[G.R. No. 127623.  June 19, 1997]

DOMINADOR VERGEL DE DIOS, petitioner, vs. THE HON. COURT OF APPEALS, Special Thirteenth Division, VALENTIN SARMIENTO, and REYNALDO (REGINO) VENTURINA, respondents.

D E C I S I O N

MENDOZA, J.:

In 1991, petitioner Dominador Vergel de Dios filed ejectment suits against private respondents Valentin Sarmiento and Reynaldo (Regino) Venturina.  Originally brought in the Regional Trial Court, Branch VII of Malolos, Bulacan, the cases were eventually referred to the Department of Agrarian Reform Adjudication Board (DARAB) of Region III and there docketed as DARAB Case Nos. 248 and 283, on the ground that they involve primarily agrarian disputes.

In DARAB Case No. 248 (De Dios v. Sarmiento and Venturina), petitioner alleged that he was the owner of a two-hectare farm in Barangay Calawitan, San Ildefonso, Bulacan under agricultural lease to private respondent Valentino Sarmiento; that sometime in 1988, respondent Sarmiento abandoned the landholding by selling his rights thereto to respondent Reynaldo Venturina; and that Sarmiento did not pay rentals, while Venturina refused to surrender the landholding to petitioner.  In DARAB Case No. 283 (De Dios v. Venturina), petitioner claimed that Venturina had been cultivating an area of 3.75 hectares without his knowledge and consent and without paying any rent.  The land was formerly under leasehold to one Jose Salonga who, before his death on July 5, 1988, had allegedly sold his rights to private respondent Reynaldo Venturina without petitioner’s consent.

In a decision dated October 28, 1992, the Provincial Adjudicator declared the agricultural leasehold relationship between petitioner and respondent Sarmiento extinguished and accordingly ordered respondent Venturina to vacate the landholding in question and to turn over its possession to petitioner.   The Provincial Adjudicator gave credence to petitioner’s claim that Sarmiento had abandoned the landholding by selling his tenancy rights to Venturina based on petitioner’s evidence.

On appeal, the DARAB reversed on the ground that petitioner’s evidence, on which the Provincial Adjudicator had relied for his decision, was, with respect to petitioner’s affidavit, self-serving, and, with regard to the affidavits of his witnesses (Ramon Santiago, Francisco Pullarca, and Diosdado Villanueva), “too good to be true.”  The DARAB also disregarded as hearsay Manuel Villanueva’s affidavit, stating among others that the sale of Sarmiento’s tenancy rights was known to the residents of the barangay.  Neither the barangay captain nor the chairperson of the Barangay Agrarian Reform Committee (BARC) was presented to attest to this fact.  The DARAB instead gave weight to the declaration of Pio Sarmiento that his father Valentin had tilled the land since 1972 but that because of old age had to relinquish its cultivation to him (Pio Sarmiento), not to Reynaldo Venturina, and that they had paid all the yearly rentals except for one (1) year when there was a devastating typhoon.

With regard to Venturina, the DARAB found him to be the lawful tenant of the 3.75 hectare lot formerly cultivated by Jose Salonga on the basis of a DAR certification issued on April 27, 1993 which stated that Venturina had been in actual cultivation of the 3.75 hectare lot owned by petitioner since 1984; the testimony of Josefina Venturina Bravo, administrator of the Victorias Ricemill at Bongay, Calawitan, that the rentals consisting of 60 cavans per year had been deposited by Venturina with the ricemill since 1984 and that all the rentals up to 1988 had been withdrawn by petitioner; the declaration of Melencia Toledo, a palay trader of Barangay Calawitan, that from 1989 up to 1992, Venturina had been depositing lease rentals for petitioner which were all withdrawn by petitioner; and the receipts for 60 cavans of palay each for 1992 and 1993 signed by petitioner on December 9, 1993 and December 16, 1993, respectively.  The DARAB held that while at the outset, petitioner may have been the unwilling lessor, his non-action, considering his own witnesses’ declaration that Venturina’s cultivation of the subject landholding was well-known in the community, and his acceptance of the rentals constituted acquiescence on his part.

The DARAB therefore dismissed the complaints for lack of evidence, ordered the Municipal Agrarian Reform Officer of San Ildefonso, Bulacan to place the property under formal leasehold in favor of Valentin Sarmiento’s son Pio by reason of Valentin’s advanced age and to prepare and execute a leasehold contract over the 3.75 hectares between petitioner and Venturina.

Petitioner moved for a reconsideration, but his motion was denied by the board in a resolution received by petitioner on July 31, 1996.  On August 9, 1996, petitioner moved for an extension of 15 days, until August 24, 1996, within which “to file a petition for certiorari” in the Court of Appeals.  On August 23, 1996, he filed his petition, denominated as “one for review by way of appeal by certiorari.”

In its resolution dated August 30, 1996, however, the Court of Appeals denied the motion for extension  (1) on the ground that the “petition for certiorari” which petitioner intended to file was not the proper remedy and (2) for violation of Circular No. 28-91, because the certification against forum shopping was executed not by petitioner himself but by petitioner’s counsel.  In another resolution dated September 18, 1996, the appellate court dismissed petitioner’s petition for having been filed late.  Unknown to the Court of Appeals, petitioner had filed on September 13, 1996 a motion for reconsideration of the resolution dated August 30, 1996 denying his motion for extension.  The motion was denied on November 15, 1996 along with the motion for reconsideration of the resolution of August 30, 1996.  Hence this petition for certiorari.

Petitioner alleges that the Court of Appeals committed grave abuse of discretion in denying his motion for extension on the grounds that the petition “which petitioner intended to file is not the proper remedy” and for violating Circular No.  28-91.  He points out that the petition he actually filed on August 23, 1996 satisfies the requirements for a petition for review under Circular No. 1-95, par. 6.

Petitioner’s contention is well-taken.  The Court of Appeals was rather hasty in concluding that petitioner was going to file a petition for certiorari solely on the basis of petitioner’s allegation that he was going to file a petition for certiorari.  It should have reserved judgment on the matter until it had actually received the petition especially considering that petitioner’s motion for extension was filed well within the reglementary period for filing a petition for review.  The very fact that petitioner sought an extension of time should have alerted the Court of Appeals to the possibility that what petitioner really intended to file was a petition for review.  As it turned out, what petitioner actually filed was a petition for review which complies with all the requirements for such a petition under Circular No. 1-95, par. 6, to wit: a statement of the full names of the parties to the case, a statement of the material dates to show that it was filed on time,  a statement of the nature of the action (one “for review by way of appeal by certiorari”), and a summary of the proceedings before the Provincial Adjudicator and the DARAB.  Under the heading “Discussion,” the petition contains an analysis of the evidence, while attached to the petition are certified true copies of the assailed decision and resolution of the DARAB and a properly executed certification against forum shopping.

The DARAB is made a respondent, a feature of a petition for certiorari, but this fact should have been treated merely as  innocuous and should not have been allowed to detract from the true consideration of the petition as a petition for review.  (Tuazon v. Court of Appeals, 234 SCRA 25 (1994))

The Court of Appeals moreover committed grave abuse of discretion in applying the requirement of Circular No. 28-91 for a certification against forum shopping to petitioner’s motion for extension.  Under this circular, such certification is required “in every petition filed with the Supreme Court or Court of Appeals.”  Obviously, a motion for extension is not the petition spoken of in this provision.  While such certification may be attached to a motion for extension and, in such a case, may be considered as compliance with the rules even if none is attached to the petition subsequently filed, the reverse does not follow.  Petitioner’s failure to have a properly executed certification against forum shopping attached to his motion for extension is not fatal, considering that the proper certification was later attached to his petition at the time of its filing.

Remington Industrial Sales Corp vs. CA

Before us is a petition for review under Rule 45 of the Rules of Court assailing the decision of the Court of Appeals in CA-G.R. SP No. 44529 dated February 24, 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 Corporation’s (Remington) complaint for sum of money and damages.  Also assailed in this petition is the resolution of the Court of Appeals denying petitioner’s motion for reconsideration.

The facts of the case, as culled from the records, are as follows:

On August 21, 1996, petitioner filed a 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 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.

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 petitioner’s legal rights.  Apart from the allegation in the complaint’s “Jurisdictional Facts” that:

1.05.  Defendants British Steel (Asia) Ltd. and Ferro Trading Gmbh, while understood by the plaintiff as mere suppliers of goods for defendant ISL, are impleaded as party defendants pursuant to Section 13, Rule 3 of the Revised Rules of Court.

no other reference was made to respondent that would constitute a valid cause of action against it.   Since petitioner failed to plead any cause of action against respondent as alternative defendant under Section 13, Rule 3, the trial court should have ordered the dismissal of the complaint insofar as respondent was concerned.

Meanwhile, petitioner sought to amend its complaint by incorporating therein additional factual allegations constitutive of its cause of action against respondent. Pursuant to Section 2, Rule 10 of the Rules of Court, petitioner maintained that it can amend the complaint as a matter of right because respondent has not yet filed a responsive pleading thereto.

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 petitioner’s Motion to Admit Amended Complaint thus:

WHEREFORE, the Amended Complaint is NOTED and further proceedings thereon and action on the other incidents as aforementioned are hereby held in abeyance until final resolution by the Honorable Court of Appeals (Special 6th Division) of the petition for certiorari and prohibition of petitioner (defendant British) and/or Manifestations and Motions of therein private respondent, herein plaintiff.

SO ORDERED.

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.

In the same decision, the Court of Appeals addressed petitioner’s prayer for suspension of proceedings in this wise:

The incident which transpired after the filing of the instant petition for certiorari and prohibition are immaterial in the resolution of this petition.  What this Court is called upon to resolve is whether the lower court committed grave abuse of discretion when it denied petitioner’s motion to dismiss the complaint against it.  The admission or rejection by the lower court of said amended complaint will not, insofar as this Court is concerned, impinge upon the issue of whether or not said court gravely abused its discretion in denying petitioner’s motion to dismiss.

Petitioner filed a motion for reconsideration of the appellate court’s decision, which was denied in a resolution dated April 28, 1998.  Hence, this petition, anchored on the following grounds:

-I-

THE HON. COURT OF APPEALS ERRED IN ORDERING THE DISMISSAL OF THE COMPLAINT AGAINST THE PRIVATE RESPONDENT FOR LACK OF CAUSE OF ACTION UNDER THE ORIGINAL COMPLAINT EVEN AS SAID COMPLAINT WAS ALREADY AMENDED AS A MATTER OF RIGHT AND SUFFICIENT CAUSES OF ACTION ARE AVERRED IN THE AMENDED COMPLAINT, IN GROSS VIOLATION OF SEC. 2, RULE 10 OF THE 1997 RULES OF CIVIL PROCEDURE.

-II-

THE HON. COURT OF APPEALS ERRED IN HOLDING THAT IF THE PETITIONER WANTS TO PURSUE ITS CASE AGAINST THE PRIVATE RESPONDENT, IT HAS TO REFILE THE COMPLAINT, THUS PRE-EMPTING THE RIGHT OF THE LOWER COURT TO RULE ON THE AMENDED COMPLAINT AND COMPELLING THE PETITIONER TO LITIGATE ITS CAUSES OF ACTION AGAINST THE PRIVATE RESPONDENT AS AN ALTERNATIVE DEFENDANT IN A SEPARATE ACTION, THEREBY ABETTING MULTIPLICITY OF SUITS.

The basic issue in this case is whether or not the Court of Appeals, by granting the extraordinary writ of certiorari, correctly ordered the dismissal of the complaint for failure to state a cause of action, despite the fact that petitioner exercised its right to amend the defective complaint under Section 2, Rule 10 of the Rules of Court.  Stated differently, the query posed before us is: can a complaint still be amended as a matter of right before an answer has been filed, even if there was a pending proceeding for its dismissal before the higher court?

Section 2, Rule 10 of the Revised Rules of Court explicitly states that a pleading may be amended as a matter of right before a responsive pleading is served.  This only means that prior to the filing of an answer, the plaintiff has the absolute right to amend the complaint whether a new cause of action or change in theory is introduced. The reason for this rule is implied in the subsequent Section 3 of Rule 10.  Under this provision, substantial amendment of the complaint is not allowed without leave of court after an answer has been served, because any material change in the allegations contained in the complaint could prejudice the rights of the defendant who has already set up his defense in the answer.

Conversely, it cannot be said that the defendant’s rights have been violated by changes made in the complaint if he has yet to file an answer thereto.  In such an event, the defendant has not presented any defense that can be altered or affected by the amendment of the complaint in accordance with Section 2 of Rule 10.  The defendant still retains the unqualified opportunity to address the allegations against him by properly setting up his defense in the answer.  Considerable leeway is thus given to the plaintiff to amend his complaint once, as a matter of right, prior to the filing of an answer by the defendant.

The right granted to the plaintiff under procedural law to amend the complaint before an answer has been served is not precluded by the filing of a motion to dismiss or any other proceeding contesting its sufficiency.  Were we to conclude otherwise, the right to amend a pleading under Section 2, Rule 10 will be rendered nugatory and ineffectual, since all that a defendant has to do to foreclose this remedial right is to challenge the adequacy of the complaint before he files an answer.

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

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

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

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

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

LOURDES A. VALMONTE and ALFREDO D. VALMONTE, petitioners, vs. THE HONORABLE COURT OF APPEALS, THIRD DIVISION and ROSITA DIMALANTA, respondents.

D E C I S I O N

MENDOZA, J.:

Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for partition filed against her and her husband, who is also her attorney, summons intended for her may be served on her husband, who has a law office in the Philippines. The Regional Trial Court of Manila, Branch 48, said no and refused to declare Lourdes A. Valmonte in default, but the Court of Appeals said yes. Hence this petition for review on certiorari.

The facts of the case are as follows:

Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both residents of 90222 Carkeek Drive South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his profession in the Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes A. Valmonte, filed a complaint for partition of real property and accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the Regional Trial Court of Manila, Branch 48. The subject of the action is a three-door apartment located in Paco, Manila.

In her Complaint, private respondent alleged:

The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses, of legal age and at present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmonte’s spouse holds office and where he can be found.

Apparently, the foregoing averments were made on the basis of a letter previously sent by petitioner Lourdes A. Valmonte to private respondent’s counsel

in which, in regard to the partition of the property in question, she referred private respondent’s counsel to her husband as the party to whom all communications intended for her should be sent. The letter reads:

July 4, 1991

Dear Atty. Balgos:

This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please address all communications to my lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax numbers appear below.

c/o Prime MarineGedisco Center, Unit 3041564 A. Mabini, ErmitaMetro ManilaTelephone:      521-1736Fax:       21-2095

Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was at his office in Manila. Petitioner Alfredo D. Valmonte accepted the summons, insofar as he was concerned, but refused to accept the summons for his wife, Lourdes A. Valmonte, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondent’s motion.

In its Order dated July 3, 1992, the trial court, denied private respondent’s motion to declare petitioner Lourdes A. Valmonte in default. A motion for reconsideration was similarly denied on September 23, 1992. Whereupon, private respondent filed a petition for certiorari, prohibition and mandamus with the Court of Appeals.

On December 29, 1992, the Court of Appeals rendered a decision granting the petition and declaring Lourdes A. Valmonte in default. A copy of the appellate court’s decision was received by petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and on January 21, 1993 in Seattle, Washington. Hence, this petition.

The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte was validly served with summons. In holding that she had been, the Court of Appeals stated:

[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the aforementioned counsel of Dimalanta to address all communications (evidently referring to her controversy with her sister Mrs. Dimalanta over the Paco property, now the subject of the instant case) to her lawyer who happens also to be her husband. Such directive was made without any qualification just as was her choice/designation of her husband Atty. Valmonte as her lawyer likewise made without any qualification or reservation. Any disclaimer therefore on the part of Atty. Valmonte as to his being his wife’s attorney (at least with regard to the dispute vis-a-vis [sic] the Paco property) would appear to be feeble or trifling, if not incredible.

This view is bolstered by Atty. Valmonte’s subsequent alleged special appearance made on behalf of his wife. Whereas Mrs. Valmonte had manifestly authorized her husband to serve as her lawyer relative to her

dispute with her sister over the Paco property and to receive all communications regarding the same and subsequently to appear on her behalf by way of a so-called special appearance, she would nonetheless now insist that the same husband would nonetheless had absolutely no authority to receive summons on her behalf. In effect, she is asserting that representation by her lawyer (who is also her husband) as far as the Paco property controversy is concerned, should only be made by him when such representation would be favorable to her but not otherwise. It would obviously be inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has the authority to represent her when an advantage is to be obtained by her and to deny such authority when it would turn out to be her disadvantage. If this be allowed, Our Rules of Court, instead of being an instrument to promote justice would be made use of to thwart or frustrate the same.

       xxx                                  xxx                                  xxx

Turning to another point, it would not do for Us to overlook the fact that the disputed summons was served not upon just an ordinary lawyer of private respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is not all, the same lawyer/husband happens to be also her co-defendant in the instant case which involves real property which, according to her lawyer/husband/ co-defendant, belongs to the conjugal partnership of the defendants (the spouses Valmonte). It is highly inconceivable and certainly it would be contrary to human nature for the lawyer/husband/co-defendant to keep to himself the fact that they (the spouses Valmonte) had been sued with regard to a property which he claims to be conjugal. Parenthetically, there is nothing in the records of the case before Us regarding any manifestation by private respondent Lourdes A. Valmonte about her lack of knowledge about the case instituted against her and her lawyer/husband/co-defendant by her sister Rosita.

PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given due course. This Court hereby Resolves to nullify the orders of the court a quo dated July 3, 1992 and September 23, 1992 and further declares private respondent Lourdes Arreola Valmonte as having been properly served with summons.

Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in refusing to apply the provisions of Rule 14, § 17 of the Revised Rules of Court and applying instead Rule 14, § 8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident defendant; and (2) because even if Rule 14, § 8 is the applicable provision, there was no valid substituted service as there was no strict compliance with the requirement by leaving a copy of the summons and complaint with petitioner Alfredo D. Valmonte. Private respondent, upon the other hand, asserts that petitioners are invoking a technicality and that strict adherence to the rules would only result in a useless ceremony.

We hold that there was no valid service of process on Lourdes A. Valmonte.

To provide perspective, it will be helpful to determine first the nature of the action filed against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte by private respondent, whether it is an action in personam, in rem or quasi in rem. This is because the rules on service of summons embodied in Rule 14 apply according to whether an action is one or the other of these actions.

In an action in personam, personal service of summons or, if this is not possible and he cannot be personally served, substituted service, as provided in Rule 14, § 7-8 is essential for the acquisition by the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the authority of the court. If defendant cannot be served with summons because he is temporarily abroad, but otherwise he is a Philippine resident, service of summons may, by leave of court, be made by publication. Otherwise stated, a resident defendant in an action in personam, who cannot be personally served with summons, may be summoned either by means of substituted service in accordance with Rule 14, § 8 or by publication as provided in § 17 and 18 of the same Rule.

In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in personam cannot be brought because jurisdiction over his person is essential to make a binding decision.

On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the country, summons may be served extraterritorially in accordance with Rule 14, § 17, which provides:

§ 17. Extraterritorial service. - When the defendant does not reside and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as under Section 7; or by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer.

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is domiciled in the Philippines or the property litigated or attached. Service of summons in the manner provided in § 17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play or due process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines

belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded.

Applying the foregoing rules to the case at bar, private respondent’s action, which is for partition and accounting under Rule 69, is in the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendant’s interest in a specific property and not to render a judgment against him. As explained in the leading case of Banco Español Filipino v. Palanca :

[An action quasi in rem is] an action which while not strictly speaking an action in rem partakes of that nature and is substantially such. . . . The action quasi in rem differs from the true action in rem in the circumstance that in the former an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment, foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered in these proceedings is conclusive only between the parties.

As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, § 17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes, the question is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, “in any . . . manner the court may deem sufficient.”

We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides. Moreover, there are several reasons why the service of summons on Atty. Alfredo D. Valmonte cannot be considered a valid service of summons on petitioner Lourdes A. Valmonte. In the first place, service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, § 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.

In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, § 17. As provided in § 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.

Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes A. Valmonte was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice. It must be noted that the period to file an Answer in an action against a resident defendant differs from the period given in an action filed against a nonresident defendant who is not found in the Philippines. In the former, the period is fifteen (15) days from service of summons, while in the latter, it is at least sixty (60) days from notice.

Strict compliance with these requirements alone can assure observance of due process. That is why in one case, although the Court considered publication in the Philippines of the summons (against the contention that it should be made in the foreign state where defendant was residing) sufficient, nonetheless the service was considered insufficient because no copy of the summons was sent to the last known correct address in the Philippines.

Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that service of summons upon the defendant’s husband was binding on her. But  the ruling in that case is justified because summons were served upon defendant’s husband in their conjugal home in Cebu City and the wife was only temporarily absent, having gone to Dumaguete City for a vacation. The action was for collection of a sum of money. In accordance with Rule 14, § 8, substituted service could be made on any person of sufficient discretion in the dwelling place of the defendant, and certainly defendant’s husband, who was there, was competent to receive the summons on her behalf. In any event, it appears that defendant in that case submitted to the jurisdiction of the court by instructing her husband to move for the dissolution of the writ of attachment issued in that case.

On the other hand, in the case of Gemperle v. Schenker, it was held that service on the wife of a nonresident defendant was found sufficient because the defendant had appointed his wife as his attorney-in-fact. It was held that although defendant Paul Schenker was a Swiss citizen and resident of Switzerland, service of summons upon his wife Helen Schenker who was in the Philippines was sufficient because she was her husband’s representative and attorney-in-fact in a civil case, which he had earlier filed against William Gemperle. In fact Gemperle’s action was for damages arising from allegedly derogatory statements contained in the complaint filed in the first case. As this Court said, “i]n other words, Mrs. Schenker had authority to sue, and had actually sued, on behalf of her husband, so that she was, also, empowered to represent him in suits filed against him, particularly in a case, like the one at bar, which is a consequence of the action brought by her on his behalf.” Indeed, if instead of filing an independent action Gemperle filed a counterclaim in the action brought by Mr. Schenker against him, there would have been no doubt that the trial court could have acquired jurisdiction over Mr. Schenker through his agent and attorney-in-fact, Mrs. Schenker.

In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. Although she wrote private respondent’ s attorney that “all communications” intended for her should be addressed to her husband who is also her lawyer at the latter’s address in Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact the letter was written seven months before the filing of this case below, and it appears that it was written in connection with the negotiations between her and her sister, respondent Rosita Dimalanta, concerning the partition of the property in question. As is usual in negotiations of this kind, the exchange of correspondence was carried on by counsel for the parties. But the authority given to petitioner’s husband in these negotiations certainly cannot be construed as also including an authority to represent her in any litigation.

For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and September 23, 1992 of the Regional Trial Court of Manila, Branch 48 are REINSTATED.

Millenium Industrial & Comm. Corp vs. Tan

In December 1994, Millenium Industrial Commercial Corporation, petitioner herein, executed a Deed of Real Estate Mortgage1 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.

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 the Court."2

Petitioner moved for the dismissal of the complaint on the ground that there was no valid service of summons upon it, as a result of which the trial court did not acquire jurisdiction over it. Petitioner invoked Rule 14, 13 of the 1964 Rules of Court and contended that service on Lynverd Cinches, as alleged in the sheriff's return, was invalid as he is not one of the authorized persons on whom summons may be served and that, in fact, he was not even its employee.3

Petitioner also sought the dismissal of the complaint against it on the ground that it had satisfied its obligation to respondent when the latter opted to be paid in shares of stock under the following stipulation in the mortgage contract:

That in the remote possibility of failure on the part of the mortgagor to pay the mortgage obligation and interest in cash, the MORTGAGEE at his option may demand that payment be made in the form of shares of stock of Millenium IndustrialCommercial Corporation totaling at least 4,000,000 shares.4

Petitioner further prayed for "other reliefs just and equitable under the premises."5 Jurismis

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 amounts to voluntary appearance and it indeed cured the defect.

Wherefore, Motion to Dismiss is hereby denied for lack of merit.6

Petitioner moved for reconsideration, but its motion was denied by the trial court in its order, dated January 16, 1996, for failure of petitioner to raise any new ground. Petitioner then filed a petition for certiorari in the Court of Appeals, assailing the aforesaid ordersof the trial court.

On September 18, 1997, the Court of Appeals dismissed the petition.7 The appellate court ruled that although petitioner denied Lynverd Cinches' authority to receive summons for it, its actual receipt of the summons could be inferred from its filing of a motion to dismiss, hence, the purpose for issuing summons had been substantially achieved. Moreover, it was held, by including the affirmative defense that it had already paid its obligation and praying for other reliefs in its Motion to Dismiss, petitioner voluntarily submitted to the jurisdiction of the court.8 Lexjuris

Hence, this petition for review. Petitioner raises the following issues:

MOTION TO DISMISS THE COMPLAINT BELOW.

First. Petitioner objects to the application of the doctrine of substantial compliance in the service of summons for two reasons: (1) the enumeration of persons on whom service of summons on a corporation may be effected in Rule 14 13, is exclusive and mandatory; and (2) even assuming that substantial compliance is allowed, its alleged actual receipt of the summons is based on an unfounded speculation because there is nothing in the records to show that Lynverd Cinches actually turned over the summons to any of the officers of the corporation.9 Petitioner contends that it was able to file a motion to dismiss only because of its timely discovery of the foreclosure suit against it when it checked the records of the case in the trial court.

The contention is meritorious.

Summons is the means by which the defendant in a case is notified of the existence of an action against him and, thereby, the court is conferred jurisdiction over the person of the defendant.10 If the defendant is corporation, Rule 14, 13 requires that service of summons be made upon the corporations president, manager, secretary, cashier, agent, or any of its directors.11 The rationale of the rule is that service must be made on a representative so integrated with the corporation sued as to make it a priori presumable that he will realize his responsibilities and know what he should do with any legal papers received by him.12

Esmso

Petitioner contends that the enumeration in Rule 14, 13 is exclusive and that service of summons upon one who is not enumerated therein is invalid. This is the general rule.13 However, it is settled that substantial compliance by serving summons on persons other than those mentioned in the above rule may be justified. In G & G Trading Corporation v. Court of Appeals,14 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.

In Porac Trucking, Inc. v. Court of Appeals,15 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 must be actual receipt of the summons by the corporation through the person on whom the summons was actually served. 16 The third

requisite is the most important for it is through such receipt that the purpose of the rule on 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 thatpetitioner's filing of a motion to dismiss the foreclosure suit is proof that it received the copy of the summons and the complaint. There is, however, no direct proof of this or that Lynverd Cinches actually turned over the summons to any of the officers of the corporation. In contrast, in our cases applying the substantial compliance rule,17 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. Mse sm

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 ofits 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.

Our decision in La Naval Drug Corporation v. Court of Appeals18 settled this question. The rule prior to La Naval was 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 have submitted himself to the jurisdiction of the court.19 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 defenses shall not be construed as an estoppel or as a waiver of such defense.20

Third. Finally, we turn to the effect of petitioner's prayer for"other reliefs" in its Motion to Dismiss. In De Midgely v. Fernandos,21 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 Naval that estoppel by jurisdiction must be unequivocal and intentional. It would be absurd to hold that petitioner unequivocally and intentionally submitted itself to the jurisdiction of the court by seeking other reliefs to which it might be entitled when the only relief that it can properly ask from the trial court is the dismissal of the complaint against it.

EB. 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, Parañaque, Metro Manila and Kolambog, Lapasan, Cagayan de Oro City. Petitioner and private respondent executed a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels of land located at Barrio Carmen, Cagayan de Oro belonging to the latter into a housing subdivision for the construction of low cost housing units. They further agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the proper courts of Makati.

On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach of Contract and Damages against petitioner, as defendant, before the Regional Trial Court of Makati allegedly for failure of the latter to comply with its contractual obligation in that, other than a few unfinished low cost houses, there were no substantial developments therein.1

Summons, together with the complaint, were served upon the defendant, through its Branch Manager Engr. Wendell Sabulbero at the stated address at Kolambog, Lapasan, Cagayan de Oro City2 but the Sheriff's Return of Service3 stated that the summons was duly served "upon defendant E.B. Villarosa & Partner Co., Ltd. thru its Branch Manager Engr. WENDELL SALBULBERO on May 5, 1998 at their new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the signature on the face of the original copy of the summons.1âwphi1.nêt

On June 9, 1998, defendant filed a Special Appearance with Motion to Dismiss4 alleging that on May 6, 1998, "summons intended for defendant" was served upon Engr. Wendell Sabulbero, an employee of defendant at its branch office at Cagayan de Oro City. Defendant prayed for the dismissal of the complaint on the ground of improper service of summons and for lack of jurisdiction over the person of the defendant. Defendant contends that the trial court did not acquire jurisdiction over its person since the summons was improperly served upon its employee in its branch office at Cagayan de Oro City who is not one of those persons named in Section 11, Rule 14 of the 1997 Rules of Civil Procedure upon whom service of summons may be made.

Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in Default5 alleging that defendant has failed to file an Answer despite its receipt allegedly on May 5, 1998 of the summons and the complaint, as shown in the Sheriffs Return.

On June 22, 1998, plaintiff filed an Opposition to Defendant's Motion to Dismiss6 alleging that the records show that defendant, through its branch manager, Engr. Wendell Sabulbero actually received the summons and the complaint on May 8, 1998 as evidenced by the signature appearing on the copy of the summons and not on May 5, 1998 as stated in the Sheriffs Return nor on May 6, 1998 as stated in the motion to dismiss; that defendant has transferred its office from Kolambog, Lapasan, Cagayan de Oro to its new office address at Villa Gonzalo, Nazareth, Cagayan de Oro; and that the purpose of the rule is to bring home to the corporation notice of the filing of the action.

On August 5, 1998, the trial court issued an Order7 denying defendant's Motion to Dismiss as well as plaintiffs Motion to Declare Defendant in Default. Defendant was given ten (10) days within which to file a responsive pleading. The trial court stated that since the summons and copy of the complaint were in fact received by the corporation through its branch manager Wendell Sabulbero, there was substantial compliance with the rule on service of summons and consequently, it validly acquired jurisdiction over the person of the defendant.

On August 19, 1998, defendant, by Special Appearance, filed a Motion for Reconsideration8 alleging that Section 11, Rule 14 of the new Rules did not liberalize but, on the contrary, restricted the service of summons on persons enumerated therein; and that the new provision is very specific and clear in that the word "manager" was changed to "general manager", "secretary" to "corporate secretary", and excluding therefrom agent and director.

On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for Reconsideration9 alleging that defendant's branch manager "did bring home" to the defendant-corporation the notice of the filing of the action and by virtue of which a motion to dismiss was filed; and that it was one (1) month after receipt of the summons and the complaint that defendant chose to file a motion to dismiss.

On September 4, 1998, defendant, by Special Appearance, filed a Reply10 contending that the changes in the new rules are substantial and not just general semantics.

Defendant's Motion for Reconsideration was denied in the Order dated November 20, 1998.11

Hence, the present petition alleging that respondent court gravely abused its discretion tantamount to lack or in excess of jurisdiction in denying petitioner's motions to dismiss and for reconsideration, despite the fact that the trial court did not acquire jurisdiction over the person of petitioner because the summons intended for it was improperly served. Petitioner invokes Section 11 of Rule 14 of the 1997 Rules of Civil Procedure.

Private respondent filed its Comment to the petition citing the cases Kanlaon Construction Enterprises Co., Inc. vs. NLRC12 wherein it was held that service upon a construction project manager is valid and in Gesulgon vs. NLRC13 which held that a corporation is bound by the service of summons upon its assistant manager.

The only issue for resolution is whether or not the trial court acquired jurisdiction over the person of petitioner upon service of summons on its Branch Manager.

When the complaint was filed by Petitioner on April 3, 1998, the 1997 Rules of Civil Procedure was already in force.14

Sec. 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:

When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel. (emphasis supplied).

This provision revised the former Section 13, Rule 14 of the Rules of Court which provided that:

Sec. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its directors. (emphasis supplied).

Petitioner contends that the enumeration of persons to whom summons may be served is "restricted, limited and exclusive" following the rule on statutory construction expressio unios est exclusio alterius and

argues that if the Rules of Court Revision Committee intended to liberalize the rule on service of summons, it could have easily done so by clear and concise language.

We agree with petitioner.

Earlier cases have uphold service of summons upon a construction project manager15; a corporation's assistant manager16; ordinary clerk of a corporation17; private secretary of corporate executives18; retained counsel19; officials who had charge or control of the operations of the corporation, like the assistant general manager20; or the corporation's Chief Finance and Administrative Officer21. In these cases, these persons were considered as "agent" within the contemplation of the old rule.22 Notably, under the new Rules, service of summons upon an agent of the corporation is no longer authorized.

The cases cited by private respondent are therefore not in point.

In the Kanlaon case, this Court ruled that under the NLRC Rules of Procedure, summons on the respondent shall be served personally or by registered mail on the party himself; if the party is represented by counsel or any other authorized representative or agent, summons shall be served on such person. In said case, summons was served on one Engr. Estacio who managed and supervised the construction project in Iligan City (although the principal address of the corporation is in Quezon City) and supervised the work of the employees. It was held that as manager, he had sufficient responsibility and discretion to realize the importance of the legal papers served on him and to relay the same to the president or other responsible officer of petitioner such that summons for petitioner was validly served on him as agent and authorized representative of petitioner. Also in the Gesulgon case cited by private respondent, the summons was received by the clerk in the office of the Assistant Manager (at principal office address) and under Section 13 of Rule 14 (old rule), summons may be made upon the clerk who is regarded as agent within the contemplation of the rule.

The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now limited and more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states "general manager" instead of only "manager"; "corporate secretary" instead of "secretary"; and "treasurer" instead of "cashier." The phrase "agent, or any of its directors" is conspicuously deleted in the new rule.

The particular revision under Section 11 of Rule 14 was explained by retired Supreme Court Justice Florenz Regalado, thus:23

. . . the then Sec. 13 of this Rule allowed service upon a defendant corporation to "be made on the president, manager, secretary, cashier, agent or any of its directors." The aforesaid terms were obviously ambiguous and susceptible of broad and sometimes illogical interpretations, especially the word "agent" of the corporation. The Filoil case, involving the litigation lawyer of the corporation who precisely appeared to challenge the validity of service of summons but whose very appearance for that purpose was seized upon to validate the defective service, is an illustration of the need for this revised section with limited scope and specific terminology. Thus the absurd result in the Filoil case necessitated the amendment permitting service only on the in-house counsel of the corporation who is in effect an employee of the corporation, as distinguished from an independent practitioner. (emphasis supplied).

Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court Revision Committee, stated that "(T)he rule must be strictly observed. Service must be made to one named in (the) statute . . . .24

It should be noted that even prior to the effectivity of the 1997 Rules of Civil Procedure, strict compliance with the rules has been enjoined. In the case of Delta Motor Sales Corporation vs. Mangosing,25 the Court held:

A strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise the service is insufficient. . . .

The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, "to bring home to the corporation notice of the filing of the action." . . . .

The liberal construction rule cannot be invoked and utilized as a substitute for the plain legal requirements as to the manner in which summons should be served on a domestic corporation. . . . . (emphasis supplied).

Service of summons upon persons other than those mentioned in Section 13 of Rule 14 (old rule) has been held as improper.26 Even under the old rule, service upon a general manager of a firm's branch office has been held as improper as summons should have been served at the firm's principal office. In First Integrated Bonding & Inc. Co., Inc. vs. Dizon,27 it was held that the service of summons on the general manager of the insurance firm's Cebu branch was improper; default order could have been obviated had the summons been served at the firm's principal office.

And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista Ricafort, et al.28 the Court succinctly clarified that, for the guidance of the Bench and Bar, "strictest" compliance with Section 11 of Rule 13 of the 1997 Rules of Civil Procedure (on Priorities in modes of service and filing) is mandated and

the Court cannot rule otherwise, lest we allow circumvention of the innovation by the 1997 Rules in order to obviate delay in the administration of justice.

Accordingly, we rule that the service of summons upon the branch manager of petitioner at its branch office at Cagayan de Oro, instead of upon the general manager at its principal office at Davao City is improper. Consequently, the trial court did not acquire jurisdiction over the person of the petitioner.

The fact that defendant filed a belated motion to dismiss did not operate to confer jurisdiction upon its person. There is no question that the defendant's voluntary appearance in the action is equivalent to service of summons.29 Before, the rule was that a party may challenge the jurisdiction of the court over his person by making a special appearance through a motion to dismiss and if in the same motion, the movant raised other grounds or invoked affirmative relief which necessarily involves the exercise of the jurisdiction of the court.30 This doctrine has been abandoned in the case of La Naval Drug Corporation vs. Court of Appeals, et al.,31 which became the basis of the adoption of a new provision in the former Section 23, which is now Section 20 of Rule 14 of the 1997 Rules. Section 20 now provides that "the inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance." The emplacement of this rule clearly underscores the purpose to enforce strict enforcement of the rules on summons. Accordingly, the filing of a motion to dismiss, whether or not belatedly filed by the defendant, his authorized agent or attorney, precisely objecting to the jurisdiction of the court over the person of the defendant can by no means be deemed a submission to the jurisdiction of the court. There being no proper service of summons, the trial court cannot take cognizance of a case for lack of jurisdiction over the person of the defendant. Any proceeding undertaken by the trial court will consequently be null and void.32

WHEREFORE, the petition is hereby GRANTED. The assailed Orders of the public respondent trial court are ANNULLED and SET ASIDE. The public respondent Regional Trial Court of Makati, Branch 132 is declared without jurisdiction to take cognizance of Civil Case No. 98-824, and all its orders and issuances in connection therewith are hereby ANNULLED and SET ASIDE.1âwphi1.nêt

SO ORDERED.

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.

D E C I S I O N

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

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 Resolution of the Court of Appeals (CA) in CA-GR CV No. 29507 which denied petitioners’ Motion to Set Aside the CA 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 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 latter’s 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 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) 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 Court’s 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 petitioners and passing petitioners property in favor of respondents, hence without due process of law.”

The Court’s 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 modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law; and whether it will be 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) 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 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 instead of the person; while an action quasi in rem names a person as defendant, but its object is to subject that person’s interest 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 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 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 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 Section 3 of Rule 3, an executor or administrator may sue or be sued without joining the party for whose benefit the action is 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, 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.

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.

D E C I S I O N

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 court’s Resolution dated February 9, 2001 dismissing petitioner’s 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 petitioner’s 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 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 pre-trial 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 petitioner’s 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 petitioner’s 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 petitioner’s 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 court’s omnibus order.   He contended therein that the case should be dismissed in view of the trial court’s failure to acquire jurisdiction over his person and the respondent’s 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 petitioner’s motion for reconsideration.

The trial court issued an Order dated January 25, 2000 denying the petitioner’s 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 court’s 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 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 petitioner’s 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 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 petitioner’s 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 court’s order denying petitioner’s motion to dismiss “is 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 respondent’s 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 petitioner’s 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 court’s 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 court’s ruling that there was no abuse of discretion on the part of the trial court when the latter denied the petitioner’s 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 petitioner’s 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 petitioner’s 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.

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.:

This petition for review assails the Decision[1]dated May 20, 2005 of the Court of Appeals in CA-G.R. SP No. 87723 and its Resolution[2] dated June 28, 2005, denying the motion for reconsideration. The appellate court had affirmed the Order[3] dated February 6, 2004 of the Regional Trial Court (RTC) of Makati City, Branch 150, in Civil Case No. 03-093 and its Order [4] dated September 16, 2004 denying the motion for partial reconsideration.

The factual antecedents of this case are as follows.

In a complaint filed with the RTC of Makati City, presided over by Pairing Judge Reinato Quilala, private respondent All Season Farm Corporation ("All Season") sought the recovery of a sum of money, accounting and damages from petitioner Dole Philippines, Inc. (Tropifresh Division) ("Dole") and several of its officers.  According to Dole, an alias summons was served upon it through a certain Marifa Dela Cruz, a legal assistant employed by Dole Pacific General Services, Ltd., which is an entity separate from Dole.

On May 20, 2003, Dole filed a motion to dismiss the complaint on the following grounds:  (a) the RTC lacked jurisdiction over the person of Dole due to improper service of summons; (b) the complaint failed to state a cause of action; (c) All Season was not the real party in interest; and (d) the officers of Dole cannot be sued in their personal capacities for alleged acts performed in their official capacities as corporate officers of Dole.[5]  In its Order dated February 6, 2004, the RTC denied said motion.  Dole moved for partial reconsideration raising the same issues but its motion was denied.

Thereafter, Dole filed a petition for certiorari with the Court of Appeals contending that the alias summons was not properly served. The appellate court, however, ruled otherwise.  It reasoned that Dole's president had known of the service of the alias summons although he did not personally receive and sign it.   It also held that in today's corporate setup, documents addressed to corporate officers are received in their behalf by their staff.[6]  Dole sought reconsideration, but its motion was likewise denied.

Hence, this petition where petitioner raises the lone issue:WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT ALLOWED SUBSTITUTED SERVICE ON A PRIVATE CORPORATION WHEN IT HELD THAT DOLE WAS VALIDLY SERVED WITH SUMMONS IN SPITE OF THE FACT THAT SUMMONS WAS NOT SERVED ON ITS PRESIDENT, MANAGING PARTNER, GENERAL MANAGER, CORPORATE SECRETARY, TREASURER OR IN-HOUSE COUNSEL THEREBY IGNORING THE RULE ON SERVICE OF SUMMONS ON PRIVATE DOMESTIC CORPORATIONS.[7]

Simply stated, the issue in this case is whether there was a valid service of summons on petitioner for the trial court to acquire jurisdiction over the person of the corporate defendant below, now the petitioner herein.

Petitioner contends that for the court to validly acquire jurisdiction over a domestic corporation, summons must be served only on the corporate officers  enumerated  in Section  11,[8]  Rule 14  of  the 1997  Rules of Civil Procedure.  Petitioner maintains that the alias summons was not validly served on it since the alias summons was served on Marifa Dela Cruz, an employee of Dole Pacific General Services, Ltd., which is an entity separate and distinct from petitioner. It further avers that even if she were an employee of the petitioner, she is not one of the officers enumerated under Section 11, Rule 14.  Thus, the RTC, without proper service of summons, lacks jurisdiction over petitioner as defendant below.

Private respondent All Season, for its part, contends that the trial court had acquired jurisdiction over

petitioner, since petitioner received the alias summons through its president on April 23, 2003.  According to private respondent, there was full compliance with Section 11, Rule 14, when Marifa Dela Cruz received the summons upon instruction of petitioner's president as indicated in the Officer's Return.[9]  More so, petitioner had admitted that it received the alias summons in its Entry of Appearance with Motion for Time[10] filed on May 5, 2003.

Well-settled is the rule that service of summons on a domestic corporation is restricted, limited and exclusive to the persons enumerated in Section 11, Rule 14 of the 1997 Rules of Civil Procedure, following the rule in statutory construction that expressio unios est exclusio alterius.[11]  Service must therefore be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.

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

However, under Section 20 of the same Rule, a defendant's voluntary appearance in the action is equivalent to service of summons.[13]  As held previously by this Court, the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary submission to the jurisdiction of the court.[14]

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

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