
Petition for Review101 on Certiorari before this court. The Petition was docketed as G.R. No.
160726.102 Sunrise Garden Corporation also filed a separate Petition for Review on Certiorari
103 before this court, docketed as G.R. No. 160778.104
First Alliance Real Estate Development, Inc. then filed its Comment105 on the Petition for
Certiorari filed by Sunrise Garden and a Consolidated Comment,106 addressing the issues
raised in the Office of the Solicitor General's Petition for Certiorari and Supplemental Petition
for Certiorari .
In a Resolution107 dated January 28, 2004, this court consolidated G.R. Nos. 158836, 158967,
160726, and 160778.
First Alliance Real Estate Development, Inc. filed an Omnibus Motion,108 praying that its
Consolidated Comment in G.R. No. 158967 "be adopted as its Comment [for] G.R. No.
160726."109 First Alliance Real Estate Development, Inc. subsequently filed a
Manifestation,110 praying that the Comment it filed in G.R. Nos. 158967 and 158836 be
adopted as its Comment in G.R. No. 160778.111
Sunrise Garden Corporation and Republic of the Philippines argue that the Court of Appeals
committed grave abuse of discretion in not dismissing the Petition outright due to
insufficiency of form and substance.112 Sunrise Garden Corporation argues that First Alliance
Real Estate Development, Inc. failed to prove its ownership over the properties in dispute.113
Thus, it did not establish any right that would entitle it to the reliefs prayed for.114 Also, no
evidence was presented before the trial court and the Court of Appeals that would prove
First Alliance Real Estate Development, Inc.'s claim that its property would be affected by the
city road project.115
Sunrise Garden Corporation points out that First Alliance Real Estate Development, Inc. still
failed to attach a certified true copy of its alleged titles to the properties affected by the city
road project.116 Sunrise Garden Corporation also manifests that the alleged properties of
First Alliance Real Estate Development, Inc. will not be affected by the city road project based
on an alleged study conducted by the Antipolo City Planning and Development Office.117
Further, Sunrise Garden Corporation and Republic of the Philippines argue that the Court of
Appeals gravely abused its discretion when it issued the Writ of Preliminary Injunction
because the Writ violated Presidential Decree No. 1818.118
Section 1 of Presidential Decree No. 1818 provides:chanRoblesvirtualLawlibrary
Section 1. No court in the Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction, or preliminary mandatory injunction in any case, dispute, or
controversy involving an infrastructure project, or a mining, fishery, forest or other natural
resource development project of the government, or any public utility operated by the
government, including among others public utilities for the transport of the goods or
commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or
governmental official from proceeding with, or continuing the execution or implementation
of any such project, or the operation of such public utility, or pursuing any lawful activity
necessary for such execution, implementation or operation.ChanRoblesVirtualawlibrary
Sunrise Garden Corporation and Republic of the Philippines119 posit that the term
"infrastructure project" includes the construction of roads.120 Also, the construction of the
city road is a capital investment on the part of government because payment to Sunrise
Garden Corporation shall be through tax credits.121
Republic of the Philippines adds that Presidential Decree No. 1818 is applicable because it
does not distinguish between local government projects and national government
projects.122 Further, the city road project is intended to benefit not only the residents of
several barangay that it will traverse, but also the students of the barangay school.123 Once
the city road project is completed, the travel time of the students will be lessened from two
hours to just 30 minutes.124
Sunrise Garden Corporation admits that the Writ of Preliminary Injunction was not issued
against First Alliance Real Estate Development, Inc.125 Nevertheless, the nullification of the
trial court's Orders effectively hampered the city road project.126 The argument of First
Alliance Real Estate Development, Inc. that "its property is being taken without just
compensation"127 proves that the injury to First Alliance Real Estate Development, Inc. is
quantifiable.
Sunrise Garden Corporation and Republic of the Philippines argue that the Writ of
Preliminary Injunction did not state the law and facts on which it was based.128 The Court of
Appeals did not state what clear legal right was being protected.129 It merely stated that
"private respondents are threatening to bulldoze the property subject matter of [the]
litigation."130
As to the alleged "gentlemen's agreement" stated in the Order of the Court of Appeals,
Sunrise Garden Corporation points out that as per the transcript of stenographic notes, the
"gentlemen's agreement" was merely a suggestion of the court, but the parties themselves
never came to an agreement.131
Sunrise Garden Corporation and Republic of the Philippines argue that First Alliance Real
Estate Development, Inc. was not denied due process when the trial court issued the
Amended Writ of Preliminary Injunction because it was afforded several opportunities to be
heard.132
Republic of the Philippines acknowledges that the complaint for damages filed by Sunrise
Garden Corporation was only against Hardrock Aggregates, Inc. because it was the entity that
initially blocked the movement of the construction equipment of Sunrise Garden
Corporation's contractor. However, First Alliance Real Estate Development, Inc. was given
several opportunities to air its side. The first opportunity was the meeting scheduled on
October 8, 2002 between First Alliance Real Estate Development, Inc., and Sunrise Garden
Corporation. However, First Alliance Real Estate Development, Inc. did not appear despite
being the requesting party.133
Further, First Alliance Real Estate Development, Inc. was duly notified when it allegedly
received a copy of Sunrise Garden Corporation's Motion to cite for contempt and filed an
Opposition to the Motion.134 Sunrise Garden Corporation points out that First Alliance Real
Estate Development, Inc. appeared in court to argue why it should not be cited in
contempt.135
First Alliance Real Estate Development, Inc. was given another chance to be heard when it
filed a Motion for Reconsideration on February 6, 2003 before the trial court.136 Thus, First
Alliance Real Estate Development, Inc. cannot claim that it was denied due process.137
In any case, Republic of the Philippines argues that the issuance of a Writ of Preliminary
Injunction does not require a trial-type hearing under Rule 58, Section 5 of the Rules of
Court.138
Sunrise Garden Corporation argues that the trial court had jurisdiction to issue the Amended
Writ of Preliminary Injunction and enforce it against First Alliance Real Estate Development,
Inc.139 Assuming that the trial court did not have jurisdiction over the person of First Alliance
Real Estate Development, Inc., this was cured when the latter voluntarily appeared in
court.140 First Alliance Real Estate Development, Inc. even filed pleadings such as an
Opposition and a Motion for Reconsideration.141 Other than filing pleadings, First Alliance
Real Estate Development, Inc. argued that its properties will be affected by the city road
project.142 This issue was then submitted for resolution before the trial court.143
Sunrise Garden Corporation further argues that First Alliance Real Estate Development, Inc.
had a plain, speedy, and adequate remedy, which was to present its title to the property.144
On the other hand, First Alliance Real Estate Development, Inc. counters that the trial court
did not acquire jurisdiction over its person as it was not impleaded as a party-litigant in the
Complaint for damages filed by Sunrise Garden Corporation against Hardrock Aggregates,
Inc.145 Sunrise Garden Corporation does not deny that First Alliance Real Estate
Development, Inc. was not included in the Complaint.146
First Alliance Real Estate Development, Inc. was not involved in the Complaint for damages
before the trial court.147 Nonetheless, Sunrise Garden Corporation sought to enforce the
Amended Writ of Injunction against it even though the Amended Writ was addressed to
Hardrock Aggregates, Inc.148 First Alliance Real Estate Development, Inc. alleges that it has no
business relations with Hardrock Aggregates, Inc.149 Thus, the Amended Writ of Preliminary
Injunction is not binding on First Alliance Real Estate Development, Inc., and it cannot be held
in contempt.150
First Alliance Real Estate Development, Inc. argues that the Amended Writ of Preliminary
Injunction dated May 22, 2002 was void as to First Alliance Real Estate Development, Inc.
since it was never notified of the hearing.151 Further, to implement the Amended Writ
against First Alliance Real Estate Development, Inc. was equivalent to deprivation of property
without due process.152 First Alliance Real Estate Development, Inc., or its properties, was
not involved in Civil Case No. 02-6396 and yet Sunrise Garden insists on including First
Alliance Real Estate Development, Inc.'s properties in the city road project.153
First Alliance Real Estate Development, Inc. argues that the Amended Writ of Preliminary
Injunction will allow Sunrise Garden Corporation to take possession and control of First
Alliance Real Estate Development, Inc.'s property without due process of law.154 First Alliance
Real Estate Development, Inc. cites Buayan Cattle Co., Inc. v. Hon. Quintillan, etc., et al.155
where this court held that "[injunctions are not available to take property out of the
possession or control of one party and place it into that of another whose title was not
clearly, been [sic] established."156
First Alliance Real Estate Development, Inc. claims that the construction of the city road has
the effect of appropriating and taking First Alliance Real Estate Development, Inc.'s private
property for public use.157 First Alliance Real Estate Development, Inc. questions the lack of
authority of Sunrise Garden Corporation to take the property considering that the Office of
the Solicitor General admitted before the Court of Appeals that there was no expropriation
ordinance, as follows:158
J. Sabio:
xxx could you show this Court an Ordinance authorizing the expropriation of that property?
xxx
Sol. Saludares:
There is no expropriation Ordinance.
J. Sabio:
How can you enter a property without any authority, [sic] it [sic] is basic that you can enter
the property only upon a Court Order.
xxx
Sol. Saludares:
We have here a copy of the Ordinance, your honor.
J. Sabio:
What does it say?
Sol. Saludares:
An Ordinance creating a technical committee to conduct x x x. As to the allegation that there was no public bidding, Republic of the Philippines discussed
that the City Government of Antipolo had no funds for the road project, thus, it could not bid
J. Sabio: out the project.177 However, due to the urgent need for the construction of the city road, the
local government had to negotiate with a party "who [could] advance its realty taxes."178
That is not expropriation. I have read that. That is not expropriation.159 (Emphasis supplied, Sunrise Garden Corporation offered to do so, and the local government found the offer
citations omitted) favorable.179
Further, the temporary restraining order and preliminary injunction issued by the Court of
The resolution of this case involves the following issues:
Appeals is not violative of Presidential Decree No. 1818.160 First Alliance Real Estate
Development, Inc. argues that the cases relied upon by Sunrise Garden Corporation and
First, whether the Court of Appeals committed grave abuse of discretion when it issued a
Republic of the Philippines, Gov. Garcia v. Hon. Burgos161 and Republic v. Silerio,162 are not
Writ of Preliminary Injunction, contrary to the provisions of Presidential Decree No.
applicable because in these cases, biddings were conducted.163 No bidding was conducted for
1818;cralawlawlibrary
the city road project as shown by Sunrise Garden Corporation's admission that it had an
agreement with the City Government of Antipolo.164 "There was no bidding conducted and
Second, whether respondent First Alliance Real Estate Development, Inc. was denied due
the agreement between the Petitioner [Sunrise Garden Corporation] and the City
process when the trial court issued its January 29, 2003 Order requiring respondent First
Government of Antipolo City relative to [the] construction of the access road and payment by
Alliance Real Estate Development, Inc. to comply with the Amended Writ of Preliminary
way of tax credit can still be questioned, for being illegal." 165
Injunction.
First Alliance Real Estate Development, Inc. also alleges that Sunrise Garden Corporation
Finally, whether the trial court acquired jurisdiction over respondent First Alliance Real Estate
disregarded the Court of Appeals' advice or their "gentlemen's agreement" to maintain the
Development, Inc.
status quo when Sunrise Garden Corporation sought an Order from the trial court to enforce
the Amended Writ of Injunction.166
I
First Alliance Real Estate Development, Inc. also questions the standing of Republic of the
At the outset, G.R. Nos. 158836 and 158967 were rendered moot and academic when the
Philippines and the City Government of Antipolo because they were not impleaded as parties
Court of Appeals promulgated its Decision in CA-G.R. SPNo. 75758 on November 5, 2003.
in CA-G.R. SP No. 75758 and Civil Case No. 02-6396.167 Since they were not parties during the
proceedings in the lower courts, they were not affected by the Writ of Preliminary
A case that is moot and academic has been defined as follows:chanRoblesvirtualLawlibrary
Injunction.168
A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events, so that a declaration thereon would be of no practical use or value.180
Also, the Petitions filed by Republic of the Philippines through the Office of the Solicitor
(Citation omitted)ChanRoblesVirtualawlibrary
General and before this court do not indicate the authority of the City Government of
Antipolo to "represent the Republic"169 and sign the certification of non-forum shopping.170 In Philippine Savings Bank (PSBANK) v. Senate Impeachment Court,181 this court
stated:chanRoblesvirtualLawlibrary
With regard to Republic of the Philippines' claim that a second Writ of Preliminary Injunction It is well-settled that courts will not determine questions that have become moot and
was issued by the Court of Appeals on August 13, 2003, First Alliance Real Estate academic because there is no longer any justiciable controversy to speak of. The judgment
Development, Inc. explains that this alleged second Writ of Preliminary Injunction was will not serve any useful purpose or have any practical legal effect because, in the nature of
actually the Writ issued by the Court of Appeals in its Resolution dated June 20, 2003.171 It is things, it cannot be enforced.182 (Citation omitted)ChanRoblesVirtualawlibrary
not a second Writ of Preliminary Injunction.
While the Petitions for Certiorari are moot and academic, we clarify that Presidential Decree
No. 1818, cited by the parties, has been repealed by Republic Act No. 8975.183 The repealing
On the arguments raised by First Alliance Real Estate Development, Inc., Republic of the
clause of this law provides for an express repeal, thus:chanRoblesvirtualLawlibrary
Philippines counters that First Alliance Real Estate Development, Inc. cannot claim denial of
SEC. 9. Repealing Clause.—All laws, decrees, including Presidential Decree Nos. 605, 1818
due process due to the lack of expropriation proceeding.172
and Republic Act No. 7160, as amended, orders, rules and regulations or parts thereof
inconsistent with this Act are hereby repealed or amended
Republic of the Philippines argues that expropriation and eminent domain are different,
accordingly.ChanRoblesVirtualawlibrary
citing Section 19173 of Republic Act No. 7160.174 Republic of the Philippines explained that if
compensation for the property is accepted, then there is no need for an expropriation This court has held that implied repeals are not favored, and "the failure to add a specific
proceeding.175 In addition, First Alliance Real Estate Development, Inc. is not an affected repealing clause indicates that the intent was not to repeal any existing law[.]"184 The express
landowner.176 repeal of Presidential Decree No. 1818 clearly indicates Congress' intent to replace
Presidential Decree No. 1818 with Republic Act No. 8975.

Republic Act No. 8975 was approved on November 7, 2000 and was published in the Malaya
and the Manila Bulletin on November 11, 2000. It was also published in the Official Gazette
on May 7, 2001.185 When this case was filed, Republic Act No. 8975 was already effective.
Section 3 of Republic Act No. 8975 provides:chanRoblesvirtualLawlibrary
SEC. 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions
and Preliminary Mandatory Injunctions. — No court, except the Supreme Court, shall issue
any temporary restraining order, preliminary injunction or preliminary mandatory injunction
against the government, or any of its subdivisions, officials or any person or entity, whether
public or private, acting under the government's direction, to restrain, prohibit or compel the
following acts:
(a) Acquisition, clearance and development of the right-of-way and/or site or location of any
national government project;cralawlawlibrary
(b) Bidding or awarding of contract/project of the national government as defined under
Section 2 hereof[.] (Emphasis supplied)ChanRoblesVirtualawlibrary
In the recent decision of this court in Dynamic Builders v. Hon. Presbitero, Jr.,186 we clarified
that Republic Act No. 8975 is applicable to national government infrastructure projects.187 It
also discussed the remedies available to aggrieved parties in cases involving local
government infrastructure projects as follows:chanRoblesvirtualLawlibrary
Republic Act No. 8975 does not sanction splitting a cause of action in order for a party to
avail itself of the ancillary remedy of a temporary restraining order from this court. Also, this
law covers only national government infrastructure projects. This case involves a local
government infrastructure project.
For local government infrastructure projects, Regional Trial Courts may issue provisional
injunctive reliefs against government infrastructure projects only when (1) there are
compelling and substantial constitutional violations; (2) there clearly exists a right in esse; (3)
there is a need to prevent grave and irreparable injuries; (4) there is a demonstrable urgency
to the issuance of the injunctive relief; and (5) when there are public interests] at stake in
restraining or enjoining the project while the action is pending that far outweigh (a) the
inconvenience or costs to the party to whom the project is awarded and (b) the public
benefits that will result from the completion of the project. The time periods for the validity
of temporary restraining orders issued by trial courts should be strictly followed. No
preliminary injunction should issue unless the evidence to support the injunctive relief is
clear and convincing.188 (Emphasis supplied)ChanRoblesVirtualawlibrary
In this case, the notice to the public states that "the City Government of Antipolo is going to
construct the 20.00 meters wide city road[.]"189 Also, the funds for the project would come
from the Sangguniang Panlungsod of Antipolo City. There is nothing on record to show that
the city road project is a national government project. Hence, the prohibition on the issuance
of restraining orders or injunctions against national government projects does not apply.
II
Due process requires that a party be given the chance to be heard. The general rule is that
"no man shall be affected by any proceeding to which he is a stranger, and strangers to a
case are not bound by a judgment rendered by the court."190 Corollarily, an ancillary writ of
remedy cannot affect non-parties to a case.
Fernandez v. Court of Appeals191 involved an Administrative Complaint against three Court of
Appeals Justices.192 One of the acts complained of was the issuance of a Writ of Preliminary
Injunction, enjoining the implementation of an Order of the trial court.193 This court
dismissed the Complaint on the ground that an Administrative Complaint is not a substitute
for a lost appeal.194 This court also held that in any case, complainants did not have the
personality to question the Writ of Preliminary Injunction since they were not the aggrieved
parties.195 Complainants had the option to intervene in the Petitions filed but did not do
so.196 This court discussed that:chanRoblesvirtualLawlibrary
Section 1 of Rule 19 of the Rules of Court provides that a person who has a legal interest in
the matter in litigation, or in the success of either of the parties, or an interest against both,
or is so situated as to be adversely affected by a distribution or other disposition of property
in the custody of the court or of an officer thereof may, with leave of court, be allowed to
intervene in the action. Conversely, a person who is not a party in the main suit cannot be
bound by an ancillary writ, such as a preliminary injunction. Indeed, he cannot be affected by
any proceeding to which he is a stranger.197 (Emphasis supplied, citation
omitted)ChanRoblesVirtualawlibrary
In Mabayo Farms, Inc. v. Court of Appeals,198 a Writ of Preliminary Injunction was issued
against Juanito Infante, Domingo Infante, Lito Mangalidan, Jaime Aquino, John Doe, Peter
Doe, and Richard Doe.199 A certain Antonio Santos, who claimed ownership over the parcel of
land, filed a Petition for Certiorari before the Court of Appeals, arguing that to enforce the
Writ of Preliminary Injunction against him would be grave abuse of discretion since the trial
court did not acquire jurisdiction over his person.200 Mabayo Farms countered that Antonio
Santos was covered by the Writ because it was issued against three Does, and these Does
include Antonio Santos.201 Also, since Santos received a copy of the Writ of Preliminary
Injunction, he cannot claim lack of due process, and it was his duty to intervene in the
case.202 The Court of Appeals granted the Petition for Certiorari and enjoined the trial court
from enforcing the Writ of Preliminary Injunction against Santos.203 This court affirmed204 the
Decision of the Court of Appeals and held that:chanRoblesvirtualLawlibrary
A preliminary injunction is an order granted at any stage of an action prior to final judgment,
requiring a person to refrain from a particular act. As an ancillary or preventive remedy, a
writ of preliminary injunction may therefore be resorted to by a party to protect or preserve
his rights and for no other purpose during the pendency of the principal action. Its object is
to preserve the status quo until the merits of the case can be heard. It is not a cause of action
in itself but merely a provisional remedy, an adjunct to a main suit. Thus, a person who is not
a party in the main suit, like private respondent in the instant case, cannot be bound by an
ancillary writ, such as the writ of preliminary injunction issued against the defendants in Civil
Case No. 6695. He cannot be affected by any proceeding to which he is a stranger.205
(Emphasis supplied, citations omitted)ChanRoblesVirtualawlibrary
Regarding Mabayo Farms' argument that Santos should have intervened, this court discussed
that:chanRoblesvirtualLawlibrary
First, private respondent had no duty to intervene in the proceedings in Civil Case No. 6695.
Intervention in an action is neither compulsory nor mandatory but only optional and
permissive. Second, to warrant intervention, two requisites must concur: (a) the movant has
a legal interest in the matter in litigation, and (b) intervention must not unduly delay or
prejudice the adjudication of the rights of the parties nor should the claim of the intervenor
be capable of being properly decided in a separate proceeding. The interest, which entitles a
person to intervene in a suit, must involve the matter in litigation and of such direct and
immediate character that the intervenor will either gain or lose by the direct legal operation
and effect of the judgment. Civil Case No. 6695 was an action for permanent injunction and
damages. As a stranger to the case, private respondent had neither legal interest in a
permanent injunction nor an interest on the damages to be imposed, if any, in Civil Case No.
6695. To allow him to intervene would have unnecessarily complicated and prolonged the
case.206 (Citations omitted)ChanRoblesVirtualawlibrary
It may be argued that respondent First Alliance Real Estate Development, Inc. should have
intervened in the case filed before the trial court. However, respondent First Alliance Real
Estate Development, Inc.'s interests, or its properties, were not part of the issues raised in
petitioner Sunrise Garden Corporation's Complaint. That Complaint was against Hardrock
Aggregates, Inc. and not respondent First Alliance Real Estate Development, Inc. or its
properties.
III
We rule that the Court of Appeals did not err when it annulled and set aside the trial court's
Orders dated January 29, 2003, and February 24, 2002.
The Court of Appeals discussed that:chanRoblesvirtualLawlibrary
Indeed public respondent court acted with grave abuse of discretion and without jurisdiction
when it sought the enforcement of its amended writ of preliminary injunction against
petitioner, who was never a party to the pending case. Worse, it threatened petitioner with
contempt of court for not following an unlawful order.
Sec. 5, Rule 58, 1st sentence provides, thus: "No preliminary injunction shall be granted
without hearing and prior notice to the party or person sought to be enjoined. . ." In the case
at bench, petitioner was not only not impleaded as party to the case, but that it was never
given prior notice regarding the writ of injunction.
Public respondents' [referring to the Republic] assertion that notice was already made to
Hardrock Aggregates, Inc. is specious. There is no showing at all as to the relationship
between Hardrock Aggregates, Inc. and petitioner. Since there is nothing to prove and
establish that Hardrock, Inc. and petitioners are one and the same, then they should be
treated as separate and distinct personalities.207ChanRoblesVirtualawlibrary
Respondent First Alliance Real Estate Development, Inc. argues that CA-G.R. SP No. 75758 is
related to Civil Case No. 02-6396 where it was not included as a party litigant.208 Respondent
First Alliance Real Estate Development, Inc. reiterates that it is not liable for contempt
because the trial court never acquired jurisdiction over it and, hence, it is not bound by the
Amended Writ of Preliminary Injunction.209
Rule 58, Section 5 of the Rules of Court requires that the party to be enjoined must be
notified and heard. The rule provides:chanRoblesvirtualLawlibrary
RULE 58
PRELIMINARY INJUNCTION
....
SEC. 5. Preliminary injunction not granted without notice; exception.—No preliminary
injunction shall be granted without hearing and prior notice to the party or person sought to
be enjoined. If it shall appear from facts shown by affidavits or by the verified application that
great or irreparable injury would result to the applicant before the matter can be heard on
notice, the court to which the application for preliminary injunction was made, may issue ex
parte a temporary restraining order to be effective only for a period of twenty (20) days from
service on the party or person sought to be enjoined, except as herein provided. Within the
said twenty-day period, the court must order said party or person to show cause, at a
specified time and place, why the injunction should not be granted, determine within the
same period whether or not the preliminary injunction shall be granted, and accordingly
issue the corresponding order. (Emphasis supplied)ChanRoblesVirtualawlibrary
In this case, petitioners Republic of the Philippines and Sunrise Garden Corporation did not
refute that respondent First Alliance Real Estate Development, Inc. was never a party to the
case. During the hearings before the Court of Appeals, counsel for petitioner Sunrise Garden
Corporation placed much emphasis on its argument that respondent First Alliance Real
Estate Development, Inc. did not prove ownership over the property but did not refute the
primary issue of lack of jurisdiction over respondent First Alliance Real Estate Development,
Inc. This is an admission that the trial court did not acquire jurisdiction over respondent First
Alliance Real Estate Development, Inc.
J. SABIO:
It is fundamental that an order of a court cannot be enforced against a person who is
not a party to a case.
ATTY. GALIT [counsel for petitioner Sunrise Garden Corporation]:
As I said, Your Honor, that is on my supposition. Earlier, Your Honor, both my good
Companeros here have intelligently and clearly ventilated, open the eyes of the
Honorable Court that this particular person is claiming, Your Honor, a right which is not
existing. A right which is not existing, Your Honor. Why take refuge from an allegation
that according to him this is not the proper forum. This is now the proper forum for the
petitioner to prove his right because he is being challenged.
J. SABIO:
He does not have to prove anything. He has the title in his possession.
ATTY. GALIT:
Mere title, Your Honor, without any specification to be attested by a competent person
such as the expert witness, a geodetic engineer, a licensed geodetic engineer. . .
J. SABIO:
 That is not the issue in this case. As we said if you try to question the validity of the title
of the petitioner[,] do it in a proper forum. This is not the proper forum. The issue here
is not that. The issue is whether a writ of injunction can be enforced against a person
who is not a party to the case. That is the pure and simple issue in this petition.
ATTY. GALIT:
We have made clear, Your Honor, as to the procedural aspect of the case and as to the
substantive aspect of the case. As to the substantive aspect of the case the petitioner,
despite several challenges against them they failed and they continued to fail to present
any iota of evidence that would prove clear and unmistakable right to warrant the. . .
J. SABIO:
That is not the issue where he has to defend his title. Because his title is not the one, the
subject matter of the case in the court below.
ATTY. GALIT:
Your Honor, guided by the Supreme Court decision, a mere photocopy, a mere xerox
copy of any public document, alleged public documents cannot be said to be a basis of
any right. This is a mere xerox copy to be treated as a mere scrap of paper.
J. SABIO:
Then you challenge it in a proper forum[,] not this forum. That is not the issue here. That
is beyond us to decide. The issue is whether he [sic] injunction issued by the lower court
should be enforced [against] petitioner who is not a party to the case.
....
ATTY. GALIT:
To be clear, Your Honor, and with all due respect to this Honorable Court. We take a
parallel stand and we absolutely submit to the pronouncement of this Honorable Court
that a party who is not a party litigant in the case below will never be affected by any
issuance of an injunction. That is precisely correct and we do not dispute that, your
Honor.
....
ATTY. SAAVEDRA [co-counsel for petitioner Sunrise Garden Corporation]:
As a matter of fact insofar as we are concerned, Your Honor, whether the lower court
has jurisdiction over their person because they were not impleaded is immaterial.
Because they are in the nature or category of strangers who refused to obey the writ of
injunction which was addressed to the squatters. Since they have no right to be
protected, they have not shown that they own any portion of the land to be traversed
what right do they have to be protected for.
J. SABIO:
Again let us not go back to that issue so that we will not be misled, we do not becloud
the real issue. The issue here is basic and fundamental. Whether petitioner [w]ho has
not been a party to the case because he has not been impleaded can be cited for
contempt for refusal to obey or comply with the amended writ of preliminary
injunction? That is all.210
Petitioner Sunrise Garden Corporation additionally argues that the trial court acquired
jurisdiction because respondent First Alliance Real Estate Development, Inc. voluntarily
appeared in court to argue why it should not be cited in contempt. 211
While Rule 14, Section 20212 of the Rules of Court provides that voluntary appearance is
equivalent to service of summons, the same rule also provides that "[t]he 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."213
In Philippine Commercial International Bank v. Spouses Dy Hong Pi, et al.,214 this court
discussed that voluntary appearance in court may not always result in submission to the
jurisdiction of a court.
Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive
power of legal processes exerted over his person, or his voluntary appearance in court. As a
general proposition, one who seeks an affirmative relief is deemed to have submitted to the
jurisdiction of the court. It is by reason of this rule that we have had occasion to declare that
the filing of motions to admit answer, for additional time to file answer, for reconsideration
of a default judgment, and to lift order of default with motion for reconsideration, is
considered voluntary submission to the court's jurisdiction. This, however, is tempered by
the concept of conditional appearance, such that a party who makes a special appearance to
challenge, among others, the court's jurisdiction over his person cannot be considered to
have submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule on voluntary
appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of the defendant
must be explicitly made, i.e., set forth in an unequivocal manner; and
(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court,
especially in instances where a pleading or motion seeking affirmative relief is filed and
submitted to the court for resolution.215 (Citations omitted)
The appearance of respondent First Alliance Real Estate Development, Inc. and K-9 Security
Agency should not be deemed as a voluntary appearance because it was for the purpose of
questioning the jurisdiction of the trial court. The records of this case show that the defense
of lack of jurisdiction was raised at the first instance and repeatedly argued by K-9 Security
Agency and respondent First Alliance Real Estate Development, Inc. in their pleadings.216
Petitioner Sunrise Garden Corporation posits that a third-party claim would have been the
proper remedy for respondent First Alliance Real Estate Development, Inc., and not a petition
for certiorari before the Court of Appeals.217 Petitioner Sunrise Garden Corporation cited
Ciudad Real & Development Corporation v. Court of Appeals218 where this court allegedly
ruled that it is grave abuse of discretion to allow a "petitioner who is not a party litigant in
the proceedings below [to file a petition] for certiorari ."219

Counsel for respondent First Alliance Real Estate Development, Inc. countered
that:chanRoblesvirtualLawlibrary
With respect to the comment of counsel for the respondent, Your Honor, [sic] We [sic] have
personality to challenge that because the writ of injunction, the order citing us for contempt
are [sic] addressed to us, Your Honor. And we have the personality to ask for the nullity of
that order, Your Honor.220ChanRoblesVirtualawlibrary
The case cited by petitioner Sunrise Garden Corporation is not applicable. In Ciudad Real, the
trial court denied the Motion to intervene filed by Magdiwang Realty Corporation.221
Magdiwang Realty Corporation did not question the trial court's Order, and it became final
and executory.222 When the case was brought before the Court of Appeals, the court
recognized Magdiwang Realty Corporation's standing.223 This court held
that:chanRoblesvirtualLawlibrary
Despite the finality of the order denying Magdiwang's intervention way back in 1989, the
respondent court in its Decision of August 20, 1992 recognized the standing of Magdiwang to
assail in the appellate court the Compromise Agreement. Again, this ruling constitutes grave
abuse of discretion for Magdiwang was not a party in interest in Civil Case No. Q-
35393.224ChanRoblesVirtualawlibrary
Considering that the trial court gravely abused its discretion when it sought to enforce the
Amended Writ of Preliminary Injunction against respondent First Alliance Real Estate
Development, Inc., the Court of Appeals did not err in granting the Petition for Certiorari filed
by respondent First Alliance Real Estate Development, Inc.

WHEREFORE, premises considered, the Petitions in G.R. Nos. 158836 and 158967 are
DISMISSED for being moot and academic.

The Petitions in G.R. Nos. 160726 and 160778 are DENIED, and the Decision of the Court of
Appeals in CA-G.R. SPNo. 75758 is AFFIRMED.

SO ORDERED.