11. 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 court’s jurisdiction over a defendant is founded on a valid service of summons. Without a valid service, the
court cannot acquire jurisdiction over the defendant, unless the defendant voluntarily submits to it. The defendant
must be properly apprised of a pending action against him and assured of the opportunity to present his defenses
to the suit. Proper service of summons is used to protect one’s right to due process.

The Case

This Petition for Review on Certiorari 1 under Rule 45 presents the core issue whether there was a valid substituted
service of summons on petitioner for the trial court to acquire jurisdiction. Petitioner Manotoc claims the court a
quo should have annulled the proceedings in the trial court for want of jurisdiction due to irregular and ineffective
service of summons.

The Facts

Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on behalf of the Estate of
Archimedes Trajano v. Imelda ‘Imee’ R. Marcos-Manotoc 2 for Filing, Recognition and/or Enforcement of Foreign
Judgment. Respondent Trajano seeks the enforcement of a foreign court’s judgment rendered on May 1, 1991 by
the United States District Court of Honolulu, Hawaii, United States of America, in a case entitled Agapita Trajano,
et al. v. Imee Marcos-Manotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for wrongful death of deceased
Archimedes Trajano committed by military intelligence officials of the Philippines allegedly under the command,
direction, authority, supervision, tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the
provisions of Rule 39 of the then Revised Rules of Court.

Based on paragraph two of the Complaint, the trial court issued a Summons 3 on July 6, 1993 addressed to
petitioner at Alexandra Condominium Corporation or Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue,
Pasig City.

On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an
alleged caretaker of petitioner at the condominium unit mentioned earlier. 4 When petitioner failed to file her
Answer, the trial court declared her in default through an Order 5 dated October 13, 1993.

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss 6 on the ground of
lack of jurisdiction of the trial court over her person due to an invalid substituted service of summons. The grounds
to support the motion were: (1) the address of defendant indicated in the Complaint (Alexandra Homes) was not
her dwelling, residence, or regular place of business as provided in Section 8, Rule 14 of the Rules of Court; (2) the
party (de la Cruz), who was found in the unit, was neither a representative, employee, nor a resident of the place;
(3) the procedure prescribed by the Rules on personal and substituted service of summons was ignored; (4)
defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be ineffective and
futile.

During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales, who testified that he
saw defendant Manotoc as a visitor in Alexandra Homes only two times. He also identified the Certification of
Renato A. de Leon, which stated that Unit E-2104 was owned by Queens Park Realty, Inc.; and at the time the
Certification was issued, the unit was not being leased by anyone. Petitioner also presented her Philippine
passport and the Disembarkation/Embarkation Card 7 issued by the Immigration Service of Singapore to show that
she was a resident of Singapore. She claimed that the person referred to in plaintiff’s Exhibits "A" to "EEEE" as
"Mrs. Manotoc" may not even be her, but the mother of Tommy Manotoc, and granting that she was the one
referred to in said exhibits, only 27 out of 109 entries referred to Mrs. Manotoc. Hence, the infrequent number of
times she allegedly entered Alexandra Homes did not at all establish plaintiff’s position that she was a resident of
said place.

On the other hand, Agapita Trajano, for plaintiffs’ estate, presented Robert Swift, lead counsel for plaintiffs in the
Estate of Ferdinand Marcos Human Rights Litigation, who testified that he participated in the deposition taking of
Ferdinand R. Marcos, Jr.; and he confirmed that Mr. Marcos, Jr. testified that petitioner’s residence was at the
Alexandra Apartment, Greenhills. 8 In addition, the entries 9 in the logbook of Alexandra Homes from August 4,
1992 to August 2, 1993, listing the name of petitioner Manotoc and the Sheriff’s Return, 10 were adduced in
evidence.

On October 11, 1994, the trial court rejected Manotoc’s Motion to Dismiss on the strength of its findings that her
residence, for purposes of the Complaint, was Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue, Pasig,
Metro Manila, based on the documentary evidence of respondent Trajano. The trial court relied on the
presumption that the sheriff’s substituted service was made in the regular performance of official duty, and such
presumption stood in the absence of proof to the contrary. 11

On December 21, 1994, the trial court discarded Manotoc’s plea for reconsideration for lack of merit. 12

Undaunted, Manotoc filed a Petition for Certiorari and Prohibition 13 before the Court of Appeals (CA) on January
20, 1995, docketed as CA-G.R. SP No. 36214 seeking the annulment of the October 11, 1994 and December 21,
1994 Orders of Judge Aurelio C. Trampe.

Ruling of the Court of Appeals

On March 17, 1997, the CA rendered the assailed Decision, 14 dismissing the Petition for Certiorari and Prohibition.
The court a quo adopted the findings of the trial court that petitioner’s residence was at Alexandra Homes, Unit E-
2104, at No. 29 Meralco Avenue, Pasig, Metro Manila, which was also the residence of her husband, as shown by
the testimony of Atty. Robert Swift and the Returns of the registered mails sent to petitioner. It ruled that the
Disembarkation/Embarkation Card and the Certification dated September 17, 1993 issued by Renato A. De Leon,
Assistant Property Administrator of Alexandra Homes, were hearsay, and that said Certification did not refer to
July 1993—the month when the substituted service was effected.

In the same Decision, the CA also rejected petitioner’s Philippine passport as proof of her residency in Singapore as
it merely showed the dates of her departure from and arrival in the Philippines without presenting the
boilerplate’s last two (2) inside pages where petitioner’s residence was indicated. The CA considered the
withholding of those pages as suppression of evidence. Thus, according to the CA, the trial court had acquired
jurisdiction over petitioner as there was a valid substituted service pursuant to Section 8, Rule 14 of the old
Revised Rules of Court.

On April 2, 1997, petitioner filed a Motion for Reconsideration 15 which was denied by the CA in its
Resolution 16dated October 8, 1997.

Hence, petitioner has come before the Court for review on certiorari.

The Issues
Petitioner raises the following assignment of errors for the Court’s consideration:

I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE DECISION AND
RESOLUTION IN QUESTION (ANNEXES A AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE IN RULING THAT THE
TRIAL COURT ACQUIRED JURISDICTION OVER THE PERSON OF THE PETITIONER THROUGH A SUBSTITUTED SERVICE
OF SUMMONS IN ACCORDANCE WITH SECTION 8, RULE 14 OF THE REVISED RULES OF COURT.

II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT THERE WAS A VALID
SERVICE OF SUMMONS ON AN ALLEGED CARETAKER OF PETITIONER’S RESIDENCE IN COMPLETE DEFIANCE OF THE
RULING IN CASTILLO VS. CFI OF BULACAN, BR. IV, G.R. NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH
DEFINES THE PROPRIETY OF SUCH SERVICE UPON MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY
RESIDES.

III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT THE RESIDENCE OF
THE HUSBAND IS ALSO THE RESIDENCE OF HIS WIFE CONTRARY TO THE RULING IN THE BANK OF THE PHILIPPINE
ISLANDS VS. DE COSTER, G.R. NO. 23181, MARCH 16, 1925, 47 PHIL. 594.

IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY THE RULE ON EXTRA-
TERRITORIAL SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES OF COURT. 17

The assigned errors bring to the fore the crux of the disagreement—the validity of the substituted service of
summons for the trial court to acquire jurisdiction over petitioner.

The Court’s Ruling

We GRANT the petition.

Acquisition of Jurisdiction

Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant’s voluntary
appearance in court. When the defendant does not voluntarily submit to the court’s jurisdiction or when there is
no valid service of summons, "any judgment of the court which has no jurisdiction over the person of the
defendant is null and void." 18 In an action strictly in personam, personal service on the defendant is the preferred
mode of service, that is, by handing a copy of the summons to the defendant in person. If defendant, for excusable
reasons, cannot be served with the summons within a reasonable period, then substituted service can be resorted
to. While substituted service of summons is permitted, "it is extraordinary in character and in derogation of the
usual method of service." 19 Hence, it must faithfully and strictly comply with the prescribed requirements and
circumstances authorized by the rules. Indeed, "compliance with the rules regarding the service of summons is as
much important as the issue of due process as of jurisdiction." 20

Requirements for Substituted Service

Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:

SEC. 8. 21 Substituted service. – If the defendant cannot be served within a reasonable time as provided in the
preceding section [personal service on defendant], service may be effected (a) by leaving copies of the summons at
the defendant’s residence with some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant’s office or regular place of business with some competent person in charge thereof.

We can break down this section into the following requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service

The party relying on substituted service or the sheriff must show that defendant cannot be served promptly or
there is impossibility of prompt service. 22 Section 8, Rule 14 provides that the plaintiff or the sheriff is given a
"reasonable time" to serve the summons to the defendant in person, but no specific time frame is mentioned.
"Reasonable time" is defined as "so much time as is necessary under the circumstances for a reasonably prudent
and diligent man to do, conveniently, what the contract or duty requires that should be done, having a regard for
the rights and possibility of loss, if any[,] to the other party." 23 Under the Rules, the service of summons has no set
period. However, when the court, clerk of court, or the plaintiff asks the sheriff to make the return of the
summons and the latter submits the return of summons, then the validity of the summons lapses. The plaintiff
may then ask for an alias summons if the service of summons has failed. 24 What then is a reasonable time for the
sheriff to effect a personal service in order to demonstrate impossibility of prompt service? To the plaintiff,
"reasonable time" means no more than seven (7) days since an expeditious processing of a complaint is what a
plaintiff wants. To the sheriff, "reasonable time" means 15 to 30 days because at the end of the month, it is a
practice for the branch clerk of court to require the sheriff to submit a return of the summons assigned to the
sheriff for service. The Sheriff’s Return provides data to the Clerk of Court, which the clerk uses in the Monthly
Report of Cases to be submitted to the Office of the Court Administrator within the first ten (10) days of the
succeeding month. Thus, one month from the issuance of summons can be considered "reasonable time" with
regard to personal service on the defendant.

Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and
reasonable promptness and speed so as not to prejudice the expeditious dispensation of justice. Thus, they are
enjoined to try their best efforts to accomplish personal service on defendant. On the other hand, since the
defendant is expected to try to avoid and evade service of summons, the sheriff must be resourceful, persevering,
canny, and diligent in serving the process on the defendant. For substituted service of summons to be available,
there must be several attempts by the sheriff to personally serve the summons within a reasonable period [of one
month] which eventually resulted in failure to prove impossibility of prompt service. "Several attempts" means at
least three (3) tries, preferably on at least two different dates. In addition, the sheriff must cite why such efforts
were unsuccessful. It is only then that impossibility of service can be confirmed or accepted.

(2) Specific Details in the Return

The sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted
personal service. 25 The efforts made to find the defendant and the reasons behind the failure must be clearly
narrated in detail in the Return. The date and time of the attempts on personal service, the inquiries made to
locate the defendant, the name/s of the occupants of the alleged residence or house of defendant and all other
acts done, though futile, to serve the summons on defendant must be specified in the Return to justify substituted
service. The form on Sheriff’s Return of Summons on Substituted Service prescribed in the Handbook for Sheriffs
published by the Philippine Judicial Academy requires a narration of the efforts made to find the defendant
personally and the fact of failure. 26 Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires
that "impossibility of prompt service should be shown by stating the efforts made to find the defendant personally
and the failure of such efforts," which should be made in the proof of service.

(3) A Person of Suitable Age and Discretion

If the substituted service will be effected at defendant’s house or residence, it should be left with a person of
"suitable age and discretion then residing therein." 27 A person of suitable age and discretion is one who has
attained the age of full legal capacity (18 years old) and is considered to have enough discernment to understand
the importance of a summons. "Discretion" is defined as "the ability to make decisions which represent a
responsible choice and for which an understanding of what is lawful, right or wise may be presupposed". 28 Thus,
to be of sufficient discretion, such person must know how to read and understand English to comprehend the
import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the
earliest possible time for the person to take appropriate action. Thus, the person must have the "relation of
confidence" to the defendant, ensuring that the latter would receive or at least be notified of the receipt of the
summons. The sheriff must therefore determine if the person found in the alleged dwelling or residence of
defendant is of legal age, what the recipient’s relationship with the defendant is, and whether said person
comprehends the significance of the receipt of the summons and his duty to immediately deliver it to the
defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and
specifically described in the Return of Summons.

(4) A Competent Person in Charge

If the substituted service will be done at defendant’s office or regular place of business, then it should be served on
a competent person in charge of the place. Thus, the person on whom the substituted service will be made must
be the one managing the office or business of defendant, such as the president or manager; and such individual
must have sufficient knowledge to understand the obligation of the defendant in the summons, its importance,
and the prejudicial effects arising from inaction on the summons. Again, these details must be contained in the
Return.

Invalid Substituted Service in the Case at Bar

Let us examine the full text of the Sheriff’s Return, which reads:

THIS IS TO CERTIFY that on many occasions several attempts were made to serve the summons with complaint and
annexes issued by this Honorable Court in the above entitled case, personally upon the defendant IMELDA ‘IMEE’
MARCOS-MANOTOC located at Alexandra Condominium Corpration [sic] or Alexandra Homes E-2 Room 104 No. 29
Merlaco [sic] Ave., Pasig, Metro-Manila at reasonable hours of the day but to no avail for the reason that said
defendant is usually out of her place and/or residence or premises. That on the 15th day of July, 1993, substituted
service of summons was resorted to in accordance with the Rules of Court in the Philippines leaving copy of said
summons with complaint and annexes thru [sic] (Mr) Macky de la Cruz, caretaker of the said defendant, according
to (Ms) Lyn Jacinto, Receptionist and Telephone Operator of the said building, a person of suitable age and
discretion, living with the said defendant at the given address who acknowledged the receipt thereof of said
processes but he refused to sign (emphases supplied).

WHEREFORE, said summons is hereby returned to this Honorable Court of origin, duly served for its record and
information.

Pasig, Metro-Manila July 15, 1993. 29

A meticulous scrutiny of the aforementioned Return readily reveals the absence of material data on the serious
efforts to serve the Summons on petitioner Manotoc in person. There is no clear valid reason cited in the Return
why those efforts proved inadequate, to reach the conclusion that personal service has become impossible or
unattainable outside the generally couched phrases of "on many occasions several attempts were made to serve
the summons x x x personally," "at reasonable hours during the day," and "to no avail for the reason that the said
defendant is usually out of her place and/or residence or premises." Wanting in detailed information, the Return
deviates from the ruling—in Domagas v. Jensen 30 and other related cases 31—that the pertinent facts and
circumstances on the efforts exerted to serve the summons personally must be narrated in the Return. It cannot
be determined how many times, on what specific dates, and at what hours of the day the attempts were made.
Given the fact that the substituted service of summons may be assailed, as in the present case, by a Motion to
Dismiss, it is imperative that the pertinent facts and circumstances surrounding the service of summons be
described with more particularity in the Return or Certificate of Service.
Besides, apart from the allegation of petitioner’s address in the Complaint, it has not been shown that respondent
Trajano or Sheriff Cañelas, who served such summons, exerted extraordinary efforts to locate petitioner. Certainly,
the second paragraph of the Complaint only states that respondents were "informed, and so [they] allege" about
the address and whereabouts of petitioner. Before resorting to substituted service, a plaintiff must demonstrate
an effort in good faith to locate the defendant through more direct means. 32 More so, in the case in hand, when
the alleged petitioner’s residence or house is doubtful or has not been clearly ascertained, it would have been
better for personal service to have been pursued persistently.

In the case Umandap v. Sabio, Jr., 33 it may be true that the Court held that a Sheriff’s Return, which states that
"despite efforts exerted to serve said process personally upon the defendant on several occasions the same proved
futile," conforms to the requirements of valid substituted service. However, in view of the numerous claims of
irregularities in substituted service which have spawned the filing of a great number of unnecessary special civil
actions of certiorari and appeals to higher courts, resulting in prolonged litigation and wasteful legal expenses, the
Court rules in the case at bar that the narration of the efforts made to find the defendant and the fact of failure
written in broad and imprecise words will not suffice. The facts and circumstances should be stated with more
particularity and detail on the number of attempts made at personal service, dates and times of the attempts,
inquiries to locate defendant, names of occupants of the alleged residence, and the reasons for failure should be
included in the Return to satisfactorily show the efforts undertaken. That such efforts were made to personally
serve summons on defendant, and those resulted in failure, would prove impossibility of prompt personal service.

Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would encourage routine
performance of their precise duties relating to substituted service—for it would be quite easy to shroud or conceal
carelessness or laxity in such broad terms. Lastly, considering that monies and properties worth millions may be
lost by a defendant because of an irregular or void substituted service, it is but only fair that the Sheriff’s Return
should clearly and convincingly show the impracticability or hopelessness of personal service.

Granting that such a general description be considered adequate, there is still a serious nonconformity from the
requirement that the summons must be left with a "person of suitable age and discretion" residing in defendant’s
house or residence. Thus, there are two (2) requirements under the Rules: (1) recipient must be a person of
suitable age and discretion; and (2) recipient must reside in the house or residence of defendant. Both
requirements were not met. In this case, the Sheriff’s Return lacks information as to residence, age, and discretion
of Mr. Macky de la Cruz, aside from the sheriff’s general assertion that de la Cruz is the "resident caretaker" of
petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged receptionist and telephone operator of Alexandra
Homes. It is doubtful if Mr. de la Cruz is residing with petitioner Manotoc in the condominium unit considering that
a married woman of her stature in society would unlikely hire a male caretaker to reside in her dwelling. With the
petitioner’s allegation that Macky de la Cruz is not her employee, servant, or representative, it is necessary to have
additional information in the Return of Summons. Besides, Mr. Macky de la Cruz’s refusal to sign the Receipt for
the summons is a strong indication that he did not have the necessary "relation of confidence" with petitioner. To
protect petitioner’s right to due process by being accorded proper notice of a case against her, the substituted
service of summons must be shown to clearly comply with the rules.

It has been stated and restated that substituted service of summons must faithfully and strictly comply with the
prescribed requirements and in the circumstances authorized by the rules. 34

Even American case law likewise stresses the principle of strict compliance with statute or rule on substituted
service, thus:

The procedure prescribed by a statute or rule for substituted or constructive service must be strictly
pursued. 35There must be strict compliance with the requirements of statutes authorizing substituted or
constructive service. 36
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 support the judgment based on such substituted or constructive
service. 37 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 of the statute have been
complied with, and such compliance must appear on the record. 38 The fact that the defendant had actual
knowledge of attempted service does not render the service effectual if in fact the process was not served in
accordance with the requirements of the statute. 39

Based on the above principles, respondent Trajano failed to demonstrate that there was strict compliance with the
requirements of the then Section 8, Rule 14 (now Section 7, Rule 14 of the 1997 Rules of Civil Procedure).

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

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

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the
Sheriff’s Return must show that serious efforts or attempts were exerted to personally serve the summons and
that said efforts failed. These facts must be specifically narrated in the Return. To reiterate, it must clearly show
that the substituted service must be made on a person of suitable age and discretion living in the dwelling or
residence of defendant. Otherwise, the Return is flawed and the presumption cannot be availed of. As previously
explained, the Return of Sheriff Cañelas did not comply with the stringent requirements of Rule 14, Section 8 on
substituted service.

In the case of Venturanza v. Court of Appeals, 41 it was held that "x x x the presumption of regularity in the
performance of official functions by the sheriff is not applicable in this case where it is patent that the sheriff’s
return is defective (emphasis supplied)." While the Sheriff’s Return in the Venturanza case had no statement on
the effort or attempt to personally serve the summons, the Return of Sheriff Cañelas in the case at bar merely
described the efforts or attempts in general terms lacking in details as required by the ruling in the case of
Domagas v. Jensen and other cases. It is as if Cañelas’ Return did not mention any effort to accomplish personal
service. Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at No. 29 Meralco
Avenue, Pasig City, our findings that the substituted service is void has rendered the matter moot and academic.
Even assuming that Alexandra Homes Room 104 is her actual residence, such fact would not make an irregular and
void substituted service valid and effective.

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
hereby REVERSEDand SET ASIDE.No costs.

SO ORDERED.
12. 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

Petitioners – defendants in a suit for libel brought by respondent – appeal the decision promulgated on March 8,
20021 and the resolution promulgated on January 13, 2003, 2 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 summons and copies of the complaint
on each of them had been valid and effective. 3

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 Building,
Solana Street corner A. Soriano Street, Intramuros, Manila.4

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 summons, and explained why in his
sheriff’s return dated September 22, 2005,5 to wit:

SHERIFF’S 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 Lu-Ann 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 counsel’s 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 being 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 remaining period allowed by the Rules of Court, 6 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 Sheriff’s 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.

On June 29, 2001, the RTC denied petitioners’ motion for reconsideration. 7 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

On March 8, 2002, the CA promulgated its questioned decision, 8 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 court’s 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 Tonite’s 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.9

On January 13, 2003, the CA denied petitioners’ motion for reconsideration. 10

Issues

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 IN THE INSTANT CASE.11

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 mainly to satisfy
the constitutional requirement of due process.12
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 the other hand, are aptly delineated in Domagas v. Jensen, 13 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 of acquiring jurisdiction over his
person unless he voluntarily appears in court.14

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, or by a voluntary appearance in the action.15

Upon the filing of the complaint and the payment of the requisite legal fees, the clerk of court forthwith issues the
corresponding summons to the defendant.16 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 relief applied for.17 To be attached to the
original copy of the summons and all copies thereof is a copy of the complaint (and its attachments, if any) and the
order, if any, for the appointment of a guardian ad litem.18
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 defendant; and (b) to afford to the defendant the opportunity to be heard on
the claim brought against him.19 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 such proper service, the ensuing trial and
judgment are void.20 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 to
the jurisdiction of the court.21 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 afford to him the opportunity to be heard on the claim against him, he may also
waive the process.21 In other words, compliance with the rules regarding the service of the summons is as much an
issue of due process as it is of jurisdiction.23

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 receive and sign for it, in tendering it to him. 24 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
with some competent person in charge thereof. 25 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 substituted service other than that authorized by statute is considered ineffective.26 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 circumstances authorized by statute.27 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 sheriff’s return.28 Nonetheless,
the requisite showing of the impossibility of prompt personal service as basis for resorting to substituted service
may be waived by the defendant either expressly or impliedly.29

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 the spirit of the procedural rules, not their letter, that
governs.30

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.
14. REMELITA M. ROBINSON, petitioner,
vs.
CELITA B. MIRALLES, respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us is the instant petition for review on certiorari assailing the Resolutions dated February 111 and May 11,
20042 of the Regional Trial Court (RTC), Branch 274, Parañaque City, in Civil Case No. 00-0372.

On August 25, 2000, Celita Miralles, respondent, filed with the said court a complaint for sum of money against
Remelita Robinson, petitioner, docketed as Civil Case No. 00-0372. Respondent alleged that petitioner borrowed
from her US$20,054.00 as shown by a Memorandum of Agreement they both executed on January 12, 2000.

Summons was served on petitioner at her given address. However, per return of service of Sheriff Maximo Potente
dated March 5, 2001, petitioner no longer resides at such address.

On July 20, 2001, the trial court issued an alias summons to be served at No. 19 Baguio St., Alabang Hills,
Muntinlupa City, petitioner’s new address.

Again, the summons could not be served on petitioner. Sheriff Potente explained that:

The Security Guard assigned at the gate of Alabang Hills refused to let me go inside the subdivision so that
I could effect the service of the summons to the defendant in this case. The security guard alleged that
the defendant had given them instructions not to let anybody proceed to her house if she is not around. I
explained to the Security Guard that I am a sheriff serving the summons to the defendant, and if the
defendant is not around, summons can be received by any person of suitable age and discretion living in
the same house. Despite of all the explanation, the security guard by the name of A.H. Geroche still
refused to let me go inside the subdivision and served (sic) the summons to the defendant. The same
thing happened when I attempted to serve the summons previously.

Therefore, the summons was served by leaving a copy thereof together with the copy of the complaint to
the security guard by the name of A.H. Geroche, who refused to affix his signature on the original copy
thereof, so he will be the one to give the same to the defendant.

Eventually, respondent filed a motion to declare petitioner in default for her failure to file an answer seasonably
despite service of summons.

On February 28, 2003, the trial court granted respondent’s motion declaring petitioner in default and allowing
respondent to present her evidence ex parte.

On June 20, 2003, the trial court issued an Order, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against defendant ordering the
defendant to pay the plaintiff as follows:

1. The sum of US$20,054.00 as the unpaid obligation, plus the stipulated interest of 3% a month from May
2000 (date of default) until fully paid;
 2. Php100,000.00 for moral damages;

3. Php50,000.00 plus Php1,500.00 per appearance as attorney’s fees;

4. Costs of suit.

SO ORDERED.

A copy of the Order was sent to petitioner by registered mail at her new address.

Upon respondent’s motion, the trial court, on September 8, 2003, issued a writ of execution.

On September 26, 2003, petitioner filed with the trial court a petition for relief from the judgment by default. She
claimed that summons was improperly served upon her, thus, the trial court never acquired jurisdiction over her
and that all its proceedings are void.

On February 11, 2004, the trial court issued a Resolution denying the petition for relief. Petitioner filed a motion
for reconsideration, but it was denied by the trial court in a Resolution dated May 11, 2004.

Hence, the instant recourse.

The sole issue for our resolution is whether the trial court correctly ruled that a substituted service of summons
upon petitioner has been validly effected.

Summons is a writ by which the defendant is notified of the action brought against him or her. 3 In a civil action,
service of summons is the means by which the court acquires jurisdiction over the person of the defendant.4 Any
judgment without such service, in the absence of a valid waiver, is null and void. 5 Where the action is in personam
and the defendant is in the Philippines, the service of summons may be made through personal or substituted
service in the manner provided for in Sections 6 and 7, Rule 14 of the 1997 Rules of Procedure, as amended, 6 thus:

SEC. 6. Service in person on defendant. – Whenever practicable, the summons shall be served by handing
a copy thereof to the defendant in person, or if he refuses to receive and sign for it, by tendering it to him.

SEC. 7. Substituted service. – If, for justifiable causes, the defendant cannot be served within a reasonable
time as provided in the preceding section, service may be effected (a) by leaving copies of the summons
at the defendant’s residence with some person of suitable age and discretion then residing therein; or (b)
by leaving the copies at the defendant’s office or regular place of business with some competent person
in charge thereof.

Under our procedural rules, personal service is generally preferred over substituted service, the latter mode of
service being a method extraordinary in character.7 For substituted service to be justified, the following
circumstances must be clearly established: (a) personal service of summons within a reasonable time was
impossible; (b) efforts were exerted to locate the party; and (c) the summons was served upon a person of
sufficient age and discretion residing at the party’s residence or upon a competent person in charge of the party’s
office or place of business.8 Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds. 9

Petitioner contends that the service of summons upon the subdivision security guard is not in compliance with
Section 7, Rule 14 since he is not related to her or staying at her residence. Moreover, he is not duly authorized to
receive summons for the residents of the village. Hence, the substituted service of summons is not valid and that
the trial court never acquired jurisdiction over her person.
We have ruled that the statutory requirements of substituted service must be followed strictly, faithfully, and fully
and any substituted service other than that authorized by the Rules is considered ineffective. 10 However, we frown
upon an overly strict application of the Rules. It is the spirit, rather than the letter of the procedural rules, that
governs.

In his Return, Sheriff Potente declared that he was refused entry by the security guard in Alabang Hills twice. The
latter informed him that petitioner prohibits him from allowing anybody to proceed to her residence whenever she
is out. Obviously, it was impossible for the sheriff to effect personal or substituted service of summons upon
petitioner. We note that she failed to controvert the sheriff’s declaration. Nor did she deny having received the
summons through the security guard.

Considering her strict instruction to the security guard, she must bear its consequences. Thus, we agree with the
trial court that summons has been properly served upon petitioner and that it has acquired jurisdiction over her.

WHEREFORE, we DENY the petition and we AFFIRM the assailed Orders of the RTC, Branch 274, Parañaque City, in
Civil Case No. 00-0372. Costs against petitioner.

SO ORDERED.
15. 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, 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 City 2 but the Sheriff's Return of
Service3stated 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.

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 Default 5 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 Dismiss 6 alleging that the records show
that defendant, through its branch manager, Engr. Wendell Sabulbero actually received the summons and the
complaint on May 8, 1998 as evidenced by the signature appearing on the copy of the summons and not on May 5,
1998 as stated in the Sheriffs Return nor on May 6, 1998 as stated in the motion to dismiss; that defendant has
transferred its office from Kolambog, Lapasan, Cagayan de Oro to its new office address at Villa Gonzalo, Nazareth,
Cagayan de Oro; and that the purpose of the rule is to bring home to the corporation notice of the filing of the
action.
On August 5, 1998, the trial court issued an Order7 denying defendant's Motion to Dismiss as well as plaintiffs
Motion to Declare Defendant in Default. Defendant was given ten (10) days within which to file a responsive
pleading. The trial court stated that since the summons and copy of the complaint were in fact received by the
corporation through its branch manager Wendell Sabulbero, there was substantial compliance with the rule on
service of summons and consequently, it validly acquired jurisdiction over the person of the defendant.

On August 19, 1998, defendant, by Special Appearance, filed a Motion for Reconsideration 8 alleging that Section
11, Rule 14 of the new Rules did not liberalize but, on the contrary, restricted the service of summons on persons
enumerated therein; and that the new provision is very specific and clear in that the word "manager" was changed
to "general manager", "secretary" to "corporate secretary", and excluding therefrom agent and director.

On August 27, 1998, plaintiff filed an Opposition to defendant's Motion for Reconsideration 9 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 Reply 10 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. NLRC13which held that a corporation is bound by the service of summons upon its assistant manager.

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

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

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

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

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

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

Petitioner contends that the enumeration of persons to whom summons may be served is "restricted, limited and
exclusive" following the rule on statutory construction expressio unios est exclusio alterius and argues that if the
Rules of Court Revision Committee intended to liberalize the rule on service of summons, it could have easily done
so by clear and concise language.

We agree with petitioner.

Earlier cases have uphold service of summons upon a construction project manager 15; a corporation's assistant
manager16; ordinary clerk of a corporation17; private secretary of corporate executives18; retained counsel19;
officials who had charge or control of the operations of the corporation, like the assistant general manager 20; 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.29Before, 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.
17. GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,
vs.
NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.

DECISION

PERALTA, J.:

For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners Green Star Express,
Inc. and Fruto Sayson, Jr. brought before the Court, assailing the Decision 1 of the Court of Appeals (CA) dated
September 17, 2007 and its Resolution2 dated January 22, 2008 in CA-G.R. SP No. 86824. The CA nullified the
Resolution dated May 5, 2004 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Civil Case No.
SPL-0969, and dismissed the complaint for lack of jurisdiction.

The following are the antecedents of the case:

On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC) owned figured in a
vehicular accident with petitioner Green Star Express, Inc.' s (Green Star) passenger bus, resulting in the death of
the van's driver. Thus, the bus driver, petitioner Fruto Sayson, Jr., was charged with the crime of reckless
imprudence resulting in homicide.

Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation (NURC) for the
repair of its passenger bus amounting to ₱567, 070.68. NURC denied any liability therefore and argued that the
criminal case shall determine the ultimate liabilities of the parties. Thereafter, the criminal case was dismissed
without prejudice, due to insufficiency of evidence.

Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San Pedro, Laguna.
Francis Tinio, one of NURC's employees, was the one who received the summons. On February 6, 2004, NURC filed
a Motion to Dismiss claiming lack of jurisdiction due to improper service.

On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that there was substantial
compliance because there was actual receipt of the summons by NURC. The dispositive portion of said Resolution
thus reads:

WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED. 3

Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a Petition for Certiorari. On
September 17, 2007, the CA reversed the RTC ruling, hence:

WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated May 5, 2004 and
dated July 26, 2004, of the Regional Trial Court of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, are
hereby NULLIFIED and a new one rendered granting Petitioner's Motion to Dismiss, dated February 3, 2004.
Private Respondents' Amended Complaint for Damages filed against Petitioner Nissin-Universal Robina
Corporation is accordingly dismissed for lack of jurisdiction.

SO ORDERED.4

Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied. Hence, this petition.

The lone issue is whether or not the summons was properly served on NURC, vesting the trial court with
jurisdiction.
The petition is benefit of merit.

It is a well-established rule that the rules on service of summons upon a domestic private juridical entity must be
strictly complied with. Otherwise, the court cannot be said to have acquired jurisdiction over the person of the
defendant.5

NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received by its cost
accountant, Francis Tinio. It argues that under Section 11, Rule 14 of the 1997 Rules of Court, which provides the
rule on service of summons upon a juridical entity, in cases where the defendant is a domestic corporation like
NURC, summons may be served only through its officers.6 Thus:

Section 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or
association organized under the laws of the Philippines with a juridical personality, service may be made on the
president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.7

This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:

Section 13. Service upon private domestic corporation or partnership. - If the defendant is a corporation organized
under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors. 8

In the past, the Court upheld service of summons upon a construction project manager, a corporation’s assistant
manager, and ordinary clerk of a corporation, private secretary of corporate executives, retained counsel, and
officials who had control over the operations of the corporation like the assistant general manager or the
corporation’s Chief Finance and Administrative Officer. The Court then considered said persons as "agent" within
the contemplation of the old rule. Notably, under the new Rules, service of summons upon an agent of the
corporation is no longer authorized,9 The rule now likewise states "general manager" instead of "manager";
"corporate secretary" instead of merely "secretary"; and "treasure" instead of "cashier." 10 It has now become
restricted, limited, and exclusive only to the persons enumerated in the aforementioned provision, following the
rule in statutory construction that the express mention of one person excludes all others, or expression unions est
exclusion alterius. Service must, therefore, be made only on the person expressly listed in the rules. 11 If the
revision committee intended to liberalize the rule on service of summons, it could have easily done so by clear and
concise language.12

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

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

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

SO ORDERED.
20. TUNG HO STEEL ENTERPRISES CORPORATION, Petitioner,
vs.
TING GUAN TRADING CORPORATION, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on, certiorari1 filed by petitioner Tung Ho Steel Enterprises Corp. (Tung Ho) to
challenge the July 5, 2006 decision2 and the March 12, 2008 resolution3 of the Court of Appeals (CA) in CA-G.R. SP
No. 92828.

The Factual Antecedents

Tung Ho is a foreign corporation organized under the laws of Taiwan, Republic of China. 4 On the other hand,
respondent Ting Guan Trading Corp. (Ting Guan) is a domestic corporation organized under the laws of the
Philippines.5

On January 9, 2002, Ting Guan obligated itself under a contract of sale to deliver heavy metal scrap iron and steel
to Tung Ho. Subsequently, Tung Ho filed a request for arbitration before the ICC International Court of Arbitration
(ICC) in Singapore after Ting Guan failed to deliver the full quantity of the promised heavy metal scrap iron and
steel.6

The ICC ruled in favor of Tung Ho on June 18, 2004 and ordered Ting Guan to pay Tung Ho the following: (1) actual
damages in the amount of US$ 659,646.15 with interest of 6% per annum from December 4, 2002 until final
payment; (2) cost of arbitration in the amount of US $ 47,000.00; and (3) legal costs and expenses in the amount of
NT $ 761,448.00 and US $ 34,552.83.7

On October 24, 2004, Tung Ho filed an action against Ting Guan for the recognition and enforcement of the arbitral
award before the Regional Trial Court (RTC) of Makati, Branch 145. Ting Guan moved to dismiss the case based on
Tung Ho’s lack of capacity to sue and for prematurity. Ting Guan subsequently filed a supplemental motion to
dismiss based on improper venue. Ting Guan argued that the complaint should have been filed in Cebu where its
principal place of business was located.8

The Proceedings before the RTC

The RTC denied Ting Guan’s motion to dismiss in an order dated May 11, 2005. Ting Guan moved to reconsider the
order and raised the RTC’s alleged lack of jurisdiction over its person as additional ground for the dismissal of the
complaint. Ting Guan insisted that Ms. Fe Tejero, on whom personal service was served, was not its corporate
secretary and was not a person allowed under Section 11, Rule 14 of the Rules of Court to receive a summons. It
also asserted that Tung Ho cannot enforce the award in the Philippines without violating public policy as Taiwan is
not a signatory to the New York Convention.9

The RTC denied the motion in an order dated November 21, 2005 and ruled that Ting Guan had voluntarily
submitted to the court’s jurisdiction when it raised other arguments apart from lack of jurisdiction in its motion to
dismiss.

The Proceedings before the CA

Ting Guan responded to the denials by filing a petition for certiorari before the CA with an application for the
issuance of a temporary restraining order and a writ of preliminary injunction. 10
In its Memorandum, Tung Ho argued that a Rule 65 petition is not the proper remedy to assail the denial of a
motion to dismiss. It pointed out that the proper recourse for Ting Guan was to file an answer and to subsequently
appeal the case. It also posited that beyond the reglementary period for filing an answer, Ting Guan was barred
from raising other grounds for the dismissal of the case. Tung Ho also claimed that the RTC acquired jurisdiction
over the person of Ting Guan since the return of service of summons expressly stated that Tejero was a corporate
secretary.11

In its decision dated July 5, 2006, the CA dismissed the complaint for lack of jurisdiction over the person of Ting
Guan. The CA held that Tung Ho failed to establish that Tejero was Ting Guan’s corporate secretary. The CA also
ruled that a petition for certiorari is the proper remedy to assail the denial of a motion to dismiss if the ground
raised in the motion is lack of jurisdiction. Furthermore, any of the grounds for the dismissal of the case can be
raised in a motion to dismiss provided that the grounds were raised before the filing of an answer. The CA likewise
ruled that Tung Ho properly filed the complaint before the RTC-Makati.12

Subsequently, both parties moved to partially reconsider the CA decision. Tung Ho reiterated that there was
proper service of summons. On the other hand, Ting Guan sought to modify the CA decision with respect to the
proper venue of the case. The CA denied Ting Guan’s motion for partial reconsideration in an order dated
December 5, 2006.13

Ting Guan immediately proceeded to file a petition for review on certiorari before this Court to question the CA’s
rulings as discussed below. In the interim (on February 11, 2008), Tung Ho (whose motion for reconsideration of
the CA decision was still pending with that court) filed a "Motion to Supplement and Resolve Motion for
Reconsideration" before the CA. In this motion, Tung Ho prayed for the issuance of an alias summons if the service
of summons had indeed been defective, but its motion proved unsuccessful.14

It was not until March 12, 2008, after the developments described below, that the CA finally denied Tung Ho’s
partial motion for reconsideration for lack of merit.

Ting Guan’s Petition before this Court

(G.R. No. 176110)

Ting Guan’s petition before this Court was docketed as G.R. No. 176110. Ting Guan argued that the dismissal of the
case should be based on the following additional grounds: first, the complaint was prematurely filed; second, the
foreign arbitral award is null and void; third, the venue was improperly laid in Makati; and lastly, the enforcement
of the arbitral award was against public policy.15

On April 24, 2007, Tung Ho filed its Comment dated April 24, 2007 in G.R. No. 176110, touching on the issue of
jurisdiction, albeit lightly. Tung Ho complained in its Comment that Ting Guan engaged in dilatory tactics when Ting
Guan belatedly raised the issue of jurisdiction in the motion for reconsideration before the RTC. However, Tung Ho
did not affirmatively seek the reversal of the July 5, 2006 decision. Instead, it merely stated that Ting Guan’s
petition "cannot be dismissed on the ground that the summons was wrongfully issued as the petitioner can always
move for the issuance of an alias summons to be served". Furthermore, Tung Ho only prayed that Ting Guan’s
petition be denied in G.R. No. 176110 and for other just and equitable reliefs. In other words, Tung Ho failed to
effectively argue its case on the merits before the Court in G.R. No. 176110.

On June 18, 2007, we issued our Resolution denying Ting Guan’s petition for lack of merit. On November 12, 2007,
we also denied Ting Guan’s motion for reconsideration. On January 8, 2008, the Court issued an entry of judgment
in Ting Guan’s petition, G.R. No. 176110.
After the entry of judgment, we referred the matter back to the RTC for further proceedings. On January 16, 2008,
the RTC declared the case closed and terminated. Its order stated:

Upon examination of the entire records of this case, an answer with caution was actually filed by the respondent
to which a reply was submitted by the petitioner. Since the answer was with the qualification that respondent is
not waiving its claim of lack of jurisdiction over its person on the ground of improper service of summons upon it
and that its petition to this effect filed before the Court of Appeals was acted favorably and this case was dismissed
on the aforementioned ground and it appearing that the Decision as well as the Order denying the motion for
reconsideration of the petitioner now final and executory, the Order of November 9, 2007 referring this petition to
the Court Annexed Mediation for possible amicable settlement is recalled it being moot and academic. This case is
now considered closed and terminated.

On February 6, 2008, Tung Ho moved to reconsider the RTC order. Nothing in the records shows whether the RTC
granted or denied this motion for reconsideration.

Tung Ho’s Petition before this Court

(G.R. No. 182153)

On May 7, 2008, Tung Ho seasonably filed a petition for review on certiorari to seek the reversal of the July 5, 2006
decision and the March 12, 2008 resolution of the CA. This is the present G.R. No. 182153 now before us.

Tung Ho reiterates that the RTC acquired jurisdiction over the person of Ting Guan. It also claims that the return of
service of summons is a prima facie evidence of the recited facts i.e., that Tejero is a corporate secretary as stated
therein and that the sheriff is presumed to have regularly performed his official duties in serving the summons. In
the alternative, Tung Ho argues that Ting Guan’s successive motions before the RTC are equivalent to voluntary
appearance. Tung Ho also prays for the issuance of alias summons to cure the alleged defective service of
summons.16

Respondent Ting Guan’s Position

(G.R. No. 182153)

In its Comment, Ting Guan submits that the appeal is already barred by res judicata. It also stresses that the Court
has already affirmed with finality the dismissal of the complaint. 17 Ting Guan also argues that Tung Ho raises a
factual issue that is beyond the scope of a petition for review on certiorari under Rule 45 of the Rules of Court. 18

The Issues

This case presents to us the following issues:

1) Whether the present petition is barred by res judicata; and

2) Whether the trial court acquired jurisdiction over the person of Ting Guan, specifically:

a) Whether Tejero was the proper person to receive the summons; and

b) Whether Ting Guan made a voluntary appearance before the trial court.

The Court’s Ruling

We find the petition meritorious.

I. The Court is not precluded from ruling on the jurisdictional issue raised in the petition

A. The petition is not barred by res judicata

Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive on the rights of the parties or their privies in all later suits on all points and matters determined in the
former suit.19 For res judicata to apply, the final judgment must be on the merits of the case which means that the
court has unequivocally determined the parties’ rights and obligations with respect to the causes of action and the
subject matter of the case.20

Contrary to Ting Guan’s position, our ruling in G.R. No. 176110 does not operate as res judicata on Tung Ho’s
appeal; G.R. No. 176110 did not conclusively rule on all issues raised by the parties in this case so that this Court
would now be barred from taking cognizance of Tung Ho’s petition. Our disposition in G.R. No. 176110 only dwelt
on technical or collateral aspects of the case, and not on its merits. Specifically, we did not rule on whether Tung
Ho may enforce the foreign arbitral award against Ting Guan in that case.

B. The appellate court cannot be ousted of jurisdiction until it finally disposes of the case

The court’s jurisdiction, once attached, cannot be ousted until it finally disposes of the case. When a court has
already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final
determination of the case is retained.21 A judge is competent to act on the case while its incidents remain pending
for his disposition.

The CA was not ousted of its jurisdiction with the promulgation of G.R. No. 176110. The July 5, 2006 decision has
not yet become final and executory for the reason that there remained a pending incident before the CA – the
resolution of Tung Ho’s motion for reconsideration – when this Court promulgated G.R. No. 176110. In this latter
case, on the other hand, we only resolved procedural issues that are divorced from the present jurisdictional
question before us. Thus, what became immutable in G.R. No. 176110 was the ruling that Tung Ho’s complaint is
not dismissible on grounds of prematurity, nullity of the foreign arbitral award, improper venue, and the foreign
arbitral award’s repugnance to local public policy. This leads us to the conclusion that in the absence of any ruling
on the merits on the issue of jurisdiction, res judicata on this point could not have set in.

C. Tung Ho’s timely filing of a motion for reconsideration and of a petition for review on certiorari prevented the
July 5, 2006 decision from attaining finality

Furthermore, under Section 2, Rule 45 of the Rules of Court, Tung Ho may file a petition for review on certiorari
before the Court within (15) days from the denial of its motion for reconsideration filed in due time after notice of
the judgment. Tung Ho’s timely filing of a motion for reconsideration before the CA and of a Rule 45 petition
before this Court prevented the July 5, 2006 CA decision from attaining finality. For this Court to deny Tung Ho’s
petition would result in an anomalous situation where a party litigant is penalized and deprived of his fair
opportunity to appeal the case by faithfully complying with the Rules of Court.

II. The trial court acquired jurisdiction over the person of Ting Guan

A. Tejero was not the proper person to receive the summons

Nonetheless, we see no reason to disturb the lower courts’ finding that Tejero was not a corporate secretary and,
therefore, was not the proper person to receive the summons under Section 11, Rule 14 of the Rules of Court. This
Court is not a trier of facts; we cannot re-examine, review or re-evaluate the evidence and the factual review made
by the lower courts. In the absence of compelling reasons, we will not deviate from the rule that factual findings of
the lower courts are final and binding on this Court.22

B. Ting Guan voluntarily appeared before the trial court

However, we cannot agree with the legal conclusion that the appellate court reached, given the established
facts.23To our mind, Ting Guan voluntarily appeared before the trial court in view of the procedural recourse that it
took before that court. Its voluntary appearance is equivalent to service of summons. 24

As a basic principle, courts look with disfavor on piecemeal arguments in motions filed by the parties. Under the
omnibus motion rule, a motion attacking a pleading, order, judgment, or proceeding shall include all objections
then available.25 The purpose of this rule is to obviate multiplicity of motions and to discourage dilatory motions
and pleadings. Party litigants should not be allowed to reiterate identical motions, speculating on the possible
change of opinion of the courts or of the judges thereof.

In this respect, Section 1, Rule 16 of the Rules of Court requires the defendant to file a motion to dismiss within the
time for, but before filing the answer to the complaint or pleading asserting a claim. Section 1, Rule 11 of the Rules
of Court, on the other hand, commands the defendant to file his answer within fifteen (15) days after service of
summons, unless a different period is fixed by the trial court. Once the trial court denies the motion, the defendant
should file his answer within the balance of fifteen (15) days to which he was entitled at the time of serving his
motion, but the remaining period cannot be less than five (5) days computed from his receipt of the notice of the
denial.26

Instead of filing an answer, the defendant may opt to file a motion for reconsideration. Only after the trial court
shall have denied the motion for reconsideration does the defendant become bound to file his answer. 27 If the
defendant fails to file an answer within the reglementary period, the plaintiff may file a motion to declare the
defendant in default. This motion shall be with notice to the defendant and shall be supported by proof of the
failure.28

The trial court’s denial of the motion to dismiss is not a license for the defendant to file a Rule 65 petition before
the CA. An order denying a motion to dismiss cannot be the subject of a petition for certiorari as the defendant still
has an adequate remedy before the trial court – i.e., to file an answer and to subsequently appeal the case if he
loses the case.29 As exceptions, the defendant may avail of a petition for certiorari if the ground raised in the
motion to dismiss is lack of jurisdiction over the person of the defendant 30 or over the subject matter.31

We cannot allow and simply passively look at Ting Guan’s blatant disregard of the rules of procedure in the present
case. The Rules of Court only allows the filing of a motion to dismiss once. 32 Ting Guan’s filing of successive
motions to dismiss, under the guise of "supplemental motion to dismiss" or "motion for reconsideration", is not
only improper but also dilatory.33 Ting Guan’s belated reliance on the improper service of summons was a mere
afterthought, if not a bad faith ploy to avoid the foreign arbitral award’s enforcement which is still at its
preliminary stage after the lapse of almost a decade since the filing of the complaint.

Furthermore, Ting Guan’s failure to raise the alleged lack of jurisdiction over its person in the first motion to
dismiss is fatal to its cause. Ting Guan voluntarily appeared before the RTC when it filed a motion to dismiss and a
"supplemental motion to dismiss" without raising the RTC’s lack of jurisdiction over its person. In Anunciacion v.
Bocanegra,34 we categorically stated that the defendant should raise the affirmative defense of lack of jurisdiction
over his person in the very first motion to dismiss. Failure to raise the issue of improper service of summons in the
first motion to dismiss is a waiver of this defense and cannot be belatedly raised in succeeding motions and
pleadings.
Even assuming that Ting Guan did not voluntarily appear before the RTC, the CA should have ordered the RTC to
issue an alias summons instead. In Lingner & Fisher GMBH vs. Intermediate Appellate Court 35, we enunciated the
policy that the courts should not dismiss a case simply because there was an improper service of summons. The
lower courts should be cautious in haphazardly dismissing complaints on this ground alone considering that the
trial court can cure this defect and order the issuance of alias summons on the proper person in the interest of
substantial justice and to expedite the proceedings.

III. A Final Note

As a final note, we are not unaware that the present case has been complicated by its unique development. The
complication arose when the CA, instead of resolving the parties’ separate partial motions for reconsideration in
one resolution, proceeded to first resolve and to deny Ting Guan’s partial motion. Ting Guan, therefore, went to
this Court via a petition for review on certiorari while Tung Ho’s partial motion for reconsideration was still
unresolved.

Expectedly, Ting Guan did not question the portions of the CA decision favorable to it when it filed its petition with
this Court. Instead, Ting Guan reiterated that the CA should have included additional grounds to justify the
dismissal of Tung Ho’s complaint with the RTC. The Court denied Ting Guan’s petition, leading to the entry of
judgment that improvidently followed. Later, the CA denied Tung Ho’s partial motion for reconsideration,
prompting Tung Ho’s own petition with this Court, which is the present G.R. No. 182153.

Under the Rules of Court, entry of judgment may only be made if no appeal or motion for reconsideration was
timely filed.36 In the proceedings before the CA, if a motion for reconsideration (including a partial motion for
reconsideration37) is timely filed by the proper party, execution of the CA’s judgment or final resolution shall be
stayed.38 This rule is applicable even to proceedings before the Supreme Court, as provided in Section 4, Rule 56 of
the Rules of Court.39

In the present case, Tung Ho timely filed its motion for reconsideration with the CA and seasonably appealed the
CA’s rulings with the Court through the present petition (G.R. No. 182153).

To now recognize the finality of the Resolution of Ting Guan petition (G.R. No. 176110) based on its entry of
judgment and to allow it to foreclose the present meritorious petition of Tung Ho, would of course cause unfair
and unjustified injury to Tung Ho. First, as previously mentioned, the Ting Guan petition did not question or assail
the full merits of the CA decision. It was Tung Ho, the party aggrieved by the CA decision, who substantially
questioned the merits of the CA decision in its petition; this petition showed that the CA indeed committed error
and Tung Ho’s complaint before the RTC should properly proceed. Second, the present case is for the enforcement
of an arbitral award involving millions of pesos. Tung Ho already won in the foreign arbitration and the present
case is simply for the enforcement of this arbitral award in our jurisdiction. Third, and most importantly, Tung Ho
properly and timely availed of the remedies available to it under the Rules of Court, which provide that filing and
pendency of a motion for reconsideration stays the execution of the CA judgment. Therefore, at the time of the
entry of judgment in G.R. No. 176110 in the Supreme Court on January 8, 2008, the CA decision which the Court
affirmed was effectively not yet be final.

Significantly, the rule that a timely motion for reconsideration stays the execution of the assailed judgment is in
accordance with Rule 51, Section 10 (Rules governing the CA proceedings) which provides that "entry of judgments
may only be had if there is no appeal or motion for reconsideration timely filed. The date when the judgment or
final resolution becomes executory shall be deemed as the date of its entry." Incidentally, this procedure also
governs before Supreme Court proceedings. 40 Following these rules, therefore, the pendency of Tung Ho’s MR with
the CA made the entry of the judgment of the Court in the Ting Guan petition premature and inefficacious for not
being final and executory.
Based on the above considerations, the Court would not be in error if it applies its ruling in the case of Realty Sales
Enterprises, Inc. and Macondray Farms, Inc. v. Intermediate Appellate Court, et al. 41 where the Court, in a per
curiam resolution, ruled that an entry of judgment may be recalled or lifted motu proprio when it is clear that the
decision assailed of has not yet become final under the rules:

The March 6, 1985 resolution denying reconsideration of the January 30, 1985 resolution was, to repeat, not
served on the petitioners until March 20, 1985 - and therefore the Jan. 30, 1985 resolution could not be deemed
final and executory until one (1) full day (March 21) had elapsed, or on March 22, 1985 (assuming inaction on
petitioners' part.) The entry of judgment relative to the January 30, 1985 resolution, made on March 18, 1985, was
therefore premature and inefficacious. An entry of judgment does not make the judgment so entered final and
execution when it is not so in truth. An entry of judgment merely records the fact that a judgment, order or
resolution has become final and executory; but it is not the operative act that make the judgment, order or
resolution final and executory. In the case at bar, the entry of judgment on March 18, 1985 did not make the
January 30, 1985 resolution subject of the entry, final and executory, As of the date of entry, March 18, 1985,
notice of the resolution denying reconsideration of the January 30, 1985 resolution had not yet been served on the
petitioners or any of the parties, since March 18, 1985 was also the date of the notice (and release) of the March 6,
1985 resolution denying reconsideration.1âwphi1

According to this ruling, the motu proprio recall or setting aside of the entry of final judgment was proper and
"entirely consistent with the inherent power of every court inter alia to amend and control its process and orders
so as to make them conformable to law and justice [Sec. 5(g), Rule 135, Rules of Court,]. That the recall has in fact
served to achieve a verdict consistent with law and justice is clear from the judgment subsequently rendered on
the merits." This course of action is effectively what the Court undertook today, adapted of course to the
circumstances of the present case.

In light of these premises, we hereby REVERSE and SET ASIDE the July 5, 2006 decision and the March 12, 2008
resolution of the Court of Appeals in CA-G.R. SP No. 92828. SP. Proc. No. 11.-5954 is hereby ordered reinstated. Let
the records of this case be remanded to the court of origin for further proceedings. No costs.

SO ORDERED.
9. PLANTERS DEVELOPMENT BANK, Petitioner,
vs.
JULIE CHANDUMAL, Respondent.

DECISION

REYES, J.:

In this petition for review under Rule 45 of the Rules of Court, Planters Development Bank (PDB) questions the
Decision1 dated July 27, 2010 of the Court of Appeals (CA), as well as its Resolution2 dated February 16, 2011,
denying the petitioner's motion for reconsideration in CA-G.R. CV No. 82861. The assailed decision nullified the
Decision3 dated May 31, 2004 of the Regional Trial Court (RTC), Las Piñas City, Branch 255 in Civil Case No. LP-99-
0137.

Antecedent Facts

The instant case stemmed from a contract to sell a parcel of land, together with improvements, between BF
Homes, Inc. (BF Homes) and herein respondent Julie Chandumal (Chandumal). The property subject of the contract
is located in Talon Dos, Las Piñas City and covered by Transfer Certificate of Title No. T-10779. On February 12,
1993, BF Homes sold to PDB all its rights, participations and interests over the contract.

Chandumal paid her monthly amortizations from December 1990 until May 1994 when she began to default in her
payments. In a Notice of Delinquency and Rescission of Contract with Demand to Vacate 4 dated July 14, 1998, PDB
gave Chandumal a period of thirty (30) days from receipt within which to settle her installment arrearages
together with all its increments; otherwise, all her rights under the contract shall be deemed extinguished and
terminated and the contract declared as rescinded. Despite demand, Chandumal still failed to settle her obligation.

On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession was filed by
PDB against Chandumal, docketed as Civil Case No. LP-99-0137. PDB alleged that despite demand, Chandumal
failed and/or refused to pay the amortizations as they fell due; hence, it caused the rescission of the contract by
means of notarial act, as provided in Republic Act (R.A.) No. 6552.5 According to PDB, it tried to deliver the cash
surrender value of the subject property, as required under R.A. No. 6552, in the amount of ₱ 10,000.00; however,
the defendant was unavailable for such purpose. 6

Consequently, summons was issued and served by deputy sheriff Roberto T. Galing (Sheriff Galing). According to
his return, Sheriff Galing attempted to personally serve the summons upon Chandumal on July 15, 19 and 22, 1999
but it was unavailing as she was always out of the house on said dates. Hence, the sheriff caused substituted
service of summons on August 5, 1999 by serving the same through Chandumal’s mother who acknowledged
receipt thereof.7

For her failure to file an answer within the prescribed period, PDB filed on April 24, 2000 an ex parte motion to
declare Chandumal in default. On January 12, 2001, the RTC issued an Order granting the motion of PDB. 8

On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached
Answer. She maintained that she did not receive the summons and/or was not notified of the same. She further
alleged that her failure to file an answer within the reglementary period was due to fraud, mistake or excusable
negligence. In her answer, Chandumal alleged the following defenses: (a) contrary to the position of PDB, the latter
did not make any demand for her to pay the unpaid monthly amortization; and (b) PDB did not tender or offer to
give the cash surrender value of the property in an amount equivalent to fifty percent (50%) of the actual total
payment made, as provided for under Section 3(b) of R.A. No. 6552. Moreover, Chandumal claimed that since the
total payment she made amounts to ₱ 782,000.00, the corresponding cash surrender value due her should be ₱
391,000.00.9

Per Order10 dated August 2, 2001, the RTC denied Chandumal’s motion to set aside the order of default. Her
motion for reconsideration was also denied for lack of merit.11 Conformably, the RTC allowed PDB to present its
evidence ex parte.12 On May 31, 2004, the RTC rendered a

Decision13 in favor of PDB, the dispositive portion of which reads:

WHEREFORE, the foregoing considered, judgment is hereby rendered in favor of the plaintiff Planters Development
Bank and against defendant Julie Chandumal as follows, to wit:

1. Declaring the notarial rescission of the Contract to Sell dated 03 January 1990 made by the plaintiff per the
Notice of Delinquency and Rescission of Contract with Demand to Vacate dated 14 July 1998 as judicially
confirmed and ratified;

2. Requiring the plaintiff to deposit in the name of the defendant the amount of ₱ 10,000.00 representing the cash
surrender value for the subject property with the Land Bank of the Philippines, Las Pi[ñ]as City Branch in
satisfaction of the provisions of R.A. No. 6552; and,

3. Ordering the defendant to pay the plaintiff the amount of ₱ 50,000.00 as and by way of attorney’s fees,
including the costs of suit.

SO ORDERED.14

From the foregoing judgment, Chandumal appealed to the CA.

On July 27, 2010, the CA, without ruling on the propriety of the judicial confirmation of the notarial rescission,
rendered the assailed decision nullifying the RTC decision due to invalid and ineffective substituted service of
summons. The dispositive portion of the CA decision provides:

WHEREFORE, premises considered, the decision of Branch 255 of the Regional Trial Court of Las Piñas City, dated
May 31, 2004, in Civil Case No. LP-99-0137 is hereby NULLIFIED and VACATED.

SO ORDERED.15

PDB filed a motion for reconsideration but it was denied by the CA in its Resolution dated February 16, 2011.

Hence, this petition based on the following assignment of errors:

The Honorable Court of Appeals erred in reversing the decision of the trial court on the ground of improper service
of summons;

II

The decision of the trial court is valid as it duly acquired jurisdiction over the person of respondent Chandumal
through voluntary appearance; and
 III

The trial court did not err in confirming and ratifying the notarial rescission of the subject contract to sell.16

PDB contends that the RTC properly acquired jurisdiction over the person of Chandumal.1âwphi1 According to
PDB, there was proper service of summons since the sheriff complied with the proper procedure governing
substituted service of summons as laid down in Section 7, Rule 14 of the Rules of Court. PDB alleges that it is clear
from the sheriff’s return that there were several attempts on at least three (3) different dates to effect personal
service within a reasonable period of nearly a month, before he caused substituted service of summons. The
sheriff likewise stated the reason for his failure to effect personal service and that on his fourth attempt, he
effected the service of summons through Chandumal’s mother who is unarguably, a person of legal age and with
sufficient discretion. PDB also argues that Chandumal voluntarily submitted herself to the jurisdiction of the court
when she filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer.

For her part, Chandumal asserts that she never received a copy of the summons or was ever notified of it and she
only came to know of the case sometime in July or August 2000, but she was already in the United States of
America by that time, and that the CA correctly ruled that there was no valid service of summons; hence, the RTC
never acquired jurisdiction over her person.

Issues

1. Whether there was a valid substituted service of summons;

2. Whether Chandumal voluntarily submitted to the jurisdiction of the trial court; and

3. Whether there was proper rescission by notarial act of the contract to sell.

Our Ruling

The fundamental rule is that jurisdiction over a defendant in a civil case is acquired either through service of
summons or through voluntary appearance in court and submission to its authority. If a defendant has not been
properly summoned, the court acquires no jurisdiction over its person, and a judgment rendered against it is null
and void.17

Where the action is in personam18 and the defendant is in the Philippines, service of summons may be made
through personal service, that is, summons shall be served by handing to the defendant in person a copy thereof,
or if he refuses to receive and sign for it, by tendering it to him. 19 If the defendant cannot be personally served with
summons within a reasonable time, it is then that substituted service may be made. 20 Personal service of summons
should and always be the first option, and it is only when the said summons cannot be served within a reasonable
time can the process server resort to substituted service. 21

No valid substituted service of

summons

In this case, the sheriff resorted to substituted service of summons due to his failure to serve it personally. In
Manotoc v. Court of Appeals,22 the Court detailed the requisites for a valid substituted service of summons,
summed up as follows: (1) impossibility of prompt personal service – the party relying on substituted service or the
sheriff must show that the defendant cannot be served promptly or there is impossibility of prompt service; (2)
specific details in the return – the sheriff must describe in the Return of Summons the facts and circumstances
surrounding the attempted personal service; (3) a person of suitable age and discretion – the sheriff must
determine if the person found in the alleged dwelling or residence of defendant is of legal age, what the recipient’s
relationship with the defendant is, and whether said person comprehends the significance of the receipt of the
summons and his duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of
summons, which matters must be clearly and specifically described in the Return of Summons; and (4) a
competent person in charge, who 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.23 These were
reiterated and applied in Pascual v. Pascual,24 where the substituted service of summon made was invalidated due
to the sheriff’s failure to specify in the return the necessary details of the failed attempts to effect personal service
which would justify resort to substituted service of summons.

In applying the foregoing requisites in the instant case, the CA correctly ruled that the sheriff’s return failed to
justify a resort to substituted service of summons. According to the CA, the Return of Summons does not
specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer or
process server in attempting to serve the summons personally to the defendant. The return merely states the
alleged whereabouts of the defendant without indicating that such information was verified from a person who
had knowledge thereof.25Indeed, the sheriff’s return shows a mere perfunctory attempt to cause personal service
of the summons on Chandumal. There was no indication if he even asked Chandumal’s mother as to her specific
whereabouts except that she was "out of the house", where she can be reached or whether he even tried to await
her return. The "efforts" exerted by the sheriff clearly do not suffice to justify substituted service and his failure to
comply with the requisites renders such service ineffective. 26

Respondent voluntarily submitted

to the jurisdiction of the trial court

Despite that there was no valid substituted service of summons, the Court, nevertheless, finds that Chandumal
voluntarily submitted to the jurisdiction of the trial court.

Section 20, Rule 14 of the Rules of Court states:

Sec. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service
of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person
of the defendant shall not be deemed a voluntary appearance.

When Chandumal filed an Urgent Motion to Set Aside Order of Default and to Admit Attached Answer, she
effectively submitted her person to the jurisdiction of the trial court as the filing of a pleading where one seeks an
affirmative relief is equivalent to service of summons and vests the trial court with jurisdiction over the
defendant’s person. Thus, it was ruled that the filing of motions to admit answer, for additional time to file answer,
for reconsideration of a default judgment, and to lift order of default with motion for reconsideration is considered
voluntary submission to the trial court’s jurisdiction.27 The Court notes that aside from the allegation that she did
not receive any summons, Chandumal’s motion to set aside order of default and to admit attached answer failed
to positively assert the trial court’s lack of jurisdiction. In fact, what was set forth therein was the substantial claim
that PDB failed to comply with the requirements of R.A. No. 6552 on payment of cash surrender value, 28 which
already delves into the merits of PDB’s cause of action. In addition, Chandumal even appealed the RTC decision to
the CA, an act which demonstrates her recognition of the trial court’s jurisdiction to render said judgment.

Given Chandumal’s voluntary submission to the jurisdiction of the trial court, the RTC, Las Piñas City, Branch 255,
had all authority to render its Decision dated May 31, 2004. The CA, therefore, erred in nullifying said RTC decision
and dispensing with the resolution of the substantial issue raised herein, i.e., validity of the notarial rescission.
Instead, however, of remanding this case to the CA, the Court will resolve the same considering that the records of
the case are already before us and in order to avoid any further delay. 29
There is no valid rescission of the
contract to sell by notarial act
pursuant to Section 3(b), R.A. No. 6552

That the RTC had jurisdiction to render the decision does not necessarily mean, however, that its ruling on the
validity of the notarial rescission is in accord with the established facts of the case, the relevant law and
jurisprudence.1âwphi1

PDB claims that it has validly rescinded the contract by notarial act as provided under R.A. No. 6552. Basically, PDB
instituted Civil Case No. LP-99-0137 in order to secure judicial confirmation of the rescission and to recover
possession of the property subject of the contract.

In Leaño v. Court of Appeals,30 it was held that:

R. A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial, residential) the
right of the seller to cancel the contract upon non-payment of an installment by the buyer, which is simply an
event that prevents the obligation of the vendor to convey title from acquiring binding force. The law also provides
for the rights of the buyer in case of cancellation. Thus, Sec. 3 (b) of the law provides that:

"If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the
property equivalent to fifty percent of the total payments made and, after five years of installments, an additional
five percent every year but not to exceed ninety percent of the total payments made: Provided, That the actual
cancellation of the contract shall take place after thirty days from receipt by the buyer of the notice of cancellation
or the demand for rescission of the contract by a notarial act and upon full payment of the cash surrender value to
the buyer."31 (Citation omitted and emphasis ours)

R.A. No. 6552 recognizes the right of the seller to cancel the contract but any such cancellation must be done in
conformity with the requirements therein prescribed. In addition to the notarial act of rescission, the seller is
required to refund to the buyer the cash surrender value of the payments on the property. The actual cancellation
of the contract can only be deemed to take place upon the expiry of a thirty (30)-day period following the receipt
by the buyer of the notice of cancellation or demand for rescission by a notarial act and the full payment of the
cash surrender value.32

In this case, it is an admitted fact that PDB failed to give Chandumal the full payment of the cash surrender value.
In its complaint,33 PDB admitted that it tried to deliver the cash surrender value of the subject property as required
under R.A. No. 6552 but Chandumal was "unavailable" for such purpose. Thus, it prayed in its complaint that it be
ordered to "deposit with a banking institution in the Philippines, for the account of Defendants (sic), the amount of
Ten Thousand Pesos (₱ 10,000.00), Philippine Currency, representing the cash surrender value of the subject
property; x x x."34 The allegation that Chandumal made herself unavailable for payment is not an excuse as the
twin requirements for a valid and effective cancellation under the law, i.e., notice of cancellation or demand for
rescission by a notarial act and the full payment of the cash surrender value, is mandatory.35 Consequently, there
was no valid rescission of the contract to sell by notarial act undertaken by PDB and the RTC should not have given
judicial confirmation over the same.

WHEREFORE, the petition is DENIED. The Decision dated July 27, 2010 of the Court of Appeals, as well as its
Resolution dated February 16, 2011, denying the Motion for Reconsideration in CA-G.R. CV No. 82861
are AFFIRMED in so far as there was no valid service of summons. Further, the Court DECLARES that there was no
valid rescission of contract pursuant to R.A. No. 6552. Accordingly, the Decision dated May 31, 2004 of the
Regional Trial Court, Las Piñas City, Branch 255 in Civil Case No. LP-99-0 137 is REVERSED and SET ASIDE, and is
therefore, DISMISSED for lack of merit.
19. HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, petitioner,
vs.
CECILIA DIEZ CATALAN, respondent.

x----------------------------x

G.R. No. 159591 October 18, 2004

HSBC INTERNATIONAL TRUSTEE LIMITED, petitioner,

vs.
CECILIA DIEZ CATALAN, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us are two petitions for review on certiorari under Rule 45 of the Rules of Court separately filed by the
Hongkong and Shanghai Banking Corporation Limited (HSBANK) and HSBC International Trustee Limited (HSBC
TRUSTEE). They seek the reversal of the consolidated Decision, 1 dated August 14, 2003, of the Court of Appeals
(CA) in CA-G.R. SP Nos. 75756 and 75757, which dismissed the petitions for certiorari of herein petitioners assailing
the Order, dated May 15, 2002, of the Regional Trial Court, Branch 44, Bacolod City (RTC) in Civil Case No. 01-
11372 that denied their respective motions to dismiss the amended complaint of respondent Cecilia Diez Catalan.

The factual antecedents are as follows:

On January 29, 2001, respondent filed before the RTC, a complaint for a sum of money with damages
against petitioner HSBANK, docketed as Civil Case No. 01-11372, due to HSBANK’s alleged wanton refusal
to pay her the value of five HSBANK checks issued by Frederick Arthur Thomson (Thomson) amounting to
HK$3,200,000.00.2

On February 7, 2001, summons was served on HSBANK at the Enterprise Center, Tower I, Ayala Avenue corner
Paseo de Roxas St., Makati City.3 HSBANK filed a Motion for Extension of Time to File Answer or Motion to Dismiss
dated February 21, 2001.4 Then, it filed a Motion to Dismiss, dated March 8, 2001, on the grounds that (a) the RTC
has no jurisdiction over the subject matter of the complaint; (b) the RTC has not acquired jurisdiction for failure of
the plaintiff to pay the correct filing or docket fees; (c) the RTC has no jurisdiction over the person of HSBANK; (d)
the complaint does not state a cause of action against HSBANK; and (e) plaintiff engages in forum-shopping.5

On September 10, 2001, Catalan filed an Amended Complaint impleading petitioner HSBC TRUSTEE as co-
defendant and invoking Article 19 of the Civil Code as basis for her cause of action. 6

The Amended Complaint alleges:

Defendants HSBANK and HSBC TRUSTEE, doing business in the Philippines, are corporations duly
organized under the laws of the British Virgin Islands with head office at 1 Grenville Street, St. Helier
Jersey, Channel Islands and with branch offices at Level 12, 1 Queen’s Road Central, Hongkong and may
be served with summons and other court processes through their main office in Manila with address at
HSBC, the Enterprise Center, Tower 1, Ayala Avenue corner Paseo de Roxas Street, Makati City.

Sometime in March 1997, Thomson issued five HSBANK checks payable to Catalan, to wit:
 CHECK NO. DATE AMOUNT
807852 Mar. 15, 1997 $600,000.00
807853 Mar. 17, 1997 800,000.00
807854 Mar. 17, 1997 600,000.00
807855 Mar. 22, 1997 600,000.00
807856 Mar. 23, 1997 600,000.00

TOTAL $3,200,000.00

The checks when deposited were returned by HSBANK purportedly for reason of "payment stopped" pending
confirmation, despite the fact that the checks were duly funded. On March 18, 1997, Thomson wrote a letter to a
certain Ricky Sousa7 of HSBANK confirming the checks he issued to Catalan and requesting that all his checks be
cleared. On March 20, 1997, Thomson wrote another letter to Sousa of HSBANK requesting an advice in writing to
be sent to the Philippine National Bank, through the fastest means, that the checks he previously issued to Catalan
were already cleared. Thereafter, Catalan demanded that HSBANK make good the checks issued by Thomson. On
May 16, 1997, Marilou A. Lozada, personal secretary and attorney-in-fact of Thomson, wrote a letter to Sousa of
HSBANK informing him that HSBANK’s failure to clear all the checks had saddened Thomson and requesting that
the clearing of the checks be facilitated. Subsequently, Thomson died and Catalan forwarded her demand to HSBC
TRUSTEE. Catalan sent photocopies of the returned checks to HSBC TRUSTEE. Not satisfied, HSBC TRUSTEE through
deceit and trickery, required Catalan, as a condition for the acceptance of the checks, to submit the original copies
of the returned checks, purportedly, to hasten payment of her claim. HSBC TRUSTEE succeeded in its calculated
deception because on April 21, 1999, Catalan and her former counsel went to Hongkong at their own expense to
personally deliver the originals of the returned checks to the officers of HSBC TRUSTEE, anxious of receiving the
money value of the checks but HSBC TRUSTEE despite receipt of the original checks, refused to pay Catalan’s claim.
Having seen and received the original of the checks, upon its request, HSBC TRUSTEE is deemed to have impliedly
accepted the checks. Moreover, the refusal of HSBANK and HSBC TRUSTEE to pay the checks is equivalent to illegal
freezing of one’s deposit. On the assurance of HSBC TRUSTEE that her claim will soon be paid, as she was made to
believe that payments of the checks shall be made by HSBC TRUSTEE "upon sight," the unsuspecting Catalan left
the originals of the checks with HSBC TRUSTEE and was given only an acknowledgment receipt. Catalan made
several demands and after several more follow ups, on August 16, 1999, Phoenix Lam, Senior Vice President of
HSBC TRUSTEE, in obvious disregard of her valid claim, informed Catalan that her claim is disapproved. No reason
or explanation whatsoever was made why her claim was disapproved, neither were the checks returned to her.
Catalan appealed for fairness and understanding, in the hope that HSBC TRUSTEE would act fairly and justly on her
claim but these demands were met by a stonewall of silence. On June 9, 2000, Catalan through counsel sent a last
and final demand to HSBC TRUSTEE to remit the amount covered by the checks but despite receipt of said letter,
no payment was made. Clearly, the act of the HSBANK and HSBC TRUSTEE in refusing to honor and pay the checks
validly issued by Thomson violates the abuse of rights principle under Article 19 of the Civil Code which requires
that everyone must act with justice, give everyone his due and observe honesty and good faith. The refusal of
HSBANK and HSBC TRUSTEE to pay the checks without any valid reason is intended solely to prejudice and injure
Catalan. When they declined payment of the checks despite instructions of the drawer, Thomson, to honor them,
coupled with the fact that the checks were duly funded, they acted in bad faith, thus causing damage to Catalan. A
person may not exercise his right unjustly or in a manner that is not in keeping with honesty or good faith,
otherwise he opens himself to liability for abuse of right.8

Catalan prays that HSBANK and HSBC TRUSTEE be ordered to pay ₱20,864,000.00 representing the value of the
five checks at the rate of ₱6.52 per HK$1 as of January 29, 2001 for the acts of HSBANK and HSBC TRUSTEE in
refusing to pay the amount justly due her, in addition to moral and exemplary damages, attorney’s fees and
litigation expenses.9

On October 2, 2001, HSBANK filed a Motion to Dismiss Amended Complaint on the grounds that: (a) the RTC has
no jurisdiction over the subject matter of the complaint since the action is a money claim for a debt contracted by
Thomson before his death which should have been filed in the estate or intestate proceedings of Thomson; (b)
Catalan engages in forum shopping by filing the suit and at the same time filing a claim in the probate proceeding
filed with another branch of the RTC; (c) the amended complaint states no cause of action against HSBANK since it
has no obligation to pay the checks as it has not accepted the checks and Catalan did not re-deposit the checks or
make a formal protest; (d) the RTC has not acquired jurisdiction over the person of HSBANK for improper service of
summons; and, (e) it did not submit to the jurisdiction of the RTC by filing a motion for extension of time to file a
motion to dismiss.10

Meanwhile, on October 17, 2001, summons for HSBC TRUSTEE was tendered to the In House Counsel of HSBANK
(Makati Branch) at the Enterprise Center, Tower 1, Ayala Avenue corner Paseo de Roxas, Makati. Without
submitting itself to the jurisdiction of the RTC, HSBC TRUSTEE filed a Special Appearance for Motion to Dismiss
Amended Complaint, dated October 29, 2001, questioning the jurisdiction of the RTC over it. 11 HSBC TRUSTEE
alleges that tender of summons through HSBANK Makati did not confer upon the RTC jurisdiction over it because:
(a) it is a corporation separate and distinct from HSBANK; (b) it does not hold office at the HSBANK Makati or in any
other place in the Philippines; (c) it has not authorized HSBANK Makati to receive summons for it; and, (d) it has no
resident agent upon whom summons may be served because it does not transact business in the Philippines.

Subsequently, HSBC TRUSTEE filed a Submission, dated November 15, 2001, attaching the Affidavit executed in
Hongkong by Phoenix Lam, Senior Vice-President of HSBC TRUSTEE, attesting to the fact that: 1) HSBC TRUSTEE has
not done nor is it doing business in the Philippines; 2) it does not maintain any office in Makati or anywhere in the
Philippines; 3) it has not appointed any agent in Philippines; and 4) HSBANK Makati has no authority to receive any
summons or court processes for HSBC TRUSTEE.12

On May 15, 2002, the RTC issued an Order denying the two motions to dismiss. 13 The RTC held that it has
jurisdiction over the subject matter of the action because it is an action for damages under Article 19 of the Civil
Code for the acts of unjustly refusing to honor the checks issued by Thomson and not a money claim against the
estate of Thomson; that Catalan did not engage in forum-shopping because the elements thereof are not
attendant in the case; that the question of cause of action should be threshed out or ventilated during the
proceedings in the main action and after the plaintiff and defendants have adduced evidence in their favor; that it
acquired jurisdiction over the person of defendants because the question of whether a foreign corporation is doing
business or not in the Philippines cannot be a subject of a Motion to Dismiss but should be ventilated in the trial on
the merits; and defendants voluntarily submitted to the jurisdiction of the RTC setting up in their Motions to
Dismiss other grounds aside from lack of jurisdiction.

HSBANK and HSBC TRUSTEE filed separate motions for reconsideration 14 but both proved futile as they were
denied by the RTC in an Order dated December 20, 2002.15

On February 21, 2003, Catalan moved to declare HSBANK and HSBC TRUSTEE in default for failure to file their
answer to the amended complaint.

On March 5, 2003, HSBANK and HSBC TRUSTEE filed separate petitions for certiorari and/or prohibition with the
CA, docketed as CA-G.R. SP Nos. 7575616 and 75757,17 respectively.

Subsequently, HSBANK and HSBC TRUSTEE filed before the RTC separate Answers ad cautelam, both dated March
18, 2003, as a "precaution against being declared in default and without prejudice to the separate petitions for
certiorari and/or prohibition then pending with the CA."18
Meanwhile, the two petitions for certiorari before the CA were consolidated and after responsive pleadings were
filed, the cases were deemed submitted for decision.

In a consolidated Decision dated August 14, 2003, the CA dismissed the two petitions for certiorari. 19 The CA held
that the filing of petitioners’ answers before the RTC rendered moot and academic the issue of the RTC’s lack of
jurisdiction over the person of the petitioners; that the RTC has jurisdiction over the subject matter since it is one
for damages under Article 19 of the Civil Code for the alleged unjust acts of petitioners and not a money claim
against the estate of Thomson; and, that the amended complaint states a cause of action under Article 19 of the
Civil Code which could merit a favorable judgment if found to be true. The CA noted that Catalan may have prayed
for payment of the value of the checks but ratiocinated that she merely used the value as basis for the
computation of the damages.

Hence, the present petitions.

In G.R. No. 159590, HSBANK submits the following assigned errors:

I.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE COURT A QUO,
ACTING AS AN (SIC) REGULAR COURT, HAS JURISDICTION OVER THE AMENDED COMPLAINT
SEEKING TO ORDER HSBC TRUSTEE, THE EXECUTOR OF THE DECEASED FREDERICK ARTHUR
THOMSON, TO PAY SUBJECT CHECKS ISSUED BY THE LATE FREDERICK ARTHUR THOMSON,
ADMITTEDLY IN PAYMENT OF HIS INDEBTEDNESS TO CATALAN.

II.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT THE AMENDED
COMPLAINT DOES NOT SEEK TO ORDER HSBANK AND HSBC INTERNATIONAL TRUSTEE LIMITED
TO PAY THE OBLIGATION OF THE (SIC) FREDERICK ARTHUR THOMSON AS EVIDENCED BY THE
CHECKS, BUT PRAYS FOR DAMAGES EQUIVALENT OR COMPUTED ON THE BASIS OF THE VALUE
OF THE CHECKS BECAUSE THE DEFENDANTS FAILED TO COMPLY WITH THE MANDATES OF
ARTICLE 19 OF THE NEW CIVIL CODE.

III.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT ALLEGATIONS IN THE
AMENDED COMPLAINT MAKE OUT A CAUSE OF ACTION WHICH COULD MERIT A FAVORABLE
JUDGMENT IF FOUND TO BE TRUE, OR IN NOT HOLDING THAT THE AMENDED COMPLAINT
STATES NO CAUSE OF ACTION AGAINST HSBANK, AS DRAWEE BANK.

IV.

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN DISREGARDING THE FACT THAT
CATALAN ENGAGED IN FORUM SHOPPING BY FILING THE AMENDED COMPLAINT WHILE HER
PETITION FOR THE PROBATE OF THE SUPPOSED WILL OF THE DECEASED FREDERICK ARTHUR
THOMSON IS PENDING WITH ANOTHER BRANCH OF THE COURT A QUO.

V.
 THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT HSBANK HAD
SUBMITTED TO THE JURISDICTION OF THE COURT A QUO BY SUBMITTING AN ANSWER TO THE
AMENDED COMPLAINT.20

In G.R. No. 159591, HSBC TRUSTEE also assigns the foregoing first, second and fifth errors as its own. 21 In addition,
it claims that:

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT ORDERING THE DISMISSAL OF THE
AMENDED COMPLAINT AGAINST HSBC TRUSTEE DESPITE THE FACT IT HAS NOT BEEN DULY SERVED WITH
SUMMONS.22

HSBANK and HSBC TRUSTEE contend in common that Catalan has no cause of action for abuse of rights under
Article 19 of the Civil Code; that her complaint, under the guise of a claim for damages, is actually a money claim
against the estate of Thomson arising from checks issued by the latter in her favor in payment of indebtedness.

HSBANK claims that the money claim should be dismissed on the ground of forum-shopping since Catalan also filed
a petition for probate of the alleged last will of Thomson before RTC, Branch 48, Bacolod City, docketed as Spec.
Proc No. 00-892. In addition, HSBANK imputes error upon the CA in holding that by filing an answer to the
amended complaint, petitioners are estopped from questioning the jurisdiction of the RTC.

HSBC TRUSTEE maintains that the RTC did not acquire jurisdiction over it for improper service of summons.

In her Comment, Catalan insists that her complaint is one for damages under Article 19 of the Civil Code for the
wanton refusal to honor and pay the value of five checks issued by the Thomson amounting to HK$3,200,000.00.
She argues that the issue of jurisdiction has been rendered moot by petitioners’ participation in the proceedings
before the RTC.

Succinctly, the issues boil down to the following:

1) Does the complaint state a cause of action?

2) Did Catalan engage in forum-shopping by filing the complaint for damages when she also filed a
petition for probate of the alleged last will of Thomson with another branch of the RTC? and,

3) Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE? Corollary thereto, did the filing of
the answer before the RTC render the issue of lack of jurisdiction moot and academic?

We shall resolve the issue in seriatim.

Does the complaint state a cause of action against HSBANK and HSBC TRUSTEE?

The elementary test for failure to state a cause of action is whether the complaint alleges facts which if true would
justify the relief demanded. Stated otherwise, may the court render a valid judgment upon the facts alleged
therein?23 The inquiry is into the sufficiency, not the veracity of the material allegations. 24 If the allegations in the
complaint furnish sufficient basis on which it can be maintained, it should not be dismissed regardless of the
defense that may be presented by the defendants.25

Catalan anchors her complaint for damages on Article 19 of the Civil Code. It speaks of the fundamental principle
of law and human conduct that a person "must, in the exercise of his rights and in the performance of his duties,
act with justice, give every one his due, and observe honesty and good faith." It sets the standards which may be
observed not only in the exercise of one’s rights but also in the performance of one’s duties. When a right is
exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. 26 But a right,
though by itself legal because recognized or granted by law as such, may nevertheless become the source of some
illegality. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he
acts with prudence and in good faith; but not when he acts with negligence or abuse.27 There is an abuse of right
when it is exercised for the only purpose of prejudicing or injuring another. The exercise of a right must be in
accordance with the purpose for which it was established, and must not be excessive or unduly harsh; there must
be no intention to injure another.28

Thus, in order to be liable under the abuse of rights principle, three elements must concur, to wit: (a) that there is
a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring
another.29

In this instance, after carefully examining the amended complaint, we are convinced that the allegations therein
are in the nature of an action based on tort under Article 19 of the Civil Code. It is evident that Catalan is suing
HSBANK and HSBC TRUSTEE for unjustified and willful refusal to pay the value of the checks.

HSBANK is being sued for unwarranted failure to pay the checks notwithstanding the repeated assurance of the
drawer Thomson as to the authenticity of the checks and frequent directives to pay the value thereof to Catalan.
Her allegations in the complaint that the gross inaction of HSBANK on Thomson’s instructions, as well as its evident
failure to inform Catalan of the reason for its continued inaction and non-payment of the checks, smack of
insouciance on its part, are sufficient statements of clear abuse of right for which it may be held liable to Catalan
for any damages she incurred resulting therefrom. HSBANK’s actions, or lack thereof, prevented Catalan from
seeking further redress with Thomson for the recovery of her claim while the latter was alive.

HSBANK claims that Catalan has no cause of action because under Section 189 of the Negotiable Instruments Law,
"a check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the
bank, and the bank is not liable to the holder unless and until it accepts or certifies it." However, HSBANK is not
being sued on the value of the check itself but for how it acted in relation to Catalan’s claim for payment despite
the repeated directives of the drawer Thomson to recognize the check the latter issued. Catalan may have prayed
that she be paid the value of the checks but it is axiomatic that what determines the nature of an action, as well as
which court has jurisdiction over it, are the allegations of the complaint, irrespective of whether or not the plaintiff
is entitled to recover upon all or some of the claims asserted therein. 30

Anent HSBC TRUSTEE, it is being sued for the baseless rejection of Catalan’s claim. When Catalan parted with the
checks as a requirement for the processing of her claim, even going to the extent of traveling to Hongkong to
deliver personally the checks, HSBC TRUSTEE summarily disapproved her claim with nary a reason. HSBC TRUSTEE
gave no heed to Catalan’s incessant appeals for an explanation. Her pleas fell on deaf and uncaring corporate ears.
Clearly, HSBC TRUSTEE’s acts are anathema to the prescription for human conduct enshrined in Article 19 of the
Civil Code.

Did Catalan engage in forum-shopping?

It has been held that forum-shopping exists where a litigant sues the same party against whom another action or
actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending, the
defense of litis pendentia in one case is a bar to the others; and, a final judgment in one would constitute res
judicata and thus would cause the dismissal of the rest.31

Thus, there is forum-shopping when there exist: a) identity of parties, or at least such parties as represent the
same interests in both actions, b) identity of rights asserted and relief prayed for, the relief being founded on the
same facts, and c) the identity of the two preceding particulars is such that any judgment rendered in the pending
case, regardless of which party is successful would amount to res judicata in the other. 32

Applying the foregoing requisites to the case before us in relation to Spec. Proc No. 00-892, the probate
proceeding brought by Catalan before RTC, Branch 48, Bacolod City, it is obvious that forum-shopping does not
exist.

There is no identity of parties. HSBANK is not a party in the probate proceeding. HSBC TRUSTEE is only a party in
the probate proceeding because it is the executor and trustee named in the Hongkong will of Thomson. HSBC
TRUSTEE is representing the interest of the estate of Thomson and not its own corporate interest.

With respect to the second and third requisites, a scrutiny of the entirety of the allegations of the amended
complaint in this case reveals that the rights asserted and reliefs prayed for therein are different from those
pleaded in the probate proceeding, such that a judgment in one case would not bar the prosecution of the other
case. Verily, there can be no forum-shopping where in one proceeding a party raises a claim for damages based on
tort and, in another proceeding a party seeks the allowance of an alleged last will based on one’s claim as an heir.
After all, the merits of the action for damages is not to be determined in the probate proceeding and vice versa.
Undeniably, the facts or evidence as would support and establish the two causes of action are not the
same.33 Consequently, HSBANK’s reliance on the principle of forum-shopping is clearly misplaced.

Did the RTC acquire jurisdiction over HSBANK and HSBC TRUSTEE?

The Rules of Court provides that a court generally acquires jurisdiction over a person through either a valid service
of summons in the manner required by law or the person’s voluntary appearance in court.34

In holding that it acquired jurisdiction over HSBANK and HSBC TRUSTEE, the RTC held that both voluntarily
submitted to the jurisdiction of the court by setting up in their Motions to Dismiss other grounds aside from lack of
jurisdiction. On the other hand, the CA ruled that HSBANK and HSBC TRUSTEE are estopped from challenging the
jurisdiction of the RTC because they filed their respective answers before the RTC.

We find that both lower courts overlooked Section 20 of Rule 14 of the 1997 Rules of Civil Procedure which
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." Nonetheless, such omission does not aid HSBANK’s
case.

It must be noted that HSBANK initially filed a Motion for Extension of Time to File Answer or Motion to
Dismiss.35HSBANK already invoked the RTC’s jurisdiction over it by praying that its motion for extension of time to
file answer or a motion to dismiss be granted. The Court has held that 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.36 Consequently, HSBANK’s expressed reservation in its Answer ad cautelam that it filed the same "as a
mere precaution against being declared in default, and without prejudice to the Petition for Certiorari and/or
Prohibition xxx now pending before the Court of Appeals"37 to assail the jurisdiction of the RTC over it is of no
moment. Having earlier invoked the jurisdiction of the RTC to secure affirmative relief in its motion for additional
time to file answer or motion to dismiss, HSBANK, effectively submitted voluntarily to the jurisdiction of the RTC
and is thereby estopped from asserting otherwise, even before this Court.

In contrast, the filing by HSBC TRUSTEE of a motion to dismiss cannot be considered a voluntary submission to the
jurisdiction of the RTC. It was a conditional appearance, entered precisely to question the regularity of the service
of summons. It is settled that a party who makes a special appearance in court challenging the jurisdiction of said
court, e.g., invalidity of the service of summons, cannot be considered to have submitted himself to the jurisdiction
of the court.38 HSBC TRUSTEE has been consistent in all its pleadings in assailing the service of summons and the
jurisdiction of the RTC over it. Thus, HSBC TRUSTEE cannot be declared in estoppel when it filed an Answer ad
cautelam before the RTC while its petition for certiorari was pending before the CA. Such answer did not render
the petition for certiorari before the CA moot and academic. The Answer of HSBC TRUSTEE was only filed to
prevent any declaration that it had by its inaction waived the right to file responsive pleadings.

Admittedly, HSBC TRUSTEE is a foreign corporation, organized and existing under the laws of the British Virgin
Islands. For proper service of summons on foreign corporations, Section 12 of Rule 14 of the Revised Rules of Court
provides:

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.

In French Oil Mill Machinery Co., Inc. vs. Court of Appeals,39 we had occasion to rule that it is not enough to merely
allege in the complaint that a defendant foreign corporation is doing business. For purposes of the rule on
summons, the fact of doing business must first be "established by appropriate allegations in the complaint" and
the court in determining such fact need not go beyond the allegations therein. 40

The allegations in the amended complaint subject of the present cases did not sufficiently show the fact of HSBC
TRUSTEE’s doing business in the Philippines. It does not appear at all that HSBC TRUSTEE had performed any act
which would give the general public the impression that it had been engaging, or intends to engage in its ordinary
and usual business undertakings in the country. Absent from the amended complaint is an allegation that HSBC
TRUSTEE had performed any act in the country that would place it within the sphere of the court’s jurisdiction.

We have held that a general allegation, standing alone, that a party is doing business in the Philippines does not
make it so; a conclusion of fact or law cannot be derived from the unsubstantiated assertions of parties
notwithstanding the demands of convenience or dispatch in legal actions, otherwise, the Court would be guilty of
sorcery; extracting substance out of nothingness.41

Besides, there is no allegation in the amended complaint that HSBANK is the domestic agent of HSBC TRUSTEE to
warrant service of summons upon it. Thus, the summons tendered to the In House Counsel of HSBANK (Makati
Branch) for HSBC TRUSTEE was clearly improper.

There being no proper service of summons, the RTC cannot take cognizance of the case against HSBC TRUSTEE for
lack of jurisdiction over it. Any proceeding undertaken by the RTC is therefore null and void. 42 Accordingly, the
complaint against HSBC TRUSTEE should have been dismissed for lack of jurisdiction over it.

WHEREFORE, the petition in G.R. No. 159590 is DENIED. The Decision of the Court of Appeals, dated August 14,
2003, in CA-G.R. SP No. 75757 dismissing the petition for certiorari of the Hongkong and Shanghai Banking
Corporation Limited is AFFIRMED.

The petition in G.R. No. 159591 is GRANTED. The Decision of the Court of Appeals, dated August 14, 2003, in CA-
G.R. SP No. 75756 dismissing the petition for certiorari of the HSBC International Trustee Limited
is REVERSEDand SET ASIDE. The Regional Trial Court, Branch 44, Bacolod City is declared without jurisdiction to
take cognizance of Civil Case No. 01-11372 against the HSBC International Trustee Limited, and all its orders and
issuances with respect to the latter are hereby ANNULLED and SET ASIDE. The said Regional Trial Court is
hereby ORDERED to DESIST from maintaining further proceedings against the HSBC International Trustee Limited
in the case aforestated.
30. ATIKO TRANS, INC. and CHENG LIE NAVIGATION CO., LTD., Petitioners,
vs.
PRUDENTIAL GUARANTEE AND ASSURANCE, INC., Respondent.

DECISION

DEL CASTILLO, J.:

Where service of summons upon the defendant principal is coursed thru its co-defendant agent, and the latter
happens to be a domestic corporation, the rules on service of summons upon a domestic private juridical
entity1must be strictly complied with. Otherwise, the court cannot be said to have acquired jurisdiction over the
person of both defendants. And insofar as the principal is concerned, such jurisdictional flaw cannot be cured by
the agent’s subsequent voluntary appearance.

This Petition for Review on Certiorari assails the December 10, 2004 Decision 2 of the Court of Appeals (CA) in CA-
G.R. SP No. 82547 which affirmed the April 8, 2003 Decision3 of the Regional Trial Court (RTC), Branch 150, Makati
City. Said Decision of the RTC affirmed the August 6, 2002 Decision 4 of the Metropolitan Trial Court (MeTC), Branch
63, Makati City, which disposed as follows:

WHEREFORE, judgment is rendered declaring defendants Cheng Lie Navigation Co., Ltd. and Atiko Trans, Inc.
solidarily liable to pay plaintiff Prudential Guarantee & Assurance, Inc. the following amounts:

1. ₱205,220.97 as actual damages with interest of 1% per month from 14 December 1999 until full
payment;

2. ₱10,000.00 as Attorney’s fees; and

3. Costs of suit.

SO ORDERED.5

Likewise assailed is the CA’s Resolution6 dated March 16, 2005 which denied the Motion for Reconsideration of the
said December 10, 2004 Decision.

Factual Antecedents

On December 11, 1998, 40 coils of electrolytic tinplates were loaded on board M/S Katjana in Kaohsiung, Taiwan
for shipment to Manila. The shipment was covered by Bill of Lading No. KNMNI-151267 issued by petitioner Cheng
Lie Navigation Co., Ltd. (Cheng Lie) with Oriental Tin Can & Metal Sheet Manufacturing Co., Inc. (Oriental) as the
notify party. The cargoes were insured against all risks per Marine Insurance Policy No. 20RN-18749/99 issued by
respondent Prudential Guarantee and Assurance, Inc. (Prudential).

On December 14, 1998, M/S Katjana arrived in the port of Manila. Upon discharge of the cargoes, it was found that
one of the tinplates was damaged, crumpled and dented on the edges. The sea van in which it was kept during the
voyage was also damaged, presumably while still on board the vessel and during the course of the voyage.

Oriental then filed its claim against the policy. Satisfied that Oriental’s claim was compensable, Prudential paid
Oriental ₱205,220.97 representing the amount of losses it suffered due to the damaged cargo.

Proceedings before the Metropolitan Trial Court

On December 14, 1999, Prudential filed with the MeTC of Makati City a Complaint8 for sum of money against
Cheng Lie and Atiko Trans, Inc. (Atiko). In addition to the above undisputed facts, Prudential alleged that:

1. Plaintiff (Prudential) is a domestic insurance corporation duly organized and existing under the laws of
the Philippines with office address at Coyiuto House, 119 Carlos Palanca[,] Jr. St., Legaspi Village, Makati
City;

2. Defendant Cheng Lie Navigation Co. Ltd., is [a] foreign shipping company doing business in the
Philippines [thru] its duly authorized shipagent defendant Atiko Trans Inc. which is a domestic corporation
duly established and created under the laws of the Philippines with office address at 7th Floor, Victoria
Bldg., United Nation[s] Ave., Ermita, Manila, where both defendants may be served with summons and
other court processes;

3. At all times material to the cause of action of this complaint, plaintiff was and still is engaged in, among
others, marine insurance business; Whereas Defendant Cheng Lie Navigation Co. Ltd. was and still is
engaged in, among others, shipping, transportation and freight/cargo forwarding business, and as such,
owned, operated and/or chartered the ocean going vessel M/S "Katjana" as common carrier to and from
any Philippine [port] in international trade [thru] its duly authorized shipagent defendant Atiko Trans Inc.
(Both defendants are hereinafter referred to as the "CARRIER");

xxxx

9. Plaintiff, as cargo-insurer and upon finding that the consignee’s insurance claim was in order and
compensable, paid the latter’s claim in the amount of ₱205,220.97 under and by virtue of the aforesaid
insurance policy, thereby subrogating herein plaintiff to all the rights and causes of action appertaining to
the consignee against the defendants;9

On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default,10 alleging among others that on
March 1, 2000 a copy of the summons was served upon petitioners thru cashier Cristina Figueroa and that despite
receipt thereof petitioners failed to file any responsive pleading. Acting on the motion, the MeTC issued an
Order11declaring Cheng Lie and Atiko in default and allowing Prudential to present its evidence ex-parte.

On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a Notice of Appeal 12 dated
November 4, 2002.

Proceedings before the Regional Trial Court and the Court of Appeals

In its Memorandum of Appeal,13 Atiko argued that Prudential failed to prove the material allegations of the
complaint. Atiko asserted that Prudential failed to prove by preponderance of evidence that it is a domestic
corporation with legal personality to file an action; that Cheng Lie is a private foreign juridical entity operating its
shipping business in the Philippines thru Atiko as its shipagent; that Cheng Lie is a common carrier, which owns and
operates M/S Katjana; that Prudential was subrogated to the rights of Oriental; and, that Atiko can be held
solidarily liable with Cheng Lie.

Although assisted by the same counsel, Cheng Lie filed its own Memorandum of Appeal 14 maintaining that the
MeTC never acquired jurisdiction over its person.

On April 8, 2003, the RTC rendered its Decision dismissing the appeal and affirming the Decision of the MeTC. Atiko
and Cheng Lie challenged the RTC Decision before the CA via a Petition for Review15 under Rule 42 of the Rules of
Court but the appellate court affirmed the RTC’s Decision.
Hence, this petition.

Issues

In their Memorandum,16 petitioners raised the following issues:

1. WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY MAKATI RTC AND THE COURT OF
APPEALS IS NULL AND VOID FOR FAILURE TO ACQUIRE JURISDICTION OVER THE PERSONS OF THE PETITIONERS-
DEFENDANTS CONSIDERING THAT THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE
14 OF THE RULES OF COURT.

2. WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE MATERIAL ALLEGATIONS IN THE

COMPLAINT EVEN IN DEFAULT JUDGMENT OR WHETHER OR NOT IN DEFAULT JUDGMENT, ALL ALLEGATIONS IN
THE COMPLAINT ARE DEEMED CONTROVERTED, HENCE, MUST BE PROVED BY COMPETENT EVIDENCE.

2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS LEGAL PERSONALITY TO SUE EVEN
IN DEFAULT JUDGMENT.

2.2. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE THAT PETITIONER-DEFENDANT ATIKO

IS THE SHIPAGENT OF PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT.

2.3. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND THE DOCUMENTARY EXHIBITS CAN BE
CONSIDERED FOR PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE OFFERED.

2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN DEFAULT ADDRESSED AND SENT TO ONLY
ONE OF THE DEFENDANTS WOULD BIND THE OTHER DEFENDANT TO WHOM THE MOTION WAS NOT
ADDRESSED AND NOT SENT.17

Our Ruling

The petition is partly meritorious. We shall first tackle the factual matters involved in this case, then proceed with
the jurisdictional issues raised.

Petitioners raised factual matters which are not the proper subject of this appeal.

Petitioners contend that the lower courts grievously erred in granting the complaint because, even if they were
declared in default, the respondent still has the burden of proving the material allegations in the complaint by
preponderance of evidence. Petitioners further argue that respondent miserably failed to discharge this burden
because it failed to present sufficient proof that it is a domestic corporation. Hence, respondent could not possibly
maintain the present action because only natural or juridical persons or entities authorized by law can be parties
to a civil action. Petitioners also claim that respondent failed to present competent proof that Cheng Lie is a
foreign shipping company doing business in the Philippines thru its duly authorized shipagent Atiko. Lastly,
petitioners assert that respondent failed to prove that Cheng Lie is a common carrier which owned, operated
and/or chartered M/S Katjana thru its duly authorized shipagent Atiko. Petitioners emphasize that there is no
proof, testimonial or otherwise, which would support the material allegations of the complaint. They also insist
that respondent’s witnesses do not have personal knowledge of the facts on which they were examined.

Respondent, for its part, assails the propriety of the remedy taken by the petitioners. It posits that petitioners
advanced factual matters which are not the proper subject of a petition for review on certiorari. Besides, the lower
courts consistently held that the allegations in respondent’s complaint are supported by sufficient evidence.
We agree with respondent.

A cursory reading of the issues raised readily reveals that they involve factual matters which are not within the
province of this Court to look into. Well-settled is the rule that in petitions for review on certiorari under Rule 45,
only questions of law can be raised. While there are recognized exceptions to this rule,18 none is present in this
case. "[A]s a matter of x x x procedure, [this] Court defers and accords finality to the factual findings of trial courts,
[especially] when such findings were [affirmed by the RTC and the CA. These] factual determination[s], as a matter
of long and sound appellate practice, deserve great weight and shall not be disturbed on appeal x x x. [I]t is not the
function of the Court to analyze and weigh all over again the evidence or premises supportive of the factual
holding of the lower courts."19

MeTC properly acquired jurisdiction over the person of Atiko.

Petitioners also argue that the MeTC did not acquire jurisdiction over the person of Atiko as the summons was
received by its cashier, Cristina Figueroa. They maintain that under Section 11, Rule 14 of the Rules of Court, when
the defendant is a domestic corporation like Atiko, summons may be served only upon its president, general
manager, corporate secretary, treasurer or in-house counsel.

We are not persuaded. True, when the defendant is a domestic corporation, service of summons may be made
only upon the persons enumerated in Section 11, Rule 14 of the Rules of Court. 20 However, jurisdiction over the
person of the defendant can be acquired not only by proper service of summons but also by defendant’s voluntary
appearance without expressly objecting to the court’s jurisdiction, as embodied in Section 20, Rule 14 of the Rules
of Court, viz:

SEC. 20. Voluntary appearance. – The defendant’s voluntary appearance in the action shall be equivalent to service
of summons. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person
of the defendant shall not be deemed a voluntary appearance.

In the case at bench, when Atiko filed its Notice of Appeal,21 Memorandum of Appeal,22 Motion for
Reconsideration23 of the April 8, 2003 Decision of the RTC, and Petition for Review, 24 it never questioned the
jurisdiction of the MeTC over its person. The filing of these pleadings seeking affirmative relief amounted to
voluntary appearance and, hence, rendered the alleged lack of jurisdiction moot. In Palma v. Galvez,25 this Court
reiterated the oft-repeated rule that "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."

Moreover, petitioners’ contention is a mere afterthought. It was only in their Memorandum 26 filed with this Court
where they claimed, for the first time, that Atiko was not properly served with summons. In La Naval Drug
Corporation v. Court of Appeals,27 it was held that the issue of jurisdiction over the person of the defendant must
be seasonably raised. Failing to do so, a party who invoked the jurisdiction of a court to secure an affirmative relief
cannot be allowed to disavow such jurisdiction after unsuccessfully trying to obtain such relief. 28

It may not be amiss to state too that in our February 13, 2006 Resolution, 29 we reminded the parties that they are
not allowed to interject new issues in their memorandum.

MeTC did not acquire jurisdiction over the person of Cheng Lie.

Petitioners likewise challenge the validity of the service of summons upon Cheng Lie, thru Atiko. They claim that
when the defendant is a foreign private juridical entity which has transacted business in the Philippines, service of
summons may be made, among others, upon its resident agent. In this case, however, there is no proof that Atiko
is the local agent of Cheng Lie.
On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6-SC,30 Section 12 of Rule 14 of
the Rules of Court 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.

Elucidating on the above provision of the Rules of Court, this Court declared in Pioneer International, Ltd. v.
Guadiz, Jr.31 that when the defendant is a foreign juridical entity, service of summons may be made upon:

1. Its resident agent designated in accordance with law for that purpose;

2. The government official designated by law to receive summons if the corporation does not have a
resident agent; or,

3. Any of the corporation’s officers or agents within the Philippines.

In the case at bench, no summons was served upon Cheng Lie in any manner prescribed above. It should be
recalled that Atiko was not properly served with summons as the person who received it on behalf of Atiko, cashier
Cristina Figueroa, is not one of the corporate officers enumerated in Section 11 of Rule 14 of the Rules of Court.
The MeTC acquired jurisdiction over the person of Atiko not thru valid service of summons but by the latter’s
voluntary appearance. Thus, there being no proper service of summons upon Atiko to speak of, it follows that the
MeTC never acquired jurisdiction over the person of Cheng Lie. To rule otherwise would create an absurd situation
where service of summons is valid upon the purported principal but not on the latter’s co-defendant cum putative
agent despite the fact that service was coursed thru said agent. Indeed, in order for the court to acquire
jurisdiction over the person of a defendant foreign private juridical entity under Section 12, Rule 14 of the Rules of
Court, there must be prior valid service of summons upon the agent of such defendant.1avvphi1

Also, the records of this case is bereft of any showing that cashier Cristina Figueroa is a government official
designated by law to receive summons on behalf of Cheng Lie or that she is an officer or agent of Cheng Lie within
the Philippines. Hence, her receipt of summons bears no significance insofar as Cheng Lie is concerned. At this
point, we emphasize that the requirements of the rule on summons must be strictly followed, 32 lest we ride
roughshod on defendant’s right to due process.33

With regard to Cheng Lie’s filing of numerous pleadings, the same cannot be considered as voluntary appearance.
Unlike Atiko, Cheng Lie never sought affirmative relief other than the dismissal of the complaint on the ground of
lack of jurisdiction over its person. From the very beginning, it has consistently questioned the validity of the
service of summons and the jurisdiction of the MeTC over its person.

It does not escape our attention though that Cheng Lie’s pleadings do not indicate that the same were filed by way
of special appearance. But these, to our mind, are mere inaccuracies in the title of the pleadings. What is
important are the allegations contained therein which consistently resisted the jurisdiction of the trial court. Thus,
Cheng Lie cannot be considered to have submitted itself to the jurisdiction of the courts.34

In fine, since the MeTC never acquired jurisdiction over the person of Cheng Lie, its decision insofar as Cheng Lie is
concerned is void.35

Cheng Lie was improperly declared in default.

Applying the above disquisition, the MeTC likewise erred in declaring Cheng Lie in default. Settled is the rule that a
defendant cannot be declared in default unless such declaration is preceded by a valid service of summons. 36

WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed December 10, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 82547 is AFFIRMED with the MODIFICATION that the judgment insofar as Cheng Lie
Navigation Co., Ltd. is concerned is declared VOID for failure to acquire jurisdiction over its person as there was
improper service of summons.

SO ORDERED.