LA NAVAL DRUG CORPORATION vs.
CA refrain from taking up the claims of the contending parties for damages, which, upon the
FACTS: Respondent Yao was the owner of a commercial building, a portion of which is
leased to herein petitioner. However, during the renewal of the contract of lease, the two
disagreed on the rental rate, and to resolve the controversy, they submitted their
disagreement to arbitration. Two arbitrators (Alamarez and Sabile) has been appointed by
the parties while the appointment of the third arbitrator (Tupang) was held in abeyance
because La Naval Drug instructed its arbitrator to defer the same until its Board of
Directors could convene and approved Tupang’s appointment. This was theorized by the
respondent as dilatory tactics, hence, he prayed that a summary hearing be conducted and
direct the 2 arbitrators to proceed with the arbitration in accordance with Contract of Lease
and the applicable provisions of the Arbitration law, by appointing and confirming the
appointment of the Third Arbitrator; and that the Board of Three Arbitrators be ordered to
immediately convene and resolve the controversy before it. The respondent court
announced that the two arbitrators chose Mrs. Eloisa R. Narciso as the third arbitrator and
ordered the parties to submit their position papers on the issue as to whether or not
respondent Yao's claim for damages may be litigated upon in the summary proceeding for
enforcement of arbitration agreement. In moving for reconsideration of the said Order,
petitioner argued that in Special Case No. 6024, the respondent court sits as a special
court exercising limited jurisdiction and is not competent to act on respondent Yao's claim
for damages, which poses an issue litigable in an ordinary civil action. However,
respondent court was not persuaded by petitioner's submission, hence, it denied the
motion for reconsideration. While the appellate court has agreed with petitioner that, under
Section 6 of Republic Act No. 876, a court, acting within the limits of its special jurisdiction,
may in this case solely determine the issue of whether the litigants should proceed or not
to arbitration, it, however, considered petitioner in estoppel from questioning the
competence of the court to additionally hear and decide in the summary proceedings
private respondent's claim for damages, it (petitioner) having itself filed similarly its own
counterclaim with the court a quo.
ISSUES:
1. WON THE COURT HAS JURISDICTION OVER THE PERSON.
2. WON THE COURT A QUO HAS JURISDICTION OVER THE SUBJECT MATTER.
HELD: As to the first issue, it was held that jurisdiction over the person must be
seasonably raised, i.e., that it is pleaded in a motion to dismiss or by way of an affirmative
defense in an answer. Voluntary appearance shall be deemed a waiver of this defense.
The assertion, however, of affirmative defenses shall not be constructed as an estoppel or
as a waiver of such defense. With regard to the second issue, it was held that where the
court itself clearly has no jurisdiction over the subject matter or the nature of the action,
the invocation of this defense may be done at any time. It is neither for the courts nor the
parties to violate or disregard that rule, let alone to confer that jurisdiction, this matter being
legislative in character. Barring highly meritorious and exceptional circumstances, such as
herein before exemplified, neither estoppel nor waiver shall apply. The court must then
other hand, may be ventilated in separate regular proceedings at an opportune.
ASIAVEST LIMITED V. CA
Facts: The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Heras
praying that said defendant be ordered to pay to the plaintiff the amounts awarded by the
Hong Kong Court Judgment. The action filed in Hong Kong against Heras was in
personam, since it was based on his personal guarantee of the obligation of the principal
debtor. The trial court concluded that the Hong Kong court judgment should be recognized
and given effect in this jurisdiction for failure of HERAS to overcome the legal presumption
in favor of the foreign judgment. Asiavest moved for the reconsideration of the decision. It
sought an award of judicial costs and an increase in attorney's fees with interest until full
payment of the said obligations. On the other hand, Heras no longer opposed the motion
and instead appealed the decision to CA. The Court of Appeals (CA) agreed with Heras
that notice sent outside the state to a non-resident is unavailing to give jurisdiction in an
action against him personally for money recovery. Summons should have been personally
served on Heras in Hong Kong,
Issue: Whether or not the judgment of the Hong Kong Court has been repelled by
evidence of want of jurisdiction due to improper notice to the party
HELD: YES. Asiavest cannot now claim that Heras was a resident of Hong Kong at the
time since the stipulated fact that Heras "is a resident of New Manila, Quezon City,
Philippines" refers to his residence at the time jurisdiction over his person was being
sought by the Hong Kong court. Accordingly, since Heras was not a resident of Hong Kong
and the action against him was, ne in personam, summons should have been personally
served on him in Hong Kong. The extraterritorial service in the Philippines was therefore
invalid and did not confer on the Hong Kong court jurisdiction over his person. It follows
that the Hong Kong court judgment cannot be given force and effect here in the Philippines
for having been rendered without jurisdiction.
On the same note, Heras was also an absentee,hence, he should have been served with
summons in the same manner as a non-resident not found in Hong Kong. Section 17, Rule
14 of the Rules of Court providing for extraterritorial service will not apply because the suit
against him was in personam. Neither can we apply Section 18, which allows
extraterritorial service on a resident defendant who is temporarily absent from the country,
because even if Heras be considered as a resident of Hong Kong, the undisputed fact
remains that he left Hong Kong not only temporarily but for good.
BPI VS SPS SANTIAGO
Facts: Centrogen, a domestic corporation engaged in pharmaceutical business obtained
several loans from Far East Bank and Trust Company (FEBTC), which was secured by a
real estate mortage over a parcel of land by Irene Santiago. Subsequently, FEBTC merged
with BPI. Due to failure of Centrogen to pay its loans,
BPI filed a case for Extra-Judicial Foreclosure of Real Estate Mortgage over the subject
property before the RTC of Sta. Cruz, Laguna. Thereafter, a Notice of Sale was issued by
the Provincial Sheriff on 21 January 2003. On the same day, the Spouses Santiago were
served with the copy of the Notice of Sale.Upon receipt the spouses and Centrogen filed a
Complaint seeking the issuance of a TRO and Preliminary and Final Injunction and in the
alternative, for the annulment of the Real Estate Mortgage with BPI. The complaint alleged
that the initial loan obligation in the amount of P490,000.00, including interest thereon has
been fully paid. Such payment notwithstanding, the amount was still included in the amount
of computation of the arrears as shown by the document of Extra-Judicial Foreclosure of
Real Estate Mortgage filed by the latter. Moreover, the Spouses Santiago and Centrogen
contended that the original loan agreement was for the amount of 5 Million but only 2 Million
was released by petitioner and as a result, the squalene project failed and the company
groped for funds to pay its loan obligations. On 27 February 2003, BPI was summoned to
file and serve its Answer and on the same day, summons was served on the Branch
Manager of BPI . Instead of filing an Answer, BPI filed a Motion to Dismiss on the ground of
lack of jurisdiction over the person of the defendant and other procedural infirmities attendant
to the filing of the complaint. BPI claimed that the Branch Manager of its Sta. Cruz, Laguna
Branch, was not one of those authorized by Section 11, Rule 14 of the Revised Rules of
Court to receive summons on behalf of the corporation. The summons served upon its
Branch Manager, therefore, did not bind the corporation. Also alleged lack of authorityof the
person who signed. RTC denied the MD and issued new summons. The RTC granted the
TRO to prevent foreclosure sale. BPI file MR but was denied hence this petition with BPI
alleging that the court a quo did not acquire jurisdiction over its person and consequently,
the Order issued by the RTC, permanently enjoining the foreclosure sale, was therefore void
and does not bind BPI.
Issue: Whether or not the court acquired jurisdiction over BPI
HELD: YES. The Court acquired jurisdiction over BPI. The defect of the service of the
original summons was cured by the issuance of the new summons which was not questioned
by BPI. There was substantial compliance. Although it may be true that the service of
summons was made on a person not authorized to receive the same in behalf of the
petitioner. Since it appears that the summons and complaint were in fact received by the
corporation through its said clerk, the Court finds that there was substantial compliance with
the rule on service of summons. The ultimate test on the validity and sufficiency on service
of summons is whether the same and the attachments thereto where ultimately received by
the corporation under such circumstances that no undue prejudice is sustained by it from
the procedural lapse and it was afforded full opportunity to present its responsive pleadings.
This is but in accord with the entrenched rule that the ends of substantial justice should not
be subordinated to technicalities and, for which purpose, each case should be examined
within the factual milieu peculiar to it. The Court also emphasized that there is no hard and
fast rule pertaining to the manner of service of summons. Rather, substantial justice
demands that every case should be viewed in light of the peculiar circumstances attendant
to each.
CHU VS MACH ASIA
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.
ELLICE AGRO-INDUSTRIAL CORPORATION vs. RODEL T. YOUNG
Remedial Law; Civil Procedure; Courts; Jurisdiction; Summons; Jurisdiction
over the defendant is acquired either upon a valid service of summons or the
defendant’s voluntary appearance in court; The purpose of summons is not only to
acquire jurisdiction over the person of the defendant, but also to give notice to the
defendant that an action has been commenced against it and to afford it an
opportunity to be heard on the claim made against it.
Same; Same; Summons; Service of Summons; Corporations; For service of
summons upon a private domestic corporation to be effective and valid, should be
made on the persons enumerated in the rule. Conversely, service of summons on
anyone other than the president, manager, secretary, cashier, agent, or director, is
not valid.―Section 13, Rule 14 of the 1964 Rules of Civil Procedure, the applicable rule on
service of summons upon a private domestic corporation then, provides: 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.
[Underscoring supplied] Based on the above-quoted provision, for service of summons upon
a private domestic corporation, to be effective and valid, should be made on the persons
enumerated in the rule. Conversely, service of summons on anyone other than the president,
manager, secretary, cashier, agent, or director, is not valid. 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.
Same; Same; Same; Same; Courts; Jurisdiction; Jurisdiction of the court over
the person of the defendant or respondent cannot be acquired notwithstanding his
knowledge of the pendency of a case against him unless he was validly served with
summons.―Granting arguendo that EAIC had actual knowledge of the existence of Civil
Case No. 96-177 lodged against it, the RTC still failed to validly acquire jurisdiction over
EAIC. In Cesar v. Ricafort-Bautista, 506 SCRA 322 (2006), it was held that “x x x jurisdiction
of the court over the person of the defendant or respondent cannot be acquired
notwithstanding his knowledge of the pendency of a case against him unless he was validly
served with summons. Such is the important role a valid service of summons plays in court
actions.”
ESPIRITU vs. LAZARO
FACTS:
Petitioners Espiritu filed a complaint for recovery of personal property with damages and
preliminary attachment against respondents Lazaro and Sison among others, involving the
alleged dollar time deposit accounts left by the late Porfirio Lazaro. The trial court granted
the prayer for preliminary attachment. Respondents' motion to discharge the attachment
and the two motions to dismiss were dismissed. Respondent Sison filed her answer with
Counterclaim and crossclaim. Lazaro filed a Cautionary Answer with Manifestation and a
Motion to File a Supplemental/Amended Answer. On Aug. 2002, petitioners received a
copy of the cautionary answer. On July 2003, the trial court dismissed the complaint due to
petitioners’ failure to prosecute for an unreasonable length of time. CA affirmed the
dismissal of the case.
ISSUE: Whether or not the trial court's dismissal of the case is proper.
RULING: Yes. Section 1 of Rule 18 of the Rules of Court imposes upon the plaintiff the
duty to set the case for pre-trial after the last pleading is served and filed. Under Section 3
of Rule 17, failure to comply with the said duty makes the case susceptible to dismissal for
failure to prosecute for an unreasonable length of time or failure to comply with the rules. In
every action, the plaintiffs are duty-bound to prosecute their case with utmost diligence and
with reasonable dispatch to enable them to obtain the relief prayed for and, at the same
time, to minimize the clogging of the court dockets.
It bears stressing that the sanction of dismissal may be imposed even absent any
allegation and proof of the plaintiff’s lack of interest to prosecute the action, or of any
prejudice to the defendant resulting from the failure of the plaintiff to comply with the rules.
The failure of the plaintiff to prosecute the action without any justifiable cause within a
reasonable period of time will give rise to the presumption that he is no longer interested in
obtaining the relief prayed for.
NEMENCIO C. EVANGELISTA, et al., petitioners, vs. CARMELINO M. SANTIAGO,
respondent.
FACTS: Petitioners alleged that they occupied and possessed parcels of land, by virtue of
several Deeds of Assignment, dated 15 April 1994 and 02 June 1994, executed by a certain
Ismael Favila y Rodriguez. According to the Deeds of Assignment, the Subject Property was
part of a vast tract of land called “Hacienda Quibiga,” which extended to Parañaque, Las
Piñas, Muntinlupa, Cavite, Batangas, Pasay, Taguig, Makati, Pasig, Mandaluyong, Quezon
City, Caloocan, Bulacan, and Rizal; awarded to Don Hermogenes Rodriguez by the Queen
of Spain and evidenced by a Spanish title. Ismael Favila claimed to be one of the heirs and
successors-in-interest of Don Hermogenes Rodriguez. Acting as Attorney-in-Fact pursuant
to a Special Power of Attorney executed by his “mga kapatid” on 25 February 1965, Ismael
Favila signed the aforementioned Deeds of Assignment, assigning portions of the Subject
Property to the petitioners, each portion measuring around 500 to 1,000 square meters, in
exchange for the labor and work done on the Subject Property by the petitioners and their
predecessors. Petitioners came by information that respondent was planning to evict them
from the Subject Property. Two of the petitioners had actually received notices to vacate.
Their investigations revealed that the Subject Property was included in Transfer Certificates
of Titles (TCTs), all originating from OCT No. 670, which was issued to respondent’s mother
pursuant to a decree arising from a case in the Court of Land Registration. The mother,
Isabel, executed a Deed of Donation transferring the property to her son, who subsequently
registered such properties in his own name. Petitioners filed with the trial court, an action for
declaration of nullity of respondent’s certificates of title on the basis that OCT No. 670 was
fake and spurious. As an affirmative defense, respondent claimed that the petitioners had
no legal capacity to file the Complaint, and thus, the Complaint stated no cause of action.
Since OCT No. 670 was genuine and authentic on its face, then OCT No. 670 and all of
respondent’s land titles derived therefrom, are incontrovertible, indefeasible and conclusive
against the petitioners and the whole world. Respondent also raised the affirmative defense
of prescription. He pointed out that any action against his certificates of title already
prescribed, especially with regard to OCT No. 670, which was issued in 1913 or more than
83 years prior to the filing of the Complaint by the petitioners. At the very least, respondent
contended, “it must be presumed that the questioned land titles were issued by the public
officials concerned in the performance of their regular duties and functions pursuant to the
law.” Lastly, respondent denied knowing the petitioners, much less, threatening to evict
them. In fact, petitioners were not included as defendants in Civil Case No. 783 entitled,
“Carmelino M. Santiago v. Remigio San Pascual, et al.,” which respondent instituted before
the same trial court against squatters occupying the Subject Property. During said hearing,
petitioners presented their lone witness, Engineer Placido Naval, a supposed expert on land
registration laws. In response to questions from Honorable Judge Francisco C. Rodriguez
of the trial court, Engineer Naval answered that a parcel of land titled illegally would revert
to the State if the Torrens title was cancelled, and that it was the State, through the
Office of the Solicitor General, that should file for the annulment or cancellation of the
title. Respondent, on the other hand, did not present any evidence but relied on all the
pleadings and documents he had so far submitted to the trial court.
RTC – denied petitioner’s petition. CA affirmed.
ISSUE: WON petitioners had legal capacity to sue
HELD: NO. But for a different reason. Before anything else, it should be clarified that “the
plaintiff has no legal capacity to sue” and “the pleading asserting the claim states no cause
of action” are two different grounds for a motion to dismiss or are two different affirmative
defenses. Lack of legal capacity to sue means that the plaintiff is not in the exercise of his
civil rights, or does not have the necessary qualification to appear in the case, or does
not have the character or representation he claims. On the other hand, a case is dismissible
for lack of personality to sue upon proof that the plaintiff is not the real party-in-interest,
hence grounded on failure to state a cause of action. The term "lack of capacity to sue"
should not be confused with the term "lack of personality to sue." While the former refers to
a plaintiff’s general disability to sue, such as on account of minority, insanity, incompetence,
lack of juridical personality or any other general disqualifications of a party, the latter refers
to the fact that the plaintiff is not the real party- in-interest. Correspondingly, the first can be
a ground for a motion to dismiss based on the ground of lack of legal capacity to sue;
whereas the second can be used as a ground for a motion to dismiss based on the fact that
the complaint, on the face thereof, evidently states no cause of action. In resolving whether
or not the Complaint in the present case 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, since these are
deemed hypothetically admitted by the respondent. The trial court evidently erred in making
findings as to the authenticity of the Deeds of Assignment executed by Ismael Favila in favor
of petitioners on 15 April 1994 and 02 June 1994; and questioning the existence and
execution of the Special Power of Attorney in favor of said Ismael Favila by his siblings on
25 February 1965. These matters may only be resolved after a proper trial on the merits.
In their Complaint, petitioners never alleged that the Subject Property was part of the public
domain. On the contrary, petitioners asserted title over the Subject Property by virtue of
their actual, physical, open, continuous and adverse possession thereof, in the concept of
owners, by themselves and through their predecessors-in-interest, since time immemorial.
The Deeds of Assignment executed in their favor and attached to their Complaint referred
to a Spanish title granted by the Queen of Spain to their predecessor-in-interest, Don
Hermogenes Rodriguez. Clearly, petitioners are asserting private title over the Subject
Property, and consequently, their action could not be one for reversion. In their instant
Petition, petitioners further averred that rather than an action for nullity of respondent’s
certificates of title, theirs was more appropriately an action to remove a cloud on or to quiet
their title over the Subject Property. Even as this Court agrees with the petitioners that their
action was one for removal of a cloud on or quieting of title, it does arrive at the same
conclusion as the trial court and the Court of Appeals that petitioners had no personality to
file the said action, not being the parties-in-interest, and their Complaint should be dismissed
for not stating a cause of action. According to Article 477 of the Civil Code, the plaintiff, in an
action to remove a cloud on or to quiet title, must have legal or equitable title to, or interest
in, the real property which is the subject matter of the action.[32] Petitioners failed to
establish in their Complaint that they had any legal or equitable title to, or legitimate interest
in, the Subject Property so as to justify their right to file an action to remove a cloud on or to
quiet title. In their Complaint, petitioners claimed title to the Subject Property by virtue of their
actual and continuous possession of the same since time immemorial, by themselves and
through their predecessors-in-interest. Yet, the Deeds of Assignment executed by Ismael
Favila in their favor, attached to and an integral part of their Complaint, revealed that
petitioners’ predecessors-in-interest based their right to the Subject Property on the
Spanish title awarded to Don Hermogenes Rodriguez. There existed a contradiction
when petitioners based their claim of title to the Subject Property on their possession thereof
since time immemorial, and at the same time, on the Spanish title granted to Don
Hermogenes Rodriguez. Possession since time immemorial carried the presumption that
the land had never been part of the public domain or that it had been private property even
before the Spanish conquest. If the Subject Property was already private property before the
Spanish conquest, then it would have been beyond the power of the Queen of Spain to
award or grant to anyone. The title to and possession of the Subject Property by petitioners’
predecessors-in-interest could be traced only as far back as the Spanish title of Don
Hermogenes Rodriguez. Petitioners, having acquired portions of the Subject Property by
assignment, could acquire no better title to the said portions than their predecessors-in-
interest, and hence, their title can only be based on the same Spanish title. Therefore,
without legal or equitable title to the Subject Property, the petitioners lacked the personality
to file an action for removal of a cloud on, or quieting of, title and their Complaint was properly
dismissed for failing to state a cause of action. In view of the dismissal of the case on this
ground, it is already unnecessary for this Court to address the issue of prescription of the
action.
Fort Bonifacio vs Domingo
Facts: Petitioner, a domestic corporation duly organized under Philippine laws, is engaged
in the real estate development business. Respondent is the assignee of L and M Maxco
Specialist Engineering Construction (LMM Construction) of its receivables from petitioner.
Petitioner entered into a Trade Contract with LMM Construction for partial structural and
architectural works on one of its projects, the Bonifacio Ridge Condominium. According to
the said Contract, petitioner had the right to withhold the retention money equivalent to 5%
of the contract price for a period of one year after the completion of the project. Due to the
defect and delay in the work of LMM Construction on the condominium project, petitioner
unilaterally terminated the Trade Contract and hired another contractor to finish the rest of
the work left undone by LMM Construction. Despite the pre-termination of the Trade
Contract, petitioner was liable to pay LMM Construction a fraction of the contract price in
proportion to the works already performed by the latter.
On 30 April 2005, petitioner received a letter dated 18 April 2005 from respondent inquiring
on the retention money supposedly due to LMM Construction and informing petitioner that
a portion of the amount receivable by LMM Construction therefrom was already assigned
to him as evidenced by the Deed of Assignment executed by LMM Construction in
respondent’s favor on 28 February 2005. LMM Construction assigned its receivables from
petitioner to respondent to settle the alleged unpaid obligation of LMM Construction to
respondent amounting to P804,068.21. Petitioner acknowledged that LMM Construction
did have receivables still with petitioner, however it still failed to pay the said amount to
respondent. This prompted respondent to file a Complaint for collection of sum of money,
against both LMM Construction and petitioner, docketed as Civil Case No. 06-0200-CFM
before the RTC of Pasay City, Branch 109. Instead of filing an Answer, petitioner filed a
Motion to Dismiss Civil Case No. 06-0200-CFM on the ground of lack of jurisdiction over
the subject matter. Petitioner argued that since respondent merely stepped into the shoes
of LMM Construction as its assignor, it was the CIAC and not the regular courts that had
jurisdiction over the dispute as provided in the Trade Contract. RTC denied the Motion to
Dismiss, CA affirmed said order.
ISSUE: WHETHER OR NOT THE RTC HAS JURISDICTION OVER CIVIL CASE NO. 06-
0200-CFM
Ruling: RTC has jurisdiction over civil case no. 06-0200-cfm. According to the Court, it is
an elementary rule of procedural law that jurisdiction of the court over the subject matter is
determined by 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. As a necessary
consequence, the jurisdiction of the court cannot be made to depend upon the defenses
set up in the answer or upon the motion to dismiss; for otherwise, the question of
jurisdiction would almost entirely depend upon the defendant. What determines the
jurisdiction of the court is the nature of the action pleaded as appearing from the
allegations in the complaint. The averments therein and the character of the relief sought
are the ones to be consulted. A scrupulous examination of the aforementioned allegations
in respondent’s Complaint unveils the fact that his cause of action springs not from a
violation of the provisions of the Trade Contract, but from the non-payment of the monetary
obligation of LMM Construction to him. What respondent puts in issue before the RTC is
the purportedly arbitrary exercise of discretion by the petitioner in giving preference to the
claims of the other creditors of LMM Construction over the receivables of the
latter. Respondent’s claim is not even construction-related at all. Petitioner’s insistence on
the application of the arbitration clause of the Trade Contract to respondent is clearly
anchored on an erroneous premise that respondent is seeking to enforce a right under the
same. Again, the right to the receivables of LMM Construction from petitioner under the
Trade Contract is not being impugned herein. In fact, petitioner readily conceded that
LMM Construction still had receivables due from petitioner, and respondent did not even
have to refer to a single provision in the Trade Contract to assert his claim. What
respondent is demanding is that a portion of such receivables amounting to P804,068.21
should have been paid to him first before the other creditors of LMM Construction, which,
clearly, does not require the CIAC’s expertise and technical knowledge of construction.
 AFDAL & AFDAL v. CARLOS
G.R. No. 173379, December 1, 2010
Jurisdiction over the defendant is acquired either upon a valid service of summons or the
defendant’s voluntary appearance in court.
FACTS: Respondent Carlos filed a complaint for unlawful detainer and damages against
petitioners, Guijabar, et al. and further alleged that the latter were occupying, by mere
tolerance, a parcel of land in respondent’s name. According to respondent, petitioner
Abubakar Afdal sold the property to him but that he allowed petitioners to stay in the property.
Later, respondent demanded that petitioners, et al turn over the property to him because he
needed the property for his personal use. Due to petitioners’ refusal, the matter was brought
to the Lupon Tagapamayapa. Petitioners, et al ignored the notices thereby resulting in the
issuance of a certificate to file action before the MTC.
According to the records, there were three attempts to serve the summons and complaint
on petitioners. However, petitioners failed to file an answer. MTC ruled in favor of
respondent. Petitioners initially filed a petition for relief from judgment with the MTC.
Realizing that it was a prohibited pleading, petitioners subsequently withdrew the same. The
same petition for relief was now brought before the RTC. The RTC dismissed the petition for
relief saying it had no jurisdiction over the petition because the petition should have been
filed before the MTC in accordance with Section 1 of Rule 38 of the Rules of Court.
ISSUE: Whether or not RTC had jurisdiction over the petition for relief from judgment.
HELD: NO. In the present case, petitioners cannot file the petition for relief with the MTC
because it is a prohibited pleading in an unlawful detainer case. Petitioners cannot also file
the petition for relief with the RTC because the RTC has no jurisdiction to entertain petitions
for relief from judgments of the MTC. Therefore, the RTC did not err in dismissing the petition
for relief from judgment of the MTC. The remedy of petitioners is to file a petition for certiorari
with the RTC under Rule 65 of the Rules of Court on the ground of lack of jurisdiction of the
MTC over the person of petitioners in view of the absence of summons to petitioners. An
action for unlawful detainer or forcible entry is a real action and in personam. In an action in
personam, jurisdiction over the person of the defendant is necessary for the court to validly
try and decide the case. Jurisdiction over the defendant is acquired either upon a valid
service of summons or the defendant’s voluntary appearance in court. Any judgment of the
court which has no jurisdiction over the person of the defendant is null and void. In the case,
petitioners were not validly served with summons and the complaint by substituted service.
Hence, the MTC failed to acquire jurisdiction over the person of the petitioners and, thus, the
MTC’s decision is void.
SPOUSES PEPITO AND LORETO LAUS, petitioners, vs. HON. COURT OF APPEALS
Facts: Loreto Laus executed a promissory note in favor of private respondent Torres under
which the former undertook to pay the latter the amount of Sixty-Six Thousand Pesos
(P66,000.00).However, only Eleven Thousand Pesos (P11,000.00) was paid; despite the
receipt of a demand letter from the private respondent, petitioners made no further
payments. Thus, Torres filed the a complaint for the collection of sum of money before the
RTC of Quezon City praying for the payment of the unpaid balance of P55,000.00 plus
interest and attys fees. Deputy Sheriff Romero S. Cruz proceeded to Laus’ address to serve
the summons and a copy of the complaint. Failing to serve the summons personally upon
the petitioners after waiting for ten (10) minutes, he resorted to a substituted service through
one Josephine Areola, who purportedly represented herself to be the maid of the said
petitioners. Upon motion of the private respondent, the RTC issued an order declaring the
former in default and setting the ex parte presentation of the private respondent's evidence.
Petitioners by way of a special appearance, filed a motion to dismiss the case for lack of
jurisdiction over their persons. They allege that the service of summons was ineffective
because it was not indicated in the return that the sheriff had first exerted efforts to serve the
same personally before resorting to substituted service. Deputy Sheriff Nilo Cabang,
pursuant to a writ of execution issued by the trial court, levied upon petitioners' properties
consisting of a 1983 Mitsubishi Galant Sedan and a men's ring and was later sold at public
auction. A hearing on the motion for reconsideration was held and the parties presented
evidence on the issue of service of summons. Petitioner Loreto Alfaro-Laus testified that
Josephine Areola, who was 11 to 12 years old at that time, was just a guest of her maid and
thus stayed in the house for a week.
RTC – denied the motion filed by LAUS; CA- denied the motion of LAUS
ISSUE. Whether or not the trial court acquired jurisdiction over the persons of the petitioners
by virtue of the substituted service of summons effected by Deputy Sheriff Cruz.
RULING: NO. The general rule in this jurisdiction is that summons must be personally
served; pursuant to Section 7, Rule 14 of the Revised Rules of Court, such personal service
is to be accomplished by "handing a copy thereof to the defendant in person, or, if he refuses
to receive it, by tendering it to him." However, if this mode of service cannot be effected
within a reasonable time, substituted service may be resorted to under Section 8 of the same
Rule. Section 8 provides:
"SECTION 8. Substituted Service. — If 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 dwelling house or 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."
A perusal of the sheriff's return in the case at bar readily reveals that it does not (a) indicate
the impossibility of service of summons within a reasonable time, (b) specify the efforts
exerted to locate the petitioners and (c) state that it was served on a person of sufficient age
and discretion residing therein. The fact of the matter is that as disclosed in his testimony
taken in connection with the motion for reconsideration, and the affidavit he prepared in
conjunction with such hearing. Deputy Sheriff Cruz resorted to a substituted service on his
first — and only — attempt to effect a personal service. Upon being informed that the
petitioners were not around at that time, he immediately resorted to a substituted service
through Josephine Areola, a person whose age he did not even know or attempt to discover.
He did not even inquire about the whereabouts of the petitioners, the time they were
expected to return home, the hours of the day they could be contacted at their house or the
location of their offices, if any, in order that he could faithfully comply with the requirement
of personal service. Since the substituted service of summons in this case was not validly
effected, the trial court did not acquire jurisdiction over the persons of the petitioners. The
order of default, the judgment by default, the writ of execution issued by it, as well as the
auction sale of the petitioners' properties levied on execution are, therefore, all null and void.
MONTEFALCON vs. VASQUEZ
FACTS: In 1999, petitioner Dolores P. Montefalcon filed a Complaint for acknowledgment
and support against respondent Ronnie S. Vasquez before the RTC of Naga City. Alleging
that her son Laurence (co-petitioner) is the illegitimate child of Vasquez, she prayed that
Vasquez be obliged to give support to their son, whose certificate of live birth he signed as
father. According to petitioners, Vasquez only gave a total of P19,000 as support for
Laurence since Laurence was born in 1993, and allegedly refused to give him regular
school allowance despite repeated demands. Petitioner Dolores added that she and
Vasquez are not legally married, and that Vasquez has his own family. A sheriff tried to
serve the summons and complaint on Vasquez in Aro-aldao, Nabua, Camarines Sur.
Vasquez's grandfather received them as Vasquez was in Manila. Vasquez's mother
returned the documents to the clerk of court, who informed the court of the non-service of
summons. Petitioners then filed a motion to declare Vasquez in default. The court denied it
for lack of proper service of summons. An alias summon was served in 2000 at the Taguig
address of Vasquez, and was received by his caretaker Bejer but the sheriff's return
incorrectly stated "Lazaro" as Vasquez's surname. Another alias summon was served this
time with the correct name of Vasquez, received by Bejer and sheriff in turn issued a
certificate that summon was duly served. On petitioners’ motion, the trial court declared
Vasquez in default for failure to file an answer despite the substituted service of
summons. Vasquez was furnished with court orders and notices of the proceedings at his
last known address. Noting that Vasquez is a seafarer and left the country on January 24,
2000 and came back on October 12, 2000. Vasquez filed a petition on appeal contending
that the court never acquired jurisdiction over his person and the awarding of support as
excessive. CA granted his appeal ruling on the service of summons was defective as there
was no proof of impossibility in personal service and an attempt to effect such. Vasquez
countered that because he was abroad; service of summons should have been personal or
by publication as substituted service is proper only if a defendant is in the
country. Vasquez also added that the sheriff’s return did not state that he exerted efforts to
personally serve the summons. In their reply, petitioners insisted that a substituted service
is the normal method if one is temporarily away from the country as personal service
abroad or by publication are not ordinary means of service.
ISSUES: Whether there is a valid substituted service of summons on Vasquez to clothe
the trial court with jurisdiction over his person.
RULING: Yes. To acquire jurisdiction over the person of a defendant, service of summons
must be personal, or if this is not feasible within a reasonable time, then by substituted
service. It is of judicial notice that overseas Filipino seafarers are contractual
employees. They go back to the country once their contracts expire, and wait for the
signing of another contract with the same or new manning agency and principal if they
wish. In this case, respondent Vasquez hails from Camarines Sur but he has lived
in Taguig City when the complaint was filed. Notice may then be taken that he has
established a residence in either place. Residence is a place where the person named in
the summons is living at the time when the service was made, even though he was
temporarily abroad at the time. As an overseas seafarer, Vasquez was a Filipino resident
temporarily out of the country. Section 16 of Rule 14 of the Civil Procedure is not
mandatory in nature, hence, personal service out of the country was impracticable. The
substituted service of summons was correctly diligently done by the sheriff when he
ascertained first the whereabouts of Vasquez. Adding also that, the person who received
the alias summons was of suitable age and discretion, then residing at Vasquez’s dwelling.
However, concluding that Vasquez had sufficient time to argue and to file a motion for
reconsideration, he was silent.
CLARITA P. NAVARRO vs. METROPOLITAN BANK & TRUST COMPANY
Judgments; Immutability of Judgments; No other procedural law principle is indeed
more settled than that once a judgment becomes final, it is no longer subject to change,
revision, amendment or reversal, except only for correction of clerical errors, or the making
of nunc pro tunc entries which cause no prejudice to any party, or where the judgment
itself is void.---The underlying reason for the rule is two-fold: (1) to avoid delay in the
administration of justice and thus make orderly the discharge of judicial business, and (2)
to put judicial controversies to an end, at the risk of occasional errors, inasmuch as
controversies cannot be allowed to drag on indefinitely and the rights and obligations of
every litigant must not hang in suspense for an indefinite period of time.
Same; Same; Just as a losing party has the right to file an appeal within the prescribed
period, the winning party also has the correlative right to enjoy the finality of the resolution
of his case by the execution and satisfaction of the judgment.
 Actions; Motion to Dismiss; Laches; As a ground for the dismissal of a complaint, the
doctrine of laches is embraced in the broad provision in Section 1 of Rule 16 of the Rules of
Court, which enumerates the various grounds on which a motion to dismiss may be based—
Paragraph (h) thereof states that the fact that the claim or demand set forth in the plaintiff’s
pleading has been paid, waived, abandoned, or otherwise extinguished, may be raised in a
motion to dismiss.—
Same; Dismissal of Actions; Where the complaint is dismissed on the ground that the
cause of action is barred by a prior judgment or by the statute of limitations, or that the claim
or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned, or
otherwise extinguished, or that the claim on which the action is founded is unenforceable
under the provisions of the statute of frauds, such dismissal operates as one with prejudice
and which therefore precludes the filing of another action based on the same claim.
Same; Judgments; Res Judicata; The principle of res judicata denotes that a final
judgment or decree on the merits by a court of competent jurisdiction is conclusive of the
rights of the parties or their privies in all later suits on all points and matters determined in
their former suit.
Leah Palma vs. Hon. Danilo Galvez
Facts: Petitioner Leah Palma filed with the RTC an action for damages against the Philippine
Heart Center and its doctors and nurses professional fault, negligence and omission for
having removed her right ovary against her will, and losing the same and the tissues
extracted from her during the surgery. One of the defendants is private respondent Psyche
Elena Agudo, one of the nurses during the surgery. The RTC’s process server submitted his
return of summons stating that the alias summons, together with a copy of the amended
complaint and its annexes, were served upon private respondent thru her husband Alfredo
Agudo, who received and signed the same as private respondent was out of the country.
Agudo filed a Motion to Dismiss on the ground that the RTC had not acquired jurisdiction
over her as she was not properly served with summons, since she was temporarily out of
the country; that service of summons on her should conform to Section 16, Rule 14 of the
Rules of Court. Palma filed her Opposition to the motion to dismiss, arguing that a substituted
service of summons on private respondent’s husband was valid and binding on her; that
service of summons under Section 16, Rule 14 was not exclusive and may be effected by
other modes of service, i.e., by personal or substituted service.
Issue: W/N there was a valid service of summons on private respondent.
Held: Yes. Considering that private respondent was temporarily out of the country, the
summons and complaint may be validly served on her through substituted service under
Section 7, Rule 14 of the Rules of Court.
Section 16 of Rule 14 uses the words “may” and “also,” it is not mandatory. Other methods
of service of summons allowed under the Rules may also be availed of by the serving officer
on a defendant-resident who is temporarily out of the Philippines. Thus, if a resident
defendant is temporarily out of the country, any of the following modes of service may be
resorted to: (1) substituted service set forth in section 7, Rule 14; (2) personal service
outside the country, with leave of court; (3) service by publication, also with leave of court;
or (4) in any other manner the court may deem sufficient. Under Section 7 of Rule 14,
substituted service may be made by leaving copies of the summons at the defendant’s
residence with some person of suitable age and discretion then residing therein.The service
was made at the defendant’s residence and her husband acknowledged receipt thereof. The
husband was presumably of suitable age and discretion, who was residing in that place and,
therefore, was competent to receive the summons on private respondent’s behalf.
RAPID CITY vs. VILLA
Civil Procedure; Jurisdiction; Voluntary Submission; Jurisdiction over the defendant in
a civil case is acquired either by the coercive power of legal processes exerted over his
person, or his voluntary appearance in the court. As a general proposition, one who seeks
an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason
of this rule that we have had occasion to declare 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 court’s
jurisdiction.—Preliminarily, jurisdiction over the defendant in a civil case is acquired either
by the coercive power of legal processes exerted over his person, or his voluntary
appearance in court. As a general proposition, one who seeks an affirmative relief is deemed
to have submitted to the jurisdiction of the court. It is by reason of this rule that we have had
occasion to declare 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 court’s jurisdiction. This,
however, is tempered by the concept of conditional appearance, such that a party who
makes a special appearance to challenge, among others, the court’s jurisdiction over his
person cannot be considered to have submitted to its authority.
REPUBLIC OF THE PHILIPPINES vs. ALBERTO A. DOMINGO
Civil Procedure; Summons; Summons is a writ by which the defendant is notified of the
action brought against him; Jurisdiction over the person of the defendant is acquired through
coercive process.—Summons is a writ by which the defendant is notified of the action
brought against him. Service of such writ is the means by which the court acquires
jurisdiction over his person. Jurisdiction over the person of the defendant is acquired through
coercive process, generally by the service of summons issued by the court, or through the
defendant’s voluntary appearance or submission to the court.
 Same; Same; When a suit is directed against an unincorporated government agency,
which, because it is unincorporated, possesses no juridical personality of its own, the suit is
against the agency’s principal, i.e., the State.—Jurisprudence further instructs that when a
suit is directed against an unincorporated government agency, which, because it is
unincorporated, possesses no juridical personality of its own, the suit is against the agency’s
principal, i.e., the State.
Same; Same; The Department of Public Works and Highways (DPWH) and its regional
office are merely the agents of the former (the Republic), which is the real party in interest
in Civil Case No. 333-M-2002; The summons in this case should have been served on the
Office of the Solicitor General (OSG).—In the instant case, the Complaint for Specific
Performance with Damages filed by Domingo specifically named as defendant the DPWH
Region III. As correctly argued by the Republic, the DPWH and its regional office are merely
the agents of the former (the Republic), which is the real party in interest in Civil Case No.
333-M-2002. Thus, as mandated by Section 13, Rule 14 of the Rules of Court, the summons
in this case should have been served on the OSG.
Same; Parties; It is the duty of the plaintiff to implead all the necessary or indispensable
parties for the complete determination of the action.—On the other hand, Domingo opines
that the DPWH Region III apparently neglected to inform the OSG of the pendency of Civil
Case No. 333-M-2002. Accordingly, Domingo asserted that he should not be faulted
therefor. The Court disagrees. Domingo ought to bear in mind that it is the duty of the plaintiff
to implead all the necessary or indispensable parties for the complete determination of the
action. It was, thus, incumbent upon him to name and implead the proper defendant in this
case, i.e., the Republic, and cause the service of summons to be made upon the officer
mandated by law, that is, the OSG. As Domingo failed to discharge this burden, he cannot
now be allowed to shift the blame on the DPWH Region III or hold in estoppel the OSG.
Same; Annulment of Judgment; A judgment of annulment shall set aside the
questioned judgment or final order or resolution and render the same null and void, without
prejudice to the original action being refiled in the proper court.—In accordance with Section
7, Rule 47 of the Rules of Court, a judgment of annulment shall set aside the questioned
judgment or final order or resolution and render the same null and void, without prejudice to
the original action being refiled in the proper court.
PEDRO T. SANTOS, JR. v. PNOC
FACTS: December 23, 2002, PNOC Exploration Corporation, respondent, filed a
complaint for a sum of money against petitioner Pedro Santos Jr. in the RTC of Pasig. The
amount sought to be collected was the 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 were made to petitioner but failed because the latter cannot
be located in his last known address despite earnest efforts to do so. Subsequently, on
respondent’s motion, the trial court allowed service of summons by publication.
Respondent caused the publication of the summons in Remate, a newspaper of general
circulation in the Philippines. Thereafter, respondent submitted the affidavit of publication
and the 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.
Petitioner still failed to answer within the prescribed period despite the publication of
summons. Hence, respondent filed a motion for the reception of its evidence ex parte. Trial
court granted said motion and proceeded with the ex parte presentation and formal offer of
its evidence. Petitioner filed an Omnibus Motion for Reconsideration and to Admit Attached
Answer, 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.Trial
court denied the said motion and held that the rules did not require such execution with the
clerk of court. It also denied the motion to admit petitioner’s answer because the same was
filed way beyond the reglementary period.
Petitioner appeals to the CA via a petition for certiorari contending that the court committed
grave abuse of discretion since it has no jurisdiction due to improper service of summons,
failure to furnish him with copies of its orders and processes and upholding technicality
over equity and justice.
ISSUE: Whether or not there was a failure on the part of the trial court to furnish Petitioner
with copies of orders and processes issued in the course of the proceedings
HELD: No, Santos failed to file an answer in time, which is why he had to file an Omnibus
Motion to Admit Attached Answer. The disputed order of September 11, 2003 was a
finding that the Santos was in default for failure to file an answer or pleading within the
period fixed. It is illogical to notify him of the order simply on account of the reality that he
was no longer residing and/or found on his last known address and his whereabouts
unknown thus the publication of summons. Santos could not reasonably demand that
copies of orders and processes be furnished him. His residence or whereabouts is not
known and he cannot be located. In the case at bar, there is obviously no way notice can
be sent to him and the notice requirement cannot apply to him. The law does not require
that the impossible be done. Nemo tenetur ad impossible. The law obliges no one to
perform an impossibility. Laws and rules must be interpreted in a way that they are in
accordance with logic, common sense, reason and practicability. Be that as it may, a copy
of the September 11, 2003 order was still mailed to him at his last known address but it
was unclaimed.