1. AGUILAR v.

LIGHTBRINGERS CREDIT COOPERATIVE (2015)

Petitioners: Neil Aguilar; Ruben Calimbas

Respondent: Lightbringers Credit Cooperative

Summary: In a complaint for sum of money against them, Aguilar and Calimbas were declared
“as in default” for failure to show up in the pre-trial conference. Thus, respondent was able to
present evidence ex parte. On appeal, Court rules that while the MCTC’s order for respondent to
present ex parte was proper, it should not be called a “default”, because such refers to failure to
submit an Answer.
Doctrine: Failure to attend the pre-trial does not result in the "default" of the defendant. Instead,
it allows the plaintiff to present his evidence ex parte and the court to render judgment on the
basis thereof. Formerly, the Rules stated that “A party who fails to appear at a pre­trial
conference may be non­suited or considered as in default”. The deletion of “as in default” in the
current Rules is one of semantical propriety or terminological accuracy as there were criticisms
on the use of the word "default", since that term is identified with the failure to file a required
answer, not appearance in court.
Facts
 Three complaints for sum of money were filed by respondent Lightbringers against
petitioners Aguilar and Calimbas, and one Perlita Tantiangco before MCTC Dinalupihan,
Bataan. The complaints alleged that Tantiangco, Aguilar and Calimbas were members of
the cooperative who borrowed funds. In their Answers, the three argued that the
discrepancy between the principal amount of the loan evidenced by the cash
disbursement voucher and the net amount of loan reflected in the PNB checks showed
that they never borrowed the amounts.
 On the scheduled pre-trial conference, only respondent and its counsel appeared. The
MCTC then issued an Order allowing respondent to present evidence ex parte.
Respondent presented Manalili, who explained that the discrepancy between the amounts
of the loan reflected in the checks and those in the vouchers were due to the accumulated
interests as well as service and miscellaneous fees.
 MCTC held that since the proceedings were being heard ex parte, the petitioners who had
been declared "as in default" had no right to participate therein and to cross-examine the
witness. MCTC then resolved the cases, dismissing the claim against Tatiangco, but
finding Aguilar and Calimbas liable. The PNB checks issued to the petitioners proved the
existence of the loan transactions. Nonetheless, only the amounts shown in the PNB
check must be awarded because respondent failed to present its bookkeeper to justify the
higher amounts claimed. The court also awarded attorney’s fees to respondent.
 RTC affirmed MCTC’s ruling. CA also denied petitioners’ appeal, stating that the
petition was formally defective because the "verification and disclaimer of forum
shopping" and the "affidavit of service" had a defective jurat. Moreover, the entire
 records of the case, inclusive of the oral and documents evidence, were not attached to
the petition. Hence this Rule 45 petition to SC.
Issues, Ratio
Whether Sec. 2 Rule 42 requires the entire records of the case be attached in a petition for
review – NO
 The enumeration in Sec. 2 does not include (per se) the entire records of the case.
 The question should be: whether the petitioners attached the sufficient pleadings and
material portions of the records in their petition for review. Court rules that the petition
was in substantial compliance with the requirements, since the petitioners attached
respondent’s complaints before the MCTC which contained the photocopies of the cash
disbursement vouchers and PNB checks. These should be considered as substantial
compliance with Section 2, Rule 42.
[^That is the only issue raised in this appeal. But instead of remanding to CA, the Court
proceeded to resolve the case once and for all.]
(RELEVANT) Whether Aguilar and Calimbas should have been allowed to present evidence –
NO
 A court can only consider the evidence presented by respondent in the MCTC because
the petitioners failed to attend the pre-trial conference pursuant to Section 5, Rule 18.
Court, however, clarifies that failure to attend the pre-trial does not result in the "default"
of the defendant. Instead, it allows the plaintiff to present his evidence ex parte and the
court to render judgment on the basis thereof.
 PH American Life & General Insurance v. Enario: Difference between non-appearance
of a defendant in a pre-trial conference and the declaration of a defendant in default
o Formerly, the Rules stated that “A party who fails to appear at a pre-trial
conference may be non­suited or considered as in default”. The deletion of “as in
default” in the current Rules is one of semantical propriety or terminological
accuracy as there were criticisms on the use of the word "default", since that term
is identified with the failure to file a required answer, not appearance in court.
 The pre-trial has been institutionalized as the answer to the clarion call for the speedy
disposition of cases. It is mandatory for trial courts to conduct pre-trial in civil cases in
order to realize the paramount goal of simplifying and expediting trial.
 Here, the petitioners failed to attend the pre-trial conference. They did not even give any
excuse for their non-appearance, manifestly ignoring the importance of the pre-trial stage.
Thus, the MCTC properly issued the Order allowing respondent to present evidence ex
parte. Aguilar and Calimbas lost the right to participate therein and to cross-examine the
witness.
Was there a contract of loan between petitioners and respondent? YES
  A check constitutes an evidence of indebtedness and is a veritable proof of an obligation.
There is no dispute that the signatures of the petitioners were present on both the PNB
checks and the cash disbursement vouchers. The checks were also made payable to the
order of the petitioners.
Whether the award of attorney’s fees was proper – NO
 Without any other basis on record to support the award, such cannot be upheld in favor of
respondent. It is settled that no premium should be placed on the right to litigate. Not
every winning party is entitled to an automatic grant of attorney's fees.
PARTIALLY GRANTED. Award of attorney’s fees, deleted.
2. G.R. No. 206666 January 21, 2015

ATTY. ALICIA RISOS-VIDAL, Petitioner,

ALFREDO S. LIM Petitioner-Intervenor,
vs.
COMMISSION ON ELECTIONS and JOSEPH EJERCITO
ESTRADA, Respondents.

FACTS:

Before the Court are (1) a Petition for Certiorari filed under Rule 64, in relation to
Rule 65, both of the Revised Rules of Court, by Atty. Alicia Risos-Vidal, which
essentially prays for the issuance of the writ of certiorari annulling and setting
aside the April 1, 2013 and April 23, 2013 Resolutions of the Commission on
Elections (COMELEC), Second Division and En bane, respectively, and (2) a
Petition-in-Intervention filed by Alfredo S. Lim (Lim), wherein he prays to be
declared the 2013 winning candidate for Mayor of the City of Manila in view of
private respondent former President Joseph Ejercito Estrada’s disqualification to
run for and hold public office.

On January 24, 2013, Risos-Vidal, filed a Petition for Disqualification against

former President Estrada before the COMELEC. Risos Vidal anchored her petition
on the theory that "[Former President Estrada] is Disqualified to Run for Public
Office because of his Conviction for Plunder by the Sandiganbayan sentencing him
to suffer the Penalty of Reclusion Perpetua with Perpetual Absolute
Disqualification. She relied on Section 40 of the Local Government Code (LGC), in
relation to Section 12 of the Omnibus Election Code (OEC), which state
respectively, that:

Sec. 40, Local Government Code:

SECTION 40. Disqualifications. - The following persons are disqualified from

running for any elective local position:

(a) Those sentenced by final judgment for an offense involving moral

turpitude or for an offense punishable by one (1) year or more of
imprisonment, within two (2) years after serving sentence; (b) Those
removed from office as a result of an administrative case;

xxx

Sec. 12, Omnibus Election Code:

Section 12. Disqualifications. - Any person who has been declared by competent
authority insane or incompetent, or has been sentenced by final judgmentfor
subversion, insurrection, rebellion, or for any offense for which he has been
sentenced to a penalty of more than eighteen months or for a crime involving moral
turpitude, shall be disqualified to be a candidate and to hold any public office,
unless he has been given plenary pardon or granted amnesty. (Emphases supplied.)

The COMELEC, Second Division, dismissed the petition for disqualification for
utter lack of merit and the subsequent motion for reconsideration was likewise
denied.

While this case was pending before the Court, the elections were conducted as
scheduled and former President Estrada was voted into office with 349,770 votes
cast in his favor.

On June 7, 2013, Lim, one of former President Estrada’s opponents for the position
of Mayor, moved for leave to intervene in this case. Lim subscribed to Risos-Vidal’s
theory that former President Estrada is disqualified to run for and hold public office
as the pardon granted to the latter failed to expressly remit his perpetual
disqualification. Further, given that former President Estrada is disqualified to run
for and hold public office, all the votes obtained by the latter should be declared
stray, and, being the second placer with 313,764 votes to his name, he should be
declared the rightful winning candidate for the position of Mayor of the City of
Manila.

ISSUE:

Whether or not the COMELEC committed grave abuse of discretion amounting to

lack or excess of jurisdiction in ruling that former President Estrada is qualified to
vote and be voted for in public office as a result of the pardon granted to him by
former President Arroyo.

RULING:

The petition for certiorari lacks merit.

Former President Estrada was granted an absolute pardon that fully restored all
his civil and political rights, which naturally includes the right to seek public
elective office, the focal point of this controversy. The wording of the pardon
extended to former President Estrada is complete, unambiguous, and unqualified. It
is likewise unfettered by Articles 36 and 41 of the Revised Penal Code. The only
reasonable, objective, and constitutional interpretation of the language of the
pardon is that the same in fact conforms to Articles 36 and 41 of the Revised Penal
Code.

As earlier stated, Risos-Vidal maintains that former President Estrada’s conviction

for plunder disqualifies him from running for the elective local position of Mayor of
the City of Manila under Section 40(a) of the LGC. However, the subsequent
absolute pardon granted to former President Estrada effectively restored his right
to seek public elective office. This is made possible by reading Section 40(a) of the
LGC in relation to Section 12 of the OEC.

While it may be apparent that the proscription in Section 40(a) of the LGC is
worded in absolute terms, Section 12 of the OEC provides a legal escape from the
prohibition – a plenary pardon or amnesty. In other words, the latter provision
allows any person who has been granted plenary pardon or amnesty after conviction
by final judgment of an offense involving moral turpitude, inter alia, to run for and
hold any public office, whether local or national position.

However, the statement "[h]e is hereby restored to his civil and political rights," to
the mind of the Court, iscrystal clear – the pardon granted to former President
Estrada was absolute, meaning, it was not only unconditional, it was unrestricted
in scope, complete and plenary in character, as the term "political rights"adverted to
has a settled meaning in law and jurisprudence.

Therefore, there can be no other conclusion but to say that the pardon granted to
former President Estrada was absolute in the absence of a clear, unequivocal and
concrete factual basis upon which to anchor or support the Presidential intent to
grant a limited pardon.

To reiterate, insofar as its coverage is concerned, the text of the pardon can
withstand close scrutiny even under the provisions of Articles 36 and 41 of the
Revised Penal Code.

The COMELEC did not commit grave abuse of discretion amounting to lack or
excess of jurisdiction in issuing the assailed Resolutions.

The Court has consistently held that a petition for certiorari against actions of the
COMELEC is confined only to instances of grave abuse of discretion amounting to
patentand substantial denial of due process, because the COMELEC is presumed to
be most competent in matters falling within its domain.

As settled in jurisprudence, grave abuse of discretion is the arbitrary exercise of

power due to passion, prejudice or personal hostility; or the whimsical, arbitrary, or
capricious exercise of power that amounts to an evasion or refusal to perform a
positive duty enjoined by law or to act at all in contemplation of law. For an act to
be condemned as having been done with grave abuse of discretion, such an abuse
must be patent and gross.

The Court finds it unnecessary to separately discuss Lim's petition-in-intervention,

which substantially presented the same arguments as Risos-Vidal's petition.
3. LETICIA NAGUIT AQUINO, MELVIN NAGUIT, ROMMEL NAGUIT, ELMA
NAGUIT TAYAG, YSSEL L. NAGUIT, ROSALINA NAGUIT AUMENTADO, RIZEL
NAGUIT CUNANAN, CARIDAD NAGUIT PARAJAS, MILLIE NAGUIT FLORENDO,
MARNEL NAGUIT, EDUARDO NAGUIT, JOSE NAGUIT, ZOILO NAGUIT, AND
AMELIA NAGUIT DIZON, REPRESENTED BY YSSEL L. NAGUIT, PETITIONERS,
VS. CESAR B. QUIAZON, AMANDA QUIAZON, JOSE B. QUIAZON AND
REYNALDO B. QUIAZON, REPRESENTED BY JAIME B. QUIAZON,
RESPONDENTS.

G.R. No. 201248, March 11, 2015

FACTS:
On December 16, 2005, petitioners filed a complaint for Annulment and Quieting of Title before
RTC-Branch 59, Angeles City. They alleged the following:
1. They were the heirs of the late Epifanio Makam and Severina Bautista, who acquired a
house and lot situated in Magalang, Pampanga, consisting of 557 square meters, by virtue
of a Deed of Sale, dated April 20, 1894;
2. That since then, they and their predecessors-in-interest had been in open, continuous,
adverse, and notorious possession for more than a hundred years, constructing houses and
paying real estate taxes on the property;
3. That sometime in June 2005, they received various demand letters from the respondents
claiming ownership over the subject property and demanding that they vacate the same;
4. That upon inquiry with the Register of Deeds of San Fernando, Pampanga, they
confirmed that the property had been titled in the name of respondents under TCT No.
213777-R;
5. That the said title was invalid, ineffective, voidable or unenforceable; and
6. That they were the true owners of the property.

Petitioners prayed that the title be cancelled and a new title be issued in their favor.
In their Answer, respondents asserted that they were the absolute owners of the subject land as
per TCT No. 213777-R; that they had inherited the same from their predecessor-in-interest,
Fausta Baluyut, one of the registered owners under OCT No. RO-1138 (11376), as per the
Project of Partition and Deed of Agreement, dated January 2, 1974; and that petitioners had been
occupying the property by mere tolerance. They denied the allegations in the complaint and
proffered affirmative defenses with counterclaims.
As their affirmative defenses, aside from prescription, laches, res judicata and forum
shopping, respondents alleged that petitioners "have no valid, legal and sufficient cause of
action" against them because their deed of sale was spurious. In their comment, Petitioners
argued that this contention was a matter of evidence which might only be resolved in a full-
blown trial. Settled rule is that to determine the sufficiency of the cause of action, only the
facts alleged in the complaint should be considered, and that the allegations in their
complaint sufficiently state a cause of action.
The RTC set a preliminary hearing on the affirmative defenses. Respondents presented their
evidence but petitioners manifested that they were opting to submit the incident for resolution
without presenting evidence, relying on their position that only the facts alleged in the complaint
should be considered.
RTC Ruling: On July 14, 2008, the RTC dismissed petitioners' complaint and ruled that the
deed of sale had become invalid by virtue of the June 28, 1919 decision.
(Just in Case Judge will ask)
Relying on the evidence presented by respondents, it found that based on the June 28, 1919
decision in Cadastral Case No. 5, the Baluyut siblings, respondents' predecessors-in-interest,
were declared the absolute owners of the subject property, over the claim of Jose Makam, the
predecessor-in-interest of petitioners, who was one of the oppositors in the said case. From this
decision, OCT No. RO-1138 (11376) was derived, which later became the subject of a project of
partition and deed of agreement among the Baluyut siblings, which, in turn, was annotated on the
OCT as Entry No. 8132. TCT No. 213777-R, covering the subject lot, was later derived from the
partition.
Anent petitioners' argument that only the complaint may be considered in determining the
sufficiency of the cause of action, the RTC ruled that under Section 2 in relation to Section 6,
Rule 16 of the Rules of Court, a preliminary hearing on the affirmative defense in the
answer might be had at the discretion of the court, during which the parties could present
their arguments and their evidence.
On December 22, 2008, it denied petitioners' motion for reconsideration stating that petitioners
were without legal or equitable title to the subject property, thus, lacking the legal personality to
file an action for quieting of title and, therefore, "the complaint was properly dismissed
for failing to state a cause of action." It stated that the court may consider evidence presented in
hearings related to the case, which was an exception to the general rule that only the complaint
should be taken into consideration.
CA RULING: On March 13, 2012, the CA dismissed petitioners' appeal explaining that that
under Section 6, Rule 16 of the Rules of Court, a court is allowed to conduct a preliminary
hearing, motu proprio, on the defendant's affirmative defenses, including the ground of "lack of
cause of action or failure to state a cause of action." CA found that petitioners did not have the
title required to avail of the remedy of quieting of title, while respondents had sufficiently proven
the validity of their Torrens title.
Petitioners filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court.
ISSUE: Whether or not the CA erred in affirming the dismissal of petitioners' complaint on the
ground of lack of cause of action or failure to state a cause of action.
SC RULING: YES
I. This case involved an allegation of "lack of cause of action" which is not one of the
grounds for a motion to dismiss under Rule 16, and hence, not proper for resolution
during a preliminary hearing held pursuant to Section 6 of the same rule.

II. In any case, even if the Court were to treat respondents' argument as a "failure to state a
cause of action," their defense would still fail. Applying the test, the complaint in this
case sufficiently stated a cause of action. Also, it has been held that a hearing pursuant to
Section 6 of Rule 16 is not necessary when the affirmative defense is failure to state a
cause of action.

DISCUSSIONS
I
As a preliminary matter, the SC noted that respondents alleged that petitioners "have no valid,
legal and sufficient cause of action," raising factual matters, which is effectively the ground of
"lack of cause of action." The ground of "lack of cause of action" has been frequently confused
with the ground of "failure to state a cause of action," and this is the situation prevailing in the
present case. The terms were, in fact, used interchangeably by both the respondents and the
lower courts.
Dabuco vs. Court of Appeals explained the distinction between the grounds of "failure to state a
cause of action" and "lack of cause of action":
Failure to State a Cause of Action Lack of Cause of Action
It refers to the insufficiency of allegation in It refers to the insufficiency of factual basis
the pleading for the action

It may be raised in a Motion to Dismiss It may be raised any time

under Rule 16

Dismissal can be made at the earliest stages

Dismissal is usually made after questions
of an action.
of fact have been resolved on the basis of
stipulations, admissions or evidence
presented.

In this case, RTC held a preliminary hearing resolving the ground of "lack of cause of action"
pursuant to Section 6 of Rule 16, which allows the court to hold a preliminary hearing on
grounds for dismissal provided in the same rule that have been raised as an affirmative defense in
the answer. The ground of "lack of cause of action," however, is not one of the grounds for a
motion to dismiss under Rule 16, and hence, not proper for resolution during a preliminary
hearing held pursuant to Section 6. Thus, the trial court clearly erred in receiving evidence on the
ground of "lack of cause of action" during the preliminary hearing.

II
The test for determining the existence of a cause of action was amply discussed in Insular
Investment and Trust Corporation v. Capital One Equities Corporation, citing Perpetual Savings
Bank v. Fajardo, to wit:
The familiar test for determining whether a complaint did or did not state a cause of
action against the defendants is whether or not, admitting hypothetically the truth of
the allegations of fact made in the complaint, a judge may validly grant the relief
demanded in the complaint.
In determining the existence of a cause of action, only the statements in the complaint may
properly be considered. It is error for the court to take cognizance of external facts or hold
preliminary hearings to determine their existence. If the allegation in a complaint furnish
sufficient basis by which the complaint may be maintained, the same should not be dismissed
regardless of the defenses that may be assessed by the defendants. Thus, in determining the
existence of a cause of action, only the allegations in the complaint may properly be considered.
For the court to do otherwise would be a procedural error and a denial of the plaintiffs right to
due process.
In order that an action for quieting of title may prosper, two requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his
title must be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy. It is readily apparent from the complaint that petitioners alleged that (1)
they had an interest over the subject property by virtue of a Deed of Sale, dated April 20, 1894;
and that (2) the title of respondents under TCT No. 213777-R was invalid, ineffective, voidable
or unenforceable. Hypothetically admitting these allegations as true, as is required in determining
whether a complaint fails to state a cause of action, petitioners may be granted their claim.
Clearly, the complaint sufficiently stated a cause of action. In resolving whether or not the
complaint stated a cause of action, the trial court should have limited itself to examining the
sufficiency of the allegations in the complaint. It was proscribed from inquiring into the truth of
the allegations in the complaint or the authenticity of any of the documents referred or attached
to the complaint, as these were deemed hypothetically admitted by the respondents.
The trial court may indeed elect to hold a preliminary hearing on affirmative defenses as raised
in the answer under Section 6 of Rules 16 of the Rules of Court. It has been held, however, that
such a hearing is not necessary when the affirmative defense is failure to state a cause of action,
and that it is, in fact, error for the court to hold a preliminary hearing to determine the existence
of external facts outside the complaint. Section 6, therefore, does not apply to the ground that the
complaint fails to state a cause of action. The trial court, thus, erred in receiving and considering
evidence in connection with this ground.
Dispositive Portion: WHEREFORE, the petition is GRANTED. The March 13, 2012 Decision
of the Court of Appeals, in CA-G.R. CV No. 92887 is REVERSED and SET ASIDE. The case is
ordered REMANDED to the Regional Trial Court for trial on the merits of the case.

Other Important Ruling:

The Court does not discount, however, that there are exceptions to the general rule that
allegations are hypothetically admitted as true and inquiry is confined to the face of the
complaint.
First, there is no hypothetical admission of (a) the veracity of allegations if their falsity is
subject to judicial notice; (b) allegations that are legally impossible; (c) facts inadmissible
in evidence; and (d) facts which appear, by record or document included in the pleadings,
to be unfounded.
Second, inquiry is not confined to the complaint if culled (a) from annexes and other
pleadings submitted by the parties; (b) from documentary evidence admitted by
stipulation which disclose facts sufficient to defeat the claim; or (c) from evidence
admitted in the course of hearings related to the case.
Pointing to the exception that inquiry was not confined to the complaint if evidence had been
presented in the course of hearings related to the case, the CA ruled that it was within the trial
court's discretion to receive and consider other evidence aside from the allegations in the
complaint in resolving a party's affirmative defense. It held that this discretion was recognized
under Section 6 of Rule 16 of the Rules of Court, which allowed the court to conduct a
preliminary hearing, motu proprio, on the defendant's affirmative defense if no corresponding
motion to dismiss was filed. However, as already explained above, preliminary hearing under
Section 6 of Rule 16 is not proper in resolving the issue in this case.
4. PEDRO T. SANTOS, JR v. PNOC EXPLORATION CORPORATION, G.R. No.
170943

FACTS

PNOC Exploration Corporation filed a complaint for a sum of money against in the RTC of
Pasig City. The complaint, sought to collect the amount of P698,502.10 representing petitioner’s
unpaid balance of the car loan advanced to him by respondent when he was still a member of its
board of directors.

Personal service of summons to petitioner failed because he could not be located in his last
known address. Subsequently, on respondent’s motion, the trial court (TC) allowed service of
summons by publication. Respondent caused the publication of the summons in Remate.
Thereafter, respondent submitted the affidavit of publication of the advertising manager of
Remate and an affidavit of service of respondent’s employee to the effect that he sent a copy of
the summons by registered mail to petitioner’s last known address. When petitioner failed to file
his answer within the prescribed period, respondent moved that the case be set for the reception
of its evidence ex parte. The TC granted the motion.

Petitioner filed an "Omnibus Motion for Reconsideration and to Admit Attached Answer." He
sought reconsideration of the September 11, 2003 order, alleging that the affidavit of service
submitted by respondent failed to comply with Section 19, Rule 14 of the Rules of Court as it
was not executed by the clerk of court.

The trial court denied petitioner’s motion for reconsideration. It held that the rules did not require
the affidavit of complementary service by registered mail to be executed by the clerk of court.

Petitioner assailed the September 11, 2003 and February 6, 2004 orders of the trial court in the
CA via a petition for certiorari. CA rendered its decision sustaining the September 11, 2003 and
February 6, 2004 orders of the trial court and dismissing the petition. It denied reconsideration.

ISSUE:

1.WON the service of summons was valid

2. WON order of default was proper

HELD:

1. Yes 2. No

1. Propriety of Service by Publication

Section 14, Rule 14 (on Summons) of the Rules of Court provides: SEC. 14. Service upon
defendant whose identity or whereabouts are unknown. – In any action where the defendant is
designated as an unknown owner, or the like, or whenever his whereabouts are unknown and
cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon
him by publication in a newspaper of general circulation and in such places and for such
times as the court may order.

Since petitioner could not be personally served with summons despite diligent efforts to locate
his whereabouts, respondent sought and was granted leave of court to effect service of summons
upon him by publication in a newspaper of general circulation. Thus, petitioner was properly
served with summons by publication.

Petitioner invokes the distinction between an action in rem and an action in personam and claims
that substituted service may be availed of only in an action in rem. Petitioner is wrong. The in
rem/in personam distinction was significant under the old rule because it was silent as to the kind
of action to which the rule was applicable. Because of this silence, the Court limited the
application of the old rule to in rem actions only. The present rule expressly states that it applies
"[i]n any action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry." Thus, it
now applies to any action, whether in personam, in rem or quasi in rem.

Regarding the matter of the affidavit of service, the relevant portion of Section 19, Rule 14 of the
Rules of Court simply speaks of the following: XXX… an affidavit showing the deposit of a
copy of the summons and order for publication in the post office, postage prepaid, directed to the
defendant by registered mail to his last known address.

Service of summons by publication is proved by the affidavit of the printer, his foreman or
principal clerk, or of the editor, business or advertising manager of the newspaper which
published the summons. The service of summons by publication is complemented by service of
summons by registered mail to the defendant’s last known address. The rules, however, do not
require that the affidavit of complementary service be executed by the clerk of court.

Moreover, even assuming that the service of summons was defective, the trial court acquired
jurisdiction over the person of petitioner by his own voluntary appearance in the action
against him. In this connection, Section 20, Rule 14 of the Rules of Court states: SEC. 20.
Voluntary appearance. – The defendant’s voluntary appearance in the action shall be
equivalent to service of summons.

Petitioner voluntarily appeared in the action when he filed the "Omnibus Motion for
Reconsideration and to Admit Attached Answer." This was equivalent to service of summons
and vested the trial court with jurisdiction over the person of petitioner.

2. Entitlement of Notice to Proceedings

The effects of a defendant’s failure to file an answer within the time allowed therefor are
governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of the Rules of Court:
SEC. 3. Default; declaration of. – If the defending party fails to answer within the time
allowed therefor, the court shall, upon motion of the claiming party with notice to the
defending party, and proof of such failure, declare the defending party in default.

SEC. 4. Effect of order of default. – A party in default shall be entitled to notice of

subsequent proceedings but not to take part in the trial.

In this case, even petitioner himself does not dispute that he failed to file his answer on time.
That was in fact why he had to file an "Omnibus Motion for Reconsideration and to Admit
Attached Answer." But respondent moved only for the ex parte presentation of evidence, not
for the declaration of petitioner in default. The September 11, 2003 order did not limit itself to
permitting respondent to present its evidence ex parte but in effect issued an order of default. But
the trial court could not validly do that as an order of default can be made only upon motion of
the claiming party. Since no motion to declare petitioner in default was filed, no default order
should have been issued.

3. Correctness of Non-admission of Answer

Petitioner failed to file his answer within the required period. Indeed, he would not have moved
for the admission of his answer had he filed it on time. Considering that the answer was belatedly
filed, the trial court did not abuse its discretion in denying its admission.

Petitioners plea for equity must fail in the face of the clear and express language of the rules of
procedure and of the September 11, 2003 order regarding the period for filing the answer. Equity
is available only in the absence of law, not as its replacement. Equity may be applied only in the
absence of rules of procedure, never in contravention thereof.
5. G.R. No. 170943

PEDRO T. SANTOS, JR v. PNOC EXPLORATION CORPORATION

FACTS

PNOC Exploration Corporation filed a complaint for a sum of money against in the RTC of
Pasig City. The complaint, sought to collect the amount of P698,502.10 representing petitioner’s
unpaid balance of the car loan advanced to him by respondent when he was still a member of its
board of directors.

Personal service of summons to petitioner failed because he could not be located in his last
known address. Subsequently, on respondent’s motion, the trial court (TC) allowed service of
summons by publication. Respondent caused the publication of the summons in Remate.
Thereafter, respondent submitted the affidavit of publication of the advertising manager of
Remate and an affidavit of service of respondent’s employee to the effect that he sent a copy of
the summons by registered mail to petitioner’s last known address. When petitioner failed to file
his answer within the prescribed period, respondent moved that the case be set for the reception
of its evidence ex parte. The TC granted the motion.

Petitioner filed an "Omnibus Motion for Reconsideration and to Admit Attached Answer." He
sought reconsideration of the September 11, 2003 order, alleging that the affidavit of service
submitted by respondent failed to comply with Section 19, Rule 14 of the Rules of Court as it
was not executed by the clerk of court.

The trial court denied petitioner’s motion for reconsideration. It held that the rules did not require
the affidavit of complementary service by registered mail to be executed by the clerk of court.

Petitioner assailed the September 11, 2003 and February 6, 2004 orders of the trial court in the
CA via a petition for certiorari. CA rendered its decision sustaining the September 11, 2003 and
February 6, 2004 orders of the trial court and dismissing the petition. It denied reconsideration.

ISSUE:

1.WON the service of summons was valid

2. WON order of default was proper

HELD:

1. Yes 2. No

1. Propriety of Service by Publication

Section 14, Rule 14 (on Summons) of the Rules of Court provides: SEC. 14. Service upon
defendant whose identity or whereabouts are unknown. – In any action where the defendant is
designated as an unknown owner, or the like, or whenever his whereabouts are unknown and
cannot be ascertained by diligent inquiry, service may, by leave of court, be effected upon
him by publication in a newspaper of general circulation and in such places and for such
times as the court may order.

Since petitioner could not be personally served with summons despite diligent efforts to locate
his whereabouts, respondent sought and was granted leave of court to effect service of summons
upon him by publication in a newspaper of general circulation. Thus, petitioner was properly
served with summons by publication.

Petitioner invokes the distinction between an action in rem and an action in personam and claims
that substituted service may be availed of only in an action in rem. Petitioner is wrong. The in
rem/in personam distinction was significant under the old rule because it was silent as to the kind
of action to which the rule was applicable. Because of this silence, the Court limited the
application of the old rule to in rem actions only. The present rule expressly states that it applies
"[i]n any action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent inquiry." Thus, it
now applies to any action, whether in personam, in rem or quasi in rem.

Regarding the matter of the affidavit of service, the relevant portion of Section 19, Rule 14 of the
Rules of Court simply speaks of the following: XXX… an affidavit showing the deposit of a
copy of the summons and order for publication in the post office, postage prepaid, directed to the
defendant by registered mail to his last known address.

Service of summons by publication is proved by the affidavit of the printer, his foreman or
principal clerk, or of the editor, business or advertising manager of the newspaper which
published the summons. The service of summons by publication is complemented by service of
summons by registered mail to the defendant’s last known address. The rules, however, do not
require that the affidavit of complementary service be executed by the clerk of court.

Moreover, even assuming that the service of summons was defective, the trial court acquired
jurisdiction over the person of petitioner by his own voluntary appearance in the action
against him. In this connection, Section 20, Rule 14 of the Rules of Court states: SEC. 20.
Voluntary appearance. – The defendant’s voluntary appearance in the action shall be
equivalent to service of summons.

Petitioner voluntarily appeared in the action when he filed the "Omnibus Motion for
Reconsideration and to Admit Attached Answer." This was equivalent to service of summons
and vested the trial court with jurisdiction over the person of petitioner.

2. Entitlement of Notice to Proceedings

The effects of a defendant’s failure to file an answer within the time allowed therefor are
governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of the Rules of Court:
SEC. 3. Default; declaration of. – If the defending party fails to answer within the time
allowed therefor, the court shall, upon motion of the claiming party with notice to the
defending party, and proof of such failure, declare the defending party in default.

SEC. 4. Effect of order of default. – A party in default shall be entitled to notice of

subsequent proceedings but not to take part in the trial.

In this case, even petitioner himself does not dispute that he failed to file his answer on time.
That was in fact why he had to file an "Omnibus Motion for Reconsideration and to Admit
Attached Answer." But respondent moved only for the ex parte presentation of evidence, not
for the declaration of petitioner in default. The September 11, 2003 order did not limit itself to
permitting respondent to present its evidence ex parte but in effect issued an order of default. But
the trial court could not validly do that as an order of default can be made only upon motion of
the claiming party. Since no motion to declare petitioner in default was filed, no default order
should have been issued.

3. Correctness of Non-admission of Answer

Petitioner failed to file his answer within the required period. Indeed, he would not have moved
for the admission of his answer had he filed it on time. Considering that the answer was belatedly
filed, the trial court did not abuse its discretion in denying its admission.

Petitioners plea for equity must fail in the face of the clear and express language of the rules of
procedure and of the September 11, 2003 order regarding the period for filing the answer. Equity
is available only in the absence of law, not as its replacement. Equity may be applied only in the
absence of rules of procedure, never in contravention thereof.
6. Chu v. Mach Asia Trading Corporation, G.R. 184333, 01 April 2013.
FACTS:
Respondent Mach Asia Trading Corporation is a corporation engaged in importing dump trucks
and heavy equipments. Petitioner Sixto N. Chu purchased on installment one (1) Hitachi
Excavator, one (1) motorgrader and one (1) payloader. Petitioner made down payments with the
balance payable in 12 monthly installments through Land Bank postdated checks. However,
upon presentment of the checks for encashment, they were dishonored by the bank either by
reason of “closed account,” “drawn against insufficient funds,” or “payment stopped.”
Respondent filed a complaint before the Regional Trial Court (RTC) of Cebu City for sum of
money, replevin, attorney’s fees and damages against the petitioner. The RTC issued an Order
allowing the issuance of a writ of replevin on the subject heavy equipments. Sheriff Cortes
proceeded at petitioner’s given address for the purpose of serving the summons, together with
the complaint, writ of replevin and bond. However, the Sheriff failed to serve the summons
personally upon the petitioner, since the latter was not there. The Sheriff then resorted to
substituted service by having the summons and the complaint received by a certain Rolando
Bonayon, a security guard of the petitioner. Petitioner failed to file any responsive pleading.
Upon motion the RTC issued an Order declaring defendant in default and, thereafter, allowed
respondent to present its evidence ex parte. The RTC rendered a decision against the petitioner.
On appeal, the CA affirmed the RTC Decision.
ISSUE:
Was the substituted service of summons to the security guard considered to be a valid as to
acquire jurisdiction over the person of petitioner Chu?
HELD: NO.
As a rule, summons should be personally served on the defendant. It is only when summons
cannot be served personally within a reasonable period of time that substituted service may be
resorted to. Section 7, Rule 14 of the Rules of Court provides:

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

It is to be noted that in case of substituted service, there should be a report indicating that the
person who received the summons in the defendant’s behalf was one with whom the defendant
had a relation of confidence, ensuring that the latter would actually receive the summon. Clearly,
it was not shown that the security guard who received the summons in behalf of the petitioner
was authorized and possessed a relation of confidence that petitioner would definitely receive the
summons. This is not the kind of service contemplated by law. Thus, service on the security
guard could not be considered as substantial compliance with the requirements of substituted
service. The service of summons is a vital and indispensable ingredient of due process. As a rule,
if defendants have not been validly summoned, the court acquires no jurisdiction over their
person, and a judgment rendered against them is null and void. Since the RTC never acquired
jurisdiction over the person of the petitioner, the judgment rendered by the court could not be
considered binding upon him for being null and void.