ORION SECURITY CORPORATION, petitioner, vs. KALFAM ENTERPRISES, INC., respondent.

G. R. No. 163287, April 27, 2007; QUISUMBING, J.:

DOCTRINES:

(1) A SPECIAL APPEARANCE PRECISELY QUESTIONING THE TRIAL COURT’S JURISDICTION ON THE
GROUND OF INVALILS SERVICE OF SUMMONS IS NOT CONSIDERED AS VOLUNTARY APPEARAANCE.

(2)SUBSTITUTE SERVICE OF SUMMONS IS VALID PROVIDED THAT THE PERSON RECEIVING IT HAS A
RELATION OF CONFIDENCE WITH THE PERSON IMPLEADED IN THE SUMMONS AND COPY OF
COMPLAINT. FOR THE PERSON WHO HAS RECEIVED IT ENSURES THAT THE PERSON IMPLEASED IN THE
SAID SUMMONS AND COPY OF COMPLAINT WILL ACTUALLY RECEIVE IT.

FACTS:
Orion Security Corp., is a domestic private corporation, which happened to be engaged in the
business of providing security services. One of its clients is KAFLAM ENTERPRISES, INC.
PETITIONER FILED A COMPLAINT: ORION filed a complaint in the RTC [Pasig City, Branch 215] for
collection of sum of money amounting to Php. 513, 839.26 which was due for the services
rendered by ORION as against KAFLAM.
SERVICE OF SUMMONS IN RE TO THE FILED COMPLAINT: The Sheriff tried to serve the summons
and a copy of the complaint towards KAFLAM Manager’s Secretary. However, such KAFLAM
representative refused to acknowledge their receipt. So, the summons and the copy of the
complaint were left at KAFLAM’s Office.
FAILURE OF RESPONDENT TO FILE AN ANSWER: KAFLAM failed to file an Answer within the
reglementary period.
IN RESPONSE, PETITIONER FILED A MOTION TO DECLARE THE RESPONDENT “IN – DEFAULT”:
RTC, DENIED such motion by reason of summons and copy of complaint being served improperly.
PETITIONER FILED A MOTION FOR ALIAS SUMMONS: RTC, GRANTED, the summons and a copy
of complaint were left at KAFLAM’s office through its security guard, and allegedly refuse to
accept its receipt/
FAILURE OF THE RESPONDENT TO FILE AN ANSWER: KAFLAM failed to file an Answer within the
reglementary period.
RTC’S DECISION VIA AN ORDER, IN RE OF THE MOTION TO DECLARE THE RESPONDENT “IN –
DEFAULT”: RTC, GRANTED such motion. The respondent was declared in default. The RTC
allowed the petitioner to adduce evidence ex parte.
RESPONDENT FILED A MOTION FOR RECONSIDERATION: KAFLAM filed MOR for the RTC’s
Resolution declaring the respondent in default. On the grounds of lack of jurisdiction over the
person due to improper service of summons. The RTC DENIED the Motion for Reconsideration.
RTC’S DECISION: Judgment, hereby rendered in favor of ORION and against KAFLAM ordering the
latter to pay the former the following amounts:
(A) Php. 513,839. 26, as total amount of the balance due to ORIO, plus 12% interest rate per
annum, as computed from the date of filing the complaint until such obligation is fully paid.
(B) Php. 51, 383,92, which the 10% outstanding obligation as attorney’s fee.
(C) Php. 5, 000, which served as litigation expenses.
(D) Php 3, 563.25 for the costs.
RESPONDENT FILED AN ORDINARY APPEAL IN THE CA: The contention of the respondent is that
the service of summons and copy of complaint was improperly done.
CA’S RESOLUTION: REVERSED and SET ASIDE. The case is hereby REMANDED to the RTC for
further proceedings upon valid service of summons to the parties concerned.
PETITIONER FILED A MOR FOR CA’S ORDER: The motion is DENIED.
PETITIONER FILED A PETITION FOR REVIEW ON CERTIORARI: The following are the issues raised
by the petitioner:
(I) WON the CA’s Resolution is null and void for failure to comply with Section 14 of the 1987
Philippine Constitution.
(II) WON the CA seriously erred in NOT RULING that the RTC has in fact acquired jurisdiction over
the person of the respondent due to its voluntary appearance in the proceedings.
(III) WON the CA seriously erred in NOT HOLDING that substituted service of summons effected
upon the security guard of the respondent should be deemed substantial compliance with the
rule on service of summons. In view of an exceptional circumstances present in the case.
PETITIONER’S CONTENTIONS: The following are the petitioner’s contentions:
(1) That the CA brushed aside KFLAM’s voluntary appearance in the RTC proceedings. According
to the petitioner. RTC did acquired jurisdiction over the respondent due to the latter’s voluntary
appearance in the court proceedings.
(2) He insisted that substituted service of summons on respondent’s security guard is substantial
com[laince with the rule on service of summon as viewed as an exceptional circumstances in the
present case.
RESPONDENT COUNTER ARGUMENT: The respondent counter the petitioner’s contentions, to
wit:
(1) Special appearance of its counsel does not constituted voluntary appearance.
(2) He maintains that the filing of an opposition to petitioner’s motion to declare respondent in
default over the case does not amount to voluntary appearance.
(3) That summons were improperly served via substitute service since the security guard was
not the competent person contemplated on Section 7, Rule 14 of the Rules of Court.
CA’s IN THIS RELUTION TOWARDS THE PETITION FOR REVIEW ON CERTIORARI: DENIED, and
AFFIRMED the CA’s Decision, towards the filed appeal. The case be REMANDED to the RTC for
further proceeding upon a valid service of summons to the respondent.

ISSUES:
(1) WON THE RTC ACQUIRES JURISDICTION OVER THE RESPONDENT VIA ITS SPECIAL
APPEARANCE IN THE TRIAL COURT’S PROCEEDINGS.
(2) WON THE SERVICE OF SUMMONS TO THE RESPONDENT’S SECURITY GUARD BE CONSIDERED
AS A SUBSTITUTED SERVICE OF SUMMONS AS CONTEMPLATED IN SECTION 7, RULE 14 OF THE
RULES OF COURT.

HELD:
(1) NO. The RTC did not acquired jurisdiction over the respondent bu the latter’s voluntary
appearance in the court proceedings. Note that as party qho makes a special appearance in court
challenging the jurisdiction of the said court based on the ground of invalid service of summons
is not deemed to have submitted himself to the jurisdiction of the court.
In the case, the respondent in its special appearance, precisely questioned the jurisdiction of the
RTC on the ground of invalid service of summons. Thus, it cannot be deemed to have submitted
itself to the court’s authority to hear, try, and decide the said case.
(2) NO. According to Section 7, Rule 14 of the Rule of Court provides that, “if, for justifiable
causes, the defendant cannot be served within a reasonable time as proved in the preceding
section, service may be effected, (a) by leaving copies of the summons at the defendant’s
residence with some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendant’s office or regular place of business with some competent person in
charge thereof.
In the case, such substituted service, there should be a report indicating that the person who
received the summons on the defendant’s behalf was one with whom the defendant had a
relation of confidence ensuring that the latter will actually receive the summons. Here, the
petitioner failed to show that the security guard who received the summons on respondent’s
behalf shared such relation of confidence, that respondent would surely receive the summons.
Hence, does not constitute a valid substitution service of summons.