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.
DECISION
PERALTA, J.:
1

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the Resolution of the Regional
2
Trial Court of Legaspi City (RTC), dated November 11, 1999, dismissing petitioners complaint, and its Order 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 P20 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 P20 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 P20 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 P100,000.00 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 ofP200,000.00.

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 P20 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
3
THE DOCTRINE LAID DOWN IN UNION GLASS.
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.
4
Philippine Bank of Communications, 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.1wphi1
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
5
adverse party by surprise or the like, which might justify a refusal of permission to amend.
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
6
the amended complaint now sufficiently state a cause of action? InHi-Yield Realty, Incorporated v. Court of Appeals, 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
7
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.
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
8
9
complaint? The Court answers in the negative. Saura v. Saura, Jr. is closely analogous to the present case. In Saura, 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 pendentiaamong 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.1wphi1 Here, the complaint is
10
for annulment of mortgage with the mortgagee bank as one of the defendants, thus, as held inSaura, 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 herebyREVERSED 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.

G.R. No. 151932

August 19, 2009

HENRY CHING TIU, CHRISTOPHER HALIN GO, and GEORGE CO, Petitioners,
vs.
PHILIPPINE BANK OF COMMUNICATIONS, Respondent.
DECISION
PERALTA, J.:
1

This is a petition for review on certiorari, under Rule 45 of the Rules of Court, seeking to annul and set aside the Decision 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,
2
petitioners submitted a Board Resolution dated June 7, 1993. The loan was guaranteed by collateral over the property covered by
3
4
Transfer Certificate of Title No. T-13020. The loan was eventually approved.
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
5
members of the Board of Directors of AWRI to become sureties. Thus, on August 16, 1996, a Surety Agreement 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
6
Records Management and Archives Office, through the Office of the RTC Clerk of Court.
Thereafter, on December 16, 1998, AWRI informed the bank of its desire to surrender and/or assign in its favor, all the present
7
properties of the former to apply as dacion en pago for AWRIs existing loan obligation to the bank. 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
8
the bank.
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
9
attached to the complaint as Annexes "A" to "A-2" 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
10
consent.
In support of their allegations, petitioners attached to their Answer a certified photocopy of the Surety Agreement issued on March
11
25, 1999 by the Records Management and Archives Office in Davao City, showing that the words "In his personal capacity" were
12
not found at the foot of page two of the document where their signatures appeared.
Because of this development, PBCOMs counsel searched for and retrieved the file copy of the Surety Agreement. The notarial copy
13
showed that the words "In his personal capacity" did not appear on page two of the Surety Agreement.
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
14
15
the insertion. Mr. Cabahug subsequently executed an affidavit 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
16
Complaint, 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.
17

On December 14, 1999, the RTC issued an Order 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.
18

19

Petitioners filed a motion for reconsideration, but it was denied in the Order 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 plaintiffs 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 Courts 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 latters cause of action was solely and principally
20
founded on the falsified document marked as Annexes "A" to "A-2."
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
22
the falsified document.
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 PBCOMs 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
23
evidence.
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
24
nullified, because the falsified document would no longer be found in the records of the case during the appeal.
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 P2,030,000.00 as evidenced by 4 promissory notes marked as Annexes B, B-1, B-2, and B-3. Thus, the conclusion of
25
the CA in declaring the petitioners liable as sureties violated their right to due process.
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 PBCOMs 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
26
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
27
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
28
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
29
trial of the case, thereby giving the petitioners all the time allowed by law to answer and to prepare for trial.
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
30
adverse party by surprise or the like, which might justify a refusal of permission to amend.
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 banks standard practice. This alteration was made without the knowledge of
the notary public. PBCOMs 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
31
alter or contradict the latter. 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
32
always be avoided. 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 partylitigants.
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
33
its 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 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,
34
speedy and adequate remedy in the ordinary course of law. 1avvphi1
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
35
either to perform the duty enjoined or to act at all in contemplation of law.
The present case failed to comply with the above-stated requisites. In the instant case, the soundness of the RTCs 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 courts 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.

G.R. No. 133657

May 29, 2002

REMINGTON INDUSTRIAL SALES CORPORATION, petitioner,

vs.
THE COURT OF APPEALS and BRITISH STEEL (ASIA), LTD., respondents.
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.
1
44529 dated February 24, 1998 , which granted the petition for certiorari filed by respondent British Steel Asia Ltd. (British Steel)
and ordered the dismissal of petitioner Remington Industrial Sales Corporations (Remington) complaint for sum of money and
2
damages. Also assailed in this petition is the resolution of the Court of Appeals denying petitioners motion for reconsideration.
The facts of the case, as culled from the records, are as follows:
3

On August 21, 1996, petitioner filed a complaint 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
4
5
action against them. On April 7, 1997, the RTC denied the motions to dismiss, as well as the ensuing motion for reconsideration. ISL
then filed its answer to the complaint.
6

On the other hand, respondent British Steel filed a petition for certiorari and prohibition before the Court of Appeals, 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 petitioners legal rights. Apart from the allegation in the complaints "Jurisdictional
Facts" that:
1.05. Defendants British Steel (Asia) Ltd. and Ferro Trading Gmbh, while understood by the plaintiff as mere suppliers of
7
goods for defendant ISL, are impleaded as party defendants pursuant to Section 13, Rule 3 of the Revised Rules of Court.
no other reference was made to respondent that would constitute a valid cause of action against it. Since petitioner failed to plead
8
any cause of action against respondent as alternative defendant under Section 13, Rule 3, 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
9
of action against respondent. Pursuant to Section 2, Rule 10 of the Rules of Court, petitioner maintained that it can amend the
10
complaint as a matter of right because respondent has not yet filed a responsive pleading thereto.
11

Subsequently, petitioner filed a Manifestation and Motion 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 petitioners Motion to Admit Amended Complaint thus:
WHEREFORE, the Amended Complaint is NOTED and further proceedings thereon and action on the other incidents as
th
aforementioned are hereby held in abeyance until final resolution by the Honorable Court of Appeals (Special 6 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 petitioners 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 petitioners 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
14
court gravely abused its discretion in denying petitioners motion to dismiss.
Petitioner filed a motion for reconsideration of the appellate courts decision, which was denied in a resolution dated April 28, 1998.
Hence, this petition, anchored on the following grounds:
-ITHE 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.
-IITHE 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
15
SUITS.
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?
16

Section 2, Rule 10 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
17
complaint whether a new cause of action or change in theory is introduced. The reason for this rule is implied in the subsequent
18
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.
Conversely, it cannot be said that the defendants rights have been violated by changes made in the complaint if he has yet to file an
19
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.
The right granted to the plaintiff under procedural law to amend the complaint before an answer has been served is not precluded
20
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.
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
21
multiplicity of suits avoided.
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 petitioners 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
22
asserted against the other defendants.
Furthermore, we do not agree with respondents claim that it will be prejudiced by the admission of the Amended Complaint
23
because it had spent time, money and effort to file its petition before the appellate court. 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 respondents 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 petitioners Amended Complaint in Civil Case No. 96-79674 and to conduct further proceedings in said
case.
SO ORDERED.

G.R. No. L-41621 February 18, 1999

PASTORA VALMONTE, JOSE DE LEON, AND JOAQUIN VALMONTE, petitioners,
vs.
THE HON. COURT OF APPEALS, PHILIPPINE NATIONAL BANK, ARTEMIO VALENTON, AND AREOPAGITA J. JOSON, renpondents.
PURISIMA, J.:
1

At bar is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court seeking a review of the Decision of the
2
Court of Appeals which affirmed the decision of the then Court of First Instance of Cabanatuan City, Branch III in Civil Case No.
2950, entitled "Pastora Valmonte, Jose de Leon and Joaquin Valmonte versus Philippine National Bank, Artemio Valenton and
Areopagita J. Joson", dismissing plaintiffs' complaint as well as defendants' counterclaim.
As culled in the Decision of the Court of Appeals sought for review, the facts of the case that matter are, as follows:
. . . On November 5, 1951, plaintiff-appellant Joaquin Valmonte sold to his daughter co-appellant Pastora, three (3)
parcels of land, situated in the Municipality of Jaen, Province of Nueva Ecija, containing a total area of 70.6
hectares (Exhs. 31-Bank, 1-Valenton). A few days later, or on Nov. 12, 1951, plaintiff-appellant Pastora obtained a
crop loan of P16,000.00 from defendant-appellee Philippine National Bank and as security for payment thereof,
she executed a Real Estate Mortgage, dated November 12, 1951, in favor of appellee bank involving the same
parcels of land (Exh. J) as covered by Transfer Certificate of Title No. NT-10423 in the name of said appellant
Pastora (Exh. Q-1).
On September 19, 1952, appellant Pastora, then single, executed a Special Power of Attorney in favor of one
Virginia V. del Castelo for the purpose of borrowing money in the amount of P5,000.00 from appellee bank with
authority to mortgage the same parcels of land hereinabove mentioned (Exh. A). As a result thereof, a loan of
P5,000.00 payable on demand was granted by appellee bank and Virginia Castelo executed a Real Estate Mortgage
in its favor (Exhs. 6 and 7-Bank, and B).
On June 14, 1954, appellee bank sent a "Notice of Extra-Judicial Sale of Mortgaged Properties" to the Provincial
Sheriff of Nueva Ecija for publication (Exh. 39-Bank).
On June 20, 1954, appellant Pastora executed a Deed of Sale in favor of her father co-appellant Joaquin Valmonte
selling unto the latter the same three (3) parcels of land covered by TCT No. NT-10423 with the following
condition:
These lands are at present mortgaged to the Philippine National Bank, and this obligation shall be
the subject of future arrangement between the vendor and vendee herein on the one hand and
the Philippine National Bank on the other before this deed of Sale shall be operative. (Exh. 2Valenton)
On July 19, 26 and August 2, 1954, the notice of extrajudicial sale on Augerst 19, 1954 to be held in the City Hall of
Cabanatuan City, for the satisfaction of appellant Pastora's debt of P5,000.00 plus interests due thereon, was
published in a newspaper called Nueva Era (Exh. 56-Bank). The same notice was posted in three (3) public and
conspicuous places in the City of Cabanatuan where the scheduled auction sale will take place and in three (3)
public and conspicuous places in the Municipality of Jaen, Nueva Ecija where the properties are located (Exh. 38Bank).
On August 19, 1954, the auction sale was conducted and appellee bank was the sole and only bidder for P5,524.40.
On the same date, the Provincial Sheriff Ex-Officio issued the corresponding Minutes of Auction Sale and
Certificate of Sale (Exh.C, 55 and 54-Bank).
The period of redemption expired on August 19, 1955 (Exh. 65-Bank). Appellee bank received a letter-offer, dated
August 31, 1955 from a certain Jose Talens to purchase the properties in question for P27,000.00, P4,000.00 down
and the balance payable in five (5) yearly amortizations (Exh. 40-Bank). In a letter dated September 28, 1955,
appellee Artemio Valenton offered to purchase said properties for P35,000.00 payable upon execution of the
contract in his favor and deposited P1,000.00 as earnest money therefor (Exh. 41-Bank, 7-Valenton). On October

10, 1955, appellant Joaquin Valmonte sent a letter-request to appellee bank for additional time within which he
may repurchase the properties in question for P35,000.00 (Exh 33-Bank; 8-Valenton). In view thereof and by
reason of the request of Congressman Celestino C. Juan, appellants were given up to December 31, 1955, to
purchase in cash the properties concerned in the amount of the bank's total claim. As of September 7, 1955, the
Bank's total claims amounted to P26,926.38, including the P16,000.00 loan obtained by appellant Pastora in 1951
(Exhs. 66-Bank and 9-Valenton; J; 43-Bank and 58-Valenaon).
On December 7, 1955, appellant Pastora designated her father, co-appellant Joaquin Valmonte as her attorney-infact for the purpose of repurchasing the land from the appellee bank (Exh. H). Appellants failed to purchase the
properties on or before December 31, 1955. Hence, on January 3, 1956, appellee Valenton deposited the balance
of P34,000.00 which the bank accepted [Exhs 47-B (Bank) and 62-B (Valenton)]. On Jan. 4, 1956, appellee bank
executed the Deed of Absolute Sale in favor of appellee Valenton (Exhs. 47-Bank, 11-Valenton and 47-C (Bank) as
well as an Affidavit of Consolidation of Ownership (Exh. D-1).
To enable the registration of the properties in the name of appellee Valenton, appellee Bank, as attorney-in-fact of
the mortgagor under the Real Estate Mortgagor, dated September 30, 1952 (Exh. B), had to execute a Deed of Sale
in its favor on January 5, 1956 (Exh. E). On January 6, 1956, a "Deed of Confirmation of Sale" was executed by
appellee bank for the main purpose of asserting that the existing certificate of title covering the parcels of land in
question at that time was TCT No. - NT 18899 of the land registry of Nueva Ecija in the name of appellee bank (Exh.
F). Appellee Valenton obtained the cancellation of TCT No. NT 18899 and the issuance of the Registry of Deeds of
Nueva Ecija of TCT No. NT-18901 in his name (Exhs. S and S-1).
xxx xxx xxx
. . . The present complaint was filed on August 1, 1958; and, after joining the issues and trial on the merits, the
3
complaint was dismissed on January 27, 1968.
The trial court of origin, as earlier alluded to, dismissed the entire case, disposing, thus:
PREMISES CONSIDERED, judgment is hereby rendered in favor of the defendants against the
plaintiffs, dismissing the complaint with costs against the said plaintiffs.
The counterclaims of the defendants are hereby dismissed.
SO ORDERED.

Therefrom, plaintiffs Pastora Valmonte, Jose de Leon and Joaquin Valmonte appealed to the Court of Appeals, which came out with
a judgment of affirmance promulgated on March 24, 1975.
Undaunted, the said plaintiffs found their way to this court via the present Petition, theorizing that:
A
THIS IS AS CLEAR A CASE AS ANY WHERE PERSONS HAVE BEEN DEPRIVED OF THEIR PROPERTY
WITHOUT DUE PROCESSOF LAW.
B
THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT HELD, AS DID THE
TRIAL COURT, THAT THE TWO MORTGAGES (P16,000.00 AND P5,000.00) WERE SEPARATE AND
DISTINCT FROM ONE ANOTHER; WORSE STILL, THAT ONE WAS "JUNIOR"AND THE OTHER WAS
"SENIOR"; THAT THE "MERGER" CAME ABOUT AFTER THE FORECLOSURE OF THE P5,000.00
PORTION OF THE MORTGAGE SUCH THAT THE PNB BECAME CREDITOR AND DEBTOR AT THE
SAME TIME.
C

THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT DID NOT HOLD
THAT, FROM THE VERY EXPRESS PROVISIONS OF THE TWO DOCUMENTS THE P16,000.00
MORTGAGE, EXH. 'J", AND THE P5,000.00 MORTGAGE, EXH. "B" THE TWO MORTGAGES
MUTUALLY AND IMMEDIATELY MERGED INTO EACH OTHER AS SECURITY FOR THE SAME
TOTALITY OF ALL OF PETITIONERS' OBLIGATIONS TO RESPONDENT PNB AT THE MOMENT THE
LATER DOCUMENT WAS EXECUTED ON SEPTEMBER 30, 1952, SO THAT THE RESULT WAS AN
INDIVISIBLE, INSEPARABLE, SINGLE MORTGAGE WHICH CANNOT BE FORECLOSED PARTIALLY;
HENCE FORECLOSURE OF THE P5,000.00 MORTGAGE ALONE DID NOT VEST TITLE OVER THE
PROPERTY IN THE PNB.
D
THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT GAVE ITS
IMPRIMATUR TO THE TRANSFER FROM RESPONDENT PNB TO RESPONDENTS VALENTON OF
PASTORA'S PROPERTY WHICH HAD NOT BEEN VALIDLY FORECLOSED.
E
THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT FAILED TO HOLD
THAT THE EXTRA JUDICIAL FORECLOSURE OF THE P5,000.00 PORTION OF THE MORTGAGE WAS
NULL AND VOID BECAUSE OF FATAL DEFECTS IN THE PUBLICATION OF THE NOTICE OF
FORECLOSURE, THE DAY OF THE FORECLOSURE, THE PLACE OF THE FORECLOSURE, THE
AUTHORITY OF THE PERSON CONDUCTING FORECLOSURE, AND THE REALITY OF THE
FORECLOSURE SALE.
F
THE RESPONDENT COURT OF APPEALS ERRED IN UPHOLDING THE TRIAL COURT'S DENIAL OF THE
PETITIONERS MOTION FOR LEAVE TO AMEND COMPLAINT TO CONFORM TO THE EVIDENCE AND
FOR ADMISSION OF THIRD AMENDED COMPLAINT.
The petition is not impressed with merit.
To begin with, succinct and unmistakable is the consistent pronouncement that the Supreme Court is not a trier of facts. And well
entrenched is the doctrine that pure questions of fact may not be the proper subject of appeal bycertiorari under Rule 45 of the
5
Revised Rules of Court, as this mode of appeal is generally confined to questions of law.
Anent the first error, petitioners theorize: (1) That there was insufficient publication of the notice of sale; (2) That the posting of the
notice was not in accordance with law; (3) That the price obtained during the auction sale was unconscionably low; (4) That the
Sheriff who conducted the sale had no authority to do so; and (5) That the auction sale was void as it was conducted on a declared
holiday.
It is well-settled that non-compliance with the notice and publication requirements of an extrajudicial foreclosure sale is a factual
issue. Compliance with the statutory requirements is a proven fact and not a matter of presumption. A mortgagor who alleges
6
absence of any of such requisites has the burden of establishing thefactum probandum.
7

Following the ruling in Sadang vs. GSIS , the Court of Appeals upheld the validity of the publication of the notice of extrajudicial
foreclosure, holding that the customary affidavit of the editor of a newspaper, duly introduced in evidence, is aprima facie proof of
said fact. The party alleging non-compliance with the requisite publication the onus probandi. Absent any proof to the contrary, lack
of publication has not been substantiated. What is more, the affidavit of the editor of Nueva Era, to the effect that the notice of sale
had been published in said newspaper of general circulation once a week for three (3) consecutive weeks, and what Basilio Castro
(letter carrier in the province of Nueva Ecija) and Eugenio de Guzman (former Justice of the Peace and Mayor of Jaen) testified and
8
attested to constitute enough evidence of publication.
9

10

11

Petitioners' reliance on the cases of Tan Ten Koc vs. Republic ; Tan Sen vs. Republic and Tan Khe Shing vs. Republic is misplaced.
In the said cases, in ruling that Nueva Era was not shown to be a newspaper of general circulation, the Court considered the failure
of the applicants to come forward with positive evidence other than the editor's affidavit. As they were naturalization cases, the

purpose of the publication requirement was to inform the officers concerned and the public in general of the filing of subject
petitions, to the end that the Solicitor General or the Provincial Fiscal (now provincial prosecutor) could be furnished whatever
derogatory information and evidence there may be against the applicants or petitioners. There is no such objective in the
publication requirement for extrajudicial foreclosures. Consequently, the petitioners here cannot rely on the aforecited cases of
different nature to buttress their stance.
The alleged failure to comply with the posting requirement in that: (1) it was not posted in three (3) public conspicuous places, and
(2) the posting was not in the municipality where the properties involved or part thereof are located, was negated by the certificate
of posting, dated July 15, 1954, and the testimony of Deputy Sheriff Jose N. Mendoza. (Exh. 38 Bank; pp. 561-563, t.s.n., Feb. 22,
12
1963)
On the issue of unconscionably low price paid by the bank for the mortgaged properties, the purchase price of P5,524.40 was found
by the respondent court to suffice. It is well settled that when there is a right to redeem, inadequacy of price of no moment for the
reason that the judgment debtor has always the chance to redeem and reacquire the property. In fact, the property may be sold for
13
less than its fair market value precisely because the lesser the price the easier for the owner to effect a redemption.
Petitioners further theorized that the foreclosure sale in question should be invalidated since it was conducted on a holiday. They
rely on Section 31 of the Revised Administrative Code, which provides that where the act required or permitted by law falls on a
holiday, the act may be done on the next succeeding business day. In the case under scrutiny, the auction sale was made on August
19, 1954, which was declared a holiday by the late Pres. Ramon Magsaysay. In upholding the validity of the sale, the Court of
14
Appeals opined "that since the law used the word 'may', it is merely discretionary and cannot be given a prohibitive meaning." The
Court is of the same conclusion on the validity of the sale.
15

Said the court in the case of Rural Bank of Caloocan, Inc. vs. Court of Appeals , in holding that Section 31 of the Revised
Administrative Code is not applicable to auction sales:
. . . The pretermission of a holiday applies only where the day or the last day for doing any act required or
permitted by law falls on a holiday, or when the last day of a given period for doing an act falls on a holiday. It does
not apply to a day fixed by an office or officer of the government for an act to be done, as distinguished from a
period of time within which an act should be done, which may be on any day within that specified period. For
example, if a party is required by law to file his answer to a complaint, within fifteen (15) days from receipt of the
summons and the last day falls on a holiday, the last day is deemed moved to the next succeeding business day.
But, if the court fixes the trial of a case on a certain day but the said date is subsequently declared a public holiday,
the trial thereof is not automatically transferred to the next succeeding business day. Since April 10, 1961 was not
the day or the last day set by law for the extrajudicial foreclosure sale, nor the last day of a given period, but a date
fixed by the deputy sheriff, the aforesaid sale cannot legally be made on the next succeeding business day without
16
the notices of the sale on that day being posted as prescribed in Sec. 9, Act. No. 3135.
Conformably, the extrajudicial foreclosure conducted on August 19, 1954 was valid, notwithstanding the fact that the said date was
declared a public holiday. Act 3135 merely requires that sufficient publication and posting of the notice of sale be caused, as
required by law.
The issue concerning the authority of the sheriff to conduct the sale is factual. This Court is bound by the findings by the trial court,
and affirmed by the respondent court, that the signing by Provincial Sheriff of the Minutes of Auction Sale (Exh. 55-Bank) and the
17
Certificate of Sale evinced that the auction sale was conducted by the Deputy Sheriff under the direction of the Provincial Sheriff.
Another basis for the Court to uphold the regularity of the extrajudicial foreclosure under controversy is the equitable principle of
estoppel. Petitioners's admission that as mortgagors, they had asked for an extension of time to redeem subject properties
estopped them from impugning the regularity of the conduct of the sale. It bears stressing that on October 10, 1955, appellant
Joaquin Valmonte (one of the herein petitioners) sent a letter-request to the appellee bank for additional time within which to
exercise the right of redemption over the properties at P35,000.00 (Exh. 33-Bank; 8-Valenton). In view of such request and of the
similar request from Congressman Celestino C. Juan, the Bank, through its Board of directors (BOD) Resolution No. 1096, extended
the redemption period until December 31, 1955 for the appellants (the petitioners here) to purchase in cash their properties in the
18
amount of the total claim of the bank.
Did the aforesaid act of seeking an extension of the redemption period constitute an act of ratification within legal contemplation,
thus rendering the petitioners in estoppel? The answer to this important and pertinent question is in the affirmative. If a party in

interest enters into a law agreement, stipulation, compromise or arrangement calculated to benefit him in connection with a
mortgage foreclosure sale, he inevitably affirms thereby the validity, force and effect of the sale. Similarly, a party cannot later on
19
rely upon the supposed defects of the sale. The act of plaintiffs in asking for an extension of time to redeem the foreclosed
20
properties estopped them from questioning the foreclosure sale thereafter.
Since the findings by the trial court are supported by the evidence and the law and the party theorizing upon the alleged
irregularities afflicting the extrajudicial foreclosure sale was unable to prove their imputation; affirmance of the finding of
respondent court is indicated.
Neither is there any sustainable basis for the second assignment of errors relied upon by petitioners.
Petitioners contend that the respondent court erred in applying the principle of merger. Mortgagors averred that the two loans
should be considered as one mortgage credit inasmuch as they were constituted between the same parties and on the same
properties. Being a single and indivisible obligation, the foreclosure sale in connection with the P5,000.00 loan necessarily included
the other loan of P16,000.00. Therefore, there was no outstanding mortgage credit for the P16,000.00 loan, and PNB being the
purchaser at the auction sale, was not subrogated to answer for any encumbrance on subject properties.
The Court of Appeals erred not on the application of the principle of merger. Merger as one of the means of extinguishing an
obligation has the following elements: (1) the merger of the characters of the creditor and debtor must be in the same person; (2) it
must take place in the person of either the principal creditor or the principal debtor; and (3) it must be complete and definite.
As can be gleaned from the attendant facts and circumstances, there were two mortgages constituted on subject properties by the
appelants. The first mortgage was for a loan of P16,000.00 and the second one was for a loan of P5,000.00, by and between
petitioners and the PNB. What the Bank did was to foreclose the second mortgage embodied in a separate mortgage contract.
Under ordinary circumstances, if a person has a mortgage credit over a property which was sold in an auction sale, the only right left
to him was to collect its mortgage credit from the purchaser thereof during the sale conducted. This is so because a mortgage
directly and immediately subjects the property on which it is constituted, whoever its possessor may be, to the fulfillment of the
21
obligation for the security of which it was created. However, these steps need not be taken in the present case because PNB was
the purchaser of subject properties and it did so with full knowledge that it has a mortgage thereon. Obligations are extinguished by
the merger of the rights of the creditor and debtor.
In the case under consideration, the merger took place in the person of PNB, the principal creditor in the case. The merger was
brought about during the auction sale, PNB purchased the properties on which it had another subsisting mortgage credit. This court
is bound by the finding of respondent court that the two loans referred to are separate and distinct and the mere allegation by
petitioners that said loans constitute a single indivisible obligation should be stricken off as the said is not supported by evidence. In
effect, the mortgage for the P16,000.00 loan was deemed extinguished. While it is true that there was still an annotation on the
Transfer Certificate of Title issued to respondent Artemio Valenton, the said annotation or encumbrance was already discharged by
operation of law. Consequently, petitioners' contention that said title issued to Valenton was not valid by reason of the said
annotation, is devoid of any legal basis.
As aptly held by respondent court:
. . . The purchaser in the extrajudicial sale is appellee bank itself. As such purchaser, it acquired
the right to pay off the claim of the senior mortgage. However, the senior mortgagee is also
appellee bank. In such a case, Art. 1275 of the New Civil Code as invoked by defendantsappellees in their respective briefs, to wit:
Art. 1275. The obligation is extinguished from the time characters of creditor
and debtor are merged in the same person.
applies. The rights pertaining to the personalities of the debtor (mortgagor) and of the creditor
(mortgagee) are merged and therefor, in case where the mortgagees of both the senior and
junior mortgages are one and the same (herein appellee bank), and especially where the
mortgagors of said encumbrances are also one and the same (herein appellant Pastora Valmonte
de Leon), the sale to appellee bank operated to divest the rights of the mortgagor (appellant
Pastora) of her rights and to vest her rights with respect to the senior mortgage, in the purchaser

(appellee bank), subject to such rights of redemption as may be required by law. Records show
however that appellant mortgagor failed to redeem the property within the one-year period
22
provided by Act No. 3135, as amended.
With respect to the third assignment of errors, untenable is petitioners' contention that the failure of PNB to foreclose the first
mortgage for the loan of P16,000.00 was in actuality a pactum commissorium, which is prohibited by law, and the subsequent
transfer by PNB to Valenton of the said property is a nullity.
Pactum Commissorium takes place when in a mortgage contract, it is stipulated that the ownership of the property would
automatically pass to the vendee in case no redemption is made within a given period, thus enabling the mortgagee to acquire
23
ownership of the mortgaged property without need of foredosure. It is not so in the present case where there was foreclosure of
the mortgage.
When PNB opted to foreclose only the second mortgage for the loan of P5,000.00, it was well within its right to do so. The only
condition the law requires in extrajudicial foreclosure is that the loan is already due and demandable and there was failure on the
part of mortgagor to pay the mortgage debt. The law does not prohibit a mortgagee from choosing which of the mortgages in his
24
favor to foreclose. It msut be borne in mind that the power to decide whether to foreclose or not resides in the mortgagee.
The next pivotal issue to resolve is whether PNB could transfer a valid title to respondent Artemio Valenton despite the existence of
a duly annotated unforeclosed mortgage between PNB and the appellants.
The court resolves this issue in the affirmative.
Since the appellants failed to redeem within the redemption period and during the extension agreed upon, the effect of such failure
25
to redeem was to vest absolute ownership over subject properteis purchased. The annotation of the unforeclosed mortgage even
if appearing on the title of Artemio Valenton did not in any way affect the sale between the latter and PNB. In fact, since there was
merger on the part of PNB prior to the sale to said Valenton, any lien which the petitioners were claiming as subsisting was already
extinguished.
Granting ex gratia argumenti that there was no merger and the unforeclosed mortgage subsisted, PNB still had the right to sell
subject properties and the party who purchased the same shall only be subjected to the said encumbrance. Indubitably, petitioners
are not the proper parties to insist that there be a foreclosure because as earlier stated, the prerogative to decide whether or not to
foreclose is the mortgagee and not with the mortgagor.
In light of the foregoing, it is decisively obvious that PNB did not acquire the mortgaged properties by pactum commissorium, but for
failure of the petitioners to redeem the same. As to the lien which, they claim, should have hindered the transfer of the certificate of
title to the name of Artemio Valenton, the merger of rights on the part of PNB extinguished whatever encumbrance there was over
the deeded out and there is no more lien to speak of. The transfer of the certificate of title to Artemio Valenton who was a
purchaser for value was valid and the petitioners cannot effectively defeat the title of Artemio Valenton by claiming otherwise.
WHEREFORE, for lack of merit, the petition is DENIED and the decision of the Court of Appeals AFFIRMED. No pronouncement as to
costs.
SO ORDERED.

G.R. No. 131724

February 28, 2000

MILLENIUM INDUSTRIAL COMMERCIAL CORPORATION, petitioner,

vs.
JACKSON TAN, respondent.
MENDOZA, J.:
1

In December 1994, Millenium Industrial Commercial Corporation, petitioner herein, executed a Deed of Real Estate Mortgage over
its real property covered by TCT No. 24069 in favor of respondent Jackson Tan. The mortgage was executed to secure payment of
petitioner's indebtedness to respondent in the amount of P2 million, without monthly interest, but which, at maturity date on June
10, 1995, was payable in the amount of P4 million.1wphi1.nt
On November 9, 1995, respondent filed against petitioner a complaint for foreclosure of 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
2
the Court."
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
3
summons may be served and that, in fact, he was not even its employee.
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
4
Commercial Corporation totaling at least 4,000,000 shares.
Petitioner further prayed for "other reliefs just and equitable under the premises."

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.

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. 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
8
submitted to the jurisdiction of the court.
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
9
any of the officers of the corporation. 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
10
is conferred jurisdiction over the person of the defendant. If the defendant is a corporation, Rule 14, 13 requires that service of
11
summons be made upon the corporation's president, manager, secretary, cashier, agent, or any of its directors. 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
12
that he will realize his responsibilities and know what he should do with any legal papers received by him.
Petitioner contends that the enumeration in Rule 14, 13 is exclusive and that service of summons upon one who is not enumerated
13
therein is invalid. This is the general rule. However, it is settled that substantial compliance by serving summons on persons other
14
than those mentioned in the above rule may be justified. In G & G Trading Corporation v. Court of Appeals, we ruled that although
the service of summons was made on a person not 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 been attained.
15

In Porac Trucking, Inc. v. Court of Appeals, this Court enumerated the requisites for the application of the doctrine of substantial
compliance, to wit: (a) there must be actual receipt of the summons by the person served,i.e., transferring possession of the copy of
the summons from the Sheriff to the person served; (b) the person served must sign a receipt or the sheriff's return; and (c) there
16
must be actual receipt of the summons by the corporation through the person on whom the summons was actually served. The
third requisite is the most important for it is through such receipt that the purpose of the rule on the service of summons is attained.
In this case, there is no dispute that the first and second requisites were fulfilled. With respect to the third, the appellate court held
that petitioner's filing of a motion to dismiss the foreclosure suit is proof that it received the copy of the summons and the
complaint. There is, however, no direct proof of this or that Lynverd Cinches actually turned over the summons to any of the officers
17
of the corporation. In contrast, in our cases applying the substantial compliance rule, there was direct evidence, such as the
admission of the corporation's 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.
18

Our decision in La Naval Drug Corporation v. Court of Appeals settled this question. The rule prior to La Navalwas that if a
defendant, in a motion to dismiss, alleges grounds for dismissing the action other than lack of jurisdiction, he would be deemed to
19
have submitted himself to the jurisdiction of the court. This rule no longer holds true. Noting that the doctrine of estoppel by
jurisdiction must be 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 defense. Voluntary appearance shall be deemed a waiver of this defense. The assertion, however, of affirmative
20
defenses shall not be construed as an estoppel or as a waiver of such defense.
21

Third. Finally, we turn to the effect of petitioner's prayer for "other reliefs" in its Motion to Dismiss. In De Midgely v.Fernandos, it
was held that, in a motion to dismiss, the allegation of grounds other than lack of jurisdiction over the person of the defendant,
including a prayer "for such other reliefs as" may be deemed "appropriate and proper" amounted to voluntary appearance. This,
however, must be deemed superseded by the ruling in La Navalthat estoppel by jurisdiction must be unequivocal and intentional. It
would be absurd to hold that petitioner unequivocally and intentionally submitted itself to the jurisdiction of the court by seeking
other reliefs to which it might be entitled when the only relief that it can properly ask from the trial court is the dismissal of the
complaint against it.1wphi1.nt
WHEREFORE, the decision of the Court of Appeals is REVERSED and the complaint against petitioner is DISMISSED.
SO ORDERED.

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.
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, Paraaque, 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
1
that, other than a few unfinished low cost houses, there were no substantial developments therein.
Summons, together with the complaint, were served upon the defendant, through its Branch Manager Engr. Wendell Sabulbero at
2
3
the stated address at Kolambog, Lapasan, Cagayan de Oro City but the Sheriff's Return of Service 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.1wphi1.nt
4

On June 9, 1998, defendant filed a Special Appearance with Motion to Dismiss 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.
5

Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in Default 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.
6

On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to Dismiss 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.
7

On August 5, 1998, the trial court issued an Order 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.
8

On August 19, 1998, defendant, by Special Appearance, filed a Motion for Reconsideration 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.
9

On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for Reconsideration 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.
10

On September 4, 1998, defendant, by Special Appearance, filed a Reply 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.
12

Private respondent filed its Comment to the petition citing the cases Kanlaon Construction Enterprises Co., Inc. vs.NLRC wherein it
13
was held that service upon a construction project manager is valid and in Gesulgon vs. NLRC 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.
15

16

Earlier cases have uphold service of summons upon a construction project manager ; a corporation's assistant manager ; ordinary
17
18
19
clerk of a corporation ; private secretary of corporate executives ; retained counsel ; officials who had charge or control of the
20
21
operations of the corporation, like the assistant general manager ; or the corporation's Chief Finance and Administrative Officer .
22
In these cases, these persons were considered 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.
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
24
strictly observed. Service must be made to one named in (the) statute . . . .
It should be noted that even prior to the effectivity of the 1997 Rules of Civil Procedure, strict compliance with the rules has been
25
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. . . .
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).
26

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
27
been served at the firm's principal office. In First Integrated Bonding & Inc.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.
28

And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista Ricafort, et al. 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
29
that the defendant's voluntary appearance in the action is equivalent to service of summons. 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
30
31
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
32
court will consequently be null and void.
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.1wphi1.nt
SO ORDERED.

G.R. No. 144294

March 11, 2003

SOLEDAD CHANLIONGCO RAMOS, FRANCISCO D. CHANLIONGCO, ADELBERTO D. CHANLIONGCO, ARMANDO D. CHANLIONGCO

and FLORENCIO D. CHANLIONGCO, petitioners,
vs.
TERESITA D. RAMOS, Spouses TERESITA and EDMUNDO S. MUYOT, Spouses VEDASTA and FLORENCIO M. DATO, LORETO MUYOT,
Spouses TERESITA and ELMER SOLIS, LICERIA TORRES, Spouses CORAZON and VICENTE MACATUNGAL, Spouses PRECILLA and
CRISOSTOMO MUYOT, and Spouses CARIDAD and SALVADOR PINGOL, respondents.
PANGANIBAN, J.:
Well-settled is the rule that a final judgment is immutable and unalterable. The only exceptions to this rule are (1) the correction of
clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void judgments.
The Case
1

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the July 31, 2000
2
Resolution of the Court of Appeals (CA) in CA-GR CV No. 29507 which denied petitioners Motion to Set Aside the CA
3
Decision dated September 28, 1995. The assailed Resolution disposed as follows:
"Finding the opposition of [respondents] to be well-taken, the [Court hereby DENIES the Motion."

The Facts
Petitioners are children of the late Paulino V. Chanliongco Jr., who was the co-owner of a parcel of land known as Lot No. 2-G of
Subdivision Plan SWO No. 7308. Situated in Tondo, Manila, it was co-owned by him, his sister Narcisa, and his brothers Mario and
Antonio. By virtue of a Special Power of Attorney executed by the co-owners in favor of Narcisa, her daughter Adoracion C. Mendoza
had sold the lot to herein respondents on different days in September 1986. Because of conflict among the heirs of the co-owners as
5
6
to the validity of the sale, respondents filed with the Regional Trial Court (RTC) a Complaint for interpleader to resolve the various
ownership claims.
The RTC upheld the sale insofar as the share of Narcisa was concerned. It ruled that Adoracion had no authority to sell the shares of
the other co-owners, because the Special Power of Attorney had been executed in favor only of her mother, Narcisa.
On appeal, the CA modified the ruling of the RTC. It held that while there was no Special Power of Attorney in favor of Adoracion,
the sale was nonetheless valid, because she had been authorized by her mother to be the latters sub-agent. There was thus no need
to execute another special power of attorney in her favor as sub-agent. This CA Decision was not appealed, became final and was
7
entered in favor of respondents on August 8, 1996.
On April 10, 1999, petitioners filed with the CA a Motion to Set Aside the Decision. They contended that they had not been served a
copy of either the Complaint or the summons. Neither had they been impleaded as parties to the case in the RTC. As it was, they
argued, the CA Decision should be set aside because it adversely affected their respective shares in the property without due
process.
In denying the Motion of petitioners, the CA cited the grounds raised in respondents Opposition: (a) the Motion was not allowed as
a remedy under the 1997 Rules of Civil Procedure; (b) the Decision sought to be set aside had long become final and executory; (c)
8
the movants did not have any legal standing; and (d) the Motion was purely dilatory and without merit.
Hence, this Petition.

The Issue
In their Memorandum, petitioners raise this sole issue for the Courts consideration:

"x x x [W]hether the Court of Appeals erred in denying petitioners Motion and allowing its Decision dated September 25,
1995 to take its course, inspite of its knowledge that the lower court did not acquire jurisdiction over the person of
10
petitioners and passing petitioners property in favor of respondents, hence without due process of law."
The Courts Ruling
The Petition is unmeritorious.
Main Issue:
Entitlement to Summons
It is well settled that a decision that has acquired finality becomes immutable and unalterable. A final judgment may no longer be
11
modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law; and whether it will be
12
made by the court that rendered it or by the highest court in the land. The only exceptions to this rule are the correction of (1)
13
clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void judgments. To determine
whether the CA Decision of September 28, 1995 is void, the failure to implead and to serve summons upon petitioners will now be
14
addressed.
To be able to rule on this point, the Court needs to determine whether the action is in personam, in rem or quasi in rem. The rules on
the service of summons differ depending on the nature of the action.
An action in personam is lodged against a person based on personal liability; an action in rem is directed against the thing itself
15
instead of the person; while an action quasi in rem names a person as defendant, but its object is to subject that persons interest
16
in a property to a corresponding lien or obligation.
The Complaint filed by respondents with the RTC called for an interpleader to determine the ownership of the real property in
17
question. Specifically, it forced persons claiming an interest in the land to settle the dispute among themselves as to which of them
owned the property. Essentially, it sought to resolve the ownership of the land and was not directed against the personal liability of
18
any particular person. It was therefore a real action, because it affected title to or possession of real property. As such, the
Complaint was brought against the deceased registered co-owners: Narcisa, Mario, Paulino and Antonio Chanliongco, as
represented by their respective estates.
Clearly, petitioners were not the registered owners of the land, but represented merely an inchoate interest thereto as heirs of
Paulino. They had no standing in court with respect to actions over a property of the estate, because the latter was represented by
19
an executor or administrator. Thus, there was no need to implead them as defendants in the case, inasmuch as the estates of the
deceased co-owners had already been made parties.
Furthermore, at the time the Complaint was filed, the 1964 Rules of Court were still in effect. Under the old Rules, specifically
20
Section 3 of Rule 3, an executor or administrator may sue or be sued without joining the party for whose benefit the action is
21
22
prosecuted or defended. The present rule, however, requires the joinder of the beneficiary or the party for whose benefit the
action is brought. Under the former Rules, an executor or administrator is allowed to either sue or be sued alone in that capacity. In
the present case, it was the estate of petitioners father Paulino Chanliongco, as represented by Sebrio Tan Quiming and Associates,
23
24
that was included as defendant and served summons. As it was, there was no need to include petitioners as defendants. Not
being parties, they were not entitled to be served summons.
Petitioner Florencio D. Chanliongco, on the other hand, was impleaded in the Complaint, but not served summons. However, the
service of summons upon the estate of his deceased father was sufficient, as the estate appeared for and on behalf of all the
beneficiaries and the heirs of Paulino Chanliongco, including Florencio.
We also note that the counsel of petitioners, Atty. Felino V. Quiming Jr., is a partner of the law firm that represented the estate of
the deceased father. Hence, it can reasonably be expected that the service upon the law firm was sufficient notice to all the
beneficiaries of the estate, including Petitioner Florencio D. Chanliongco.
WHEREFORE, the Petition is hereby DENIED and the assailed Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. 169116

March 28, 2007

BANK OF THE PHILIPPINE ISLANDS, Petitioner,

vs.
SPS. IRENEO M. SANTIAGO and LIWANAG P. SANTIAGO, CENTROGEN, INC., REPRSENTED BY EDWIN SANTIAGO, Respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari filed by petitioner Bank of the Philippine Islands (BPI) seeking to reverse and
1
2
3
set aside the Decision of the Court of Appeals dated 3 March 2005 and its Resolution dated 28 July 2005 affirming the Order of the
Regional Trial Court (RTC) of Santa Cruz, Laguna, Branch 91, dated 20 March 2003 enjoining the extrajudicial foreclosure sale of a
parcel of land covered by Transfer Certificate of Title (TCT) No. T-131382 registered under the name of Spouses Ireneo and Liwanag
Santiago. The dispositive portion of the Court of Appeals Decision reads:
WHEREFORE, premises considered, the petition is DISMISSED. The assailed orders dated March 20, 2003 and August 25, 2003 of the
respondent court in Civil Case No. SC-4259 are hereby AFFIRMED.
Petitioner BPI is a banking institution duly organized and existing as such under the Philippine laws.
Private respondent Centrogen, Inc. (Centrogen) is a domestic corporation engaged in pharmaceutical business, duly organized and
existing as such under the Philippine laws and represented in this act by its President, Edwin Santiago, son of private respondents
Spouses Ireneo M. Santiago and Liwanag P. Santiago.
On several occasions, private respondent Centrogen obtained loans from Far East Bank and Trust Company (FEBTC) in different
amounts, the total of which reached the sum P4,650,000.00, as evidenced by promissory notes executed by Edwin Santiago.
As a security for a fraction of the loan obligation, Ireneo M. Santiago executed a Real Estate Mortgage over a parcel of land covered
by TCT No. T-131382 registered under his name and located at Sta Cruz, Laguna, with an area of 2,166 square meters (subject
4
property). The mortgage secured the principal loan in the amount ofP490,000.00. Later on, the same property secured another loan
5
obligation in the amount of P1,504,280.00.
Subsequently, however, Centrogen incurred default and therefore the loan obligation became due and demandable.
Meanwhile, FEBTC merged with the BPI with the latter as the surviving corporation. As a result, BPI assumed all the rights, privileges
and obligations of FEBTC.
6

On 13 December 2002, BPI filed an Extra-Judicial Foreclosure of Real Estate Mortgage over the subject property before the RTC of
Sta. Cruz, Laguna. In order to validly effect the foreclosure, a Notice of Sale was issued by the Provincial Sheriff on 21 January 2003.
On the same day, the Spouses Santiago were served with the copy of the Notice of Sale.
Upon receipt of the Notice of Sale, the Spouses Santiago and Centrogen filed a Complaint seeking the issuance of a Temporary
Restraining Order and Preliminary and Final Injunction and in the alternative, for the annulment of the Real Estate Mortgage with
BPI.
The complaint alleged that the initial loan obligation in the amount of P490,000.00, including interest thereon was fully paid as
evidenced by Union Bank Check No. 0363020895 dated 20 December 2001 in the amount ofP648,521.51 with BPI as payee. Such
payment notwithstanding, the amount was still included in the amount of computation of the arrears as shown by the document of
Extra-Judicial Foreclosure of Real Estate Mortgage filed by the latter.
In addition, the Spouses Santiago and Centrogen asseverated that the original loan agreement was for the amount of Five Million
Pesos. Such amount will be supposedly utilized to finance the squalene project of the company. However, after the amount of Two
Million Pesos was released and was accordingly used in funding the erection of the structural details of the project, FEBTC, in gross
violation of the agreement, did not release the balance of Three Million Pesos that will supposedly finance the purchase of

machineries and equipment necessary for the operation. As a result, the squalene project failed and the company groped for funds
to pay its loan obligations.
On 27 February 2003, BPI was summoned to file and serve its Answer to the Complaint filed by Spouses Santiago and Centrogen. On
the same day, the Sheriff served a copy of the summons to the Branch Manager of BPI Sta. Cruz, Laguna Branch, as evidenced by the
7
Sheriffs Return, which reads:
SHERIFFS RETURN
Respectfully returned the original summons and order dated February 2003 with the information that on February 27, 2003 the
undersigned served the copy of summons together with the corresponding copy of complaint and its Annexes and order dated
February 27, 2003, to defendants (sic) Bank of the Philippine Islands (BPI) thru the manager Ms. Glona Ramos at Sta. Cruz Laguna
Branch, at Sta. Cruz, Laguna, to defendant Sheriff Marcial Opinion at the Office of the Provincial Sheriff of Laguna, R.T.C. (sic) Sta.
Cruz, Laguna as shown by their signatures on the original summons and order.
8

Instead of filing an Answer, BPI filed a Motion to Dismiss the complaint on the ground of lack of jurisdiction over the person of the
defendant and other procedural infirmities attendant to the filing of the complaint. In its Motion to Dismiss, BPI claimed that the
Branch Manager of its Sta. Cruz, Laguna Branch, was not one of those authorized by Section 11, Rule 14 of the Revised Rules of
9
Court to receive summons on behalf of the corporation. The summons served upon its Branch Manager, therefore, did not bind the
corporation. In addition, it was alleged that the complaint filed by the Spouses Santiago and Centrogen lacked a Certificate of Non10
Forum Shopping and was therefore dismissible. Finally, BPI underscored that the person who verified the complaint was not duly
11
authorized by Centrogens Board of Directors to institute the present action as required by Section 23 of the Corporation Code.
12

In an Order dated 28 February 2003, the RTC denied the Motion to Dismiss and emphasized that the nature of the case merited its
removal from the purview of Section 11, Rule 14 of the Revised Rules of Court. Based on the provisions of Section 5, Rule 58 of the
13
Revised Rules of Court, the RTC declared that the instant Order is still valid and binding despite non-compliance with the provisions
of Section 11, Rule 14 of the same Rules. The dispositive portion of the Order reads:
WHEREFORE, premises considered, the motion to dismiss is hereby denied because of the presence of extreme urgency wherein the
Court has jurisdiction to act on the TRO despite lack of proper service of summons. Let the instant case be called for summary
hearing on plaintiffs application for temporary restraining order.
After summary hearing on the Spouses Santiago and Centrogens application for Temporary Restraining Order, the RTC, on 28
14
February 2003, issued an Order enjoining the Provincial Sheriff from proceeding with the extra-judicial foreclosure sale of the
subject property until the propriety of granting a preliminary injunction is ascertained. The decretal portion of the said Order reads:
Wherefore, premises considered, the Court orders that pending the resolution of the plaintiffs prayer for preliminary injunction:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents are enjoined from proceeding with the threatened
extra-judicial foreclosure sale (to be conducted today) of the parcel of land owned by plaintiffs Spouses Ireneo M. Santiago
and Liwanag P. Santiago located in (sic) Brgy. Sto. Angel Norte, Sta. Cruz, Laguna.
2. The application for a preliminary injunction is hereby set for hearing on March 10, 2003 at 1:30 pm. Further, the plaintiffs
are hereby ordered to immediately file a bond amounting to One Hundred Thousand Pesos (P100,000.00) to answer for
damages that Defendant Bank may sustain if the court should finally decide that the plaintiffs are not entitled thereto.
On 6 March 2003, the RTC ordered the service of new summons to BPI in accordance with the provisions of the Revised Rules of
Court. The aforesaid Order reads:
To avoid further argument as regards the proper service of summons to Defendant Bank, the Branch Clerk of Court is hereby
directed to issue another summons and serve copy of the same together with the complaint and its annexes to any of the officers of
15
the Defendant Bank as provided by the rules of civil procedure.
In compliance with the aforesaid Order, the Branch Clerk of Court caused the issuance of a new summons on 7 March 2003, a copy
of which was served upon the Office of the Corporate Secretary of the BPI on 11 March 2003, as evidenced by the Sheriffs
16
Return, which reads:

Sheriffs Return
This is to Certify that on March 11, 2003 the undersigned caused the service of summons together with the copy of complaint and its
annexes to defendant Bank of the Philippine Islands (BPI) and receive (sic) by the Office of the Corporate Secretary dated March 11,
2003 at the BPI Building Ayala Avenue, Makati City.
On 20 March 2003, the RTC issued an Order granting the application for the issuance of a Writ of Preliminary Injunction filed by the
Spouses Santiago and Centrogen. It enjoined the extra-judicial foreclosure sale of the subject property pending resolution of the
main action for Annulment of Real Estate Mortgage or until further orders of the trial court. In issuing the Writ of Preliminary
Injunction, it rationalized that to allow the foreclosure without hearing the main case would work injustice to the complainant and
since Spouses Santiago and Centrogen claimed that the first loan in the amount of P490,000.00 secured by the property subject of
the extra-judicial sale had long been paid by Centrogen through a Union Bank Check No. 0363020895 presented as evidence. The
dispositive part of the Order reads:
Wherefore, premises considered, the Court orders that pending the resolution of the main action for the annulment of the real
estate mortgage, etc., and /or order from this Court:
1. The Defendant Provincial Sheriff, his deputies, employees, and agents are enjoined from proceeding with the threatened
extra-judicial foreclosure sale of the parcel of land covered by TCT No. T-131382 owned by Plaintiffs Spouses Ireneo M.
Santiago and Liwanag P. Santiago located in Brgy. Sto. Angel, Sta. Cruz, Laguna.
2. The bond in the amount of One Hundred Thousand (P100,000.00) Pesos ordered by the Court to be posted by the
plaintiffs to answer for damages that defendant bank may sustain if the court should finally decide that the plaintiffs are
entitled thereto still stands.
17

The Motion for Reconsideration filed by BPI was denied by the RTC in its Order dated 25 August 2003.
Aggrieved, BPI filed a Petition for Certiorari before the Court of Appeals seeking the reversal of the adverse Orders of the RTC.
18

On 3 March 2005, the Court of Appeals rendered a Decision affirming the assailed Orders of the RTC and dismissing the Petition for
Certiorari filed by BPI. The Court of Appeals declared that jurisdiction was acquired upon the service of new summons. Before the
assailed Orders were therefore issued, the RTC properly acquired jurisdiction over the person of BPI.
Undaunted, BPI filed this instant Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court. For our resolution are
the following issues:
I.
WHETHER OR NOT THE RTC ACQUIRED JURISDICTION OVER THE PERSON OF BPI WHEN THE ORIGINAL SUMMONS WAS SERVED
UPON THE BRANCH MANAGER OF ITS STA. CRUZ, LAGUNA BRANCH.
II.
WHETHER OR NOT THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION IN ISSUING THE WRIT OF PRELIMINARY INJUNCTION.
BPI vehemently insists that the court a quo did not acquire jurisdiction over its person and consequently, the Order issued by the
RTC, permanently enjoining the foreclosure sale, was therefore void and does not bind BPI.
We are not persuaded.
The pertinent provision of the Revised Rules of Court provides:
Sec. 11, Rule 14. 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.

Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation.
19
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.
Applying the aforestated principle in the case at bar, we rule that the service of summons on BPIs Branch Manager did not bind the
corporation for the branch manager is not included in the enumeration of the statute of the persons upon whom service of
summons can be validly made in behalf of the corporation. Such service is therefore void and ineffectual.
However, upon the issuance and the proper service of new summons on 11 March 2003, before the Writ of Preliminary Injunction
was issued on 20 March 2003, whatever defect attended the service of the original summons, was promptly and accordingly
cured.
It bears stressing, that on 7 March 2003, the Branch Clerk of Court issued a new summons which was properly served upon BPIs
Corporate Secretary on 11 March 2003, as evidenced by the Sheriffs Return.
The subsequent service of summons was neither disputed nor was it mentioned by BPI except in a fleeting narration of facts and
20
therefore enjoys the presumption that official duty has been regularly performed. The Process Servers Certificate of Service of
21
Summons is a prima facie evidence of facts set out in that certificate.
Inarguably, before the Order granting the application for Writ of Preliminary Injunction was issued, the RTC already acquired
jurisdiction over the person of BPI by virtue of the new summons validly served on the Corporate Secretary. The fact that the original
summons was invalidly served is of no moment since jurisdiction over BPI was subsequently acquired by the service of a new
summons.
In the case of The Philippine American Life and General Insurance Company v. Brevea,[22] we ruled:
A case should not be dismissed simply because an original summons was wrongfully served. It should be difficult to conceive, for
example, that when a defendant personally appears before a Court complaining that he had not been validly summoned, that the
case against him should be dismissed. An alias summons can be actually served on said defendant.
xxxx
x x x It is not pertinent whether the summons is designated as an "original" or an "alias" summons as long as it has adequately
served its purpose. What is essential is that the summons complies with the requirements under the Rules of Court and it has
been duly served on the defendant together with the prevailing complaint. x x x Moreover, the second summons was technically
not an alias summons but more of a new summons on the amended complaint. It was not a continuation of the first summons
considering that it particularly referred to the amended complaint and not to the original complaint. (Emphases supplied.)
BPIs lamentation, at every turn, on the invalidity of the service of summons made on the Branch Manager and its deliberate neglect
to acknowledge the fact that a new summons was accordingly served on its Corporate Secretary, is an attempt in futility to mislead
this Court into believing that the court a quo never acquired jurisdiction over the case and thus the issuance of the Writ of
Preliminary Injunction was invalid.
We are not drawn into petitioners sophistry.
23

In the case of G&G Trading Corporation v. Court of Appeals, this Court made the following pronouncements:
Although it may be true that the service of summons was made on a person not authorized to receive the same in behalf of the
petitioner, nevertheless since it appears that the summons and complaint were in fact received by the corporation through its said
clerk, the Court finds that there was substantial compliance with the rule on service of summons. x x x The need for speedy justice
must prevail over a technicality.
24

In explaining the test on the validity of service of summons, Justice Florenz Regalado stressed that substantial justice must take
precedence over technicality and thus stated:

The ultimate test on the validity and sufficiency on service of summons is whether the same and the attachments thereto where
ultimately received by the corporation under such circumstances that no undue prejudice is sustained by it from the procedural
lapse and it was afforded full opportunity to present its responsive pleadings. This is but in accord with the entrenched rule that the
ends of substantial justice should not be subordinated to technicalities and, for which purpose, each case should be examined within
the factual milieu peculiar to it.
Prescinding from the above, we deem it best to underscore that there is no hard and fast rule pertaining to the manner of service of
summons. Rather, substantial justice demands that every case should be viewed in light of the peculiar circumstances attendant to
each.
In any event, as it is glaringly evident from the records of the case that jurisdiction over the person of the defendant was validly
acquired by the court by the valid service of a new summons before the writ of preliminary injunction was issued and guided by
jurisprudential pronouncements heretofore adverted to, we hold that the proceedings attendant to the issuance of the writ of
preliminary injunction were regular.
Having settled this issue necessitates us to look into the propriety of the issuance of the Writ of Preliminary Injunction.
BPI asserts that the RTC gravely abused its discretion in granting the Spouses Santiago and Centrogens application for the Writ of
Preliminary Injunction in the absence of showing that the latter have a clear legal right sought to be protected.
Again, we do not agree.
An injunction is a preservative remedy for the protection of ones substantive right or interest; it is not a cause of action by itself but
25
merely a provisional remedy, an adjunct to the main suit. The purpose of injunction is to prevent threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly studied and educated. Its sole aim is to preserve
26
the status quo until the merits of the case is heard fully.
The issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending
case is entirely within the discretion of the court taking cognizance of the case, the only limitation being that the discretion should
be exercised based upon the grounds and in a manner provided by law. Before a writ of preliminary injunction may be issued, the
following requisites must be complied with: (1) a right inesse or a clear or unmistakable right to be protected; (2) violation of that
27
right; and (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage.
Verily, the aforestated requisites for the issuance of the Writ of Preliminary Injunction have been fully complied with. The right of
Spouses Santiago over the property clearly exists since they are the registered owners thereof, and the existence of a Real Estate
Mortgage does not undermine the right of the absolute owner over the property. The violation of such right is manifest in the
threatened foreclosure proceedings commenced by BPI amidst the claim that the principal obligation has been fully paid. Finally, to
allow the foreclosure of the subject property without first calibrating the evidence of opposing parties pertaining to the action for
the annulment of mortgage would cause irreparable damage to the registered owner.
The right of BPI to foreclose the subject property is under dispute upon the claim interposed by the Spouses Santiago and Centrogen
that payments for the loan secured by the property subject to the threatened foreclosure proceedings were already made. To
support their assertions, Spouses Santiago and Centrogen presented as evidence Union Bank Check No. 0363020895 dated 20
December 2001 in the amount of P648,521.51, with BPI as payee. From this, we can deduce that the right of BPI to foreclose the
subject property is questionable. We cannot therefore allow the foreclosure of the Real Estate Mortgage to proceed without first
setting the main case for hearing so that based on the evidence presented by the parties, the trial court can determine who between
them has the better right over the subject property. To rule otherwise would cause a grave irreparable damage to the Spouses
Santiago and Centrogen.
Parenthetically, this petition affords us the opportunity to once again reiterate the rule that the issuance of the writ of preliminary
injunction rests entirely within the discretion of the court and generally not interfered with except in case of manifest abuse. The
assessment and evaluation of evidence in the issuance of the writ of preliminary injunction involve finding of facts ordinarily left to
28
the trial court for its conclusive determination.
29

30

In Toyota Motor Phils. Corp. Workers Association v. Court of Appeals, citing Ubanes, Jr. v. Court of Appeals, we made the
following declaration:

[T]he matter of the issuance of writ of a preliminary injunction is addressed to the sound discretion of the trial court, unless the
court commits a grave abuse of discretion. Grave abuse of discretion in the issuance of writs of preliminary injunction implies a
capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction or whether the power is exercised in an
arbitrary or despotic manner by reason of passion, prejudice or personal aversion amounting to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined, or to act at all in contemplation of law. x x x.
In the case at bar, after summary hearing and evaluation of evidence presented by both contending parties, the RTC ruled that
justice would be better served if status quo is preserved until the final determination of the merits of the case, to wit:
For purposes of preliminary injunction, between the evidence presented by [the spouses Santiago and Centrogen] and [BPI], the
evidence of the former carries more weight. The evidence of [the spouses Santiago and Centrogen] established that to allow extrajudicial foreclosure without hearing the main action for the annulment of mortgage would probably work injustice to the plaintiffs
and would probably violate their rights over the subject lot.
Furthermore, this case involves complicated issues that must be resolved first before altering the status quo. The issue of payment
and non-payment of the loan and the issue of breach of the second loan directly affect the rights of the plaintiffs over the subject
lot. Hence, the last actual, peaceable, uncontested status of the parties before the controversy must be preserved.
The unyielding posture of BPI that its right to foreclose the subject property was violated since it is permanently barred from
proceeding with the auction sale is patently erroneous. The RTC, in the exercise of its discretion merely intended to preserve
the status quo while the principal action for the annulment of mortgage is heard with the end view that no irreversible damage may
be caused to the opposing parties. We find nothing whimsical, arbitrary or capricious in the exercise of the RTC of its discretion.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is DENIED. The Decision dated 3 March 2005, and the Resolution
dated 28 July 2005, rendered by the Court of Appeals in CA-G.R. SP No. 80643, are herebyAFFIRMED. Costs against petitioner.
SO ORDERED.

G.R. No. 170943; September 23, 2008

PEDRO T. SANTOS, JR., Petitioner vs. PNOC EXPLORATION CORPORATION
DECISION
CORONA, J.:
1

This is a petition for review of the September 22, 2005 decision and December 29, 2005 resolution of the Court of Appeals in CAG.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
4
the amount ofP698,502.10 representing petitioners unpaid balance of the car loan advanced to him by respondent when he was
still a member of its board of directors.
Personal service of summons to petitioner failed because he could not be located in his last known address despite earnest efforts to
do so. Subsequently, on respondents 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,
5
2003. Thereafter, respondent submitted the affidavit of publication of the advertising manager of Remate and an affidavit of service
6
of respondents employee to the effect that he sent a copy of the summons by registered mail to petitioners 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
evidenceex 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 respondents 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 petitioners 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 petitioners 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
7
petitioner to pay P698,502.10 plus legal interest and costs of suit.
8

Meanwhile, on September 22, 2005, the Court of Appeals rendered its decision sustaining the September 11, 2003 and February 6,
9
2004 orders of the trial court and dismissing the petition. It denied reconsideration. 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 respondents messenger.
The petition lacks merit.
ProprietyOf
Service By Publication
Section 14, Rule 14 (on Summons) of the Rules of Court provides:
SEC. 14. Service upon defendant whose identity or whereabouts are unknown. In any action where the defendant is designated as
an unknown owner, or the like, or whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry, service
may, by leave of court, be effected upon him by publication in a newspaper of general circulation and in such places and for such
times as the court may order. (emphasis supplied)
Since petitioner could not be personally served with summons despite diligent efforts to locate his whereabouts, respondent sought
and was granted leave of court to effect service of summons upon him by publication in a newspaper of general circulation. Thus,
petitioner was properly served with summons by publication.
Petitioner invokes the distinction between an action in rem and an action in personam and claims that substituted service may be
availed of only in an action in rem. Petitioner is wrong. The in rem/in personam distinction was significant under the old rule because
10
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
11
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
12
applies to anyaction, whether in personam, in rem or quasi in rem.
13

Regarding the matter of the affidavit of service, the relevant portion of Section 19, 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 defendants last known address. This complementary service is evidenced by an
affidavit "showing the deposit of a copy of the summons and order for publication in the post office, postage 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 defendants 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
14
Answer." This was equivalent to service of summons and vested the trial court with jurisdiction over the person of petitioner.
EntitlementTo
Notice Of Proceedings
The trial court allowed respondent to present its evidence ex parte on account of petitioners 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 courts failure to furnish him with
copies of orders and processes issued in the course of the proceedings.
The effects of a defendants failure to file an answer within the time allowed therefor are governed by Sections 3 and 4, Rule 9 (on
Effect of Failure to Plead) of the Rules of Court:
SEC. 3. Default; declaration of. If the defending party fails to answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party, and proof of such failure, declare the defending party in default.
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
15
upon motion of the claiming party. 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
16
sent to him and the notice requirement cannot apply to him. The law does not require that the impossible be done. Nemo tenetur
17
ad impossibile. The law obliges no one to perform an impossibility. Laws and rules must be interpreted in a way that they are in
18
accordance with logic, common sense, reason and practicality.
Hence, even if petitioner was not validly declared in default, he could not reasonably demand that copies of orders and processes be
furnished him. Be that as it may, a copy of the September 11, 2003 order was nonetheless still mailed to petitioner at his last known
address but it was unclaimed.

CorrectnessOf
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.
Petitioners plea for equity must fail in the face of the clear and express language of the rules of procedure and of the September 11,
19
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.
WHEREFORE, the petition is hereby DENIED.
Costs against petitioner.
SO ORDERED.

G.R. No. 147038

April 24, 2003

RICHARD TEH, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, HON. ALFREDO C. FLORES, Presiding Judge, Regional Trial Court of Pasig City, Branch 167,
EIM INTERNATIONAL SALES, INC., respondents.
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the 1997 Rules of Civil Procedure. Petitioner Richard Teh assails the Resolution of the
Court of Appeals dated March 14, 2000 which dismissed his petition for certiorari for failure to attach the original or certified true
copies of the annexes thereto, as well as the appellate courts Resolution dated February 9, 2001 dismissing petitioners motion for
reconsideration for lack of merit.
The antecedent facts of the case are as follows:
On August 20, 1998, respondent EIM International Sales, Inc. filed in the Regional Trial Court (RTC) of Pasig City a Complaint for
collection of sum of money with prayer for issuance of preliminary attachment against Wood Based Panels, Inc., Sinrimco. Inc.,
Manfred Luig and petitioner. The case was docketed as Civil Case No. 66974 and raffled to Branch 167 of the RTC of Pasig City.
Petitioner was impleaded in the case because he was the President of both Wood Based Panels, Inc. and Sinrimco, Inc.
Subsequently, summons were served upon the two corporations and Luig (defendants). The sheriff failed to serve the summons
intended for the petitioner because the former could not locate the petitioners address as indicated in the complaint. Said address
was obtained by the respondent from the General Information Sheets filed with the Securities and Exchange Commission by the two
1
corporations.
The defendants filed a motion to dismiss, but the same was denied by the trial court. Thereafter, they filed their respective answers
to the complaint. The respondent then filed a motion to set the case for pre-trial, and the court granted the same and set the pretrial on October 19, 1999. A notice of pre-trial was sent by the RTC to the defendants, including the petitioner. The notice to the
latter was again sent to the address indicated in the complaint.
On October 19, 1999, the petitioner filed a Motion to Dismiss the complaint on the ground that the trial court had not acquired
jurisdiction over his person because he had not been served with summons. The trial court ordered the cancellation of the pre-trial
and the resetting thereof on November 19, 1999. It, likewise, ordered the respondent to submit a reply or opposition to petitioners
motion to dismiss within five days from October 19, 1999.
The next day, October 20, 1999, the respondent filed a Comment explaining that summons had not been served on the petitioner
because, according to the sheriff, the petitioners address indicated in the complaint, "138 Maria Clara Street, Sta. Mesa, Manila,"
could not be located.
The trial court issued an Omnibus Order dated November 17, 1999 denying petitioners motion to dismiss and directing that an alias
summons be issued against the petitioner to be served upon him at 138 Maria Clara Street, Sta. Mesa, Manila. The respondent
thereafter filed a manifestation and motion, informing the court that the address of the petitioner as indicated in the complaint was
erroneous, and that summons should instead be served upon him at "138 Maria Clara Street, Sta. Mesa Heights, Quezon City," which
was his correct address.
On December 14, 1999, the petitioner filed a Motion for Reconsideration of the trial courts omnibus order. He contended therein
that the case should be dismissed in view of the trial courts failure to acquire jurisdiction over his person and the respondents
failure to prosecute the case, considering that more than a year had passed since the complaint was instituted and yet summons
had not yet been served on him. The respondent opposed the petitioners motion for reconsideration.
The trial court issued an Order dated January 25, 2000 denying the petitioners motion for reconsideration, which order the
petitioner received on February 3, 2000.
On February 28, 2000, the petitioner filed with the Court of Appeals a Petition for Certiorari and Prohibition questioning the trial
courts November 17, 1999 Omnibus Order and the January 25, 2000 Order denying his motion for reconsideration.

On March 14, 2000, the appellate court issued its Resolution dismissing the petition for failure to attach certified true copies of
2
relevant documents referred to in the petition.
The petitioner filed a motion for reconsideration of the foregoing resolution, but said motion was denied by the Court of Appeals in
a Resolution dated February 9, 2001. The appellate court upheld the petitioners argument that Rule 65 of the Rules of Civil
Procedure requires the originals or certified true copies only of the orders challenged in the petition and not of the other relevant
documents attached thereto. However, it dismissed the petition on the ground that the order assailed therein was one denying a
motion to dismiss, an interlocutory order which is beyond the scope of a petition for certiorari. The Court of Appeals further held
that the trial court did not abuse its discretion when it denied the motion to dismiss on the ground of lack of jurisdiction over the
3
person of the petitioner and ordered the issuance of an alias summons to the latter.
Hence, this petition.
The petitioner claims that the Court of Appeals committed grave abuse of discretion in denying his motion for reconsideration
despite its own finding that petitioners position that Rule 65 of the Rules of Civil Procedure requires the originals or certified true
copies only of the orders challenged in the petition and not of the other relevant documents attached thereto is correct. He argues
that the appellate court should not have dismissed the motion for reconsideration on grounds other than that mentioned in its
March 14, 2000 Resolution. He complains that the appellate court did not give any indication in the aforesaid resolution that the
petition would later be dismissed for lack of merit because it only stated therein that the petition was being dismissed on the ground
of a technicality.
He, likewise, contends that the Court of Appeals erred in ruling that the trial courts order denying petitioners motion to dismiss "is
4
an interlocutory order and therefore beyond the scope of a petition for certiorari." The petitioner asseverates that the trial court
should have dismissed the case because it in fact admitted that summons had not yet been served on him, and that such failure to
serve summons amounts to a failure on the respondents part to prosecute.
There is no merit in the petition.
The Court of Appeals was not required to look into the merits of the petition for certiorari before issuing its March 14, 2000
Resolution because it ruled in good faith that the petition was defective in form. Under Rule 65, Section 6 of the 1997 Rules of Civil
Procedure, a petition for certiorari may be dismissed outright if it is insufficient in form, that is, it fails to comply with the
requirements in Section 1 of the same Rule.
When the appellate court studied the petitioners motion for reconsideration and found that the contention therein was correct, it
proceeded to look into the merits of the petition. However, it found that the same should be dismissed for lack of merit because it
found that the trial courts order assailed by the petitioner therein was an order denying a motion to dismiss. Based on the factual
circumstances of the case, the appellate court ruled that the order sought to be reversed was an interlocutory order which is beyond
the scope of a petition for certiorari, and that the trial court did not commit abuse of discretion when it denied the motion to
dismiss on the ground of lack of jurisdiction over the person of the petitioner and ordered the issuance of an alias summons to the
latter.
The Court agrees with the appellate courts ruling that there was no abuse of discretion on the part of the trial court when the latter
denied the petitioners motion to dismiss the complaint and ordered the issuance of an alias summons to be served upon him.
Although the respondent should have resorted to other means to determine the correct address of the petitioner when it was
informed by the sheriff that he failed to serve the summons on the petitioner, the respondent is not entirely to blame for such
failure because the petitioners address as indicated by Wood Based Panels, Inc., and Sinrimco, Inc. on their respective General
Information Sheets, was incorrect.
Moreover, the trial court was merely exercising its discretion under Rule 16, Section 3 of the 1997 Rules of Civil Procedure when it
denied the petitioners motion to dismiss. Under said rule, after hearing the motion, a judge may dismiss the action, deny the
motion to dismiss or order the amendment of the pleading. The trial court denied the motion to dismiss based on its finding that the
issues alleged by the respondent in its complaint could not be resolved fully in the absence of the petitioner. In its desire to resolve
completely the issues brought before it, the trial court deemed it fitting to properly acquire jurisdiction over the person of the
petitioner by ordering the issuance of alias summons on the petitioner. Evidently, the trial court acted well within its discretion. The
Court of Appeals did not, therefore, err in dismissing the petition for certiorari filed before it.
WHEREFORE, the petition is hereby DENIED for lack of merit. 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.
DECISION
QUISUMBING, J.:
1

This petition for review assails the decision, dated May 12, 2000, of the Court of Appeals and its resolution dated August 25, 2000
3
in CA-G.R. SP No. 54649 denying petitioners motion for reconsideration. The decision set aside the decision of the Regional Trial
Court of Pasay City, Branch 112, in Civil Case No. 98-1567 and directed said court to conduct further proceedings on the complaint
for rescission of lease contract.
The antecedent facts of the case, as found by the Court of Appeals, are as follows:
Petitioners spouses Efren and Digna Mason owned two parcels of land located along Epifanio delos Santos Avenue in Pasay City. On
March 30, 1993, petitioners and private respondent Columbus Philippines Bus Corporation (hereafter Columbus) entered into a
lease contract, under which Columbus undertook to construct a building worth ten million pesos (P10,000,000) at the end of the
third year of the lease. Because private respondent failed to comply with this stipulation, the petitioners on November 13, 1998,
filed a complaint for rescission of contract with damages against private respondent before the Regional Trial Court of Pasay City,
docketed as Civil Case No. 98-1567. Summons was served upon private respondent through a certain Ayreen Rejalde. While the
receiving copy of the summons described Rejalde as a secretary of Columbus, the sheriffs 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 P10 Million which is the value of the building which defendant failed to construct on the
leased properties, as and by way [of] actual damages;
2. To pay plaintiffs the amount of P63,862.57 beginning November 1998 until defendant and the sub-lessee vacate the
leased property by way of reasonable compensation for the use of the properties;
3. and all other persons and entities claiming rights under it, to surrender possession to plaintiffs and to vacate the leased
premises;
4. to pay plaintiffs the amount of P300,000.00 as and by way of moral damages;
5. to pay plaintiffs the amount of P100,000.00 as and by way of exemplary damages;
6. to pay plaintiffs attorneys fees in the amount of P100,000.00; and
7. to pay the cost of suit.
SO ORDERED.

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, defendants
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.

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.

The Court of Appeals held that the trial court erred when it denied private respondents 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
7
Answer. Section 11, 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 respondents office,
as evidenced by the latters 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
8
AND THAT ITS MOTION TO LIFT ORDER OF DEFAULT LACKS MERIT.
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 respondents 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
9
substantial compliance rule. Petitioners cite Millenium Industrial Commercial Corporation v. Tan, and maintain that this Court, by
10
referring to E.B Villarosa & Partner Co., Ltd. v. Judge Benito, 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
corporations 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 respondents corporation, there was
substantial compliance with Section 11, Rule 14 because the summons actually reached private respondent. This can be gleaned
from private respondents 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
11
would not be pursued by petitioners because the corporation already made payments to them.
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.
12

Petitioners further contend that the Court of Appeals reliance on E.B Villarosa & Partner Co., Ltd. v. Judge Benito, 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
14
any of its directors" is conspicuously deleted in the new rule.
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 respondents 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, Paraaque, 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 Villarosas favor and declared the trial court
without jurisdiction to take cognizance of the case.1awphi1.ntWe 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 courts basis for denying the motion to
dismiss, namely, private respondents substantial compliance with the rule on service of summons, and fully agreed with petitioners
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
15
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.
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
16
ingredient of due process. 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 respondents motion to lift order of default was not in order for it was filed late,
17
contrary to the provision in sub-paragraph (b), Section 3, 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 respondents 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 respondents 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
18
jurisdiction over private respondent. Consequently, all the subsequent proceedings held before it, including the order of default,
19
are null and void. 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.
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
1

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the February 26, 2001
2
Decision 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
3
private respondents with the court a quo."
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 P20,000 and attorneys fees ofP20,000 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
4
[petitioners] moved for the execution of the controverted judgment which the respondent judge ultimately granted."
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.

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
6
and defective service of summons and the court did not acquire jurisdiction over the person of the respondents."
In sum, the main issue revolves around the validity of the service of summons on respondents.1vvphi1.nt
The Courts 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 formers last known address.1awphi1.nt
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 defendants 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
7
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 officers return. The failure to comply faithfully, strictly and fully with all the
8
foregoing requirements of substituted service renders the service of summons ineffective.
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
9
actually exerting any genuine effort to locate respondents. A review of the records 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
10
Romeo Boyon is in Bicol thus substituted service was made in accordance with Section 7, Rule 14, of the Revised Rules of Court."
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 servers Return or Proof of Service the material facts and circumstances sustaining the validity
11
of substituted service was explained by this Court in Hamilton v. Levy, 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 Officers
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
12
fully comply with the requirements of substituted service renders said service ineffective."
Moreover, the requirements of substituted service of summons and the effect of noncompliance with the subsequent proceedings
13
therefor were discussed in Madrigal v. Court of Appeals 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 Officers 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
14
invalidate all subsequent proceedings on jurisdictional grounds."
Summons by Publication Improper
It must be noted that extraterritorial service of summons or summons by publication applies only when the action isin rem or quasi
in rem. The first is an action against the thing itself instead of against the defendants person; in the latter, an individual is named as
15
defendant, and the purpose is to subject that individuals interest in a piece of property to the obligation or loan burdening it.
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
16
personam.
Having failed to serve the summons on respondents properly, the RTC did not validly acquire jurisdiction over their persons.
17
Consequently, due process demands that all the proceedings conducted subsequent thereto should be deemed null and void.
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.

G.R. No. 130974 August 16, 2006

MA. IMELDA M. MANOTOC, Petitioner,
vs.
HONORABLE COURT OF APPEALS and AGAPITA TRAJANO on behalf of the Estate of ARCHIMEDES TRAJANO, Respondents.
DECISION
VELASCO, JR., J.:
The courts 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 ones right to due process.
The Case
1

This Petition for Review on Certiorari 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
2
Trajano v. Imelda Imee R. Marcos-Manotoc for Filing, Recognition and/or Enforcement of Foreign Judgment. Respondent Trajano
seeks the enforcement of a foreign courts 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.
3

Based on paragraph two of the Complaint, the trial court issued a Summons 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
4
of petitioner at the condominium unit mentioned earlier. When petitioner failed to file her Answer, the trial court declared her in
5
default through an Order dated October 13, 1993.
6

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss 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
7
anyone. Petitioner also presented her Philippine passport and the Disembarkation/Embarkation Card issued by the Immigration
Service of Singapore to show that she was a resident of Singapore. She claimed that the person referred to in plaintiffs 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 plaintiffs 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 petitioners residence was at the Alexandra Apartment, Greenhills. In addition,
9
the entries in the logbook of Alexandra Homes from August 4, 1992 to August 2, 1993, listing the name of petitioner Manotoc and
10
the Sheriffs Return, were adduced in evidence.
On October 11, 1994, the trial court rejected Manotocs 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 sheriffs substituted service was
11
made in the regular performance of official duty, and such presumption stood in the absence of proof to the contrary.
On December 21, 1994, the trial court discarded Manotocs plea for reconsideration for lack of merit.

12

13

Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 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
14

On March 17, 1997, the CA rendered the assailed Decision, dismissing the Petition for Certiorari and Prohibition. The court a quo
adopted the findings of the trial court that petitioners 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 1993the month when the substituted service was effected.
In the same Decision, the CA also rejected petitioners 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 boilerplates last two (2) inside pages where
petitioners 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
1997.

15

16

which was denied by the CA in its Resolution dated October 8,

Hence, petitioner has come before the Court for review on certiorari.
The Issues
Petitioner raises the following assignment of errors for the Courts 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 PETITIONERS 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
17
SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES OF COURT.

The assigned errors bring to the fore the crux of the disagreementthe validity of the substituted service of summons for the trial
court to acquire jurisdiction over petitioner.
The Courts Ruling
We GRANT the petition.
Acquisition of Jurisdiction
Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants voluntary appearance in court.
When the defendant does not voluntarily submit to the courts jurisdiction or when there is no valid service of summons, "any
18
judgment of the court which has no jurisdiction over the person of the defendant is null and void." 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
19
derogation of the usual method of service." 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
20
the issue of due process as of jurisdiction."
Requirements for Substituted Service
Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:
21

SEC. 8. 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 defendants residence with
some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendants 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
22
of prompt service. 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
23
should be done, having a regard for the rights and possibility of 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 the
summons and the latter submits the return of summons, then the validity of the summons lapses. The plaintiff may then ask for an
24
alias summons if the service of summons has failed. 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 Sheriffs 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

25

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. The form on Sheriffs 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
26
and the fact of failure. 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 defendants house or residence, it should be left with a person of "suitable age and
27
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
28
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 recipients 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 defendants 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 Sheriffs 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
30
31
information, the Return deviates from the rulingin 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.
Besides, apart from the allegation of petitioners address in the Complaint, it has not been shown that respondent Trajano or Sheriff
Caelas, 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
32
direct means. More so, in the case in hand, when the alleged petitioners residence or house is doubtful or has not been clearly
ascertained, it would have been better for personal service to have been pursued persistently.
33

In the case Umandap v. Sabio, Jr., it may be true that the Court held that a Sheriffs 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 servicefor 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 Sheriffs 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 defendants 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 Sheriffs Return lacks information as to
residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriffs 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 petitioners 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 Cruzs 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 petitioners 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
34
requirements and in the circumstances authorized by the rules.
Even American case law likewise stresses the principle of strict compliance with statute or rule on substituted service, thus:
35

The procedure prescribed by a statute or rule for substituted or constructive service must be strictly pursued. There must be strict
36
compliance with the requirements of statutes authorizing substituted or constructive service.
Where, by the local law, substituted or constructive service is in certain situations authorized in the place of personal service when
the latter is inconvenient or impossible, a strict and literal compliance with the provisions of the law must be shown in order to
37
support the judgment based on such substituted or constructive service. Jurisdiction is not to be assumed and 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
38
of the statute have been complied with, and such compliance must appear on the record. The fact that the defendant had actual
knowledge of attempted service does not render the service effectual if in fact the process was not served in accordance with the
39
requirements of the statute.

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
40
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 Sheriffs 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 Caelas did not comply with the stringent requirements of Rule
14, Section 8 on substituted service.
41

In the case of Venturanza v. Court of Appeals, 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 sheriffs return is defective (emphasis supplied)."
While the Sheriffs Return in the Venturanza case had no statement on the effort or attempt to personally serve the summons, the
Return of Sheriff Caelas 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 Caelas 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.
IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed March 17, 1997 Decision and October 8,
1997 Resolution of the Court of Appeals and the October 11, 1994 and December 21, 1994 Orders of the Regional Trial Court,
National Capital Judicial Region, Pasig City, Branch 163 are herebyREVERSED and SET ASIDE. No costs.
SO ORDERED.

G.R. No. 158407

January 17, 2005

FILOMENA DOMAGAS, petitioner,

vs.
VIVIAN LAYNO JENSEN, respondent.
DECISION
CALLEJO, SR., J.:
1

This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the Decision of the Court of Appeals (CA) in CA-G.R.
2
CV No. 73995, which affirmed the Decision of the Regional Trial Court (RTC) of Dagupan City, Branch 44, in Civil Case No. 20003
0244-D, which declared null and void the decision of the Municipal Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No. 879.
The antecedent facts follow.
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 petitioners 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 (P5,000.00) 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 (P20,000.00) PESOS; moral damages
in the amount of TWENTY THOUSAND (P20,000.00) PESOS; attorneys fees of THIRTY THOUSAND (P30,000.00) PESOS in
retainers fee and ONE THOUSAND FIVE HUNDRED (P1,500.00) PESOS per court appearance fee; exemplary damages in the
amount of TWENTY THOUSAND (P20,000.00) PESOS, and, costs.
Plaintiff further prays for other reliefs and remedies just and equitable in the premises.

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 respondents) brother, Oscar Layno, who was then in
the respondents house at No. 572 Barangay Buenlag, Calasiao, Pangasinan. The Sheriff left the summons and complaint with Oscar
5
Layno, who received the same.
Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent and all persons occupying the property for
and in the latters behalf to vacate the disputed area and to pay monthly rentals therefor, including actual damages, attorneys 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 P1,000.00 to the plaintiff;

3) To pay plaintiff actual damages of P20,000.00; attorneys fees of P15,000.00 and exemplary damages in the amount
of P20,000.00 plus the costs.
SO ORDERED.

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 Sheriffs 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
7
in her behalf.
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.
8

The respondent filed a Manifestation dated August 31, 2000, and appended thereto the following: (a) a copy of her passport
9
showing that she left the country on February 17, 1999; (b) a copy 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
10
affidavit 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
11
case; (d) the affidavit of Oscar Layno declaring that sometime in April 1999, he was in the respondents 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;
12
and that he never informed the respondent of his receipt of the said summons and complaint; (e) an affidavit 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 abalikbayan;
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.
13

The petitioner appended the following to her answer: (a) a copy 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
14
Mortgage executed by the respondent, dated February 9, 1999 showing that she was a resident of Barangay Buenlag, Calasiao,
15
Pangasinan; (c) the Joint Affidavit 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 Voters Registration
16
Record 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 P50,000.00;
b.) Attorneys fees in the amount of P50,000.00;
c.) Moral Damages in the amount of P50,000.00;
d.) Exemplary Damages in the amount of P50,000.00; 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 respondents 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 inpersonam or quasi in rem.
The ruling of the CA that the petitioners 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.
18

The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam,
19
or quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a
proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person,
although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of
20
it in accordance with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a
21
court, some responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant
22
to specifically perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has

for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its state. It has
been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the
23
person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam. In Combs v.
24
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 between the affected parties is in personam. Actions for recovery of real property
25
are in personam.
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the
26
discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding
27
is to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal 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 are
28
binding only upon the parties who joined in the action.
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when. - Subject to the provisions of the next succeeding section, a person deprived of
the possession of any land or building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in
the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or
persons claiming under them, for the restitution of such possession, together with damages and costs.
Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of preliminary prohibition or mandatory injunction:
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 of dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry or unlawful detainer may, within five (5) days from the filing of the
complaint, present a motion in the action for forcible entry or unlawful detainer for the issuance of a writ of preliminary mandatory
injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the filing thereof.
If, after due proceedings, the trial court finds for the plaintiff, it shall then render judgment in his or her favor, thus:
Sec. 17. Judgment. If, after trial, the court finds that the allegations of the complaint are true, it shall render judgment in favor of
the plaintiff for the restitution of the premises, the sum justly due as arrears of rent or as reasonable compensation for the use and
occupation of the premises, attorneys fees and costs. If it finds that said allegations are not true, it shall render judgment for the
defendant to recover his costs. If a counterclaim is established, the court shall render judgment for the sum found in arrears from
either party and award costs as justice requires.
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
29
defendant under 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 reasonable compensation for his use or occupation of the
30
property.
As gleaned from the averments of the petitioners complaint in the MTC, she sought a writ of 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" ofP1,000.00 to the plaintiff therein (the petitioner in this case).
On the issue of whether the respondent was validly served with the summons and complaint by the Sheriff on April 5, 1999, the
petitioner asserts that since her action of forcible entry against the respondent in Civil Case No. 879 was in personam, summons may
be served on the respondent, by substituted service, through her brother, Oscar Layno, in accordance with Section 7, Rule 14 of the
Rules of Court. The petitioner avers that Oscar Layno, a person of suitable age and discretion, was residing in the house of the
respondent on April 5, 1999. She avers that the fact that the house was leased to and occupied by Eduardo Gonzales was of no

moment. Moreover, the Sheriff is presumed to have performed his duty of properly serving the summons on the respondent by
substituted service.
The contention of the petitioner has no merit.
31

In Asiavest Limited v. Court of Appeals , the Court had the occasion to state:
In an action in personam, jurisdiction over the person of the defendant is necessary for the 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
32
sufficient.
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 defendants residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendants 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
34
defendant. The statutory requirement of substituted service must be followed faithfully and strictly and any substituted service
35
36
other than that authorized by the statute is rendered ineffective. As the Court held in Hamilton v. Levy :
The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officers
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
37
fully comply with the requirements of substituted service renders said service ineffective.
38

In Keister v. Narcereo, 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 formers 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
39
the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.
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 Server

40

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
latters 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
41
ordinarily stays and to which he intends to return.
The Voters 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.
DECISION
QUISUMBING, J.:
1

This petition for review assails the Decision dated May 20, 2005 of the Court of Appeals in CA-G.R. SP No. 87723 and its
2
3
Resolution dated June 28, 2005, denying the motion for reconsideration. The appellate court had affirmed the Order dated
4
February 6, 2004 of the Regional Trial Court (RTC) of Makati City, Branch 150, in Civil Case No. 03-093 and its Order 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
5
official capacities as corporate officers of Dole. 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 Doles president had known of the service of the alias summons
although he did not personally receive and sign it. It also held that in todays corporate setup, documents addressed to corporate
6
officers are received in their behalf by their staff. 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 IN7
HOUSE COUNSEL THEREBY IGNORING THE RULE ON SERVICE OF SUMMONS ON PRIVATE DOMESTIC CORPORATIONS.
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
8
the corporate officers enumerated in Section 11, 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 petitioners president as indicated in the
9
Officers Return. More so, petitioner had admitted that it received the alias summons in its Entry of Appearance with Motion for
10
Time 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
11
unios est exclusio alterius. Service must therefore be made on the president, managing partner, general manager, corporate
secretary, treasurer, or in-house counsel.
12

In this case, it appears that on April 23, 2003, Marifa Dela Cruz, a legal assistant, received the alias summons. Contrary to private
respondents claim that it was received upon instruction of the president of the corporation as indicated in the Officers 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 defendants voluntary appearance in the action is equivalent to service of
13
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
14
considered voluntary submission to the jurisdiction of the court.
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
15
acknowledging the receipt of the alias summons and praying for additional time to file responsive pleading. 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
16
from asserting otherwise, even before this Court. 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 Doles 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.

G.R. No. 184333

April 1, 2013

SIXTO N. CHU, Petitioner,

vs.
MACH ASIA TRADING CORPORATION, Respondent.
DECISION
PERALTA, J.:
1

This is a petition for review on certiorari assailing the Decision dated July 25, 2007 of the Court of Appeals (CA) in CA-G.R. CV No.
2
70666, and the Resolution dated August 28, 2008 denying petitioner's Motion for Reconsideration.
The factual and procedural antecedents are as follows:
Respondent Mach Asia Trading Corporation is a corporation engaged in importing dump trucks and heavy equipments. On
December 8, 1998, petitioner Sixto N. Chu purchased on installment one (1) Hitachi Excavator worth P900,000.00 from the
respondent. Petitioner initially paid P180,000.00 with the balance of P720,000.00 to be paid in 12 monthly installments through
Prime Bank postdated checks. On March 29, 1999, petitioner again purchased two (2) heavy equipments from the respondent on
installment basis in the sum of P1,000,000.00, namely: one (1) motorgrader and one (1) payloader. Petitioner made a down payment
3
of P200,000.00 with the balance of P800,000.00 payable in 12 monthly installments through Land Bank postdated checks.
However, upon presentment of the checks for encashment, they were dishonored by the bank either by reason of "closed account,"
"drawn against insufficient funds," or "payment stopped." Respondent informed petitioner that the checks were dishonored and
invited him to its office to replace the checks. On September 16, 1999, respondent sent petitioner a formal demand letter urging the
latter to settle his accounts within five days from receipt of the letter. In response, petitioner sent respondent a letter explaining
that his business was badly hit by the Asian economic crisis and that he shall endeavor to pay his obligation by giving partial
4
payments. He said that he shall also voluntarily surrender the subject units should he fail to do so.
On November 11, 1999, respondent filed a complaint before the Regional Trial Court (RTC) of Cebu City for sum of money, replevin,
attorneys fees and damages against the petitioner. Respondent prayed for the payment of the unpaid balance of P1,661,947.27 at
5
21% per annum until full payment, 25% of the total amount to be recovered as attorneys fees, litigation expenses and costs.
6

On November 29, 1999, the RTC issued an Order allowing the issuance of a writ of replevin on the subject heavy equipments.
On December 9, 1999, Sheriff Doroteo P. Cortes proceeded at petitioners given address for the purpose of serving the summons,
together with the complaint, writ of replevin and bond. However, the Sheriff failed to serve the summons personally upon the
petitioner, since the latter was not there. The Sheriff then resorted to substituted service by having the summons and the complaint
7
received by a certain Rolando Bonayon, a security guard of the petitioner.
Petitioner failed to file any responsive pleading, which prompted respondent to move for the declaration of defendant in default. On
January 12, 2000, the RTC issued an Order declaring defendant in default and, thereafter, allowed respondent to present its
evidence ex parte.
On December 15, 2000, after respondent presented its evidence, the RTC rendered a Decision against the petitioner, thus:
1. By adjudicating and adjudging plaintiffs right of ownership and possession over the subject units mentioned and
described in the complaint, and which were already seized and turned over to the plaintiff by virtue of the writ of replevin.
2. Ordering defendants to pay to plaintiff the sum of (sic) equivalent to 25% of the total amount recovered or value of the
heavy equipments possessed as attorneys fees, and to reimburse no less than P15,000.00 as expenses for litigation, plus
8
the cost of the premium of replevin bond in the amount of P11,333.50.
Aggrieved, petitioner sought recourse before the CA, docketed as CA-G.R. CV No. 70666. Petitioner argued that the RTC erred in
concluding that the substituted service of summons was valid, and that, consequently, there was error on the part of the RTC when
it declared him in default, in proceeding with the trial of the case, and rendering an unfavorable judgment against him.

On July 25, 2007, the CA rendered a Decision affirming the Decision of the RTC, the decretal portion of which reads:
WHEREFORE, IN LIGHT OF THE FOREGOING, the Decision of the Regional Trial Court of Cebu, Branch 17, in Civil Case No. CEB-24551,
rendered on December 15, 2000, is hereby AFFIRMED with the sole modification as to award of attorneys fees, which is hereby
reduced to 10% of the value of the heavy equipments recovered.
SO ORDERED.

10

Ruling in favor of the respondent, the CA opined, among others, that the requirement of due process was complied with,
considering that petitioner actually received the summons through his security guard. It held that where the summons was in fact
received by the defendant, his argument that the Sheriff should have first tried to serve summons on him personally before
resorting to substituted service of summons deserves scant consideration. Thus, in the interest of fairness, the CA said that the
process servers neglect or inadvertence in the service of summons should not unduly prejudice the respondents right to speedy
justice.
The CA also noted that petitioner failed to set up a meritorious defense aside from his contention that summons was not properly
served.1wphi1 It went further and decided the case on the merits and ruled that petitioner has an unpaid obligation due to
respondent for the heavy machineries he purchased from the latter. It, however, reduced the amount of attorneys fees awarded to
10% of the value of the heavy equipments recovered.
11

Petitioner filed a Motion for Reconsideration, but it was denied in the Resolution dated August 28, 2008.
Hence, the petition assigning the following errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN DEFIANCE OF LAW AND JURISPRUDENCE IN
FINDING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER THE PERSON OF THE DEFENDANT EVEN WHEN THE
12
SUBSTITUTED SERVICE OF SUMMONS WAS IMPROPER.
II
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN DEFIANCE OF LAW AND JURISPRUDENCE IN
HOLDING THAT HEREIN PETITIONER SHOULD HAVE SET UP A MERITORIOUS DEFENSE EVEN WHEN THE SUMMONS WAS
13
IMPROPERLY SERVED.
Petitioner argues that there was no valid substituted service of summons in the present case. He maintains that jurisdiction over the
person of the defendant is acquired only through a valid service of summons or the voluntary appearance of the defendant in court.
Hence, when there is no valid service of summons and no voluntary appearance by the defendant, any judgment of a court, which
acquired no jurisdiction over the defendant, is null and void.
On its part, respondent posits that the RTC acquired jurisdiction over the person of the petitioner and the judgment by default of the
RTC was based on facts, law, and jurisprudence and, therefore, should be enforced against the petitioner.
The petition is meritorious.
Courts acquire jurisdiction over the plaintiffs upon the filing of the complaint. On the other hand, jurisdiction over the defendants in
a civil case is acquired either through the service of summons upon them or through their voluntary appearance in court and their
14
submission to its authority.
As a rule, summons should be personally served on the defendant. It is only when summons cannot be served personally within a
15
reasonable period of time that substituted service may be resorted to. Section 7, Rule 14 of the Rules of Court provides:
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.
It is to be noted that in case of substituted service, there should be a report indicating that the person who received the summons in
the defendant's behalf was one with whom the defendant had a relation of confidence, ensuring that the latter would actually
16
receive the summons.
Also, impossibility of prompt personal service must be shown by stating that efforts have been made to find the defendant
personally and that such efforts have failed. This is necessary because substituted service is in derogation of the usual method of
service. It is a method extraordinary in character, hence, may be used only as prescribed and in the circumstances authorized by
statute. The statutory requirements of substituted service must be followed strictly, faithfully and fully, and any substituted service
17
other than that authorized by statute is considered ineffective.
In the case at bar, the Sheriffs Return provides:
Respectfully returned to the Honorable Regional Trial Court, Branch 17, Cebu City, the Summons and writ issued in the aboveentitled case with the following information, to wit:
1. That the Summons, together with the complaint, writ of replevin and bond was received on December 7, 1999, by
Rolando Bonayon, a security guard on defendant Sixto Chu at his given address who received and signed receipt thereof.
2. That the writ of replevin was duly executed on the same date, December 7, 1999, Tacloban City and San Jorge, Samar of
the following properties subject of the writ.
a) Excavator Hitachi with Serial No. WHO44-116-0743
b) Motorgrader with Serial No. N525PS-1014
c) Payloader with Serial No. KLD70-54224
After the issuance of the Sheriffs inventory receipt, the units were turned over to Al Caballero and companion, representatives of
plaintiff, who shipped the same to Cebu to be deposited with MACH ASIA TRADING CORPORATION, Block 26 MacArthur Highway,
18
Reclamation Area, Cebu City, for safekeeping, subject to the provision of Sec. 6, Rule 60 of the Rules of Court.
Clearly, it was not shown that the security guard who received the summons in behalf of the petitioner was authorized and
possessed a relation of confidence that petitioner would definitely receive the summons. This is not the kind of service
contemplated by law. Thus, service on the security guard could not be considered as substantial compliance with the requirements
of substituted service.
Moreover, the reasoning advanced by the CA in ruling against the petitioner was based merely on conjectures and surmises. The CA
even went as far as to conclude that the process servers neglect should not have unduly prejudiced the respondent, thus:
Hence, if Chu had actually received the summons through his security guard, the requirement of due process would have
nevertheless been complied with. x x x. Based on the presumption that a person takes ordinary care of his concerns, the security
guard would not have allowed the sheriff to take possession of the equipments without the prior permission of Chu; otherwise he
would be accountable to Chu for the said units. Chu, for his part, would not have given his permission without being informed of the
fact of the summons and the writ of replevin issued by the lower court, which permission includes the authority to receive the
summons and the writ of replevin.
Thus, where summons was in fact received by defendant, his argument that the sheriff should have tried first to serve summons on
him personally before resorting to substituted service of summons is not meritorious.
x x x x.
Evidently, plaintiff-appellee cannot be penalized, through no fault of its own, for an irregular or defective return on service of
summons. x x x.

x x x x.
In the interest of fairness, the process server's neglect or inadvertence in the service of summons should not, thus, unduly prejudice
19
plaintiff-appellee's right to speedy justice. x x x
The service of summons is a vital and indispensable ingredient of due process. As a rule, if defendants have not been validly
20
summoned, the court acquires no jurisdiction over their person, and a judgment rendered against them is null and void. Since the
RTC never acquired jurisdiction over the person of the petitioner, the judgment rendered by the court could not be considered
binding upon him for being null and void.
WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals, dated July 25, 2007, as well as its
Resolution dated August 28, 2008, in CA-G.R. CV No. 70666 is hereby REVERSED and SET ASIDE. The Decision of the Regional Trial
Court dated December 15, 2000 is declared NULL and VOID. The Regional Trial Court is hereby ORDERED to validly serve summons
upon Sixto N. Chu and, thereafter, proceed with the trial of the main action with dispatch.
SO ORDERED.

G.R. No. 156759

June 5, 2013

ALLEN A. MACASAET, NICOLAS V. QUIJANO, JR., ISAIAS ALBANO, LILY REYES, JANET BAY, JESUS R. GALANG, AND RANDY
HAGOS, Petitioners,
vs.
FRANCISCO R. CO, JR., Respondent.
DECISION
BERSAMIN, J.:
To warrant the substituted service of the summons and copy of the complaint, the serving officer must first attempt to effect the
same upon the defendant in person. Only after the attempt at personal service has become futile or impossible within a reasonable
time may the officer resort to substituted service.
The Case
1

Petitioners defendants in a suit for libel brought by respondent appeal the decision promulgated on March 8, 2002 and the
2
resolution promulgated on January 13, 2003, whereby the Court of Appeals (CA) respectively dismissed their petition for certiorari,
prohibition and mandamus and denied their motion for reconsideration. Thereby, the CA upheld the order the Regional Trial Court
(RTC), Branch 51, in Manila had issued on March 12, 2001 denying their motion to dismiss because the substituted service of the
3
summons and copies of the complaint on each of them had been valid and effective.
Antecedents
On July 3, 2000, respondent, a retired police officer assigned at the Western Police District in Manila, sued Abante Tonite, a daily
tabloid of general circulation; its Publisher Allen A. Macasaet; its Managing Director Nicolas V. Quijano; its Circulation Manager Isaias
Albano; its Editors Janet Bay, Jesus R. Galang and Randy Hagos; and its Columnist/Reporter Lily Reyes (petitioners), claiming
damages because of an allegedly libelous article petitioners published in the June 6, 2000 issue of Abante Tonite. The suit, docketed
as Civil Case No. 00-97907, was raffled to Branch 51 of the RTC, which in due course issued summons to be served on each
defendant, including Abante Tonite, at their business address at Monica Publishing Corporation, 301-305 3rd Floor, BF Condominium
4
Building, Solana Street corner A. Soriano Street, Intramuros, Manila.
In the morning of September 18, 2000, RTC Sheriff Raul Medina proceeded to the stated address to effect the personal service of the
summons on the defendants. But his efforts to personally serve each defendant in the address were futile because the defendants
were then out of the office and unavailable. He returned in the afternoon of that day to make a second attempt at serving the
summons, but he was informed that petitioners were still out of the office. He decided to resort to substituted service of the
5
summons, and explained why in his sheriffs return dated September 22, 2005, to wit:
SHERIFFS RETURN
This is to certify that on September 18, 2000, I caused the service of summons together with copies of complaint and its annexes
attached thereto, upon the following:
1. Defendant Allen A. Macasaet, President/Publisher of defendant AbanteTonite, at Monica Publishing Corporation, Rooms
301-305 3rd Floor, BF Condominium Building, Solana corner A. Soriano Streets, Intramuros, Manila, thru his secretary LuAnn Quijano, a person of sufficient age and discretion working therein, who signed to acknowledge receipt thereof. That
effort (sic) to serve the said summons personally upon said defendant were made, but the same were ineffectual and
unavailing on the ground that per information of Ms. Quijano said defendant is always out and not available, thus,
substituted service was applied;
2. Defendant Nicolas V. Quijano, at the same address, thru his wife Lu-Ann Quijano, who signed to acknowledge receipt
thereof. That effort (sic) to serve the said summons personally upon said defendant were made, but the same were
ineffectual and unavailing on the ground that per information of (sic) his wife said defendant is always out and not
available, thus, substituted service was applied;

3. Defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes, at the same address, thru Rene Esleta,
Editorial Assistant of defendant AbanteTonite, a person of sufficient age and discretion working therein who signed to
acknowledge receipt thereof. That effort (sic) to serve the said summons personally upon said defendants were made, but
the same were ineffectual and unavailing on the ground that per information of (sic) Mr. Esleta said defendants is (sic)
always roving outside and gathering news, thus, substituted service was applied.
Original copy of summons is therefore, respectfully returned duly served.
Manila, September 22, 2000.
On October 3, 2000, petitioners moved for the dismissal of the complaint through counsels special appearance in their behalf,
alleging lack of jurisdiction over their persons because of the invalid and ineffectual substituted service of summons. They
contended that the sheriff had made no prior attempt to serve the summons personally on each of them in accordance with Section
6 and Section 7, Rule 14 of the Rules of Court. They further moved to drop Abante Tonite as a defendant by virtue of its b eing
neither a natural nor a juridical person that could be impleaded as a party in a civil action.
At the hearing of petitioners motion to dismiss, Medina testified that he had gone to the office address of petitioners in the
morning of September 18, 2000 to personally serve the summons on each defendant; that petitioners were out of the office at the
time; that he had returned in the afternoon of the same day to again attempt to serve on each defendant personally but his attempt
had still proved futile because all of petitioners were still out of the office; that some competent persons working in petitioners
office had informed him that Macasaet and Quijano were always out and unavailable, and that Albano, Bay, Galang, Hagos and
Reyes were always out roving to gather news; and that he had then resorted to substituted service upon realizing the impossibility
of his finding petitioners in person within a reasonable time.
On March 12, 2001, the RTC denied the motion to dismiss, and directed petitioners to file their answers to the complaint within the
6
remaining period allowed by the Rules of Court, relevantly stating:
Records show that the summonses were served upon Allen A. Macasaet, President/Publisher of defendant AbanteTonite, through
LuAnn Quijano; upon defendants Isaias Albano, Janet Bay, Jesus R. Galang, Randy Hagos and Lily Reyes, through Rene Esleta,
Editorial Assistant of defendant Abante Tonite (p. 12, records). It is apparent in the Sheriffs Return that on several occasions, efforts
to served (sic) the summons personally upon all the defendants were ineffectual as they were always out and unavailable, so the
Sheriff served the summons by substituted service.
Considering that summonses cannot be served within a reasonable time to the persons of all the defendants, hence substituted
service of summonses was validly applied. Secretary of the President who is duly authorized to receive such document, the wife of
the defendant and the Editorial Assistant of the defendant, were considered competent persons with sufficient discretion to realize
the importance of the legal papers served upon them and to relay the same to the defendants named therein (Sec. 7, Rule 14, 1997
Rules of Civil Procedure).
WHEREFORE, in view of the foregoing, the Motion to Dismiss is hereby DENIED for lack of merit..
Accordingly, defendants are directed to file their Answers to the complaint within the period still open to them, pursuant to the
rules.
SO ORDERED.
Petitioners filed a motion for reconsideration, asserting that the sheriff had immediately resorted to substituted service of the
summons upon being informed that they were not around to personally receive the summons, and that Abante Tonite, being
neither a natural nor a juridical person, could not be made a party in the action.
7

On June 29, 2001, the RTC denied petitioners motion for reconsideration. It stated in respect of the service of summons, as follows:
The allegations of the defendants that the Sheriff immediately resorted to substituted service of summons upon them when he was
informed that they were not around to personally receive the same is untenable. During the hearing of the herein motion, Sheriff
Raul Medina of this Branch of the Court testified that on September 18, 2000 in the morning, he went to the office address of the
defendants to personally serve summons upon them but they were out. So he went back to serve said summons upon the
defendants in the afternoon of the same day, but then again he was informed that the defendants were out and unavailable, and

that they were always out because they were roving around to gather news. Because of that information and because of the nature
of the work of the defendants that they are always on field, so the sheriff resorted to substituted service of summons. There was
substantial compliance with the rules, considering the difficulty to serve the summons personally to them because of the nature of
their job which compels them to be always out and unavailable. Additional matters regarding the service of summons upon
defendants were sufficiently discussed in the Order of this Court dated March 12, 2001.
Regarding the impleading of Abante Tonite as defendant, the RTC held, viz:
"Abante Tonite" is a daily tabloid of general circulation. People all over the country could buy a copy of "Abante Tonite" and read it,
hence, it is for public consumption. The persons who organized said publication obviously derived profit from it. The information
written on the said newspaper will affect the person, natural as well as juridical, who was stated or implicated in the news. All of
these facts imply that "Abante Tonite" falls within the provision of Art. 44 (2 or 3), New Civil Code. Assuming arguendo that "Abante
Tonite" is not registered with the Securities and Exchange Commission, it is deemed a corporation by estoppels considering that it
possesses attributes of a juridical person, otherwise it cannot be held liable for damages and injuries it may inflict to other persons.
Undaunted, petitioners brought a petition for certiorari, prohibition, mandamusin the CA to nullify the orders of the RTC dated
March 12, 2001 and June 29, 2001.
Ruling of the CA
8

On March 8, 2002, the CA promulgated its questioned decision, dismissing the petition for certiorari, prohibition, mandamus, to
wit:
We find petitioners argument without merit. The rule is that certiorari will prosper only if there is a showing of grave abuse of
discretion or an act without or in excess of jurisdiction committed by the respondent Judge. A judicious reading of the questioned
orders of respondent Judge would show that the same were not issued in a capricious or whimsical exercise of judgment. There are
factual bases and legal justification for the assailed orders. From the Return, the sheriff certified that "effort to serve the summons
personally xxx were made, but the same were ineffectual and unavailing xxx.
and upholding the trial courts finding that there was a substantial compliance with the rules that allowed the substituted service.
Furthermore, the CA ruled:
Anent the issue raised by petitioners that "Abante Tonite is neither a natural or juridical person who may be a party in a civil case,"
and therefore the case against it must be dismissed and/or dropped, is untenable.
The respondent Judge, in denying petitioners motion for reconsideration, held that:
xxxx
Abante Tonites newspapers are circulated nationwide, showing ostensibly its being a corporate entity, thus the doctrine of
corporation by estoppel may appropriately apply.
An unincorporated association, which represents itself to be a corporation, will be estopped from denying its corporate capacity in a
suit against it by a third person who relies in good faith on such representation.
There being no grave abuse of discretion committed by the respondent Judge in the exercise of his jurisdiction, the relief of
prohibition is also unavailable.
WHEREFORE, the instant petition is DENIED. The assailed Orders of respondent Judge are AFFIRMED.
SO ORDERED.

On January 13, 2003, the CA denied petitioners motion for reconsideration.

Issues

10

Petitioners hereby submit that:

1. THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN HOLDING THAT THE TRIAL COURT ACQUIRED JURISDICTION
OVER HEREIN PETITIONERS.
2. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR BY SUSTAINING THE INCLUSION OF ABANTE TONITE AS PARTY
11
IN THE INSTANT CASE.
Ruling
The petition for review lacks merit.
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. Jurisdiction over the defendantin an action in rem or
quasi in rem is not required, and the court acquires jurisdiction over an actionas long as it acquires jurisdiction over the resthat is
thesubject matter of the action. The purpose of summons in such action is not the acquisition of jurisdiction over the defendant but
12
mainly to satisfy the constitutional requirement of due process.
The distinctions that need to be perceived between an action in personam, on the one hand, and an action inrem or quasi in rem, on
13
the other hand, are aptly delineated in Domagas v. Jensen, thusly:
The settled rule is that the aim and object of an action determine its character. Whether a proceeding is in rem, or in personam, or
quasi in rem for that matter, is determined by its nature and purpose, and by these only. A proceeding in personam is a proceeding
to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person, although it may
involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of it in accordance
with the mandate of the court. The purpose of a proceeding in personam is to impose, through the judgment of a court, some
responsibility or liability directly upon the person of the defendant. Of this character are suits to compel a defendant to specifically
perform some act or actions to fasten a pecuniary liability on him. An action in personam is said to be one which has for its object a
judgment against the person, as distinguished from a judgment against the property to determine its state. It has been held that an
action in personam is a proceeding to enforce personal rights or obligations; such action is brought against the person. As far as suits
for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam. In 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 between the affected parties is in personam. Actions for recovery of real property are in personam.
On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the
discharge of the claims assailed. In an action quasi in rem, an individual is named as defendant and the purpose of the proceeding is
to subject his interests therein to the obligation or loan burdening the property. Actions quasi in rem deal 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 are binding
only upon the parties who joined in the action.
As a rule, Philippine courts cannot try any case against a defendant who does not reside and is not found in the Philippines because
of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court; but when the case is an action in
rem or quasi in rem enumerated in Section 15, Rule 14 of the Rules of Court, Philippine courts have jurisdiction to hear and decide
the case because they have jurisdiction over the res, and jurisdiction over the person of the non-resident defendant is not essential.
In the latter instance, extraterritorial service of summons can be made upon the defendant, and such extraterritorial service of
summons is not for the purpose of vesting the court with jurisdiction, but for the purpose of complying with the requirements of fair
play or due process, so that the defendant will be informed of the pendency of the action against him and the possibility that
property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff,
and he can thereby take steps to protect his interest if he is so minded. On the other hand, when the defendant in an action in
personam does not reside and is not found in the Philippines, our courts cannot try the case against him because of the impossibility
14
of acquiring jurisdiction over his person unless he voluntarily appears in court.
As the initiating party, the plaintiff in a civil action voluntarily submits himself to the jurisdiction of the court by the act of filing the
initiatory pleading. As to the defendant, the court acquires jurisdiction over his person either by the proper service of the summons,
15
or by a voluntary appearance in the action.

Upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court forthwith issues the corresponding
16
summons to the defendant. The summons is directed to the defendant and signed by the clerk of court under seal. It contains the
name of the court and the names of the parties to the action; a direction that the defendant answers within the time fixed by the
Rules of Court; and a notice that unless the defendant so answers, the plaintiff will take judgment by default and may be granted the
17
relief applied for. To be attached to the original copy of the summons and all copies thereof is a copy of the complaint (and its
18
attachments, if any) and the order, if any, for the appointment of a guardian ad litem.
The significance of the proper service of the summons on the defendant in an action in personam cannot be overemphasized. The
service of the summons fulfills two fundamental objectives, namely: (a) to vest in the court jurisdiction over the person of the
19
defendant; and (b) to afford to the defendant the opportunity to be heard on the claim brought against him. As to the former,
when jurisdiction in personam is not acquired in a civil action through the proper service of the summons or upon a valid waiver of
20
such proper service, the ensuing trial and judgment are void. If the defendant knowingly does an act inconsistent with the right to
object to the lack of personal jurisdiction as to him, like voluntarily appearing in the action, he is deemed to have submitted himself
21
to the jurisdiction of the court. As to the latter, the essence of due process lies in the reasonable opportunity to be heard and to
submit any evidence the defendant may have in support of his defense. With the proper service of the summons being intended to
21
afford to him the opportunity to be heard on the claim against him, he may also waive the process. In other words, compliance
23
with the rules regarding the service of the summons is as much an issue of due process as it is of jurisdiction.
Under the Rules of Court, the service of the summons should firstly be effected on the defendant himself whenever practicable.
Such personal service consists either in handing a copy of the summons to the defendant in person, or, if the defendant refuses to
24
receive and sign for it, in tendering it to him. The rule on personal service is to be rigidly enforced in order to ensure the realization
of the two fundamental objectives earlier mentioned. If, for justifiable reasons, the defendant cannot be served in person within a
reasonable time, the service of the summons may then be effected either (a) by leaving a copy of the summons at his residence with
some person of suitable age and discretion then residing therein, or (b) by leaving the copy at his office or regular place of business
25
with some competent person in charge thereof. The latter mode of service is known as substituted service because the service of
the summons on the defendant is made through his substitute.
It is no longer debatable that the statutory requirements of substituted service must be followed strictly, faithfully and fully, and any
26
substituted service other than that authorized by statute is considered ineffective. This is because substituted service, being in
derogation of the usual method of service, is extraordinary in character and may be used only as prescribed and in the
27
circumstances authorized by statute. Only when the defendant cannot be served personally within a reasonable time may
substituted service be resorted to. Hence, the impossibility of prompt personal service should be shown by stating the efforts made
to find the defendant himself and the fact that such efforts failed, which statement should be found in the proof of service or
28
sheriffs return. Nonetheless, the requisite showing of the impossibility of prompt personal service as basis for resorting to
29
substituted service may be waived by the defendant either expressly or impliedly.
There is no question that Sheriff Medina twice attempted to serve the summons upon each of petitioners in person at their office
address, the first in the morning of September 18, 2000 and the second in the afternoon of the same date. Each attempt failed
because Macasaet and Quijano were "always out and not available" and the other petitioners were "always roving outside and
gathering news." After Medina learned from those present in the office address on his second attempt that there was no likelihood
of any of petitioners going to the office during the business hours of that or any other day, he concluded that further attempts to
serve them in person within a reasonable time would be futile. The circumstances fully warranted his conclusion. He was not
expected or required as the serving officer to effect personal service by all means and at all times, considering that he was expressly
authorized to resort to substituted service should he be unable to effect the personal service within a reasonable time. In that
regard, what was a reasonable time was dependent on the circumstances obtaining. While we are strict in insisting on personal
service on the defendant, we do not cling to such strictness should the circumstances already justify substituted service instead. It is
30
the spirit of the procedural rules, not their letter, that governs.
In reality, petitioners insistence on personal service by the serving officer was demonstrably superfluous. They had actually received
the summonses served through their substitutes, as borne out by their filing of several pleadings in the RTC, including an answer
with compulsory counterclaim ad cautelam and a pre-trial brief ad cautelam. They had also availed themselves of the modes of
discovery available under the Rules of Court. Such acts evinced their voluntary appearance in the action.
Nor can we sustain petitioners contention that Abante Tonite could not be sued as a defendant due to its not being either a natural
or a juridical person. In rejecting their contention, the CA categorized Abante Tonite as a corporation by estoppel as the result of its
having represented itself to the reading public as a corporation despite its not being incorporated. Thereby, the CA concluded that
the RTC did not gravely abuse its discretion in holding that the non-incorporation of Abante Tonite with the Securities and Exchange
Commission was of no consequence, for, otherwise, whoever of the public who would suffer any damage from the publication of

articles in the pages of its tabloids would be left without recourse. We cannot disagree with the CA, considering that the editorial
box of the daily tabloid disclosed that basis, nothing in the box indicated that Monica Publishing Corporation had owned Abante
Tonite.
WHEREFORE, the Court AFFIRMS the decision promulgated on March 8, 2002; and ORDERS petitioners to pay the costs of suit.
SO ORDERED.

AM No. 11-3-6-SC
AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON SERVICE UPON FOREIGN PRIVATE JURIDICAL ENTITY.
As amended, said provision of the Rules of Court now reads:
SEC. 12. Service upon foreign private juridical entity. When the defendant is a foreign private juridical entity which has transacted
business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if
there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the
Philippines.
If the foreign private juridical entity is not registered in the Philippines or has no resident agent, service may, with leave of court, be
effected out of the Philippines through any of the following means:
a) By personal service coursed through the appropriate court in the foreign country with the assistance of the Department
of Foreign Affairs;
b) By publication once in a newspaper of general circulation in the country where the defendant may be found and by
serving a copy of the summons and the court order by-registered mail at the last known address of the defendant;
c) By facsimile or any recognized electronic means that could generate proof of service; or
d) By such other means as the court may in its discretion direct.