G

G.R. No. 169129

March 28, 2007SPS. VIRGILIO F. SANTOS & ESPERANZA LATI SANTOS, SPS.VICTORINO F. SANTOS, & LAGRIMAS SANTOS, ERNESTO F. SANTOS, and TADEO F. SANTOS,Petitioners,

vs.SPS. JOSE LUMBAO and PROSERFINA LUMBAO,Respondents.

Herein petitioners Virgilio, Victorino, Ernesto and Tadeo, all surnamed Santos, are the legitimate and surviving heirs of the late Rita Catoc Santos (Rita), who died on 20 October 1985. The other petitioners Esperanza Lati and Lagrimas Santos are the daughters-in-law of Rita.

Herein respondents Spouses Jose Lumbao and Proserfina Lumbao are the alleged owners of the 107-square meter lot (subject property), which they purportedly bought from Rita during her lifetime.

Facts:

1. On two separate occasions during her lifetime, Rita sold to respondents Spouses Lumbao the subject property which is a part of her share in the estate of her deceased mother, Maria Catoc (Maria), who died intestate.2. On the first occasion, Rita sold 100 square meters of her inchoate share in her mothers estate through a document denominated as "Bilihan ng Lupa," Respondents Spouses Lumbao claimed the execution of the aforesaid document was witnessed by petitioners Virgilio and Tadeo as shown by their signatures affixed therein.3. On the second occasion, an additional seven square meters was added to the land as evidenced by a document4. Spouses Lumbao erected thereon a house which they have been occupying as exclusive owners up to the present. As the exclusive owners, respondents Spouses Lumbao made several verbal demands upon Rita for them to execute the necessary documents to effect the issuance of a separate title in favor of respondents Spouses Lumbao insofar as the subject property is concerned.5. Respondents Spouses Lumbao alleged that prior to her (Rita) death, Rita informed respondent Lumbao she could not deliver the title to the subject property because the entire property inherited by her and her co-heirs from Maria had not yet been partitioned.6. Spouses Lumbao claimed that petitioners, acting fraudulently and in conspirac, executed a Deed of Extrajudicial Settlement, partitioning among themselves and the other heirs, the estate left by Maria, which included the subject property already sold to respondents Spouses Lumbao7. Petitioners refused toreconvey the subject property despite formal demand letter.8. Petitioners denied the allegationthat the subject property had been sold to the respondents. They likewise denied that the Deed of Extrajudicial Settlement had been fraudulently executed because the same was duly published as required by law.9. On the contrary, they prayed for the dismissal of the Complaint for lack of cause of action because respondents Spouses Lumbao failed to first resort to barangay conciliation (the Revised Katarungang Pambarangay Law).

10. Respondents, with leave of court, amended their Complaint because they discovered without their knowledge, petitioners executed a Deed of Real Estate Mortgage in favor of Julieta S. Esplana. Also, in answer to the allegation of the petitioners that they failed to comply with the mandate of the Revised Katarungang Pambarangay Law, respondents Spouses Lumbao said that the Complaint was filed directly in court in order that prescription or the Statute of Limitations may not set in.

11. During the trial, respondents Spouses Lumbao presented Proserfina Lumbao and Carolina Morales as their witnesses, while the petitioners presented only the testimony of petitioner Virgilio.

TC: Ruled in favor of petitioners. Resps. pay pets. CA REVERSED TC. Pets reconvey lands to resps. Petitioners filed MFR. DENIED. Hence, this petition.

12. Petitioners ask this Court to scrutinize the evidence presented in this case, because they claim that the factual findings of the trial court and the appellate court are conflicting. They allege that the findings of fact by the trial court revealed that petitioners Virgilio and Tadeo did not witness the execution of the documents known as "Bilihan ng Lupa"; hence, this finding runs counter to the conclusion made by the appellate court.13. And even assuming that they were witnesses to the aforesaid documents, still, respondents Spouses Lumbao were not entitled to the reconveyance of the subject property because they were guilty of laches for their failure to assert their rights for an unreasonable length of time.(12 years reckoned from the date of execution of the second "Bilihan ng Lupa,")14. Petitioners allege they are in good faith in executing the Deed of Extrajudicial Settlement because even respondents Spouses Lumbaos witness, Carolina Morales, testified that neither petitioner Virgilio nor petitioner Tadeo was present during the execution of the "Bilihan ng Lupa"15. Petitioners affirm that the Deed of Extrajudicial Settlement was published in a newspaper of general circulation and no claimant interposed a claim. 16. Petitioners also contend that they are not bound by the documents denominated as "Bilihan ng Lupa" because the same were null and void for the following reasons: 1) for being falsified documents because one of those documents made it appear that petitioners Virgilio and Tadeo were witnesses to its execution and that they appeared personally before the notary public, when in truth and in fact they did not; 2) the identities of the properties in the "Bilihan ng Lupa," dated 17 August 1979 and 9 January 1981 in relation to the subject property in litigation were not established by the evidence presented by the respondents Spouses Lumbao; 3) the right of the respondents Spouses Lumbao to lay their claim over the subject property had already been barred through estoppel by laches; and 4) the respondents Spouses Lumbaos claim over the subject property had already prescribed.17. Finally, petitioners claim that the Complaint for Reconveyance with Damages filed by respondents Spouses Lumbao was dismissible because they failed to comply with the mandate Republic Act No. 7160, particularly Section 412 of Republic Act No. 7160.

Issues:

I. Whether or not the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao is dismissible for their failure to comply with the mandate of the Revised Katarungang Pambarangay Law under R.A. No. 7160. NO.

II. Whether or not the documents known as "Bilihan ng Lupa" are valid and enforceable, thus, they can be the bases of the respondents spouses Lumbaos action for reconveyance with damages.

III. Whether or not herein petitioners are legally bound to comply with the "Bilihan ng Lupa" dated 17 August 1979 and 9 January 1981 and consequently, reconvey the subject property to herein respondents spouses Lumbao.

Held.

1st issue

18. No. Non-compliance with the said condition precedent could affect the sufficiency of the plaintiffs cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants failed to object to such exercise of jurisdiction. (SC is not a trier of facts, but when the findings of the appellate court are contrary to those of the trial court, the Court can try facts.

19. In this case, however, respondents Spouses Lumbaos non-compliance with the aforesaid condition precedent cannot be considered fatal. Although petitioners alleged in their answer that the Complaint for Reconveyance with Damages filed by respondents spouses Lumbao should be dismissed for their failure to comply with the condition precedent, which in effect, made the complaint prematurely instituted and the trial court acquired no jurisdiction to hear the case, yet, they did not file a Motion to Dismiss the said complaint.20. Instead of filing MTD, they invoked the very same jurisdiction by filing an answer seeking an affirmative relief from it. Worse, petitioners actively participated in the trial of the case by presenting their own witness and by cross-examining the witnesses presented by the respondents Spouses Lumbao. It is elementary that the active participation of a party in a case pending against him before a court is tantamount to recognition of that courts jurisdiction and a willingness to abide by the resolution of the case which will bar said party from later on impugning the courts jurisdiction.2nd issue:

21. No. Upon examination of the aforesaid documents, this Court finds that in the "Bilihan ng Lupa," dated 17 August 1979, the signatures of petitioners Virgilio and Tadeo appeared thereon. Moreover, in petitioners Answer and Amended Answer to the Complaint for Reconveyance with Damages, both petitioners Virgilio and Tadeo made an admission that indeed they acted as witnesses in the execution of the "Bilihan ng Lupa,"22. However, in order to avoid their obligations in the said "Bilihan ng Lupa," petitioner Virgilio, in his cross-examination, denied having knowledge of the sale transaction and claimed that he could not remember the same as well as his appearance before the notary public due to the length of time that had passed. Noticeably, petitioner Virgilio did not categorically deny having signed the "Bilihan ng Lupa (As shown in his testimony)23. As a general rule, facts alleged in a partys pleading are deemed admissions of that party and are binding upon him, but this is not an absolute and inflexible rule. An answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.And in spite of the presence of judicial admissions in a partys pleading, the trial court is still given leeway to consider other evidence presented.24. However, in the case at bar, as the CA mentioned in its Decision, "[herein petitioners] had not adduced any other evidence to override the admission made in their [A]nswer that [petitioners Virgilio and Tadeo] actually signed the [Bilihan ng Lupa dated 17 August 1979] except that they were just misled as to the purpose of the document, Virgilios answers were unsure and quibbled. Hence, the general rule that the admissions made by a party in a pleading are binding and conclusive upon him applies in this case.25. If the statement of Carolina Morales is calibrated it its entirety, it shows that her subsequent statement that the [petitioners Virgilio and Tadeo] were not with them during the transaction does not automatically imply that [petitioners Virgilio and Tadeo] did not at any time sign as witnesses as to the deed of sale attesting to their mothers voluntary act of selling a portion of her share in her deceased mothers property.26. Furthermore, both "Bilihan ng Lupa" documents dated 17 August 1979 and 9 January 1981 were duly notarized before a notary public. It is well-settled that a document acknowledged before a notary public is a public document25that enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution. This they failed to do.27. In the case at bar, the right of the respondents Spouses Lumbao to seek reconveyance does not prescribe because the latter have been and are still in actual possession and occupation as owners of the property sought to be reconveyed, which fact has not been refuted nor denied by the petitioners. 28. Furthermore, respondents Spouses Lumbao cannot be held guilty of laches because from the very start that they bought the 107-square meter lot from the mother of the petitioners, they have constantly asked for the transfer of the certificate of title into their names but Rita, during her lifetime, and the petitioners, after the death of Rita, failed to do so on the flimsy excuse that the lot had not been partitioned yet.29. The failure of respondents Spouses Lumbao to have the said documents registered does not affect its validity and enforceability. It must be remembered that registration is not a requirement for validity of the contract as between the parties, for the effect of registration serves chiefly to bind third persons.3rd issue:

30. Yes, Finally, the general rule that heirs are bound by contracts entered into by their predecessors-in-interest applies in the present case. Article 131132of the NCC is the basis of this rule. It is clear from the said provision that whatever rights and obligations the decedent have over the property were transmitted to the heirs by way of succession, a mode of acquiring the property, rights and obligations of the decedent to the extent of the value of the inheritance of the heirs. The death of a party does not excuse nonperformance of a contract which involves a property right and the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly, nonperformance is not excused by the death of the party when the other party has a property interest in the subject matter of the contract.31. WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and Resolution of the Court of Appeals dated 8 June 2005 and 29 July 2005, respectively, are hereby AFFIRMED. Herein petitioners are ordered to reconvey to respondents Spouses Lumbao the subject property and to pay the latter attorneys fees and litigation expenses. Costs against petitioners.

RUBY H. GARDNER and FRANK GARDNER, JR., petitioners, vs.COURT OF APPEALS, DEOGRACIAS R. NATIVIDAD and JUANITA A. SANCHEZ, respondents.

Facts:

On November 27, 1961, the GARDNERS and the spouses Ariosto C. SANTOS and Cirila Serrano (the SANTOSES) entered into an agreement for the subdivision of the two parcels, with the SANTOSES binding themselves to advance to the GARDNERS the amount of P93,000.00 in installments. For the protection of both parties they executed the following documents all on the same date and referring to the same parcels of land: (1) Absolute Deed of Sale in favor of the SANTOSES (the First Transfer, considering the nature of the document); (2) Subdivision Joint Venture Agreement; and (3) Supplemental Agreement. Despite the "sale,", the GARDNERS were still denominated in the Subdivision Joint Venture Agreement and in the Supplemental Agreement as "owners" and Ariosto SANTOS merely as "broker". It appears from the evidence that the sale to the SANTOSES was one "in trust" for the protection of the SANTOSES who had obligated themselves to give cash advances to the GARDNERS from time to time. On December 5, 1961, new titles were issued in favor of the SANTOSES.

Unknown to the GARDNERS, on June 10, 1964, the SANTOSES transferred Lot No. 1426-New to Jose Cuenca, married to Amanda Relova (the JOSE CUENCAS), and on June 15, 1964, Lot No. 4748-New to Juan Cuenca, married to Soledad Advincula (the JUAN CUENCAS) (jointly, the Second Transfer). Titles were thereafter issued in their respective names.

Upon learning of the Transfer of the properties to the CUENCAS, petitioner 'Ruby GARDNER, caused the inscription of an Adverse Claim on the titles of the CUENCAS with the Register of Deeds of Laguna on December 2, 1965

In their Answer, the SANTOSES claimed, in brief, that the sale to them was conditional in the sense that the properties were to be considered as the investment of the GARDNERS in the subdivision venture and that in the event that this did not materialize they were to reconvey the lots to the GARDNERS upon reimbursement by the latter of all sums advanced to them; and that the deed of sale was to be registered for the protection of the SANTOSES considering the moneys that the latter would be advancing.

Issue:

WON the Court of Appeals erred in holding that the testimonies of Ariosto Santos under oath on the witness stand cannot prevail over the allegations in Santos' answer (not verified and only signed by Ariosto Santos' counsel) and, regarding which there is no substantial conflict or variance.

Decision:

In its Resolution reversing the original Decision, respondent Court discredited the testimony of Ariosto SANTOS for being at variance with the allegations in his Answer. The fact, however, that the allegations made by Ariosto SANTOS in his pleadings and in his declarations in open Court differed wi; not militate against the findings herein made nor support the reversal by respondent Court.

As a general rule, facts alleged in a party's pleading are deemed admissions of that party and binding upon it, but this is not an absolute and inflexible rule.

An Answer is a mere statement of fact which the party filing it expects to prove, but it is not evidence.

As Ariosto SANTOS himself, in open Court, had repudiated the defenses he had raised in his Answer and against his own interest, his testimony is deserving of weight and credence.

Both the Trial Court and the Appellate Court believed in his credibility and we find no reason to overturn their findings thereon.

CAMILO P. CABILI and THE HON. MANUEL ESTIPONA, as Judge of the Court of First Instance of Lanao del Norte, petitioners,

vs. MARIANO LL. BADELLES and HON. COURT OF APPEALS, respondents.

Valerio V. Rovira for petitioners.

San Juan, Benedicto & Africa for respondents.

SYLLABUS

1. ELECTIONS; RULES OF COURT APPLICABLE TO ELECTION CASES IN A SUPPLETORY CHARACTER; SERVICE OF DECISIONS TO COUNSEL OF RECORD MANDATORY. The Rules of Court apply to election cases in a suppletory character whenever practicable and convenient. As there is no provision in the Election Law regarding the manner in which parties should be notified of the proceedings, pleadings or decisions in election cases, Section 2, Rule 27 of the Rules of Court, under which service of decisions should be made to the lawyers on record, and not to parties, should be applied.

Facts:

In the elections of November 10, 1959, Mariano Ll. Badelles and Camilo P. Cabili were rival candidates for the office of city mayor of Iligan City. Cabili was proclaimed elected and thereafter assumed office, succeeding Badelles, then the incumbent. Badelles filed before the Court of First Instance of Lanao del Norte Election Case No. 288, for quo warranto, questioning Cabili's right to hold the office (of City Mayor of Iligan City) on the ground that he was not a resident of the city for at least one year prior to his election.

Badelles was also represented by several other lawyers but the senior counsel was Attorney Jose L. Africa of the above- mentioned law office, who, in the initial hearing, explained that he is the one in charge of the case, and, therefore, requested that all pleadings, notices, orders and other papers be served at his office at 480 Padre Faura St., Manila. In order to avoid any confusion in the service of pleadings and orders, he made of record that only service at the given address will be considered as service on petitioner Badelles and counsel. The court took note of said request of Attorney Africa.

It appears however that, in the interim, i.e. on December 28, 1959, Badelles, who was then in Iligan City, requested the judge for a copy of the decision. Badelles was given a copy but refused to sign a receipt therefor. The judge ordered his court interpreter to record the fact of said delivery of a copy to Badelles. This order was complied with. The judge also telegraphed the law office of Atty. Africa in Manila on December 28, 1959 that a copy of the decision was sent to them on December 24, 1959 and that petitioner Badelles personally was furnished a copy also on that same day. The telegram was received by Atty. Africa on December 29, 1959.

The Court of Appeals held that the receipt by the petitioner of a copy of the decision which was given to the party himself, who in his curiosity desired to be informed in advance of the decision of his case, should not be considered as service under the rules. It also held that neither could the telegram received by the attorneys for Badelles be considered as a service of the decision because the contents of the latter were not contained in the telegram. The Court further held that the participation of petitioner in the course of the trial and in the proceedings was in his capacity as a party litigant and not as a lawyer. Accordingly, it held that the five-day period within which to appeal was to begin when copy of the decision was received by the attorneys for Badelles on January 4, 1960, and not from December 28, 1959.

Issue:

WON the CA committed an error for not considering the receipt by him (Badelles) of a copy of the decision as a receipt by the aggrieved party himself, who under Section 178 of the Revised Election Code, is authorized to appeal from a decision.

Decision:

The decision of the Court of Appeals appealed from should be, as it is hereby, affirmed, with costs against the petitioner.

It is to be noted that while the Rules of Court are not applicable in election cases, in general, they are of a suppletory character whenever practicable and convenient. As there is no provision in the Election Law about the manner in which the parties should be notified of the proceedings or pleadings or decisions in election cases, the Rules of Court should be followed in such matters.

In accordance with the provisions of Rule 27, Section 2, service of decisions should be made to the lawyers on record and not to parties. In a long line of decisions We have held that when a party appears by an attorney who makes of record his appearance, service of pleadings is required to be made upon said attorney and not upon the party; that a notice given to the client and not to his attorney is not a notice in law; that service upon a party who has an attorney of record is not a compliance with Rule 27, Sec. 2, which makes service upon counsel mandatory; and that personal information by a party of the rendition of a decision does not satisfy the right of counsel to receive a copy of the decision rendered.

Title: Venturanza v. CA

Issue: WON the summons was served to Venturanza

Facts:

Plaintiff Nieves Y. Senoran (now private respondent) filed a complaint against spouses Violeta S. Venturanza and Romy Venturanza (now petitioners)with MTC for collection of sums of money for loans evidenced by promissory notes and due to non-payment became demandable.Hence the summons.

The problem arose when the sheriff served the summons in the last known address of the Venturanza in 3412 B.A. Tan, Bo. Obrero Tondo, Manila. The summons was served on the petitioners through the father who refused to sign the receipt. Due to petitioner failure to file an Answer, the court rendered a decision ordering petitioners to pay. However, the said decision could not be served to petitioners address since they were no longer residing there; hence it was served in the Office of Violeta at ADB.

The MTC ruled in favor of Senoran ordering Venturanza to pay her debt. Hence the case.

The petitioners filed a "Motion to Set Aside Decision and to Declare Past Proceedings Null and Void for Lack of Jurisdiction," alleging that there was no proper and valid service of summons upon them in accordance with either Section 7 or Section 8 of Rule 14 of the Rules of Courtand that the courta quo never acquired jurisdiction over the person of the petitioners, since the address where the summons was served is the residence of Violeta S. Venturanza's father, and not on her address.

The MTC which was affirmed by the RTC ruled on the matter based on the sheriffs affidavit, stating that he did his earnest efforts to locate Venturanza. He served the summons in her residence proving the address is the same as what she has provided in the company telephone book.

Held:

The service of summons was not properly served.

Ratio:

There is no question that the case at bar which is an action for collection of sum of money, an action in personam thereby requiring personal service of summons on the defendants. It is only when a defendant can not be personally served with summons within a reasonable time that a substituted service may be availed of. For a substituted service to be valid, summons served at the defendant's residence must be served at his residence at the time of such service and not at his former place of residence.

It is further required by law that an effort or attempt should first be made to personally serve the summons and after this has failed, a substituted service may be caused upon the defendant, and the same must be reflected in the proof of service. Upon examination of the sheriff 's Return in this case, no statement was made that an effort or attempt was exerted to personally serve the summons on the defendants and that the same had failed. In fact, said Return did not indicate the address of the defendants to whom summons was supposed to have been served. The presumption of regularity in the performance of official functions by the sheriff is not applicable in this case where it is patent that the sheriff's return is defective. CA decision reversed and set aside.

Notes: Heres all of the important matters of the cause

Under Rule 14 of the Rules of Court, there are three (3) methods of service of summons in civil actions, namely: 1) personal service (See. 7); 2) substituted service (Sec. 8); and 3) service by publication.16Strict compliance with these modes of service is required in order that the court may require jurisdiction over the person of the defendant.17Service of summons upon the defendant is the means by which the court acquires jurisdiction over his person. This process is for the benefit of the defendant, and is intended to afford the latter an opportunity to be heard on the claim against him.18In the absence of valid waiver trial and judgment, without such service, are null and void.

There is no question that the case at bar which is an action for collection of sum of money is an action in personam thereby requiring personal service of summons on the defendants.

In an action strictly in personam, personal sevice of summons within the forum is essential to the acquisition of jurisdiction over the person of the defendant who does not voluntarily submit himself to the authority of the court. (Pantaleon vs. Asuncion, 105 Phil. 761; Sequito vs. Letrondo 10 Phil. 1139),

It is only when a defendant can not be personally served with summons within a reasonable time that a substituted service may be availed of, the same to be effected in the following manner: a) by leaving copies of the summons at the defendants' 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.19For a substituted service to be valid, summons served at the defendant's residence must be served at his residence at the time of such service and not at his former place of residence.

The terms "dwelling house" or "residence" are generally held to refer to the time of service, hence it is not sufficient "to leave the copy at defendant's former dwelling house, residence, or place of abode, as the case may be, after his removal therefrom." They refer to the place where the person named in the summons is living at the time when the service is made, even though he may be temporarily out of the country at the time. (Keister v. Navarro, 77 SCRA 209, May 31, 1977)

It is further required by law that an effort or attempt should first be made to personally serve the summons and after this has failed, a substituted service may be caused upon the defendant, and the same must be reflected in the proof of service.20The substituted service should be availed of only when the defendant cannot be served promptly in person. Impossibility of prompt service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts. The statement should be made in the proof of service. This is necessary because substituted service is in derogation of the usual method of service. It has been held that it is a method extraordinary in character, and hence may be used only as prescribed in the circumstances authorized by statute. Thus, the statutory requirements of substituted service must be followed strictly, faithfully, and any substituted service other than that authorized by the statute is considered ineffective ... (Arevalo vs. Quitalon 166 SCRA 707)

Title: Samartino v. Raon

Issue: The substitute summons by the sheriff

Facts:

Respondents Leonor Bernardo-Raon and Agustin G. Crisostomo are the surviving sister and spouse, respectively, of the late Filomena Bernardo-Crisostomo, who passed away on May 17, 1994. Among the properties left by the deceased was her one-half share in a parcel of land in Noveleta, Cavite, registered under in the name of co-owners Lido Beach Corporation and Filomena Bernardo.

In 1996,respondents instituted a complaint for ejectment against petitioner Regalado P. Samartino a complaint for ejectmentalleging that during the lifetime of Filomena, she leased her share to petitioner for a period of five years counted from 1986; that the said lease expired and was not extended thereafter; and that petitioner refused to vacate the property despite demands therefor.

Summons was served on Roberto Samartino, brother of petitioner.At the time of service, he was not at home as he was then confined at the NBI rehab center since January 19, 1996, where he was undergoing treatment and rehabilitation for drug dependency. Thus, on February 2, 1996, a liaison officer of the NBI-TRC appeared before the trial court with a certification that petitioner will be unable to comply with the directive to answer the complaint within the reglementary period, inasmuch as it will take six months for him to complete the rehabilitation program and before he can be recommended for discharge by the Rehabilitation Committee.]

The trial court, despite the written certification from NBI-TRC, declared petitioner in default and ordered them to present evidenceex-parte.On March 21, 1996, the trial court rendered judgment in favor of respondents. Counsel of respondent filed a motion to set aside judgement at the RTC, RTC affirmed lower court decision. This decision became final, the property was sold in an auction to the respondents, Petitioner filed petition for relief from judgement allegingthat the parcel of land from which he was being evicted had been sold to him by Filomena Bernardo-Crisostomo, as evidenced by the Deed of Absolute Sale dated December 13, 1988. Petition was dismissed by RTC. Petitioner filed petition for certiorari before CA which was also dismissed, including his MR, hence this petition for review.

Held:

The Supreme Court reversed and set aside the validity of the summons ruled by the lower courts.

Ratio:

The summon was ineffective.There being no valid substituted service of summons, the trial court did not acquire jurisdiction over the person of petitioner. In actionsin personam,summons on the defendant must be served by handing a copy thereof to the defendant in person, or, if he refuses to receive it, by tendering it to him. If efforts to serve the summons personally to defendant is impossible, service may be effected by leaving copies of the summons at the defendants dwelling house or residence with some person of suitable age and discretion residing therein, or by leaving the copies at the defendants office or regular place of business with some competent person in charge thereof.

It was likewise not proven in the affidavit of the sheriff the reasons for the failure to serve the summons personally.

Notes:

Part 1: Actions in personam

In actionsin personam,summons on the defendant must be served by handing a copy thereof to the defendant in person, or, if he refuses to receive it, by tendering it to him. If efforts to serve the summons personally to defendant is impossible, service may be effected by leaving copies of the summons at the defendants dwelling house or residence with some person of suitable age and discretion residing therein, or by leaving the copies at the defendants office or regular place of business with some competent person in charge thereof.Otherwise stated, service of summons upon the defendant shall be by personal service first and only when the defendant cannot be promptly served in person will substituted service be availed of.

Rule 14 of the 1997 Rules of Civil Procedure clearly provides:

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

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

We have long held that the impossibility of personal service justifying availment of substituted service should be explained in the proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officers Return; otherwise, the substituted service cannot be upheld. It is only under exceptional terms that the circumstances warranting substituted service of summons may be proved by evidencealiunde.It bears stressing that since service of summons, especially for actionsin personam,is essential for the acquisition of jurisdiction over the person of the defendant, the resort to a substituted service must be duly justified. Failure to do so would invalidate all subsequent proceedings on jurisdictional grounds.

In this connection, Supreme Court Administrative Circular No. 59was issued on November 19, 1989 to stress the importance of strict compliance with the requisites for a valid substituted service, to wit:

Delays in court proceedings have been caused by faulty and erroneous implementation of Section 8, Rule 14, Rules of Court on Substituted Service of Summons.

The Trial Judges of all lower courts, as well as the Clerks of Court in their capacity as Ex-Officio Sheriffs together with the Deputy Sheriffs are reminded of the provision of Section 8, Rule 14, Rules of Court on substituted service as follows:

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The manner of effecting substituted service as prescribed inVenturanza vs. Court of Appeals, 156SCRA 305, must be strictly complied with, thus:

The substituted service should be availed only when the defendant cannot be served promptly in person. Impossibility of prompt service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts. The statement should be made in the proof of service. This is necessary because substituted service is in derogation of the usual method of service.

Substituted service is a method extraordinary in character, and hence may be used only as prescribed in the circumstances authorized by statute. Thus, the statutory requirements of substituted service must be followed strictly, faithfully and any substituted service other than authorized by the statute is considered ineffective.

Part 2:

The affidavit needed for the substitute summons must state the valid reason why it was not served. Absence of summons would be contrary to the due process rule; the notice and hearing.

Valmonte v. CAG.R. No. 108538 January 22, 1996

Service of Summons

SYLLABUS

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

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

ACTION IN REM; NON-RESIDENT DEFENDANT MAY BE SERVED WITH SUMMONS EXTERRITORIALLY. On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the country, summons may be served exterritorially in accordance with Rule 14, 17. In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the personal status of the plaintiff who is domiciled in the Philippines or the property litigated or attached.

PURPOSE. Service of summons in the manner provided in 17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play or due process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby take steps to protect his interest if he is so minded.

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

SERVICE OF SUMMONS ON DEFENDANT'S HUSBAND AND COUNSEL IN PHILIPPINES, NOT VALID. Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes, the question is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third mode, namely, "in any . . . manner the court may deem sufficient." We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine Embassy in the foreign country where the defendant resides. Moreover, there are several reasons why the service of summons on Atty. Alfredo A. Valmonte cannot be considered a valid service of summons on petitioner Lourdes A. Valmonte. In the first place, service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer. In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also in Rule 14, 17. As provided in 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some person on his behalf and setting forth the grounds for the application.

Facts:

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

2. Private respondent Rosita Dimalanta, who is the sister of petitioner filed an action for partition against former and her husband. She alleged that, the plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the defendants are spouses but, for purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes spouse holds office and where he can be found.He husband was also her counsel, who has a law office in the Philippines. The summons were served on her husband.

3. Petitioner in a letter, referred private respondents counsel to her husband as the party to whom all communications intended for her should be sent. Service of summons was then made upon petitioner Alfredo at his office inManila. Alfredo D. Valmonte accepted his summons, but not the one for Lourdes, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

4. Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special appearance in behalf of his wife and opposed the private respondents motion. RTC denied the MR of respondents. CA declared petitioner Lourdes in default. Said decision was received by Alfredo hence this petition.

Issue: Whether or not petitioner Lourdes A. Valmonte was validly served with summons.

Held:

NO.

There was no valid service of summons on Lourdes.

1.The action herein is in the nature of an action quasiin rem.Such an action is essentially for the purpose of affecting the defendants interest in a specific property and not to render a judgment against him. As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in accordance with Rule 14, 17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other manner which the court may deem sufficient.

2.In the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two modes. This mode of service, like the first two, must be made outside thePhilippines, such as through the Philippine Embassy in the foreign country where the defendant resides. The service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.

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

4.Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes was not given ample time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice.

ASIAVEST LIMITED, petitioner, vs. THE COURT OF APPEALS and ANTONIO HERAS, respondents.

G.R. No. 128803

September 25, 1998

SYLLABUS

REMEDIAL LAW; EVIDENCE; PRESUMPTIONS; VALIDITY OF FOREIGN JUDGMENTS. Under paragraph (b) of Section 50, Rule 39 of the Rules of Court, which was the governing law at the time this case was decided by the trial court and respondent Court of Appeals, a foreign judgment against a person rendered by a court having jurisdiction to pronounce the judgment is presumptive evidence of a right as between the parties and their successors in interest by the subsequent title. However, the judgment may be repelled by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Also, Section 3(n) of Rule 131 of the New Rules of Evidence provides that in the absence of proof to the contrary, a court, or judge acting as such, whether in the Philippines or elsewhere, is presumed to have acted in the lawful exercise of jurisdiction. Hence, once the authenticity of the foreign judgment is proved, the burden to repel it on grounds provided for in paragraph (b) of Section 50, Rule 39 of the Rules of Court is on the party challenging the foreign judgment. EACTSH

CASE AT BAR. At the pre-trial conference, HERAS admitted the existence of the Hong Kong judgment. On the other hand, ASIAVEST presented evidence to prove rendition, existence, and authentication of the judgment by the proper officials. The judgment is thus presumed to be valid and binding in the country from which it comes, until the contrary is shown. Consequently, the first ground relied upon by ASIAVEST has merit. The presumption of validity accorded foreign judgment would be rendered meaningless were the party seeking to enforce it be required to first establish its validity.ACTIONS; ACTION IN PERSONAM, IN REM AND QUASI IN REM; DISTINGUISHED. An action in personam is an action against a person on the basis of his personal liability. An action in rem is an action against the thing itself instead of against the person. An action quasi in rem is one wherein an individual is named as defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property.

ACTION IN PERSONAM; JURISDICTION OVER THE PERSON OF THE DEFENDANT, NECESSARY. 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 person of a resident defendant who does not voluntarily appear in court can be acquired by personal service of summons as provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons within a reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he is temporarily out of the country, any of the following modes of service may be resorted to: (1) substituted service set forth in Section 8; (2) personal service outside the country, with leave of court (3) service by publication, also with leave of court; or (4) any other manner the court may deem sufficient. However, in an action in personam wherein the defendant is a non-resident who does not voluntarily submit himself to the authority of the court, personal service of summons within the state is essential to the acquisition of jurisdiction over her person. This method of service is possible if such defendant is physically present in the country. If he is not found therein, the court cannot acquire jurisdiction over his person and therefore cannot validly try and decide the case against him. An exception was laid down in Gemperle v. Schenker wherein a non-resident was served with summons through his wife, who was a resident of the Philippines and who was his representative and attorney-in-fact in prior civil case filed by him; moreover, the second case was a mere offshoot of the first case.

ACTION IN REM; JURISDICTION OVER THE PERSON OF DEFENDANT, NOT A PREREQUISITE; SUMMONS MUST BE SERVED UPON DEFENDANT TO SATISFY DUE PROCESS REQUIREMENT. In a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res. Nonetheless, summons must be served upon the defendant not for the purpose of vesting the court with jurisdiction but merely for satisfying the due process requirements. Thus, where the defendant is a non-resident who is not found in the Philippines and (1) the action affects the personal status of the plaintiff; (2) the action relates to, or the subject matter of which is property in the Philippines in which the defendant has or claims a lien or interest; (3) the action seeks the exclusion of the defendant from any interest in the property located in the Philippines; or (4) the property of the defendant has been attached in the Philippines service of summons may be effected by (a) personal service out of the country, with leave of court; (b) publication, also with leave of court; or (c) any other manner the court may deem sufficient.

ENFORCEMENT OF FOREIGN JUDGMENT; SUMMONS MUST BE SERVED ON DEFENDANT IN FOREIGN LAND; CASE AT BAR. In the pre-trial conference, the parties came up with stipulations of facts, among which was that "the residence of defendant, Antonio Heras, is New Manila, Quezon City." We note that the residence of HERAS insofar as the action for the enforcement of the Hong Kong court judgment is concerned, was never in issue. He never challenged the service of summons on him through a security guard in his Quezon City residence and through a lawyer in his office in that city. In his Motion to Dismiss, he did not question the jurisdiction of the Philippine court over his person on the ground of invalid service of summons. What was in issue was his residence as far as the Hong Kong suit was concerned. We therefore conclude that 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. With that stipulation of fact, ASIAVEST cannot now claim that HERAS was a resident of Hong Kong at the time. Accordingly, since HERAS was not a resident of Hong Kong and the action against him was, indisputably, one 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. Even assuming that HERAS was formerly as resident of Hong Kong, he was no longer so in November 1984 when the extraterritorial service of summons was attempted to be made on him; As declared by his secretary, which statement was not disputed by ASIAVEST, HERAS left Hong Kong in October 1984 "for good." His absence in Hong Kong must have been the reason why summons was not served on him therein; thus, ASIAVEST was constrained to apply for leave to effect service in the Philippines, and upon obtaining a favorable action on the matter, it commissioned the Sycip Salazar Hernandez & Gatmaitan law firm to serve the summons here in the Philippines. HERAS, who was also an absentee, 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 of 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." Facts:

1. 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 wasin personam, since it was based on his personal guarantee of the obligation of the principal debtor.

2. 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.

3. 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.

4. The Court of Appeals (CA) agreed with Heras that notice sent outside the state toa non-resident is unavailing to give jurisdictionin 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 partyHeld: YES.

1. Asiavest cannot now claim that Heras was a resident of Hong Kong at the time sincethe 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, nein 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.

2. 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 wasin 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.

THE PHILIPPINE AMERICAN LIFE & GENERAL INSURANCE COMPANY, petitioner, vs.HON. AUGUSTO V. BREVA, in his capacity as Presiding Judge, Regional Trial Court, Davao City, Branch 10, and MILAGROS P. MORALES, respondents.G.R. No. 147937 | November 11, 2004NATURE: Before us is a petition for review of the Decision1 of the Court of Appeals (CA), dated October 24, 2000, dismissing the special civil action for certiorari and prohibition filed by the petitioner, The Philippine American Life & General Insurance Company, and the Resolution dated April 25, 2001, denying the petitioner's motion for reconsideration.

FACTS: The petitioner is a domestic corporation duly organized under Philippine laws with principal address at the Philamlife Building, United Nations Avenue, Ermita, Manila, and with a regional office in Davao City.

On September 22, 1999, respondent Milagros P. Morales filed a Complaint2 for damages and reimbursement of insurance premiums against the petitioner with the Regional Trial Court (RTC) of Davao City, Branch 10, docketed as Civil Case No. 27554-99. The complaint specifically stated that the petitioner could be served with summons and other court processes through its Manager at its branch office located at Rizal St., Davao City.

Thereafter, Summons3 dated September 29, 1999, together with the complaint, was served upon the petitioner's Davao regional office, and was received by its Insurance Service Officer, Ruthie Babael, on November 19, 1999.4On December 8, 1999, the petitioner filed a Motion to Dismiss5 the complaint on the ground of lack of jurisdiction over its person due to improper service of summons. It contended that summons was improperly served upon its employee in its regional office at Davao City, and that the said employee was not among those named in Section 11,6 Rule 14 of the 1997 Rules of Civil Procedure upon whom service of summons may be properly made.

On December 9, 1999, the respondent filed an Amended Complaint,7 alleging that summons and other court processes could also be served at its principal office at the Philamlife Building, U.N. Avenue, Ermita, Manila, through the president or any of its officers authorized to receive summons.

On December 10, 1999, the RTC issued an Order8 denying the petitioner's motion to dismiss and directing the issuance of an alias summons to be served at its main office in Manila.9The RTC held that the improper service of summons on the petitioner is not a ground for dismissal of the complaint considering that the case was still in its initial stage. It ruled that the remedy was to issue an alias summons to be served at the principal office of the petitioner. It also held that the jurisprudence cited by the petitioner was inapplicable, as it involved a case already decided by a court which did not have jurisdiction over the defendant therein due to improper service of summons.

On January 12, 2000, the petitioner filed a Motion for Reconsideration10 of the said order. In the meantime, on December 14, 1999, the petitioner received an Alias Summons11 together with a copy of the amended complaint.

On January 14, 2000, the RTC issued an Order12 denying the petitioner's motion for reconsideration and supplemental oral motion to strike out the amended complaint. The RTC reiterated that it would be improper to dismiss the case at its early stage because the remedy would be to issue an alias summons. Anent the motion to strike out the amended complaint, the RTC held that the complaint may be amended without leave of court considering that the respondent had not yet filed an answer thereto.

On March 2, 2000, the petitioner filed with the CA a special action for certiorari and prohibition under Rule 65, with application for a writ of preliminary injunction and/or temporary restraining order, assailing the Orders dated December 10, 1999 and January 14, 2000.

On October 24, 2000, the CA dismissed the petition and affirmed the assailed orders of the RTC.

Hence, this petition for review.

ISSUES: (1) whether the trial court committed grave abuse of discretion in denying the motion to dismiss on the ground of lack of jurisdiction over the person of the petitioner due to improper service of summons, and (2) whether the trial court acquired jurisdiction over the person of the petitioner as the defendant therein.

HELD: NO. The petition is without merit.

The trial court did not commit grave abuse of discretion when it denied the motion to dismiss filed by the petitioner due to lack of jurisdiction over its person. In denying the motion to dismiss, the CA correctly relied on the ruling in Lingner & Fisher GMBH vs. Intermediate Appellate Court,17 thus:

A case should not be dismissed simply because an original summons was wrongfully served. It should be difficult to conceive, for example, that when a defendant personally appears before a Court complaining that he had not been validly summoned, that the case filed against him should be dismissed. An alias summons can be actually served on said defendant.18We note, however, that in the case at bar, the complaint was amended after the petitioner filed the motion to dismiss. The trial court even acknowledged this when it rendered its order denying the motion to dismiss and ordered the issuance of an alias summons. The Rules on Civil Procedure provide that the amended complaint supersedes the complaint that it amends.21

In the instant case, since at the time the complaint was amended no summons had been properly served on the petitioner and it had not yet appeared in court, new summons should have been issued on the amended complaint.23 Hence, the CA was correct when it held that, technically, the trial court should have ordered the issuance of an original summons, not an alias summons.24 After all, an alias summons is merely a continuation of the original summons. In this case, however, there was no sense in issuing an alias summons on the original complaint since the complaint had already been amended. The trial court should have instead issued a new summons on the amended complaint.

The CA held that it would be a great injustice to the respondent if the complaint would be dismissed just because what was issued and served was an alias summons; that she would be made to file a new complaint and thus, incur further monetary burden.25We agree with the CA. It is not pertinent whether the summons is designated as an "original" or an "alias" summons as long as it has adequately served its purpose. What is essential is that the summons complies with the requirements under the Rules of Court and it has been duly served on the defendant together with the prevailing complaint. In this case, the alias summons satisfies the requirements under the Rules, both as to its content and the manner of service. It contains all the information required under the rules, and it was served on the persons authorized to receive the summons on behalf of the petitioner at its principal office in Manila. Moreover, the second summons was technically not an alias summons but more of a new summons on the amended complaint. It was not a continuation of the first summons considering that it particularly referred to the amended complaint and not to the original complaint.

BPI v Santiago

G.R. No. 169116

March 28, 2007FACTS:

1. Centrogen, through its President, Edwin Santiago, son of respondents Spouses Ireneo M. Santiago and Liwanag P. Santiago, obtained loans from the Far East Bank and Trust Company (FEBTC), the total of which reached the sumP4,650,000.00, as evidenced by promissory notes executed by Edwin Santiago.2. As a security for a fraction of the loan obligation, Ireneo M. Santiago executed a Real Estate Mortgage over a parcel of land registered under his name and located at Sta Cruz, Laguna, with an area of 2,166 square meters. The mortgage secured the principal loan in the amount ofP490,000.00. Later on, the same property secured another loan obligation in the amount ofP1,504,280.00.

3. Subsequently, however, Centrogen incurred default and therefore the loan obligation became due and demandable.

4. Meanwhile, FEBTC merged with the BPI with the latter as the surviving corporation. As a result, BPI assumed all the rights, privileges and obligations of FEBTC.

5. On 13 December 2002, BPI filed an Extra-Judicial Foreclosure of Real Estate Mortgageover the subject property before the RTC of Sta. Cruz, Laguna. In order to validly effect the foreclosure, 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.

6. The Spouses Santiago and Centrogen filed a Complaint seeking the issuance of a Temporary Restraining Order and Preliminary and Final Injunction and in the alternative, for the annulment of the Real Estate Mortgage with BPI.

7. They allege that the initial loan obligation in the amount ofP490,000.00, including interest was fully paid as evidenced by Union Bank Check in the amount ofP648,521.51 with BPI as payee. However, 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.

8. On 27 February 2003, BPI was summoned to file and serve its Answer to the Complaint filed by Spouses Santiago and Centrogen. On the same day, the Sheriff served a copy of the summons to the Branch Manager of BPI Sta. Cruz, Laguna Branch, as evidenced by the Sheriffs Return.

9. Instead of filing an Answer, BPI filed a Motion to Dismiss8the complaint on the ground of lack of jurisdiction over the person of the defendant and other procedural infirmities attendant to the filing of the complaint. In its Motion to Dismiss, 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 Court9to receive summons on behalf of the corporation.

10. The summons served upon its Branch Manager, therefore, did not bind the corporation. In addition, it was alleged that the complaint filed by the Spouses Santiago and Centrogen lacked a Certificate of Non-Forum Shoppingand was therefore dismissible. Finally, BPI underscored that the person who verified the complaint was not duly authorized by Centrogens Board of Directors to institute the present action as required by Section 23 of the Corporation Code.

11. The RTC denied the Motion to Dismiss and emphasized that the nature of the case merited its removal from the purview of Section 11, Rule 14 of the Revised Rules of Court. Based on the provisions of Section 5, Rule 58 of the Revised Rules of Court,13the RTC declared that the instant Order is still valid and binding despite non-compliance with the provisions of Section 11, Rule 14 of the same Rules

12. After summary hearing on the Spouses Santiago and Centrogens application for Temporary Restraining Order, the RTC, on 28 February 2003, issued an Orderenjoining the Provincial Sheriff from proceeding with the extra-judicial foreclosure sale of the subject property until the propriety of granting a preliminary injunction is ascertained.

13. On 6 March 2003, the RTC ordered the service of new summons to BPI in accordance with the provisions of the Revised Rules of Court. The aforesaid Order reads:To avoid further argument as regards the proper service of summons to Defendant Bank, the Branch Clerk of Court is hereby directed to issue another summons and serve copy of the same together with the complaint and its annexes to any of the officers of the Defendant Bank as provided by the rules of civil procedure.

13. In compliance with the aforesaid Order, the Branch Clerk of Court caused the issuance of a new summons on 7 March 2003, a copy of which was served upon the Office of the Corporate Secretary of the BPI on 11 March 2003

14. On 20 March 2003, the RTC issued an Order granting the application for the issuance of a Writ of Preliminary Injunction filed by the Spouses Santiago and Centrogen

15. The Court of Appeals rendered a Decision18affirming the assailed Orders of the RTC and dismissing the Petition for Certiorari filed by BPI. The Court of Appeals declared that jurisdiction was acquired upon the service of new summons. Before the assailed Orders were therefore issued, the RTC properly acquired jurisdiction over the person of BPI.

ISSUE: Whether the RTC acquired jurisdiction over the person of BPI when the original summons was served upon the Branch Manager of its Sta. Cruz, Laguna branch, thus the order enjoining the foreclosure sale is void.HELD: The RTC did not acquire jurisdiction over the person of BPI when the original summons was served to the branch manager, but the order is valid.

The pertinent provision of the Revised Rules of Court provides:

Sec. 11, Rule 14. Service upon domestic private juridical entity When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality service may be made on the president, managing partner, general manager, corporate secretary, treasurer or in-house counsel.

Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon whom service is made must be one who is named in the statute; otherwise, the service is insufficient.19The 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.

Applying the aforestated principle in the case at bar, we rule that the service of summons on BPIs Branch Manager did not bind the corporation for the branch manager is not included in the enumeration of the statute of the persons upon whom service of summons can be validly made in behalf of the corporation. Such service is therefore void and ineffectual.

However,upon the issuance and the proper service of new summonson 11 March 2003, before the Writ of Preliminary Injunction was issued on 20 March 2003,whatever defect attended the service of the original summons, was promptly and accordingly cured.

The subsequent service of summons was neither disputed nor was it mentioned by BPI except in a fleeting narration of facts and therefore enjoys the presumption that official duty has been regularly performed.The Process Servers Certificate of Service of Summons is aprima facieevidence of facts set out in that certificate.

Inarguably, before the Order granting the application for Writ of Preliminary Injunction was issued, the RTC already acquired jurisdiction over the person of BPI by virtue of the new summons validly served on the Corporate Secretary. The fact that the original summons was invalidly served is of no moment since jurisdiction over BPI was subsequently acquired by the service of a new summons.

In the case ofThe Philippine American Life and General Insurance Company v. Brevea,we ruled:

A case should not be dismissed simply because an original summons was wrongfully served.It should be difficult to conceive, for example, that when a defendant personally appears before a Court complaining that he had not been validly summoned, that the case against him should be dismissed.Analiassummons can be actually served on said defendant.

x x x x

x x xIt is not pertinent whether the summons is designated as an "original" or an "alias" summons as long as it has adequately served its purpose.What is essential is that the summons complies with the requirements under the Rules of Court and it has been duly served on the defendant together with the prevailing complaint. x x x Moreover, the second summons was technically not an alias summons but more of a new summons on the amended complaint. It was not a continuation of the first summons considering that it particularly referred to the amended complaint and not to the original complaint.

BPIs lamentation, at every turn, on the invalidity of the service of summons made on the Branch Manager and its deliberate neglect to acknowledge the fact that a new summons was accordingly served on its Corporate Secretary, is an attempt in futility to mislead this Court into believing that the court aquonever acquired jurisdiction over the case and thus the issuance of the Writ of Preliminary Injunction was invalid.

In explaining the test on the validity of service of summons, Justice Florenz Regaladostressed that substantial justice must take precedence over technicality and thus stated:

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.

Prescinding from the above, we deem it best to underscore 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.

In any event, as it is glaringly evident from the records of the case that jurisdiction over the person of the defendant was validly acquired by the court by the valid service of a new summons before the writ of preliminary injunction was issued and guided by jurisprudential pronouncements heretofore adverted to, we hold that the proceedings attendant to the issuance of the writ of preliminary injunction were regular.

NOTES:

Issue number 2: whether RTC gravely abused its discretion in granting the Spouses Santiago and Centrogens application for the Writ of Preliminary Injunction in the absence of showing that the latter have a clear legal right sought to be protected

An injunction is a preservative remedy for the protection of ones substantive right or interest; it is not a cause of action by itself but merely a provisional remedy, an adjunct to the main suit.25The purpose of injunction is to prevent threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied and educated. Its sole aim is to preserve thestatus quountil the merits of the case is heard fully.

The issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending case is entirely within the discretion of the court taking cognizance of the case, the only limitation being that the discretion should be exercised based upon the grounds and in a manner provided by law.

Before a writ of preliminary injunction may be issued, the following requisites must be complied with: (1) a right in esseor a clear or unmistakable right to be protected; (2) violation of that right; and (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage.

Verily, the aforestated requisites for the issuance of the Writ of Preliminary Injunction have been fully complied with. The right of Spouses Santiago over the property clearly exists since they are the registered owners thereof, and the existence of a Real Estate Mortgage does not undermine the right of the absolute owner over the property. The violation of such right is manifest in the threatened foreclosure proceedings commenced by BPI amidst the claim that the principal obligation has been fully paid.

Finally, to allow the foreclosure of the subject property without first calibrating the evidence of opposing parties pertaining to the action for the annulment of mortgage would cause irreparable damage to the registered owner.

The right of BPI to foreclose the subject property is under dispute upon the claim interposed by the Spouses Santiago and Centrogen that payments for the loan secured by the property subject to the threatened foreclosure proceedings were already made. To support their assertions, Spouses Santiago and Centrogen presented as evidence Union Bank Check No. 0363020895 dated 20 December 2001 in the amount ofP648,521.51, with BPI as payee.

From this, we can deduce that the right of BPI to foreclose the subject property is questionable. We cannot therefore allow the foreclosure of the Real Estate Mortgage to proceed without first setting the main case for hearing so that based on the evidence presented by the parties, the trial court can determine who between them has the better right over the subject property. To rule otherwise would cause a grave irreparable damage to the Spouses Santiago and Centrogen.

LOLITA AMIGO and ESTELITA VDA. DE SALINAS, petitioners, vs. THE HONORABLE COURT OF APPEALS, HONORABLE AUGUSTO V. BREVA, as Judge, RTC of Davao, Branch X, THE SHERIFF OF THE RTC represented by Alfonso M. Zamora, Deputy Sheriff of Branch X, and JESUS WEE ENG, respondents.G.R. No. 102833 February 9, 1996

REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION OVER THE SUBJECT MATTER; JURISDICTION OVER THE PERSON OF THE DEFENDANT; DISCUSSION AND APPLICATION IN CASE AT BAR. Jurisdiction over the subject matter of a case is conferred by law and determined by the allegations of the complaint. It should hardly be of any consequence that the merits of the case are later found to veer away from the claims asseverated by the plaintiff. The suit below is aimed at recovering real property, an action clearly well within the jurisdiction of the Regional Trial Court. Jurisdiction over the person of the defendant in a civil action is acquired either by his voluntary appearance in court and his submission to its authority or by service of summons. In this case, by their filing of an answer and later an amended answer, petitioners must be deemed to have formally and effectively appeared before the lower court. Unlike the question of jurisdiction over the subject matter which may be invoked at any stage of the proceedings (even on appeal), the issue of jurisdiction over the person of the defendant, however, as has been so held lately in La Naval Drug Corporation v. Court of Appeals, must be seasonably raised, and it can well be pleaded in a motion to dismiss or by way of an affirmative defense in an answer. The records bear out the fact that petitioners have allowed the issue of jurisdiction to pass unquestioned until the rendition of the judgment. It is now too late in the day for petitioners to assail the jurisdiction of the lower court over their person, a somersault that neither law nor policy will sanction. D E C I S I O N

Challenged in the petition for review on certiorari is the decision of the Court of Appeals rendered on 12 November 1991 1 dismissing the petition to annul the writs of execution and demolition issued by the Regional Trial Court of Davao City, Branch 10, 2 in the implementation of its final judgment of eviction against herein petitioners in Civil Case No. 10363.

Petitioners Lolita Amigo and Estelita vda. de Salinas leased in 1961 from Mercedes Inigo, a parcel of land, also known as Lot 502-C-9, Psd-10752, located along Leon Garcia St., Agdao District, Davao City, registered in the lessor's name under TCT No. T-5454. Petitioners constructed their houses on the lot. Mercedes Inigo later sold and transferred her ownership of the land to Juan Bosquit and herein private respondent Jesus Wee Eng. TCT No. T-5454 was cancelled and another title, TCT No. 13659, was issued on 28 May 1964 jointly in the names of the two vendees.

On 17 December 1966, Bosquit and Wee entered into a deed of exchange with the City Government of Davao. Bosquit and Wee exchanged a portion of their Lot 502-C-9 for also a portion of Lot No. 502-C-11 under TCT No. T-5788 in the name of the city. The transaction was authorized and approved by the City Council of Davao. 3

In order to delineate the portion of Lot 502-C-9 ceded to the city government, Bosquit and Wee caused the preparation of plan Psd-11-000258 subdividing the property into Lot 502-C-9-A and Lot 502-C-9-B. For its part, the city government caused the subdivision of Lot 502-C-11 into Lot 502-C-11-A and Lot 502-C-11-B. In consonance with the agreement, TCT No. T-13659 held by Bosquit and Wee was cancelled and in lieu thereof, two separate certificates of title were issued: TCT No. 46656 in the name of the City Government of Davao covering Lot 502-C-9-A, and TCT No. 46657 in the names of Bosquit and Wee corresponding to Lot 502-C-9- B. In turn, TCT No. T-5788 in the name of the city government, was cancelled and two separate titles were issued: TCT No. T-51826 in the names of Bosquit and Wee for Lot 502-C-11-A and TCT No. T-51827 in the name of the city government over Lot 502-C-11-B.

On 01 October 1969, Bosquit and Wee instituted an action for unlawful detainer against petitioners before the City Court of Davao (Civil Case No. 1561-A). After almost seven years, or on 19 July 1976, the city court finally dismissed the action on the technicality that the plaintiffs did not observe the required 15-day period from the sending of the letter of demand before filing the action, the letter having been sent instead on 19 September 1969 or only twelve days before the filing of the action. 4

On 25 October 1976, Bosquit sold his rights and interests over Lots 502-C-9-B and 502-C-11-A to Wee. The titles over the property were thereupon cancelled and TCT No. T-53041 and TCT No. T-53042 were issued solely in the name of Wee.

On 22 July 1977, Wee, herein private respondent, filed a complaint (docketed Civil Case No. 10363) against petitioners in the then Court of First Instance of Davao, Branch III, for recovery of the real property in question. On 08 September 1978, after the petitioners had filed their answer, the court appointed Orville O. Bueno, a duly licensed geodetic engineer, its commissioner to conduct a relocation survey of the boundaries of the land. In his report, dated 27 November 1978, Bueno stated that

". . . portions of about two-thirds (2/3) of the houses of Lolita Amigo and that of Estelita Vda. de Salinas is inside of Lot 502-C-9-B, Psd-11-000258, covered by TCT No. T-53041, issued in the name of Jesus Wee Eng; the remaining one-third of it lies on the road widening and the creek respectively." 5

Whereupon, private respondent sought an amendment of his complaint which was allowed by the lower court on 13 November 1979. 6 As so amended, the complaint prayed not only for the recovery of real property and damages but also for an abatement of nuisance 7 over the portion of the improvements introduced by petitioners that encroached on the sidewalk of Leon Garcia Street.

In their amended answer, petitioners denied the material allegations of the amended complaint. Petitioners stressed that their houses stood neither on private respondent's land nor on the sidewalk or shoulders of Leon Garcia Street but along the banks of the Agdao Creek.

Parenthetically, in 1982, during the pendency of Civil Case No. 10363, petitioners Amigo and Salinas were designated census-beneficiaries of their respective areas (Tag No. 82-A-0342 and Tag No. 82-A-0341) 8 under a so-called City of Davao RCDP-NHA Agreement.

After a full reception of the evidence, the trial court, on 23 September 1983, rendered its decision which held:

"WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff:

"UNDER THE FIRST CAUSE OF ACTION

"1.Ordering the defendants to vacate the portions of land occupied by them as appearing in the Commissioner's Report (Exhibits 'C' and 'D') and to deliver the same to the plaintiff; and

"2.To pay the plaintiff the amount of THIRTY (P30.00) PESOS each per month for the use of plaintiff's land, to be reckoned from the date of judicial demand on July 22, 1977 until defendants shall have vacated the premises in question.

"UNDER THE SECOND CAUSE OF ACTION

"1.The defendants are hereby ordered to demolish the portions of their houses constructed on the road widening of Leon Garcia Street which constitute a nuisance per se;

"2.To pay plaintiff the amount of TWO THOUSAND (P2,000.00) PESOS for and as attorney's fees; and

"3.To pay costs.

"All other claims and counterclaims are hereby DISMISSED.

"SO ORDERED." 9

Petitioners appealed the decision to the Court of Appeals (AC-G.R. CV No. 02405). In its resolution of 29 November 1984, however, the appellate court dismissed the appeal for the failure of petitioners to file an appeal brief. 10 A petition for relief from the order of dismissal was denied by the appellate court, in a resolution of 09 July 1985, for having been filed beyond the reglementary period." 11

In due time, private respondent moved for execution of the judgment. The lower court, in its order of 28 October 1988, granted the motion and ordered the issuance of the corresponding writ. 12 An omnibus motion to quash the writ of execution 13 filed by petitioners was denied by said court on 27 January 1989. 14 Private respondent, forthwith moved for a special order of demolition which the court granted on 13 March 1989. 15

Meanwhile, on 02 March 1989, petitioners filed with the Court of Appeals an action (docketed CA-G.R. SP No. 16979) for the annulment of the trial court's decision of 23 September 1983, as well as all orders and proceedings subsequent thereto, including the various writs of execution and demolition. 16 Petitioners contended that the judgment rendered by the lower court was void for want of jurisdiction.

On 08 March 1989, the Court of Appeals granted petitioners' prayer for a temporary restraining order. 17 The restraining order was lifted when, on 12 November 1991, the appellate court ultimately dismissed the petition. 18

Petitioners instituted the instant petition for review on certiorari raising several questions:

1.Whether or not the court a quo acquired jurisdiction over the subject matter and their person in the case at bench;

2.Whether or not the Court of Appeals erred when it failed to consider the badges of fraud in the exchange of lots between private respondent and the City Government of Davao;

3.Whether or not their status as lessees in the disputed lot was affected by the said swapping or exchange of lots; and

4.Whether or not they are entitled to the so-called "right of first refusal" under Section 6 of P.D. No. 1417 and as such cannot be evicted from the disputed lot.

We deny the petition.

The Court must remind the parties that the case brought up to the Court of Appeals is an extraordinary action that has sought to annul the writs of execution and demolition issued under and by virtue of a final judgment that is alleged to be void for want of jurisdiction. The petition should not thus be used as a stratagem to once again reopen the entire controversy, and make a complete farce of a duly promulgated decision that has long become final and executory, such as by allowing matters outside the question of jurisdiction to be here litigated anew. Accordingly, this ponencia must and shall only deal with the first of the above-enumerated issues raised in the instant petition.

Petitioners maintain that the judgment of the trial court is void for being coram non judice. Jurisdiction over the subject matter of a case is conferred by law 19 and determined by the allegations of the complaint. It should hardly be of any consequence that the merits of the case are later found to veer away from the claims asseverated by the plaintiff. The suit below is aimed at recovering real property, an action clearly well within the jurisdiction of the Regional Trial Court. 20 Incidentally, petitioners' assertion that the litigated lots belong in ownership to the city government and not to private respondent is not borne out by the evidence on record. On the contrary, it appears that private respondent has been, and still is, the registered owner of both Lot 502-C-9-B and Lot 502-C-11-A, respectively, under TCT No. T-53041 and TCT No. T-53042. 21

Neither may petitioners feign absence of jurisdiction over their persons. Jurisdiction over the person of the defendant in a civil action is acquired either by his voluntary appearance in court and his submission to its authority or by service of summons. 22 In this case, by their filing of an answer and later an amended answer, petitioners must be deemed to have formally and effectively appeared before the lower court. As early as 1918, the essence of voluntary appearance has been explained by this Court; thus, in Flores v. Zurbito, 23 we have said:

"A voluntary appearance is a waiver of the necessity of a formal notice. An appearance in whatever form, without expressly objecting to the jurisdiction of the court over the person, is a submission to the jurisdiction of the court over the person. While the formal method of entering an appearance in a cause pending in the courts is to deliver to the clerk a written direction ordering him to enter the appearance of the person who subscribes it, an appearance may be made by simply filing a formal motion, or plea or answer. This formal method of appearance is not necessary." (Emphasis supplied.)

Unlike the question of jurisdiction over the subject matter which may be invoked at any stage of the proceedings (even on appeal), the issue of jurisdiction over the person of the defendant, however, as has been so held lately in La Naval Drug Corporation v. Court of Appeals, 24 must be seasonably raised, and it can well be pleaded in a motion to