SUMMONS /---!e-library! 6.

0 Philippines Copyright 2000 by Sony Valdez---\ [1989V185] CRISOSTOMO REBOLLIDO, FERNANDO VALENCIA and EDWIN REBOLLIDO, petitioners, vs. HONORABLE COURT OF APPEALS and PEPSICO, INC., respondents.1989 February 283rd DivisionG.R. No. 81123D E C I S I O N GUTIERREZ, JR., J.: The issues raised in this petition for review on certiorari an action for damages arising from a vehicular accident are lack of jurisdiction over the defendant and absence of due process. On August 7, 1984, the petitioners filed Civil Case No. 8113 for damages against Pepsi Cola Bottling Company of the Philippines, Inc. (hereinafter referred to as Pepsi Cola) and Alberto Alva before the Regional Trial Court of Makati. The case arose out of a vehicular accident on March 1, 1984, involving a Mazda Minibus used as a schoolbus with Plate Number NWK353 owned and driven by petitioners Crisostomo Rebollido and Fernando Valencia, respectively and a truck trailer with Plate Number NRH-522 owned at that time by Pepsi Cola and driven by Alberto Alva. (p. 37, Rollo) On September 21, 1984, the sheriff of the lower court served the summons addressed to the defendants. It was received by one Nenette Sison who represented herself to be the authorized person receiving court processes as she was the secretary of the legal department of Pepsi Cola. (pp. 33, 75, Rollo) Pepsi Cola failed to file an answer and was later declared in default. The lower court heard the case ex-parte and adjudged the defendants jointly and severally liable for damages in a decision rendered on June 24, 1985. The dispositive portion of the decision reads: WHEREFORE, judgment is rendered in favor of plaintiffs, ordering defendants Pepsi Cola Bottling Company of the Philippines, Inc., and its driver Fernando (should be Alberto) G. Alva to jointly and severally pay plaintiffs the following amounts: "1) P12,126.10, for the hospitalization and medical expenses of plaintiff Fernando Valencia; "2) P326.35 as expenses for the medical treatment of plaintiff Edwin Rebollido; "3) P9,922 .00, for the repair of and cost of replacement parts of the Mazda Minibus belonging to plaintiff Crisostomo Rebollido; "4) P16,200.00, for the expenses incurred by plaintiff Crisostomo Rebollido in hiring another vehicle to transport school pupils; "5) P102,261.90, as unrealized monthly net income due plaintiff from June 1984 to March 30, 1985; "6) P10,800.00, representing the unpaid salaries of plaintiff Fernando Valencia for the period from March to December 1984; "7) P20,000.00, as moral damages due plaintiff Fernando Valencia; "8) P20,000.00, as moral damages due plaintiff Crisostomo Rebollido; "9) A sum equivalent to ten (10%) per cent of the total amount due, as and for attorney's fees; and "10) The costs of suit." (pp. 38-39, Rollo) On August 5, 1985, when the default judgment became final and executory, the petitioners filed a motion for execution, a copy of which was received no longer by the defendant Pepsi Cola but by private respondent PEPSICO, Inc., on August 6, 1985. At that time, the private respondent was already occupying the place of business of Pepsi Cola at Ricogen Building, Aguirre Street, Legaspi Village, Makati, Metro Manila. Private respondent, a foreign corporation organized under the laws of the State of Delaware, USA, held offices here for the purpose, among others, of settling Pepsi Cola's debts, liabilities and obligations which it assumed in a written undertaking executed on June 11, 1983, preparatory to the expected dissolution of Pepsi Cola. The dissolution of Pepsi Cola as approved by the Securities and Exchange Commission materialized on March 2, 1984, one day after the accident occurred. (p. 45, Rollo). Earlier or in June 1983, the Board of Directors and the stockholders of Pepsi Cola adopted its amended articles of incorporation to shorten its corporate term in accordance with Section 120 of the Corporation Code following the procedure laid down by Section 37 (power to extend or shorten the corporate term) and Section 16 (amendment of the articles of incorporation) of the same Code. Immediately after such amendment or on June 16, 23 and 30, 1983, Pepsi Cola caused the publication of a notice of dissolution and the assumption of liabilities by the private respondent in a newspaper of general circulation. (p. 77, Rollo) Realizing that the judgment of the lower court would eventually be executed against it, respondent PEPSICO, Inc., opposed the motion for execution and moved to vacate the judgment on the ground of lack of jurisdiction. The private respondent questioned the validity of the service of summons to a mere clerk. It invoked Section 13, Rule 14 of the Rules of Court on the manner of service upon a private domestic corporation and Section 14 of the same rule on service upon a private foreign corporation. (p. 82, Rollo) On August 14, 1985, the lower court denied the motion of the private respondent holding that despite the dissolution and the assumption of liabilities by the private respondent, there was proper service of summons upon defendant Pepsi Cola. The lower court said that under Section 122 of the Corporation Code, the defendant continued its corporate existence for three (3) years from the date of dissolution. (p. 87, Rollo)

On August 27, 1985, the private respondent filed a special civil action for certiorari and prohibition with the respondent court to annul and set aside the judgment of the lower court and its order denying the motion to vacate the judgment, for having been issued without jurisdiction. On December 29, 1986, the Court of Appeals granted t petition on the ground of lack of jurisdiction ruling that there was no valid service of summons. The appellate court stated that any judgment rendered against Pepsi Cola after its dissolution is a "liability" of the private respondent within the contemplation of the undertaking, but service of summons should be made upon the private respondent itself in accordance with Section 14, Rule 14 of the Rules of Court. It remanded the case to the lower court and ordered that the private respondent be summoned and be given its day in court. On November 27, 1987, a motion for reconsideration was denied. Hence, this petition. The issues raised are two-fold: (1) whether or not Pepsi Cola, the dissolved corporation, is the real party in interest to whom summons should be served in the civil case for damages; and (2) whether or not there was valid service of summons through Nenette Sison, allegedly the secretary of the legal department of Pepsi Cola. If there was valid service of summons upon Pepsi Cola, the issue arises as to whether or not such service validly vested jurisdiction on the lower court over the person of respondent corporation. On the first issue, the petitioner maintain that it is Pepsi Cola which is the real party in the case before the trial court because when the accident happened on March 1, 1984 or one day before the date of legal dissolution, Pepsi Cola was still the registered owner of the truck involved. Being solidarily liable with its driver for damages under Articles 2176 and 2180 of the Civil Code, there appears to be no question that the complaint and summons were correctly filed and served on Pepsi Cola. Section 2, Rule 3 of the Revised Rules of Court mandates that: "Parties in interest ---- Every action must be prosecuted and defended in the name of the real party in interest. . . ." The Court has defined the real party-in-interest in the recent case of Samahan ng mga Nangungupahan sa Azcarraga Textile Market, Inc., et al. v. Court of Appeals (G.R. No. 68357, Sept. 26, 1988), as follows: "The real party-in-interest is the party who stands to be benefited or injured by the judgment or the party entitled to the avails the suit. 'Interest' within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest . . . (Francisco, the Revised Rules of Court in the Phil., Vol. I, p. 126 cited in House International Building Tenants Association, Inc. v. Intermediate Appellate Court, 151 SCRA 705)." Furthermore, the Court in Walter Ascona Lee, et al. v. Hon. Manuel Romillo, Jr., et al. (G.R. No. 60937, May 28, 1988) said: xxx xxx xxx

". . . A real party in interest-plaintiff is one who has a legal right while a real party in interest-defendant is one who has a correlative legal obligation whose act or omission violates the legal rights of the former." For purposes of valid summons, the dissolved Pepsi Cola was the real party in interest-defendant in the civil case filed by the petitioners not only because it is the registered owner of the truck involved but also because, when the cause of action accrued, Pepsi Cola still existed as a corporation and was the party involved in the acts violative of the legal right of another. The petitioners had a valid cause of action for damages against Pepsi Cola. A cause of action is defined as "an act omission of one party in violation of the legal right or rights the other; and its essential elements are a legal right of the plaintiff, correlative obligation of the defendants and an act or omission of the defendant in violation of said legal right." (Santos v. Intermediate Appellate Court, 145 SCRA 248 [1986] citing Ma-ao Sugar Central Co. v. Barrios, et al., 79 Phil. 666 [1947]; See also Republic Planters Bank v. Intermediate Appellate Court 131 SCRA 631 [1984]). The law provides that a corporation whose corporate term has ceased can still he made a party to suit. Under paragraph 1, Section 122 of the Corporation Code, a dissolved corporation: xxx xxx xxx

". . . shall nevertheless be continued as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the business for which it was established." In American jurisprudence, a similar provision in the Corporate Act of 1896 was construed with respect to the kinds of suits that can be prosecuted against dissolved corporations: xxx xxx xxx

". . . The words 'defending suits against them' mean suits at law or in equity, in contract or tort, or of what nature soever, and whether begun before or after dissolution." (Hould v. John P. Squire and Co. [1911] 81 NJL 103, 79 A 282) The rationale for extending the period of existence of a dissolved corporation is explained in Castle's Administrator v. Acrogen Coal, Co. (145 Ky 591, 140 SW 1034 [1911]) as follows: "This continuance of its legal existence for the purpose of enabling it to close up its business is necessary to enable the corporation to collect the demands due it as well as to allow its creditors to assert the demands against it. If this were not so, then a corporation that became involved in liabilities might escape the payment of its just obligations by merely surrendering its charter, and thus defeat its creditors or greatly hinder and delay them in the collection of their demands. This course of conduct on the part of

corporations the law in justice to persons dealing with them does not permit. The person who has a valid claim against a corporation, whether it arises in contract or tort should not be deprived of the right to prosecute an action for the enforcement of his demands by the action of the stockholders of the corporation in agreeing to its dissolution of a corporation does not extinguish obligations or liabilities due by or to it." In the case at bar, the right of action of the petitioners against Pepsi Cola and its driver arose not at the time when the complaint was filed but when the acts or omission constituting the cause of action accrued (Deter v. City of Delta 271 p. 67, 73 Colo 589, Keister v. Keister, 96 SE 315 123 Va 157, ALR 439), i.e. on March 1, 1984 which is the date of the accident and when Pepsi Cola allegedly committed the wrong. On the second and main issue of whether or not the service of summons through Ms. Nenette C. Sison, upon Pepsi Cola operates to vest jurisdiction upon private respondent, it is important to know the circumstances surrounding the service. At the time of the issuance and receipt of the summons, Pepsi Cola was already dissolved. The Court is of the opinion that service is allowed in such a situation. In the American case of Crawford v. Refiners Co-operative Association, Incorporation (71 NM 1, 375 p 2d 212 [1962]), it was held that a "defendant corporation is subject to suit and service of process even though dissolved." Nowhere in the Corporation Code is there any special provision on how process shall be served upon a dissolved defendant corporation. The absence of any such provision, however, should not leave petitioners without any remedy, unable to pursue recovery for wrongs committed by the corporation before its dissolution. Since our law recognizes the liability of a dissolved corporation to an aggrieved creditor, it is but logical for the law to allow service of process upon a dissolved corporation. Otherwise, substantive rights would be lost by the mere lack explicit technical rules. The Rules of Court on service of summons upon a private domestic corporation is also applicable to a corporation which is no longer a going concern. Section 13, Rule 14 mandates: "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. The case of Castle's Administrator v. Acrogen Coal Co. (supra), is illustrative of the manner by which service can nevertheless be made despite the death of the entity: "[W]hen an action that might have been instituted against a foreign or domestic corporation while it was a going concern is instituted after its dissolution, process in the action may be served upon the same person upon whom the process could be served before the dissolution." (p. 1036). Therefore, service upon a dissolved corporation may be made through any of the persons enumerated in Section 13, Rule 14. To be sure, this Court has ruled that service on a mere employee or clerk of a corporation is not sufficient. (Delta Motor Sales Corp. v. Mangosing, 70 SCRA 598 [1976]; ATM Trucking, Inc. v. Buencamino, 124 SCRA 434 [1983]; Filoil Marketing Corp. v. Marine Development Corp. of the Phil., 117 SCRA 86 [1982]). The persons who should receive the summons should be those named in the statute; otherwise, those who have charge or control of the operations of the company or who may be relied upon to deliver the papers served upon them. (Villa Rey Transit, Inc. v. Far East Motor Corp., 81 SCRA, 298 [1978]; and Summit Trading and Development Corp. v. Avendano, 135 SCRA 397 [1985]). A liberal interpretation of Section 13, Rule 14 has been adopted in the case of G & G Trading Corporation v. Court of Appeals (158 SCRA 466 [1988]): "Although it maybe true that the service of summons was made on a person not authorized to receive the same . . ., nevertheless since it appears that the summons an 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. Indeed the purpose of said rule as above stated to assure service of summons on the corporation had thereby been attained. The need for speedy justice must prevail over a technicality." (at p. 469) The rationale for the rule on service of summons upon a defendant corporation as explained in Delta Motors Sales v. Mangosing (supra), is as follows: "The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to insure that the summons be served on a representative so integrated with the corporation that such person will know what to do with the legal papers served on him. In other words, 'to bring home to the corporation notice of the filing of the action'. (35A C.J.S. 288 citing Jenkins v. Lykes Bros. S.S. Co., 48 F. Supp. 848; MacCarthy v. Langston, D.C. Fla., 23 F.R.D. 249)." (at p. 603) The fact that the summons was received through Miss Sison is not disputed by the parties. For which corporation was she acting? After the dissolution and during the pendency of the case below, private respondent PEPSICO held office at the same address of Pepsi Cola where Miss Sison was working. The petitioners argue that summons was served through the secretary of the legal department who acted as agent of Pepsi Cola. On the other hand, it is contended by private respondent PEPSICO that Miss Sison works for its legal department and not of Pepsi Cola. So that, private respondent avers, there was no valid service upon Pepsi Cola since Miss Sison acted in PEPSICO's behalf (p. 64, Rollo) Even assuming this contention to be true, the private respondent had the obligation to act upon the summons received and to defend Pepsi Cola pursuant to the undertaking it executed on June 11, 1983. Whomsoever Miss Sison was acting for in receiving the summons there is no question that the notice of the action was promptly delivered either to Pepsi Cola or PEPSICO with whom she is admittedly connected. We rule, as in G & G Trading Corporation v. Court of Appeals (supra), that there was substantial compliance with Section 13, Rule 14 because the purpose of notice was satisfied. Contrary to the decision of the Court of Appeals, we therefore, hold that there was proper service of summons to bind Pepsi Cola and

that the decision of the lower court against Pepsi Cola rendered on June 24, 1985 is valid and enforceable against the private respondent. According to the undertaking executed in favor of Pepsi Cola, private respondent assumed: xxx xxx xxx

". . . [A]ll the debts, liabilities and obligations (collectively, the 'Liabilities') of PBC, whether firm or contingent, contractual or otherwise, express or implied, wherever located, and of whatever nature and description (including, but without limiting the generality of the foregoing, liabilities for damages and taxes), hereby agrees and undertakes (i) to pay or cause to be paid or otherwise discharge or cause to be discharged all of the Liabilities of PBC, which Liabilities may be enforced against the Corporation to the same extent as if the said Liabilities had been incurred or contracted originally by the Corporation . . . and (iv) not to prejudice in any way the rights of creditors of PBC." (p. 46, Rollo) It is clear that private respondent is aware that the liabilities of Pepsi Cola are enforceable against it upon the dissolution of Pepsi Cola. As correctly stated by the Court of Appeals, by virtue of the assumption of the debts, liabilities and obligations of Pepsi Cola, "any judgment rendered against Pepsi Cola after its dissolution is a 'liability' of PEPSICO, Inc., within the contemplation of the undertaking." Hence it was incumbent upon respondent PEPSICO, Inc., to have defended the civil suit against the corporation whose liabilities it had assumed. Failure to do so after it received the notice by way of summons amounts to gross negligence and bad faith. The private respondent cannot now invoke a technical defect involving improper service upon Pepsi Cola and alleged absence of service of summons upon it. There is the substantive right of the petitioners to be considered over and above the attempt of the private respondent to avoid the jurisdiction of the lower court. Even assuming that jurisdiction over the private respondent can be acquired only by way of service of summons in literal compliance with Section 14, Rule 14, the petitioners cannot be faulted for having brought the case naming Pepsi Cola as one of the defendants so that the summons was addressed only to the defendants named therein and not to the private respondent. At the time of the commencement of the suit below, the petitioners had no knowledge of the legal dissolution and the undertaking assumed by PEPSICO. The publication of the notice of dissolution and the assumption of liabilities, done in June 1983 or eight months before the vehicular accident, cannot serve as a notice to the petitioners who were not yet creditors having a claim upon a quasi-delict. In view of the above, the valid service of summons upon Pepsi Cola operated as a sufficient service of summons upon the private respondent. The lower court can enforce judgment against the private respondent. Therefore, we rule that the private respondent is bound to satisfy the judgment by default which has become final and executory. The lower court did not abuse its discretion in denying the motion of the private respondent to vacate judgment. WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals is REVERSED and SET ASIDE. The judgment of the lower court and its order denying the motion to vacate judgment are REINSTATED. SO ORDERED. Fernan (C.J.), Feliciano, Bidin and Corts, JJ., concur. ~*~

135 SCRA 397 [1985]

PHILIPPINE JURISPRUDENCE - FULL TEXT The Lawphil Project - Arellano Law Foundation G.R. No. L-60038 March 18, 1985 SUMMIT TRADING AND DEVELOPMENT CORPORATION vs. JUDGE HERMINIO A. AVENDANO Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-60038 March 18, 1985 SUMMIT TRADING AND DEVELOPMENT CORPORATION, petitioner, vs. JUDGE HERMINIO A. AVENDANO, Court of First Instance of Laguna, Binan Branch I, SEGUNDO PILIPINIA and EDGARDO MINDO, represented by ERNESTO PILIPINIA, respondents. AQUINO, J.: This case is about the summons intended for defendant Summit Trading and Development Corporation. As background, it should be stated that Segundo Pilipinia and Edgardo Mindo in 1973 acquired under Land Authority Administrative Order No. 4 two registered lots with a total area of 2 hectares located at Barrio San Vicente, San Pedro, Laguna. The titles of the lots contain the annotation that should Pilipinia and Mindo sell the same, they have the right to redeem the lots within five years from the date of the sale (Exh. H and I). Pilipinia and Mindo sold the lots for P16,000 and P12,000 to Gavino Ortega on February 14 and April 19, 1977. They have retained possession of the lots which are ricelands. They became tenants thereof.

At the instance of Ortega, the said annotation was cancelled by Judge Avendao in his order of September 24, 1979 ostensibly because the lots would be converted into commercial, industrial or residential sites (Exh. M). That conversion has not taken place. At present the two lots are still ricelands. In a letter dated October 16, 1979, Ortega advised Ernesto Pilipinia (attorney-in-fact of Segundo and Mindo) that he and his father would have the right of first refusal in case the lots were sold (Exh. E and O). Ortega resold the two lots on November 14, 1979 for P16,000 and P11,000 to Summit Trading through its president, Virgilio P. Balaguer (Exh. N and N-1). On August 10, 1981, or within the five-year period, Pilipinia and Mindo filed a complaint against Ortega and Summit Trading for the redemption or repurchase of the two lots. They deposited P100,000 with the Royal Savings and Loan Association for that purpose. Ortega was duly summoned. He failed to answer the complaint. He was declared in default. Summit Trading was also declared in default. In his judgment by default dated October 29, 1981, Judge Avendano (the same judge who ordered the cancellation of the annotation) gave plaintiffs Pilipinia and Mindo 15 days from notice within which to redeem the lots for P16,000 and P12,000 and ordered Summit Trading to execute the corresponding deeds of sale and surrender the Torrens titles. If it failed to do so, the clerk of court was directed to perform that task. The register of deeds was ordered to issue new titles to Pilipinia and Mindo. The default judgment was rendered on the assumption that Summit Trading was duly summoned through Marina Saquilayan as secretary of Summit Trading. She received the summons on August 28, 1981. A copy of the judgment was also served on her on November 13, 1981 (Exh. B, pp. 31-32, 64, Record). Actually, Saquilayan received the summons as secretary of Balaguer, already mentioned as the president of Summit Trading which purchased the lots from Ortega. Bonifacio Tiongson was the corporate secretary. Nineteen days after Saquilayan received a copy of the decision, Summit Trading filed a motion for reconsideration on the ground that the trial court did not acquire jurisdiction over it because summons was not served upon it in accordance with Rule 14 of the Rules of Court which 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. It is true that Saquilayan is not among the persons mentioned in section 13. However, she, being under the control of Summit Trading, has not explained what she has done with the summons and complaint. The logical assumption is that she delivered it to her boss, the president of Summit Trading. As already stated, she received a copy of the decision and Summit Trading became aware of it. Summit Trading's motion for reconsideration was denied. While Summit Trading is technically correct in contending that there was no strict compliance with section 13, we cannot close our eyes to the realities of the situation. Under the facts of this case, Saquilayan, being the secretary of the president (whose contact with the outside world is normally through his secretary), may be regarded as an "agent" within the meaning of section 13.(See Villa Rey Transit, Inc. vs. Far East Motor Corporation, L-31339, January 31, 1978, 81 SCRA 298; Filoil Marketing Corporation vs. Marine Development Corporation of the Phil., L-29636, September 30, 1982, 117 SCRA 86.) Hence summons was validly served upon Summit Trading. Its negligence in not answering the complaint was inexcusable. In fact, up to this time, Summit Trading has not bothered to state its defenses to the action nor stated whether it has a meritorious case warranting the setting aside of the default judgment. The cases of Delta Motor Sales Corporation vs. Mangosing, L-41667, April 30,1976, 70 SCRA 598 and ATM Trucking Inc. vs. Buencamino, G.R. No. 62445, August 31, 1983, 124 SCRA 434 are not in point because the summons in the two cases was served upon mere clerks or employees of the corporations who cannot be relied upon to know what to do with the legal papers served upon them. In the instant case, service was made on the president's secretary who could have easily notified the president that an action was filed against the corporation just as she had apprised him of the judgment in this case. The instant petition for certiorari, treated as an appeal under Republic Act No. 5440, was filed out of time. Considered as a special civil action under Rule 65 of the Rules of Court, it is baseless because the trial court had acquired jurisdiction over Summit Trading. As already shown, summons was properly served on the president's secretary. We are not saying that service on such a secretary is always proper. Generally, it is improper. The president himself must be served personally with the summons if it is desired to effect the service on that particular officer. But, as already stated, under the facts of this case, the president's secretary may be regarded as the "agent" within the meaning of section 13 since service upon her of the judgment itself came to the notice of Summit Trading. WHEREFORE, the petition is dismissed. The trial court's judgment is affirmed. Its implementation is now in order. The restraining order is dissolved. Costs against the petitioner. SO ORDERED. Makasiar (Chairman), Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ., concur. ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1987V707] SPOUSES VIOLETA S. VENTURANZA and ROMY VENTURANZA, petitioners, vs. HON. COURT OF APPEALS, HON. JUDGE BERNARDO P. PARDO, PRESIDING JUDGE OF REGIONAL TRIAL COURT OF MANILA, BRANCH XLIII, HON. JUDGE ERNESTO MADAMBA, PRESIDING JUDGE OF METROPOLITAN TRIAL COURT OF MANILA, BRANCH XVII AND NIEVES SENORAN, respondents.1987 December 112nd DivisionG.R. No. 77760D E C I S I O N PADILLA, J.: Petition for review on certiorari of the decision * of the Court of Appeals, dated 6 March 1987, in CA-G.R. No. SP-08971 entitled "Spouses Violeta S. Venturanza and Romy Venturanza, petitioners, vs. Hon. Judge Bernardo Pardo, et al., respondents," affirming the decision ** of the Regional Trial Court of Manila, Branch XLIII. On 22 May 1985, plaintiff Nieves Y. Senoran (now private respondent) filed a complaint against spouses Violeta S. Venturanza and Romy Venturanza (now petitioners) with the Metropolitan Trial Court of Manila, Branch XVII, docketed as Civil Case No. 109950, for collection of sums of money in the aggragate amount of P9,711.50, representing several loans evidenced by promissory notes which had become due and demandable but unpaid despite repeated demands. 1 On 10 June 1985, summons was issued against the petitioners and served on Augusto Soan, father of petitioner Violeta S. Venturanza, at 3412 B.A. Tan Street, Barrio Obrero, Tondo, Manila, the address of petitioners stated in the complaint. The sheriff's Return, states as follows: 2

"I certify that on this date I served a copy of this Summons together with a copy of the corresponding Complaint on Violeta Venturanza and Romy Venturanza at the address designated herein/at _________ Manila, personally/thru Mr./Miss/Mrs. Augusto Soan, father, a person working/residing therein who is of sufficient age and discretion and/or duly authorized to receive services of this nature and who signed/but who, however, refused to sign for the receipt hereof, as evidenced by his/her/the latter's signature appearing on the face of this summons. Manila, Philippines, June 10, 1985." For failure of the petitioners to file their Answer, a decision dated 12 August 1985 was rendered by the court a quo based on the allegations of fact in the complaint, and ordering the petitioners to pay jointly and severally the private respondent the sum of P9,711.50 with interest thereon at the rate of twelve percent (12%) per annum from due date per promissory notes until fully paid, to pay P1,000.00 as attorney's fees and costs of suit. 3 Considering that, as per sheriff's Return, dated 17 August 1985, said decision could not be served upon the petitioners at 3412 B.A. Tan St., Barrio Obrero, Tondo, Manila, on the ground that they were no longer at said address, the same was served on 16 September 1985 upon Violeta S. Venturanza in her office at Asian Development Bank, Roxas Blvd., Pasay City. 4 On 22 September 1985, petitioners filed a "Motion to Set Aside Decision and to Declare Past Proceedings Null and Void for Lack of Jurisdiction," alleging that there had been 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 Court 5 and that the court a quo never acquired jurisdiction over the person of the petitioners, considering that the address where the summons was served is the residence of Violeta S. Venturanza's father, Augusto Soan, and not the residence or dwelling house of the petitioners, and that since April 1985, petitioners had been already residing at Aurora Street, Pasay City. 6 In an order dated 20 October 1985, the court a quo denied the motion, for lack of merit, stating thus: "The preponderance of evidence weighs heavily in favor of an affirmative resolution of the issue. "In the affidavit of Deputy Sheriff, Jose L. Cruz, attached as Annex "A" of plaintiff's opposition to the motion under consideration, he positively states that upon his service at defendants' abovementioned given address, he inquired from one Augusto Soan, who identified himself to be defendant's father whether defendants were residents of the place. Upon confirming that defendants were in fact residents thereat, Jose L. Cruz forthwith handed to said Augusto Soan the summons together with a copy of the complaint requesting the latter to serve the same upon defendants. "The Telephone Directory of Asian Development Bank for February, 1984, attached and marked as Annex "B" of plaintiff's opposition clearly indicates therein that defendant Violeta S. Venturanza is a resident of 3412 B.A. Tan, Bo. Obrero, Tondo, Manila (Annex "B"). The Telephone Directory of the same Asian Development Bank, where defendant, Violeta S. Venturanza is employed for October, 1984 (Annex "C"), bears the same information (Annex "C-1"). Indeed the PLDT Telephone Directory for 1985-1986 (Annex "F") also bears a substantial identical information as to defendant, Violeta S. Venturanza's residence. In the light of all the foregoing evidence indubitably showing that defendants have always been residents of 3412 B.A. Tan St., Bo. Obrero, Tondo, Manila up to the present, the bare allegation in defendants' motion that they have been residing at Aurora St., Pasay City since April 1985, unsupported by any other independent competent evidence, is, utmost (sic), self-serving, and devoid of any probative value. WHEREFORE, let defendants, motion be, as it is hereby denied for lack of merit. SO ORDERED." 7 On appeal to the Regional Trial Court of Manila, Branch XLIII, the appeal being docketed as Civil Case No. 86-34319, the decision of the court a quo was affirmed with a slight modification, i.e., lowering the amount of attorney's fees to P500.00. 8 On 6 March 1987, a petition for review was filed with the Court of Appeals. Said RTC decision was affirmed in toto. 9 Hence, this petition for review on certiorari. The issues raised and to be resolved in this instance, are the following: I. Whether or not the Metropolitan Trial Court validly acquired jurisdiction over the persons of the petitioners when the summons was served upon Augusto Soan, father of petitioner Violeta S. Venturanza at 3412 B.A. Tan St., Bo. Obrero, Tondo, Manila, which address is no longer the residence nor the place of business of petitioners. II. Whether or not the provisions of Section 8, Rule 14 of the Rules of Court was legally complied with by the Sheriff in serving the summons upon the father of one of the petitioners. 10 The court a quo, in its findings of fact, reached the conclusion that the address at 3412 B.A. Tan St., Bo. Obrero, Tondo, Manila, where summons was served by the branch sheriff, Jose L. Cruz, was the place of residence of the petitioners, after the latter allegedly failed to submit any evidence to prove their allegation that they were no longer residents of said address and had transferred to 2511 Aurora St., Pasay City. 11 The court a quo relied heavily on what appeared in the 1984 Telephone Directory of Asian Development Bank, where defendant Violeta S. Venturanza is employed, in the PLDT Telephone Directory for 1985-1986, and the sheriff's affidavit dated 16 October 1985 stating that, upon inquiry from Augusto Soan on whether the defendants were residents of the above-said address, the latter confirmed the same. 12 It is the general rule that findings of fact of the Court of Appeals when supported by substantial evidence, are beyond this Court's power of review. 13 However, in the instant case, we cannot but consider that the address of defendant Violeta S. Venturanza found in the 1984 Asian Development Bank Directory and the PLDT Telephone Directory for 1985-86, together with the affidavit of the branch sheriff, are not sufficient to substantiate the findings of the court a quo that petitioners were bona fide residents of 3412 B.A. Tan St., Barrio Obrero, Tondo, Manila at the time summons was served on Augusto Soan. There is no question, and in fact it was admitted by the petitioners, that in 1984 they were actual residents of 3412 B.A. Tan St., Barrio Obrero, Tondo, Manila and, as correctly reflected in the 1984 Asian Development Bank Directory. However, the change of their address, upon their transfer to Pasay City in April 1985, could not be reflected in the 1985-86 PLDT Telephone Directory, because this

directory had already been printed and circulated to the public before their transfer in April 1985 to Aurora St. in Pasay City. Moreover, the copy of the contract of lease dated April 1985 between petitioner Romualdo Venturanza as lessee and Linda Galvez as lessor over an apartment unit located at 2511 Aurora St., Pasay City 14 and the affidavit of Augusto Soan dated 29 April 1986 stating that he never told the sheriff that the defendants were residing in his house at 3412 B.A, Tan St., Barrio Obrero, Tondo, Manila, sufficiently negate the conclusion of the court a quo. 15 Under Rule 14 of the Rules of Court, there are three (3) methods of service of summons in civil actions, namely: 1) personal service (Sec. 7); 2) substituted service (Sec. 8); and 3) service by publication. 16 Strict compliance with these modes of service is required in order that the court may require jurisdiction over the person of the defendant. 17 Service 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. 18 In 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 service 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. 19 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. "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. 20 "The 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) Upon careful examination of the sheriff's Return in this case, dated 10 June 1985, which purports to serve as proof that summons had been served upon the defendants, together with a copy of the complaint, through Augusto Soan, no statement is 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 does not even 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. WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The case is remanded to the court of origin for further proceedings, including a valid service of summons. No costs. SO ORDERED. Yap (Chairman), Melencio-Herrera, Paras and Sarmiento, JJ., concur. --------------Footnotes * Penned by Justice Jorge S. Imperial with the concurrence of Justices Vicente V. Mendoza and Manuel C. Herrera. ** Rendered by Judge Bernardo P. Pardo. 1. Rollo, pp. 16-17. 2. Rollo, p. 15 (Annex A of the Petition). 3. Rollo, pp. 16-17 (Penned by Judge Ernesto A. Madamba, Metropolitan Trial Court of Manila, Br. XVII). 4. Rollo, p. 30. 5. ELections 7 and 8 of Rule 14 of the Rules of Court state: SEC. 7. Personal service of summons. The summons shall be served by handling a copy thereof to the defendant in person or, if he refuses to receive it, by tendering it to him. SEC. 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, (b) by leaving the copies at defendant's office or regular place of business with some competent person in charge thereof. 6. Rollo, pp. 18-21. 7. Rollo. pp. 23-24. 8. Id., pp. 25-26. 9. Rollo, pp. 28-35. 10 Memorandum for Petitioners, Rollo, pp. 75-76.

11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Order dated 29 October 1985, MTC of Manila, Branch XVII, Rollo, pp. 23-24. Affidavit of Jose L. Cruz, Rollo, p. 36. Rizal Cement Co., Inc., vs. Villareal, 135 SCRA 22, February 28, 1985. Annex H of the Petition, Rollo, p. 37. Rollo, p. 40. Rule of Court in the Phil. by Ruperto G. Martin, 1986 Ed., p. 485. Pantaleon vs. Asuncion, 105 Phil. 761; Sequito vs. Letrondo, 10 Phil. 1139. Keister v. Navarro, 77 SCRA 209, May 31, 1977. Section 8, Rule 14 of the Rules of Court. Ibid. ~*~

/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1993V212] SPOUSES PEPITO AND LORETO LAUS, petitioners, vs. HON. COURT OF APPEALS, HON. SALVADOR C. CEGUERA, in his capacity as Presiding Judge of the Regional Trial Court of Quezon City, Branch 82; NILO SM. CABANG, in his capacity as Deputy Sheriff of Quezon City and CONSUELO P. TORRES, respondents.1993 Mar 83rd DivisionG.R. No. 101256D E C I S I O N DAVIDE, JR., J p: Petitioners seek the review and reversal of the 30 May 1991 Decision 1 of respondent Court of Appeals in CA-G.R. SP No. 22232 2 and the 30 July 1991 Resolution denying their motion to reconsider the said decision. The challenged decision dismissed, for lack of merit, their petition for certiorari, prohibition and injunction to annul the Orders dated 5 March 1990 and 9 July 1990 of Branch 82 of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-89-3327 which, respectively, declared them in default and denied their motion to reconsider such declaration. The antecedents of this case are not controverted. On 24 August 1989, private respondent Consuelo P. Torres filed against "Loredo (sic) Alfaro-Laus and John Doe" a complaint, docketed as Civil Case No. Q-89-3327, for the collection of a sum of money. The defendants in the said case are the petitioners in the instant petition. The complaint alleges that petitioner Loreto Alfaro-Laus executed a promissory note in favor of the private respondent under which the former undertook to pay the latter the amount of Sixty-Six Thousand Pesos (P66,000.00) after three (3) months from the date thereof. Upon maturity of the said promissory note, 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, the former filed the aforementioned complaint praying for the payment of the unpaid balance of P55,000.00 "plus interest at the rate of ten per cent (10%), compounded monthly beginning February 21, 1989, and twenty-five per cent (25%) of the entire amount due for and as attorney's fees, such being in accordance with the terms and conditions set forth in the promissory note." 3 On 10 October 1989, Deputy Sheriff Romero S. Cruz proceeded to the petitioners' address at 122 Molave Park Subdivision, Paraaque, Metro Manila 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. 4 On the same date, Deputy Sheriff Cruz executed and filed a return 5 which reads: "Respectfully returned to the REGIONAL TRIAL COURT Branch 82, QUEZON CITY, the attached original copy of the summons issued in connection with Civil Case No. 89-3327 entitled CONSUELO P. TORRES versus LOREDO (sic) LAUS & JOHN DOE with the information that duplicate copy of the same together with the complaint and its annexes was duly served upon defendant Loredo (sic) Laus of 122 Molave Park Subd. Paraaque M. M. thru JOSEPHINE AREOLA, maid of Loredo Daus (sic) of same address, received as evidenced by her signature appearing thereon." The petitioners did not file any answer. Consequently, upon motion of the private respondent, the trial court 6 issued on 29 December 1989 an order declaring the former in default and setting the ex parte presentation of the private respondent's evidence for 16 January 1990. 7 The petitioners claim that they received this 29 December 1989 Order only on 22 January 1990. On 24 January 1990, the trial court rendered a judgment by default against the petitioners; it ordered the latter "[T]o pay the plaintiff (private respondent) the amount of FIFTY-FIVE Thousand Pesos (P55,000.00) at the rate of ten per cent (10%), compounded monthly beginning February 21, 1989 up to the present; and . . . [T]o pay attorney's fees equivalent to twenty-five percent (25%) of the entire amount due" to the private respondent. 8 On 2 February 1990, before receiving a copy of the 22 January 1990 decision, 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. 9 In its Order of 5 March 1990, the trial court denied the motion to dismiss for lack of merit on the ground that it had already rendered a judgment by default on 24 January 1990. 10 Petitioners received a copy of this order on 24 March 1990. In the meantime, the trial court issued a writ of execution. On 30 March 1990, public respondent 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. On 3 April 1990, petitioners filed a motion to reconsider the Order of 5 March 1990; 11 they reiterated therein the contention that the trial court did not acquire jurisdiction over their persons because of the defective service of summons, and further aver that: "Josephine Areola, the person who supposedly received the summons is not even known to the defendants. It turned out from their investigation that said Josephine Areola was just a guest of one of their maid (sic) who stayed for only about a week. Furthermore

Josephine Areola was just a child of about ten to eleven years old and would not be expected to know what to do with the documents handed to her. With all due respect it would not be fair for the defendant if the summons would be served upon the defendants through a person who is not of sufficient age and discretion at the time the summons was served, and a transcient (sic) at that." 12 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. Private respondent, on the other hand, presented evidence to show that Josephine had been staying in the petitioners' house since July 1990 for she was the person who received the demand letter sent to the petitioners on 3 July 1989. 13 Deputy Sheriff Cruz also took the witness stand, identified the affidavit he executed on 27 April 1990 14 and further asserted that he found no one in the house of the petitioners when he arrived on 10 October 1989; he claimed that he waited for ten (10) minutes. Thereupon, two (2) women arrived; the said women told him, upon his inquiry, that the petitioners were not around. He then served the summons through one of them, Josephine Areola. 15 In its Order of 9 July 1990, 16 the trial court denied the petitioners' motion for reconsideration and held that there was a proper service of summons because contrary to Loreto Alfaro-Laus' statement that Areola was a guest of their maid for a week, it was proven that Areola was in fact the very person who, on 3 July 1989, received the demand letter sent by the private respondent. On 17 July 1990, petitioners filed with the Court of Appeals a petition for certiorari, prohibition and injunction with application for a restraining order 17 to set aside the trial court's Orders of 5 March 1990 and 9 July 1990, and to dismiss Civil Case No. Q-89-3327. The petition was docketed as CA-G.R. SP No. 22232. Petitioners insisted therein that the trial court committed grave abuse of discretion and a grave error in denying their motion to dismiss and the motion to reconsider said denial despite the lack of jurisdiction over their persons. They likewise challenged the denial of such motion to dismiss which was based solely on the ground that a judgment by default had already been rendered. 18 On 30 May 1991, the respondent Court of Appeals promulgated its decision 19 denying the petition for lack of merit. It made the following disqualifications: " . . . it was the defendants-petitioners who erred in filing a motion to dismiss at that late stage of the proceedings. A motion to dismiss on the ground that the Court has no jurisdiction over the person of the defendants is proper only when made within the reglementary period for filing a responsive pleading and before such responsive pleading is filed (Rule 16, Sec. 1[a]). In this case, the defendants-petitioners' motion to dismiss was filed five (5) months after the complaint was filed and only after a default judgment had already been rendered by the respondent Court. Thus, it was rather too late in the day for the defendants-petitioners' motion to dismiss to be considered by the respondent Court. In the proper exercise of its sound judicial discretion, the respondent Court did not err in denying the motion to dismiss on the ground that a judgment by default had already been rendered. Besides, even if the motion to dismiss was filed on time, and yet, was still denied by the respondent Court, the order of the court denying the motion to dismiss is interlocutory and cannot be the subject of a petition for certiorari, such as this instant petition (National Investment and Development Corp. vs. Aquino, 163 SCRA 153). The denial of a motion to dismiss cannot be questioned in a petition for certiorari, which is an extra-ordinary writ that is not allowed as a substitute for ordinary appeal (Tan vs. Intermediate Appellate Court, 164 SCRA 130). Be that as it may, the defendants-petitioners had other remedies available to them, but which they failed to avail of. In a long line of cases decided by the Supreme Court, it has been repeatedly provided that the remedies of a defaulted defendant are: (a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake, excusable negligence, and that he has a meritorious defense; (b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a Motion for New Trial under Section 1[a] of Rule 37; (c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Sec. 2 of Rule 38; and (d) He may also appeal from the judgment rendered against him as contrary to the evidence or to law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41). (Lina vs. Court of Appeals, 135 SCRA 637; Tiburcio vs. Castro, 161 SCRA 583). As it is, the defendants-petitioners failed, after they received notice of the order declaring them in default and before the default judgment was rendered, to file a motion, under oath, to set aside the order of default on the ground that they failed to file a timely answer due to fraud, accident, mistake, or excusable negligence, and showing (sic) that they had a meritorious defense. The other applicable remedy which they failed to employ is the remedy of appeal from the judgment rendered against them as contrary to the evidence or the law, even in the absence of a motion/petition to set aside the order of default. This instant petition for certiorari cannot be a substitute for the remedy of appeal, which the defendants-petitioners did not pursue, as they must first exhaust the remedies available to them (Lina vs. Court of Appeals, supra.). That the judgment by default had already become final and is about to be executed is the result of the defendants-petitioners' failure to file a timely appeal. As such, the default judgment may no longer be challenged (Tiburcio vs. Castro, supra.) Lastly, We find that the respondent Court was liberal enough in hearing the defendants-petitioners' motion for reconsideration of the denial of their motion to dismiss. As the pivotal issue therein, the defendant-petitioners were given their day in court to prove that the service of summons to them was both improper and invalid. After weighing the evidence and testimonies of the parties and other persons involved, the respondent Court ruled that there was valid service of summons. We find no compelling reason to rule otherwise. There is such a presumption of regularity in the performance of official functions by the sheriff, and it was up to the defendantspetitioners to convince the respondent Court that there was, indeed, invalid service of summons. This they failed to do. They could

not substantiate their claim that Josephine Areola was a child of 10 to 11 years who would not know what to do with the court documents received by her. The defendants-petitioners' contention that Josephine Areola stayed with them for only a few days backfired when the private respondent presented documentary evidence to show that Josephine Areola was already residing in the defendants-petitioners' house at least three (3) months before the summons was served. No other proof was presented by the defendants-petitioners to bolster their allegations apart from their self-serving, and sometimes conflicting, testimonies. Thus, We find no error or grave abuse of discretion on the part of the respondent Court in denying the defendants-petitioners' motion for reconsideration." 20 Meanwhile, on 13 June 1991, respondent sheriff Nilo Cabang sold at a public auction the levied men's ring - on oval diamond set in yellow gold - to the private respondent for P140,000.00, and the Galant car to Atty. Leonardo Perez, Jr., counsel for the latter, for P180,000.00. Both were the highest bidders. 21 Their motion for the reconsideration of the aforesaid decision having been denied in the respondent Court's Resolution of 30 July 1991, 22 petitioners availed of this recourse under Rule 45 of the Revised Rules of Court and raise the following issues: "1. WHETHER OR NOT THE COURT A QUO ACQUIRED JURISDICTION OVER THE REASONS OF THE PETITIONERS BY VIRTUE OF THE SUBSTITUTED SERVICE OF SUMMONS EFFECTED BY DEPUTY SHERIFF ROMEO CRUZ; 2. WHETHER OR NOT THE REMEDY OF CERTIORARI CAN BE AVAILED OF BY A PARTY IMPROVIDENTLY DECLARED IN DEFAULT TO CHALLENGE THE ORDER OF DEFAULT AND THE SUBSEQUENT JUDGMENT BY DEFAULT." 23 On 10 February 1992, after the filing of the private respondent's comment and the petitioners' reply thereto, We resolved to give due course to the petition and required the parties to file their respective memoranda which they subsequently complied with.We find merit in this petition. The focal issue is 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. Since the petitioners did not voluntarily submit to the jurisdiction of the trial court, proper service of summons became imperative. If the service effected in the case at bar was, as claimed by the petitioners, invalid, the trial court acquired no jurisdiction over their persons. 24 In such an instance, the order of default, judgment by default and writ of execution issued by the trial court would be null and void. 25 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: "SEC. 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." This provision is a reproduction of Section 8, Rule 7 of the 1940 Rules of Court except that inter alia, "promptly" in the latter was changed to "within a reasonable time" in the former. "Within a reasonable time" contemplates a period of time longer than that demarcated by the word "prompt," and presupposes that a prior attempt at personal service, within a justifiable time frame as would be necessary to bring the defendant within the jurisdiction of the court, had failed. 26 Since substituted service is in derogation of the common law and is extraordinary in character, it must be used only as prescribed and in the circumstances authorized by statute. 27 Statutes prescribing modes other than personal service of summons must be strictly complied with to give the court jurisdiction, and such compliance must appear affirmatively in the return. 28 In Keister vs. Navarro, 29 this Court described how the impossibility of personal service should be shown: "Impossibility of prompt service should be shown by stating the efforts made to find the defendant personally and the fact that such efforts failed. This statement should be made in the proof of service (I Moran, Comments on the Rules of Court, 1970 Ed., p. 444). This is necessary because substituted service is in derogation of the usual method of service. It has been held that this method of service is `in derogation of the common law; it is a method extraordinary in character, and hence may be used only as prescribed and in the circumstances authorized by statute.' . . . (72 C.J.S. 1053)." Emphasizing the need for strict compliance with the requirements of substituted service, this Court issued Administrative Circular No. 59, the pertinent portions of which read as follows: "SUBJECT: Service of Summons. 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: xxx xxx xxx

The manner of effecting substituted service as prescribed in Venturanza v. Court of Appeals, 156 SCRA 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 that authorized by the statute is considered ineffective.' For immediate compliance." 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. Thus, he declared and admitted: "Q. In this case, you went to the residence of the defendant once as you stated on paragraph 3 30 on October 10, 1989? A. Yes, sir. Q. And you did not wait the (sic) defendant to come because according to you in paragraph 4, you were informed that the defendant was not around, is that correct? A. According to the maid. Q. So upon being informed that the defendant was not around you served the summons, according to paragraph 4 to one Josephine Ariola, is that correct? A. Yes, sir. Q. In other words, you relied on the information given to you by somebody that the defendant was not around? A: I waited there for around ten (10) minutes and then two (2) women arrived in the tricycle and I waited them (sic) to get inside and I asked them if Mr. and Mrs. Laus will be coming. Q. And they answered they were not around at that time? A.Yes, sir. Q. So, you immediately served the summons upon the persons arriving (sic)? A. Yes, sir. Q. And who were these persons who arrived? A. Josephine Ariola. Q. And who is her companion? A. I did not ask anymore? xxx xxx xxx

Q. Who is older, is this Josephine Ariola or her companion? A. Josephine Ariola, she was the one who signed the summons. Q. Did you ask her age? A. I did not ask anymore because she look already (sic) of sufficient age. Q. That's your conclusion? A. Yes because she was the maid there and she was the older one." 31 As it turns out, the unrebutted evidence for the petitioners establishes that Areola (or Ariola) was only 11 to 12 years old at the time substituted service was attempted. 32 It is all too obvious that no earnest efforts were exerted by Deputy Sheriff Cruz to effect the personal service of summons. His testimony thus attests to an undue, if not indecent, haste to serve the summons at the first attempt without making sure that personal service was, by then and even thereafter, an impossibility because either the petitioners had left for a foreign country or an unknown destination with not definite date of returning within a reasonable period or had gone into hiding to avoid service of any process from the courts. If he had only made the inquiries suggested above, he could have returned in the evening of 10 October 1989 or on any of the succeeding days - including the following Saturday and Sunday. Service of summons may be made at night as well as during the day, or even on a Sunday or holiday because of its ministerial character. 33

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. There is more in this case which further unmasks the nullity of the decision of the trial court. Both parties agree that the petitioners were the defendants in Civil Case No. Q-89-3327. However, petitioner Loreto Alfaro-Laus is erroneously mentioned in the complaint as Loredo. On the other hand, petitioner Pepito Laus, the husband of Loreto, is merely designated as JOHN DOE. The latter was impleaded as a co-defendant presumably on the theory that the liability sought to be enforced is a conjugal partnership liability. In short, Loreto's husband was sued as an indispensable party; it is clear that the trial court treated him as such when in its decision, ordered the defendants, not just Loreto, to pay the adjudged amounts. The sheriff's return of service indisputably discloses that no summons was even attempted to be served on petitioner Pepito Laus. Sheriff Cruz unequivocally states therein that the "duplicate copy of the same together with the complaint and its annexes was duly served upon defendant Loredo (sic) Laus of 122 Molave Park Subd. Paraaque M. M. thru JOSEPHINE AREOLA, maid of Loredo Daus (sic) of same address, . . . ." 34 Neither Deputy Sheriff Cruz nor the private respondent had volunteered additional information to the effect that at some other time, summons was in fact served on Pepito Laus. Accordingly, the trial court never acquired jurisdiction over his person. And yet, while it concedes in its 29 December 1989 Order that the substituted service of summons was valid only for Loreto, it declared the defendants - and not only her - in default. The court could have easily avoided this misdoing if it only examined the records before issuing the order. On this score alone, the judgment by default is fatally flawed. There is still another fact which betrays the trial court's unusual haste in rendering the judgment by default. In the dispositive portion of the decision, the defendants were ordered, inter alia: "1. To pay the plaintiff the amount of FIFTY-FIVE Thousand Pesos (P55,000.00) at the rate of ten per cent (10%), compounded monthly beginning February 21, 1989 up to the present;" 35 While this rate of ten per cent (10%) could only refer to the imposable interest, the court failed to state whether its application shall be on a monthly or yearly basis. The body of the decision, however, speaks of ten per cent (10%) interest PER MONTH; 36 this seems to have been the basis relied on by respondent sheriff Cabang in computing for the petitioners' alleged liability for purposes of execution. 37 This award of interest - in effect amounting to one hundred twenty per cent (120%) per annum - and the additional twenty-five per cent (25%) of the total amount due ordered paid as attorney's fees, are unreasonable and unconscionable. Since the trial court's default order and judgment by default are null and void, the respondent Court gravely erred in affirming them. Some further comments, en passant, on the ratiocination of the respondent Court are in order. It is not accurate for the latter to have said that the petitioners' motion to dismiss was not filed seasonably because it was filed beyond the reglementary period provided in the Revised Rules of Court. Such a conclusion would doubtless be correct if there was a valid service of summons. If, however, a defendant has not been properly summoned, the period to file a motion to dismiss for lack of jurisdiction over his person does not commence to run until he voluntarily submits to the jurisdiction of the court, since the court has no jurisdiction to adjudicate the controversy as to him until such time. 38 In this case, petitioners did not voluntarily submit to the jurisdiction of the trial court. Consequently, the period to file a responsive pleading did not even commence to run. Nor are We persuaded by the respondent Court's declaration that even if the motion to dismiss had been filed on time, the trial court's order denying the same, being interlocutory, still cannot be the subject of a petition for certiorari. To be sure, this rule admits of an exception, as when the trial court clearly acted outside of its jurisdiction or with grave abuse of discretion in denying the motion to dismiss. 39 This is exactly what happened in the case while it was pending before the trial court; the denial of the motion to dismiss was based solely on the ground that a judgment by default had already been entered. Certainly, this does not constitute a valid ground for the denial because the motion raises a fundamental and prejudicial issue affecting the validity of the decision by default. Equally unmeritorious is the respondent Court's statement that the failure of the petitioners to appeal from the judgment by default rendered such judgment final and unassailable. In the first place, it is axiomatic that a void judgment can never become final and executory and may even be assailed or impugned at any time. 40 An action to declare the nullity of a void judgment does not prescribe. 41 Secondly, the motion to dismiss in this case was filed before the petitioners received a copy of the decision by default. Since the said motion is based on the lack of jurisdiction over the persons of the petitioners which, if true - in fact, We have found it to be so - would result in the nullification not only of the default order but of the decision as well, then for all legal intents and purposes, the latter was covered by the motion. This was precisely the orientation of the trial court when it allowed the parties to submit evidence to support the motion to reconsider the Order of 5 March 1990 denying the motion to dismiss. It would certainly not have gone that far if it thought otherwise for by then, the decision had already become final. Its suggestion that the petitioners should have filed a motion to set aside the order of default on the ground that they had failed to file the answer on grounds of fraud, accident, mistake or excusable negligence or a motion for new trial or a petition for relief from judgment, is untenable for it begs the question. Besides, as shown above, petitioners' failure to file the answer was not based on any of these grounds, but stood on the void service of summons. Finally, respondent Court's reliance on the presumption of regularity in the performance of official functions is misplaced. We have held that such a presumption does not apply where it is patent that the sheriff's return is defective. 42 WHEREFORE, the Decision of the respondent Court of Appeals of 30 May 1991 and the Resolution dated 30 July 1991 in CA-G.R. SP No. 22232 are hereby REVERSED and SET ASIDE. The Order of Branch 82 of the Regional Trial Court of Quezon City of 29 December 1989 (Civil Case No. Q-89-3327) declaring petitioners in default, its Decision of 24 January 1990, Orders of 5 March 1990 and 9 July 1990 and the writ of execution issued therein, as well as all proceedings had pursuant to the writ of execution, are declared NULL and VOID. The case is hereby remanded to the court of origin for further proceedings which shall include the valid service of summons. SO ORDERED.

Feliciano (Acting Chairman), Bidin, Romero and Melo, JJ., concur. Gutierrez, Jr., J., (Chairman), Is on terminal leave. Footnotes 1. Per Associate Justice Venancio D. Aldecoa, Jr., concurred in by Associate Justice Jose C. Campos, Jr. and Filemon H. Mendoza. 2. Entitled "Spouses Pepito and Loreto Laus vs. Hon. Salvador C. Ceguera, et al." 3. Rollo, 21. 4. Rollo, 21. 5. Id., 28. 6. Per Judge Salvador C. Ceguera. 7. CA rollo, 20. 8. CA rollo, 27. 9. Id., 22-25. 10. Id., 13. 11. CA rollo, 28-31. 12. Id., 30. 13. Id., 82-83. 14. Id., 37-38. 15. Pages 2 & 3, Order of 9 July 1990; Rollo, 80-81. 16. Id., 79. 17. CA rollo, 2-12. 18. Id., 7. 19. CA rollo, 50-56; Rollo, 20-26. 20. CA rollo, 54-56; Rollo, 24-26. 21. Certificates of Sale; Id., 55-56. 22. Rollo, 27. 23. Id., 12. 24. Keister vs. Navarro, 77 SCRA 209 [1977]; Litonjua vs. Court of Appeals, 80 SCRA 246 [1977]. 25. Delta Motor Sales Corp. vs. Mangosing, 70 SCRA 598 [1976]. 26. Mapa vs. Court of Appeals, G.R. Nos. 79374 and 82986, 2 October 1992. 27. 72 CJS 1053. 28. 62 Am Jur 2d., 950. 29. Supra; see also, Busuego vs. Court of Appeals, 151 SCRA 376 [1987]; Venturanza vs. Court of Appeals, 156 SCRA 305 [1987]; Paluwagan ng Bayan Savings Banks vs. King, 172 SCRA 60 [1989]. 30. This refers to paragraph 3 of the 27 April 1990 Affidavit of Romeo Cruz; Rollo, 37-38 31. Quoted in the trial court's Order of 9 July 1990 from TSN, 10 May 1990, 5-7; Rollo, 80-81. 32. Id., 82. 33. 62 Am Jur 2d., 816. 34. Supra. 35. CA rollo, 27.

36. Id., 26. 37. Certificates of Sale; Rollo, 55-56. 38. FRANCISCO, V.J., The Revised Rules of Court, Vol. I, 2nd ed., 880, citing Orange Theatre Corp. vs. Raynertz Amusement Corp., 139 F. 2d; 871. 39. Sanchez vs. Zosa, 66 SCRA 171 [1975]; Manalo vs. Mariano, 69 SCRA 80 [1976]; Quisumbing vs. Gumban, 193 SCRA 520 [1991]; Mendoza vs. Court of Appeals, 201 SCRA 343 [1991]. 40. Zelde vs. Court of Appeals, 184 SCRA 531 [1990]. 41. Paluwagan ng Bayan Savings Bank vs. King, supra.; Vda. de Macoy vs. Court of Appeals, 206 SCRA 244 [1992]. 42. Venturanza vs. Court of Appeals, supra. ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1992V806] TOMAS G. MAPA, petitioner, vs. COURT OF APPEALS, JUDGE MAXIMO A. SAVELLANO, JR., REGIONAL TRIAL COURT OF MANILA BRANCH LIII, and LAND BANK OF THE PHILIPPINES, respondents.1992 Oct 23rd DivisionG.R. No. 79374D E C I S I O N DAVIDE, JR., J.: The validity of a substituted service of summons upon the petitioner is raised as the common issue in these two (2) cases. Since identical parties are involved in both, this Court ordered their consolidation. 1 G.R. No. 79374 involves a petition filed under Rule 45 of the Rules of Court to review the 3 June 1987 Decision of public respondent Court of Appeals in C.A.-G.R. SP No. 08535 2 denying, for lack of merit, the petition therein which sought to set aside the decision of Branch 53 of the Regional Trial Court (RTC) of Manila. A similar petition under Rule 45 of the Rules of Court was filed in G.R. No. 82986 to review the decision of public respondent Court of Appeals, dated 20 January 1988, in C.A.-G.R. SP No. 13252. 3 The said decision set aside (a) the 4 May 1987 Order of Branch 10 of the Regional Trial Court of Manila in Civil Case No. 82-13465 reversing its earlier decision of 18 September 1983 on the ground that the herein petitioner was not validity served with summons and (b) the 16 October 1987 Order denying the motion for reconsideration of the latter. The antecedent facts as disclosed by the records in these cases are not disputed. High Peak Mining Exploration Corporation (hereinafter referred to as High Peak), through its duly authorized corporate officers Encarnation C. Tittel and Juergen Tittel, borrowed various sums of money from the private respondent Land Bank of the Philippines (LBP), the latter acting as trustee of Trust Account No. 01-139. The loans are evidenced by the following Promissory Notes executed on different dates, signed by the said officers and made payable to the Trust Account: (1) On 23 June 1980, the sum of Five Million Pesos (P5,000,000.00) for a term of 360 days, with interest at 16% per annum and with a maturity value of P5,800,000.00, under Promissory Note (SER No. 0001); (2) On 14 August 1980, the sum of Three Million Pesos (P3,000,000.00) for a term of 360 days, with interest at 17% per annum and with a maturity value of P3,510,000.00, under Promissory Note (SER No. 0002); and (3) On 9 September 1980, the sum of Three Million Pesos (P3,000,000.00) for a term of 360 days, with interest at 17% per annum and with a maturity value of P3,510,000.00, under Promissory Note (SER No. 0003). No security being required, none was put up by High Peak for the faithful performance of its obligations under the Promissory Notes. These three (3) Promissory Notes expressly provide that demand and dishonor are waived by High Peak and its officers. High Peak failed to pay the said loans. Despite the waiver of notice of demand, the LBP nevertheless sent demand letters to the former which ignored the same. The LBP was thus constrained to take legal action based on the three (3) Promissory Notes. The first note became the subject matter of a complaint for the recovery of a sum of money with an application for a writ of preliminary attachment filed solely against High Peak. The complainant was filed on 14 July 1981 with the then Court of First Instance (now Regional Trial Court) of Manila. It was docketed therein as Civil Case No. 82-6235 and was assigned to Branch 26 thereof. The case was later renumbered as Civil Case No. 142400 when Branch 26 became Branch 53 of the Regional Trial Court of Manila. The complaint was thereafter amended to implead as additional defendants the petitioner herein, in his personal capacity and as Chairman of High Peak's Board of Directors, and the abovenamed signatories to the promissory notes. The amended complaint was admitted by the court in its Order of 16 September 1982. This is the case involved in G.R. No. 79374. The second and third Promissory Notes, on the other hand, became the subject matter of a complaint for the recovery of a sum of money filed against High Peak, the herein petitioner in his personal capacity and as Chairman of High Peak's Board of Directors and the aforementioned signatories to the three (3) Promissory Notes. This complaint was likewise filed on 29 October 1982 with the Court of First Instance of Manila. It was docketed as Civil Case No. 82-13465 and was assigned to Branch 10 thereof. This is the case involved in G.R. No. 82986.

The amended complaint in Civil Case No. 142400 and the complaint in Civil Case No. 82-13465 both allege that the defendants could be served with summons at the Second Floor, First Midland Condominium Bldg., Gamboa St., Legaspi Village Makati, Metro Manila. The subsequent procedural antecedents in each case are hereunder summarized. G.R. No. 79374 (re Civil Case No. 142400) On 2 December 1982, Deputy Sheriff Romulo A. Flores of the Office of the Provincial Sheriff filed a return of service of summons in Civil Case No. 142400, reading as follows:. "SHERIFF'S RETURN THIS IS TO CERTIFY that on the 10th day of November, 1982 I have served copies of herein summons with complaint and annexes attached thereto issued by the Court in the above entitled case upon the defendants High Peak Mining Exploration Corporation, Tomas G. Mapa, Encarnacion C. Tittel and Juergen Tittel, thru SUSAN O. DELA TORRE, a person of suitable age and discretion working therein, who claims to be the person authorized to receive processess (sic) of this nature and who acknowledged the receipt thereof at second (sic) floor, First Midland Condominium Bldg., Gamboa Street, Legaspi Village, Makati, Metro-Manila. WHEREFORE, said summons is hereby returned to the Honorable Court of origin DULY SERVED, for its record and information. Pasig, Metro-Manila, November 15, 1982." 4 No answer having been filed by the defendants, the trial court, upon motion of the LBP, issued an order on 15 April 1983 declaring the defendants in default and ordering the LBP to present its evidence ex-parte. On 20 September 1983, said court, per Judge Maximo Savellano, JR., rendered a decision against the defendants; the latter's liability for the amount adjudged was made joint and several. Herein petitioner, as one of the defendants below, received a copy of the decision in his residence at No. 625 N.S. Amoranto Ave., Sta. Mesa Heights, Quezon City on 10 December 1984. On 21 December 1984, petitioner filed a Motion to Dismiss and Set Aside Judgment 5 on the ground that service of summons upon him and High Peak was fatally defective because it was not made in accordance with law. As to him, the sheriff's return did not show that the sheriff exerted efforts to personally serve the summons; thus, substituted service pursuant to Sections 7 and 8, Rule 14 of the Rules of Court was not warranted. Petitioner additionally postulates that even granting that the substituted service was proper, the actual service upon Susan O. dela Torre cannot be considered valid because "(a) it was left not at defendant Mapa's residence and dela Torre was not residing therein, and (b) that he (Mapa) was not holding office or regular place of business at the second floor, First Midland Condominium Bldg., Gamboa St., Legaspi Village, Makati, Metro Manila;" he holds office in his residence. The motion was denied by the trial court in its Order of 10 May 1985. A motion to reconsider the same was likewise denied in the Order of 31 January 1986. Petitioner then sought redress from the respondent Court of Appeals through a petition for certiorari against Judge Savellano and the LBP. The case was docketed as C.A.-G.R. SP No. 08535. In its decision promulgated on 3 June 1987, 6 respondent Court of Appeals denied the petition on the ground that ". . . respondent Court was right in assuming jurisdiction over the defendants Tomas G. Mapa, Encarnacion C. Tittel and Juergen Tittel who were being sued in their personal capacities, on the basis of its finding that the substituted service of summons pursuant to Section 8, Rule 14 of the Rules of Court was properly affected (sic) by Deputy Sheriff Romulo A. Flores." Respondent Court further that the service of summons upon Susan O. dela Torre, an employee of the corporation, may be regarded as service upon an agent of a corporation within the meaning of Section 13 of Rule 14. Finally, it took note of the trial court's observation in the latter's Order of 10 May 1985 that since petitioner Mapa has not even assailed the merits of the court's 30 September 1983 decision, justice and equity demanded that "the same should be left undisturbed." His motion to reconsider the adverse decision having been denied in the respondent Court's resolution of 29 July 1987, petitioner filed the instant petition on 16 September 1987. G.R. No. 82986 (re Civil Case No. 82-13465) The duty to serve the summons in Civil Case No. 82-13465 also fell on the shoulders of Deputy Sheriff Romulo A. Flores. On 15 November 1982, he filed his return of service which reads: "SHERIFF'S RETURN THIS IS TO CERTIFY that on the 10th day of November, 1982, I have served copies of herein summons with complaint and annexes attached thereto issued by the Court in the above-entitled case upon defendants High Peak Mining Exploration Corporation, Tomas G. Mapa, Encarnacion C. Tittel and Juegen (sic) Tittle, thru SUSAN O. DELA TORRE, a person of suitable age and discretion working with said defendants, who claims to be the person authorized (sic) to receive process (sic) of this nature and who acknowledged the receipt thereof at 2nd Floor, First Midland Condominium Bldg., Gamboa St., Legaspi Vill., Makati, Metro-Manila. WHEREFORE, said summons is hereby returned to the Honorable Court of origin DULY SERVED, for its record and information. Pasig, Metro-Manila, November 15, 1982." 7 No answer having been filed by the defendants therein, the LBP filed a motion to declare them in default, which the trial court granted. On 18 September 1983, said court, per then Judge Eduardo R. Bengzon, handed down a decision against the defendants. The latter were adjudged joint and severally liable for the amounts to be paid. 8 On 14 October 1986, petitioner filed a Motion to Dismiss and Set Aside Judgment 9 on the ground that service of summons to him and the corporation was fatally defective; he reiterated the same arguments he raised in the similar motion he filed in Civil Case No.

142400. Over the LBP's opposition, the trial court, this time per Judge Josefina Cruz Rodil, issued an Order on 4 May 1987 10 partly granting the said motion by setting aside the decision because no jurisdiction was acquired over both the petitioner and High Peak. The court held that there is no showing that efforts were exerted by the sheriff to serve the summons personally upon the petitioner; the former immediately resorted to substituted service upon Susan O. dela Torre who cannot be considered a competent person in charge of the office. With respect to High Peak, Miss dela Torre, a mere employee thereof, is not one of those explicitly authorized to receive summons in behalf of a corporation under Section 13, Rule 14 of the Rules of Court. It denied, however, the motion to dismiss; instead, it allowed the petitioner "to file his answer or responsive pleading within fifteen (15) days from receipt of this Order," and directed the issuance of summons on the other defendants. 11 On 15 June 1987, the LBP filed a motion to reconsider this Order 12 alleging therein that there was substantial compliance with the rule on service of summons. The LBP further invited the trial court's attention to the 3 June 1987 decision of the Court of Appeals in the aforementioned C.A.-G.R. SP No. 08535. Petitioner consequently filed his opposition 13 thereto; he reiterates the arguments raised in his motion to dismiss and, with respect to the aforesaid decision of the Court of Appeals, contends that since the same is not final, it does not yet control. The trial court denied the motion in its Order of 16 October 1987. 14 Unable to accept the above orders of the trial court, the LBP filed with the Court of Appeals a special civil action for certiorari, prohibition and mandamus which was docketed therein as C.A.-G.R. SP No. 13252. On 20 January 1988, the Court of Appeals promulgated its decision in said C.A.-G.R. SP No. 13252 15 finding the trial court to have committed grave abuse of discretion amounting to lack of jurisdiction in issuing the challenged orders, and resolving as follows: "WHEREFORE, the petition for certiorari is hereby GRANTED and the decision 16 of the respondent court dated May 4, 1987 and October 16, 1987 are hereby set aside for being contrary to law. The restraining order issued on November 16, 1987 is likewise made permanent. . . ." 17 His motion to reconsider the said decision having been denied on 13 April 1988, 18 the petitioner filed the instant petition. On 20 May 1988, this Court gave due course to G.R. No. 79374. 19 After the petitioner filed his reply to the private respondent's comment in G.R. No. 82986, this Court, in the Resolution of 6 March 1989, ordered the latter's consolidation with the former. 20 The parties in these cases, particularly the private respondent, as plaintiff below, should have striven to consolidate Civil Case No. 142400 and Civil Case No. 82-13465 while they were still pending before the trial court. Both involve identical parties, similar transactions made one after the other and the same trust account of the LBP. As a matter of fact, if the filing of Civil Case No. 142400 had only been delayed by just three (3) months, there would have been no need to file more than one (1) case. Moreover, summonses upon defendants in both cases were served on the same occasion. Valuable time of the parties, the two (2) branches of the trial court and eventually even of the Court of Appeals would have been saved had the said cases been consolidated pursuant to Section 1, Rule 31 of the Rules of Court. Parties should avail of this rule both for their own and the court's advantage and benefit. The purpose or object of consolidation is precisely to avoid multiplicity of suits, guard against oppression or abuse, prevent delay, declog congested dockets, simplify the work of the trial court and save unnecessary costs or expenses; in short, the aim is to attain justice with the least expense and vexation to the parties litigants. 21 As stated in the exordium of this ponencia, the basic issue raised in these petitions is whether or not there was a valid substituted service of summons in both Civil Case No. 142400 and Civil Case No. 82-13465. Both cases are unquestionably actions in personam. Jurisdiction over the petitioner, as defendant therein, can therefore be acquired either by his voluntary submission to such jurisdiction, as when he appears in court, or by service of summons upon him. Voluntary appearance is equivalent to service of summons; 22 in fact, it even cures the defect of summons. 23 Since petitioner did not voluntarily submit to the jurisdiction of the trial court in both cases, personal service became imperative. Section 7, Rule 14 of the Rules of Court explicitly requires personal service of summons which is 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 personal service cannot be effected within a reasonable time, substituted service, as provided for in Section 8 of the abovementioned Rule 14, may suffice: "SEC. 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." This provision is a reproduction of Section 8, Rule 7 of the 1940 Rules of Court except that, inter alia, the word "promptly" in the latter was changed to "within a reasonable time" in the former. Of course, "within a reasonable time" in the former. Of course, "within a reasonable time" contemplates a period of time longer than that demarcated by the word "prompt", and presupposes that a prior attempt at personal service, within a justifiable time frame as would be necessary to bring the defendant within the jurisdiction of the court, had failed. It is not shown when the summons in Civil Cases Nos. 142400 and 82-13465 were actually issued; what is clear to this Court is that the amended complaint in the first case was admitted by the trial court on 16 September 1982, while the complaint in Civil Case No. 82-13465 was filed on 29 October 1982. While the separate Sheriff's returns indicate that the summonses in both cases were served on 10 November 1982, these returns do not show that prior attempts at personal service were made by the Sheriff and that such attempts had failed, prompting the latter to resort to substituted service. In Keister vs. Navarro, 24 this Court described how the impossibility of personal service should be shown: "Impossibility of prompt service should be shown by stating the efforts failed. This statement should be made in the proof of service (I Moran, Comments on the Rules of Court, 1970 Ed., p. 444). This is necessary because substituted service is in derogation of the usual method of service. It has been held that this method of service is 'in derogation of the common law'; it is a method extraordinary in character, and hence may be 'used only as prescribed and in the circumstances authorized by statute.' . . . (72 C.J.S. 1053)." The proof of service alluded to is the return required by Section 6 of Rule 14 which reads:

"SEC. 6. Return. When the service has been completed, the server shall give notice thereof, by registered mail, to the plaintiff or his counsel, and shall return the summons to the clerk who issued it, accompanied with the proof of service." In Busuego vs. Court of Appeals, 25 this Court also succinctly expressed how such impossibility is to be shown. Thus: ". . . Perusal, however, of the sheriff's return reveals that the sheriff failed to specify therein what prior efforts, if any, had been exerted to serve summons upon the other defendants personally within a reasonable period of time, and the lack of success of such efforts, before proceeding to substituted service. . . ." As earlier adverted to, the sheriff's returns in Civil Cases Nos. 142400 and 82-13465 are patently wanting in particulars that would justify the substituted service. Accordingly, it is fatally flawed and defective; on that basis alone, therefore, the trial court acquired no jurisdiction over the person of the petitioner. It must nevertheless be emphasized that the absence in the sheriff's return of a statement about the impossibility of personal service does not conclusively prove that the service is invalid. Proof of prior attempts at personal service may be submitted by the plaintiff during the hearing of any incident assailing the validity of the substituted service. While the sheriff's return carries with it the presumption, albeit disputable, of regularity in the sense that inter alia, the entries therein are deemed correct, it does not necessarily follow that an act done in relation to the official duty for which the return is made was not done simply because it is not disclosed therein. Besides, the sheriff's neglect in making such a disclosure should not unduly prejudice the plaintiff if what was undisclosed was in fact done. Unfortunately in these instant cases, the private respondent failed to present evidence during the hearings of the petitioner's separate motions to dismiss and set aside judgment to prove that substituted service of summons was indeed effected in strict compliance with Section 8, Rule 14 of the Rules of Court. During such hearings, the private respondent could also have presented evidence to show that the petitioner did in fact receive from Susan O. dela Torre the summonses, together with copies of the complaints, in both cases. If indeed the petitioner received the same, the requirement of due process would have been complied with. Thus, in Boticano vs. Chu, 26 this Court had the occasion to state: "In the case at bar, there is no question that summons was timely issued and received by private respondent. In fact, he never denied actual receipt of such summons but confined himself to the argument that the Sheriff should prove that personal service was first made before resorting to substituted service. This brings to the fore the question of procedural due process. In Montalban vs. Maximo (22 SCRA 1077 [1968]) the Court ruled that 'The constitutional requirement of due process exacts that the service be such as may be reasonably expected to give the notice desired. Once the service provided by the rules reasonably accomplishes that end, the requirement of justice is answered; the traditional notions of fair play are satisfied; due process is served.' Indeed, such construction is but fair, and in accord with substantial justice. The burden on a plaintiff is not to be enlarged with a restrictive construction desired by the defendant (Ibid., p. 1078)." On the same matter, Moran 27 has this to say: "Irregularities of this kind may, however, be cured by proof that the copies have actually been delivered to the defendant, which is equivalent to personal service." While in his separate motions to dismiss and set aside judgment in the two (2) cases filed before the trial court and annexed to his pleadings in these petitions, petitioner never alleged that he did not in fact receive the summonses, such circumstance by itself cannot warrant the conclusion that he actually received from Susan dela Torre the said summonses and copies of the complaints. In the absence of a categorical admission similar to that made in Boticano vs. Chu, no such inference to the contrary could be drawn. It was thus incumbent upon the private respondent to prove that Susan dela Torre delivered to the petitioner copies of both the summonses and the complaints. The conclusion then is inevitable that neither a valid personal nor substituted service of summons in Civil Cases Nos. 142400 and 8213465 had been effected on the petitioner. However, Branch 10 of the RTC of Manila gravely erred when, in its Order of 4 May 1987, it set aside the decision of 18 September 1983 because it was also of the opinion that there was no valid service of summons on High Peak and the other defendants. It entirely forgot that it was only the petitioner herein who filed a motion to dismiss and set aside the judgment. For reasons which remain undisclosed, petitioner did not include his co-defendants in the said motion. In any event, the validity of the service of summonses on Encarnacion Tittel and Juergen Tittel has not been raised in issue; moreover, based on the sheriff's return of service in said case, this Court is satisfied that there was a valid service of summons on High Peak Section 13, Rule 14 of the Rules of Court provides for the manner in which service of summons upon a private domestic corporation shall be made. It reads: "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." The rationale for the above rule 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 a person will know what to do with the legal papers served on him. In other words, the rule is meant to bring home to the corporation notice of the filing of the action. 28 The summonses for High Peak in Civil Cases Nos. 142400 and 82-13465 were received by Susan O. dela Torre who is described in the separate sheriff's returns as "a person of suitable age and discretion working therein, who claims to be the person authorized to receive processess (sic) of this nature and who acknowledged the receipt thereof at second (sic) floor, First Midland Condominium Bldg., Gamboa Street, Legaspi Village, Makati, Metro Manila." In his separate motions to dismiss, while petitioner categorically admits that this Susan O. dela Torre is an employee of the corporation, he does not disclose her specific duties and responsibilities. He does not even deny the statement, made in the said returns, that Susan is "authorized to receive processess (sic) of this nature." Until rebutted by competent evidence, these returns would have to stand in the meantime for they enjoy the presumption of regularity.

Susan O. dela Torre may thus be deemed an agent of High Peak for purposes of the aforesaid Section 13 of Rule 14. It is then logical to presume that she delivered the copies of the summonses and complaints to the corporation, considering especially the fact that she was working in the office of the said corporation as indicated in the complaints. This latter presumption has not likewise been rebutted Accordingly, even if Miss dela Torre may not strictly be considered as the proper agent for purposes of the aforecited Section 13, there was, nonetheless, substantial compliance therewith In G & G Trading Corporation vs. Court of Appeals, 29 this Court stated: "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, nevertheless 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. Indeed the purpose of said rule as above stated to assure service of summons on the corporation had thereby been attained. The need for speedy justice must prevail over a technicality." One final word. As stated earlier, the three (3) promissory notes involving the original amounts of P5,000,000.00, P3,000,000.00 and P3,000,000.00, or a total of P11,000,000.00, were to be released as loans from a Trust Account of the LBP unsecured by mortgage or any other security. This Court is unable to understand how Eleven Million Pesos an enormous amount can be so easily released without any form of security. Unless allowed by the Trust Account itself or the rules and regulations of the LBP, the transactions appear to be highly questionable. In this regard, since private respondent LBP is a government-owned institution, an inquiry by appropriate agencies of the government is in order to determine who were responsible for the approval of said loans. WHEREFORE, subject to the modifications as above indicated the instant petitions are hereby partly GRANTED. The decision of respondent Court of Appeals of 3 June 1987 in C.A.-G.R. SP No. 08535, subject of G.R. No. 79374, is AFFIRMED in all respects except insofar as it sustains the ruling of the trial court in Civil Case No. 142400 that the petitioner was validly served with summons in said case; the Decision of 20 September 1983 of Branch 53 of the Regional Trial Court of Manila in Civil Case No. 142400 (formerly R-82-6235) stands as to the other defendants but is hereby SET ASIDE as against the petitioner, and its Orders of 10 May 1985 and 31 January 1986 are accordingly MODIFIED. Said court shall cause alias summons to be served on the petitioner. The Decision of respondent Court of Appeals of 20 January 1988 in C.A.-G.R. SP No. 13252, subject of G.R. No. 82986, is AFFIRMED in all respects except insofar as the petitioner is concerned. The Decision of 18 September 1983 of Branch 10 of the Regional Trial Court of Manila in said Civil Case No. 82-13465 stands as against the other defendants therein but is hereby SET ASIDE as against the petitioner, and the Orders therein of 4 May 1987 and 16 October 1987 are thus MODIFIED accordingly. A separate trial is hereby ordered against the petitioner in Civil Case No. 142400 and Civil Case No. 82-13465, for which purpose the latter shall be consolidated with the former. No pronouncement as to costs. SO ORDERED. Footnotes 1. Rollo (G.R. No. 82986), 74. 2. Per Associate Justice Arturo B. Buena, concurred in by Associate Justices Floreliana Castro-Bartolome and Eduardo R. Bengzon; Rollo (G.R. No. 79374), 17-25. 3. Per Associate Justice Justo P. Torres, Jr., concurred in by Associate Justices Bienvenido C. Ejercito and Oscar M. Herrera; Rollo (G.R. No. 82986), 57-66. 4. Rollo of C.A.-G.R. SP No. 08535, 34. 5. Rollo of C.A.-G.R. SP No. 08535, 35-38. 6. Rollo (G.R. No. 79374), 17-25. 7. Rollo (G.R. No. 82986), 23. 8. Id., 24-27. 9. Rollo (G.R. No. 82986), 28-31. 10. Id., 32-34. 11. Id., 34. 12. Id., 35-45. 13. Rollo, (G.R. No. 82986), 46-52. 14. Id., 53-55. 15. Id., 57-66. 16. Should be order. 17. Op. cit., 66. 18. Rollo (G.R. No. 82986), 68. 19. Rollo (G.R. No. 79374), 49. 20. Op. cit., 116. 21. Cojuangco, Jr. vs. Court of Appeals, 203 SCRA 619 [1991], citing 1 C.J.S., 1343. 22. Section 23, Rule 14, Rules of Court. 23. Infante vs. Toledo, 44 Phil. 834 [1918]; Republic vs. Ker & Co., 18 SCRA 207 [1966]; Aguilos vs. Sepulveda, 53 SCRA 269 [1973]; J.M. Tuason & Co. vs. Estabillo, 62 SCRA 1 [1975]; Boticano vs. Chu, 148 SCRA 541 [1987]; Busuego vs. Court of Appeals, 151 SCRA 376 [1987]. 24. 77 SCRA 209, 215 [1977]; see also Paluwagan ng Bayan Savings Bank vs. King, 172 SCRA 60 [1989]. 25. Supra., 383-384. 26. Supra. 27. MORAN, M.V., comments on the Rules of Court, vol. 1, 1979 ed., 444. 28. Delta Motor Sales Corp. vs. Mangosing, 70 SCRA 598 [1976]; Villa Rey Transit, Inc. vs. Far East Motor Corp., 81 SCRA 298 [1978] citing 19 C.J.S. 995; ATM Trucking Inc. vs. Buencamino, 124 SCRA 434 [1983]; Far Corporation vs. Francisco, 146 SCRA 197 [1986]; G & G Trading Corp. vs. Court of Appeals, 158 SCRA 466 [1988]; Lee vs. Court of Appeals, 205 SCRA 752 [1992]. 29. Supra.; see also Rebollido vs. Court of Appeals, 170 SCRA 800 [1989].

~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1995V94] NORTHWEST ORIENT AIRLINES, INC., petitioner, vs. COURT OF APPEALS and C.F. SHARP & COMPANY, INC., respondents.1995 Feb 91st DivisionG.R. No. 112573D E C I S I O N DAVIDE, J.: This petition on certiorari seeks to set aside the decision of the court of Appeals affirming the dismissal of the petitioner's complaint to enforce the judgment of a Japanese court. The principal issue here is whether a Japanese court can acquire jurisdiction over a Philippine corporation doing business in Japan by serving summons through diplomatic channels on the Philippine corporation at its principal office in Manila after prior attempts to serve summons in Japan had failed. Petitioner Northwest Orient Airlines, Inc. (hereinafter NORTHWEST ), a corporation organized under the laws of the State of Minnesota, U.S.A., sought to enforce in Civil Case No. 83-17637 of the Regional Trial Court (RTC), Branch 54, Manila, a judgment rendered in its favor by a Japanese court against private respondent C.F. Sharp & Company, Inc., (hereinafter SHARP), a corporation incorporated under Philippine laws. As found by the Court of Appeals in the challenged decision of 10 November 1993, 1 the following are the factual and procedural antecedents of this controversy: On May 9, 1974, plaintiff Northwest Airlines and defendant C.F. Sharp & Company, through its Japan branch, entered into an International Passenger Sales Agency Agreement, whereby the former authorized the latter to sell its air transportation tickets. Unable to remit the proceeds of the ticket sales made by defendant on behalf of the plaintiff under the said agreement, plaintiff on March 25, 1980 sued defendant in Tokyo, Japan, for collection of the unremitted proceeds of the ticket sales, with claim for damages. On April 11, 1980, a writ of summons was issued by the 36th Civil Department, Tokyo District Court of Japan against defendant at its office at the Taiheiyo Building, 3rd floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture. The attempt to serve the summons was unsuccessful because the bailiff was advised by a person in the office that Mr. Dinozo, the person believed to be authorized to receive court processes was in Manila and would be back on April 24, 1980. On April 24, 1980, bailiff returned to the defendant's office to serve the summons. Dr. Dinozo refused to accept the same claiming that he was no longer an employee of the defendant. After the two attempts of service were unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of summons served at the head office of the defendant in Manila. On July 11, 1980, the Director of the Tokyo District Court requested the Supreme Court of Japan to serve the summons through diplomatic channels upon the defendant's head office in Manila. On August 28, 1980, defendant received from Deputy Sheriff Rolando Balingit the writ of summons (p. 276, Records). Despite receipt of the same, defendant failed to appear at the scheduled hearing. Thus, the Tokyo Court proceeded to hear the plaintiff's complaint and on [January 29, 1981], rendered judgment ordering the defendant to pay the plaintiff the sum of 83,158,195 Yen and damages for delay at the rate of 6% per annum from August 28, 1980 up to and until payment is completed (pp. 12-14, Records). On March 24, 1981, defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having appealed the judgment, the same became final and executory. Plaintiff was unable to execute the decision in Japan, hence, on May 20, 1983, a suit for enforcement of the judgment was filed by plaintiff before the Regional Trial Court of Manila, Branch 54. 2 On July 16, 1983, defendant filed its answer averring that the judgment of the Japanese Court sought to be enforced is null and void and unenforceable in this jurisdiction having been rendered without due and proper notice to the defendant and/or with collusion or fraud and/or upon a clear mistake of law and fact (pp. 41-45, Rec.). Unable to settle the case amicably, the case was tried on the merits. After the plaintiff rested its case, defendant on April 21, 1989, filed a Motion for Judgment on a Demurrer to Evidence based on two grounds: (1) the foreign judgment sought to be enforced is null and void for want of jurisdiction and (2) the said judgment is contrary to Philippine law and public policy and rendered without due process of law. Plaintiff filed its opposition after which the court a quo rendered without due process of law. Plaintiff filed its opposition after which the court a quo rendered the now assailed decision dated June 21, 1989 granting the demurrer motion and dismissing the complaint (Decision, pp. 376-378, Records). In granting the demurrer motion, the trial court held that: "The foreign judgment in the Japanese Court sought in this action is null and void for want of jurisdiction over the person of the defendant considering that this is an action in personam; the Japanese Court did not acquire jurisdiction over the person of the defendant because jurisprudence requires that the defendant be served with summons in Japan in order for the Japanese Court to acquire jurisdiction over it, the process of the Court in Japan sent to the Philippines which is outside Japanese jurisdiction cannot confer jurisdiction over the defendant in the case before the Japanese court of the case at bar. Boudard versus Tait 67 Phil. 170. The plaintiff contends that the Japanese Court acquired jurisdiction because the defendant is a resident of Japan, having four (4) branches doing business therein and in fact had a permit from the Japanese government to conduct business in Japan (citing the exhibits presented by the plaintiff); if this is so then service of summons should have been made upon the defendant in Japan in any of these alleged four branches; as admitted by the plaintiff the service of the summons issued by the Japanese Court was made in the Philippines thru a Philippine sheriff. This Court agrees that if the defendant in a foreign court is a resident in the court of that foreign court such court could acquire jurisdiction over the person of the defendant but it must be served upon the defendant in the territorial

jurisdiction of the foreign court. Such is not the case here because the defendant was served with summons in the Philippines and not in Japan." Unable to accept the said decision, plaintiff on July 11, 1989 moved for reconsideration of the decision, filing at the same time a conditional Notice of Appeal, asking the court to treat the said notice of appeal "as in effect after and upon issuance of the court's denial of the motion for reconsideration." Defendant opposed the motion for reconsideration to which a Reply dated August 28, 1989 was filed by the plaintiff. On October 16, 1989, the lower court disregarded the Motion for Reconsideration and gave due course to the plaintiff's Notice of Appeal. 3 In its decision, the Court of Appeals sustained the trial court. It agreed with the latter in its reliance upon Boudard vs. Tait 4 wherein it was held that "the process of the court has no extraterritorial effect and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state." To support its position, the Court of Appeals further stated: In an action strictly in personam, such as the instant case, personal service of summons within the forum is required for the court to acquire jurisdiction over the defendant (Magdalena Estate Inc. vs. Nieto, 125 SCRA 230). To confer jurisdiction on the court, personal or substituted service of summons on the defendant not extraterritorial service is necessary (Dial Corpo. vs. Soriano, 161 SCRA 739). But while plaintiff-appellant concedes that the collection suit filed is an action in personam, it is its theory that a distinction must be made between an action in personam against a resident defendant and an action in personam against a non-resident defendant. Jurisdiction is acquired over a non-resident defendant only if he is served personally within the jurisdiction of the court, and over a resident defendant if by personal, substituted or constructive service conformably to statutory authorization. Plaintiff-appellant argues that since the defendant-appellee maintains branches in Japan, it is considered a resident defendant. Corollarily, personal substituted or constructive service of summons when made in compliance with the procedural rules is sufficient to give the court jurisdiction to render judgment in personam. Such an argument does not persuade. It is general rule that processes of the court cannot lawfully be served outside the territorial limits of the jurisdiction of the court from which it issues (Carter vs. Carter, 41 S.E. 2d 532, 201) and this is regardless of the residence or citizenship of the party thus served (Iowa-Rahr, 129 NW 494, 150 Iowa 511, 35 LRC, NS 292, am. Case 1912 D680). There must be actual service within the proper territorial limits on defendant or someone authorized to accept service for him. Thus, a defendant, whether a resident or not in the forum where the action is filed, must be served with summons within the forum. But even assuming a distinction between a resident defendant and non-resident defendant were to be adopted, such distinction applies only to natural persons and not to corporations. This finds support in the concept that "a corporation has no home or residence in the sense in which those terms are applied to natural persons" (Claude Neon Lights vs. Phil. Advertising Corp., 57 Phil. 607). Thus, as cited by the defendant-appellee in its brief: "Residence is said to be an attribute of a natural person, and can be predicated on an artificial being only by more or less imperfect analogy. Strictly speaking, therefore, a corporation can have no local residence or habitation. It has been said that a corporation is a mere ideal existence, subsisting only in contemplation of law - an invisible being which can have, in fact, no locality and can occupy no space, and therefore cannot have a dwelling place. (18 Am. Jur. 2d, p. 693 citing Kimmerle vs. Topeka, 88 370, 128 p. 367; wood v. Hartfold F. Ins. Co., 13 Conn 202)" Jurisprudence so holds that the foreign or domestic character of a corporation is to be determined by the place of its origin, where its charter was granted and not by the location of its charter was granted and not by the location of its business activities (Jennings v. Idaho Rail Light & P. Co., 26 Idaho 703, 146 p. 101). A corporation is a "resident" and an inhabitant of the state in which it is incorporated and no other (36 Am. Jur. 2d, p. 49). Defendant-appellee is a Philippine Corporation duly organized under the Philippine laws. Clearly, its residence is the Philippines, the place of its incorporation, and not Japan. While defendant-appellee maintains branches in Japan, this will not make it a resident of Japan. A corporation does not become a resident of another by engaging in business there even though licensed by that state and in terms given all the rights and privileges of a domestic corporation (Galveston H. & S.A.R. Co. vs. Gonzales, 151 US 496, 38 L ed. 248, 4 S Ct. 401). On this premise, defendant appellee is a non-resident corporation. As such, court processes must be served upon it at a place within the state in which the action is brought and not elsewhere (St. Clair vs. Cox, 106 US 350, 27 L ed. 222, 1 S. Ct. 354). 5 It then concluded that the service of summons effected in Manila or beyond the territorial boundaries of Japan was null and did not confer jurisdiction upon the Tokyo District Court over the person of SHARP; hence, its decision was void. Unable to obtain a reconsideration of the decision, NORTHWEST elevated the case to this Court contending that the respondent court erred in holding that SHARP was not a resident of Japan and that summons on SHARP could only be validly served within the country. A foreign judgment is presumed to be valid and binding in the country from which it comes, until the contrary is shown. It is also proper to presume the regularity of the proceedings and the giving of due notice therein. 6 Under Section 50, Rule 39 of the rules of court, a judgment in an action in personam of a tribunal of a foreign country having jurisdiction to pronounce the same is presumptive evidence of a right as between the parties and their successors-in-interest by a subsequent title. The judgment may, however, be assailed by evidence of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere, enjoins the presumption that it was acting in the lawful exercise of jurisdiction and has regularly performed its official duty.

Consequently, the party attacking a foreign judgment has the burden of overcoming the presumption of its validity. 7 Being the party challenging the judgment rendered by the Japanese court, SHARP had the duty to demonstrate the invalidity of such judgment. In attempt to discharge that burden, it contends that the extraterritorial was not only ineffectual but also void, and the Japanese Court did not, therefore, acquire jurisdiction over it. It is settled that matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex forti or the internal law of the forum. 8 In this case, it is the procedural law of Japan where the judgment was rendered that determines the validity of the extraterritorial service of process on SHARP. As to what this law is a question of fact, not of law. It may not be taken judicial notice of and must be pleaded and proved like any other fact. 9 Sections 24 and 25, rule 132 of the Rules of Court provide that it may be evidenced by an official publication or by a duly attested or authenticated copy thereof. It was then incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show that under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption of validity and regularity of the service of summons and the decision thereafter rendered by the Japanese court must stand. Alternatively, in the light of the absence of proof regarding Japanese law, the presumption of identity or similarity or the so-called processual presumption 10 may be invoked. applying it, the Japanese law on the matter is presumed to be similar with the Philippine law on service of summons on a private foreign corporation doing business in the Philippines. Section 14, Rule 14 of the rules of Court provides that if the defendant is a foreign corporation doing business in the Philippines, service may be made: (1) on its resident agent designated in accordance with law for that purpose, or, (2) if there is no such resident agent, on the government official designated by law to that effect, or (3) on any of its officers or agents within the Philippines. If the foreign corporation has designated an agent to receive summons, the designation is exclusive, and service of summons is without force and gives the court no jurisdiction unless made upon him. 11 Where the corporation has no such agent, service shall be made on the government official designated by law, to wit: (a) the Insurance Commissioner, in the case of a foreign insurance company; (b) the Superintendent of Banks, in the case of a foreign banking corporation; and (c) the Securities and Exchange Commission, in the case of other foreign corporations duly licensed to do business in the Philippines. whenever service of process is so made, the government office or official served shall transmit by mail a copy of the summons or other legal process to the corporation at its home or principal office. The sending of such copy is a necessary part of the service. 12 SHARP contends that the laws authorizing service of process upon the Securities and Exchange commission, the Superintendent of Banks, and the Insurance Commissioner, as the case may be, presuppose a situation wherein the foreign corporation doing business in the country no longer has any branches or offices within the Philippines. Such contention is belied by the pertinent provisions of the said laws. Thus, Section 128 of the Corporation code 13 and Section 190 of the Insurance Code 14 clearly contemplate two situations: (1) if the corporation had left the Philippines or had ceased to transact business therein, and (2) if the corporation has no designated agent. Section 17 of the General Banking Act 15 does not speak of a corporation which had ceased to transact business in the Philippines. Nowhere in its pleadings did SHARP profess to having had a resident agent authorized to receive court processes in Japan. This silence could only mean, or at least create an impression, that it had none. Hence, service on the designated government official or on any of SHARP's officers or agents in Japan could be availed of. The respondent, however, insists that only service on any of its officers or employees in its branches in Japan could be resorted to. We do not agree. As found by the respondent court, two attempts at service were made at SHARP's Yokohoma branch. Both were unsuccessful. On the first attempt, Mr. Dinozo, who was believed to be the person authorized to accept court process, was in Manila. On the second, Mr. Dinozo was present, but he refused to accept the summons because, according to him, he was no longer an employee of SHARP. While it may be true that service could have been made upon any of the officers or agents of SHARP at its three other branches in Japan, the availability of such a recourse would not preclude service upon the proper government official, as stated above. As found by the Court of Appeals, it was the Tokyo District Court which ordered that summons for SHARP be served at its head office in the Philippines after the two attempts of service had failed. 16 The Tokyo District Court requested the Supreme Court of Japan to cause the delivery of the summons and other legal documents to the Philippines. Acting on that request, the Supreme Court of Japan sent the summons together with the other legal documents to the Ministry of Foreign Affairs of Japan which, in turn forwarded the same to the Japanese Embassy in Manila. Thereafter, the court processes were delivered to the Ministry (now Department) of Foreign Affairs of the Philippines, then to the executive Judge of the Court of First Instance (now Regional Trial Court) of Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the same on SHARP at its principal office in Manila. This service is equivalent to service on the proper government official under Section 14, Rule 14 of the Rules of Court, in relation to Section 128 of the Corporation Code. Hence, SHARP's contention that such manner of service is not valid under Philippine laws holds no water. 17 In deciding against the petitioner, the respondent court sustained the trial court's reliance on Boudard vs. Tait 18 where this Court held: "The fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be based upon personal service within the state which renders the judgment." xxx xxx xxx

"The process of a court has no extraterritorial effect, and no jurisdiction is acquired over the person of the defendant by serving him beyond the boundaries of the state. Nor has a judgment of a court of a foreign country against a resident of this country having no property in such foreign country based on process served here, any effect here against either the defendant personally or his property situated here." "Process issuing from the courts of one state or country cannot run into another, and although a nonresident defendant may have been personally served with such process in the state or country of his domicile, it will not give such jurisdiction as to authorize a personal judgment against him."

It further availed of the ruling in Magdalena Estate, Inc. vs. Nieto 19 and Dial Corp. vs. Soriano, 20 as well as the principle laid down by the Iowa Supreme Court in the 1911 case of Raher vs. Raher. 21 The first three cases are, however, inapplicable. Boudard involved the enforcement of a judgment of the civil division of the Court of First Instance of Hanoi, French Indo-China. The trial court dismissed the case because the Hanoi court never acquired jurisdiction over the person of the defendant considering that "[t]he evidence adduced at the trial conclusively proves that neither the appellee [the defendant] nor his agent or employees were ever in Hanoi, French Indo-China; and that the deceased Marie Theodore Jerome Boudard had never, at any time, been his employee." In Magdalena Estate, what was declared invalid resulting in the failure of the court to acquire jurisdiction over the person of the defendants in an action in personam was the service of summons through publication against non-appearing resident defendants. It was claimed that the latter concealed themselves to avoid personal service of summons upon them. In Dial, the defendants were foreign corporations which were not domiciled and licensed to engage in business in the Philippines and which did not have officers or agents, places of business, or properties here. On the other hand, in the instant case, SHARP was doing business in Japan and was maintaining four branches therein. Insofar as the Philippines is concerned, Raher is a thing of the past. In that case, a divided Supreme Court of Iowa declared that the principle that there can be no jurisdiction in a court of a territory to render a personal judgment against anyone upon service made outside its limits was applicable alike to cases of residents and non-residents. The principle was put at rest by the United States Supreme Court when it ruled in the 1940 case of Milliken vs. Meyer 22 that domicile in the state is alone sufficient to bring an absent defendant within the reach of the state's jurisdiction for purposes of a personal judgment by means of appropriate substituted service or personal service without the state. This principle is embodied in Section 18, Rule 14 of the Rules of Court which allows service of summons on residents temporarily out of the Philippines to be made out of the country. The rationale for this rule was explained in Milliken as follows: [T]he authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties. "Enjoyment of the privileges of residence within the state, and the attendant right to invoke the protection of its laws, are inseparable" from the various incidences of state citizenship. The responsibilities of that citizenship arise out of the relationship to the state which domicile creates. That relationship is not dissolved by mere absence from the state. The attendant duties, like the rights and privileges incident to domicile, are not dependent on continuous presence in the state. One such incident of domicile is amenability to suit within the state even during sojourns without the state, where the state has provided and employed a reasonable method for apprising such an absent party of the proceedings against him. 23 The domicile of a corporation belongs to the state where it was incorporated. 24 In a strict technical sense, such domicile as a corporation may have is single in its essence and a corporation can have only one domicile which is the state of its creation. 25 Nonetheless, a corporation formed in one state may, for certain purposes, be regarded a resident in another state in which it has offices and transacts business. This is the rule in our jurisdiction and apropos thereto, it may be necessary to quote what we stated in State Investment House, Inc. vs. Citibank, N.A., 26 to wit: The issue whether these Philippine branches or units may be considered "residents of the Philippine Islands" as that term is used in Section 20 of the Insolvency Law . . . or residents of the state under the laws of which they were respectively incorporated. The answer cannot be found in the Insolvency Law itself, which contains no definition of the term, resident, or any clear indication of its meaning. There are however other statutes, albeit of subsequent enactment and effectivity, from which enlightening notions of the term may be derived. The National Internal Revenue Code declares that the term "'resident foreign corporation' applies to a foreign corporation engaged in trade or business within the Philippines," as distinguished from a "'non-resident foreign corporation' . . . (which is one) not engaged in trade or business within the Philippines." [Sec. 20, pars. (h) and (i)]. The Offshore Banking Law, Presidential Decree No. 1034, states "that branches, subsidiaries, affiliation, extension offices or any other units of corporation or juridical person organized under the laws of any foreign country operating in the Philippines shall be considered residents of the Philippines." [Sec. 1 (e)]. The General Banking Act, Republic Act No. 337, places "branches and agencies in the Philippines of foreign banks . . . (which are) called Philippine branches, in the same category as "commercial banks, savings associations, mortgage banks, development banks, rural banks, stock savings and loan associations" (which have been formed and organized under Philippine laws), making no distinction between the former and the latter in so far as the terms "banking institutions" and "bank" are used in the Act [Sec. 2], declaring on the contrary that in "all matters not specifically covered by special provisions applicable only to foreign banks, or their branches and agencies in the Philippines, said foreign banks or their branches and agencies in the Philippines, said foreign banks or their branches and agencies lawfully doing business in the Philippines "shall be bound by all laws, rules and regulations applicable to domestic banking corporations of the same class, except such laws, rules and regulations as provided for the creation, formation, organization, or dissolution of corporations or as fix the relation, liabilities, responsibilities, or duties of members, stockholders or offices of corporation." [Sec. 18]. This Court itself has already had occasion to hold [Claude Neon Lights, Fed. Inc. vs. Philippine Advertising Corp., 57 Phil. 607] that a foreign corporation licitly doing business in the Philippines, which is a defendant in a civil suit, may not be considered a non-resident within the scope of the legal provision authorizing attachment against a defendant not residing in the Philippine Islands; [Sec. 424, in relation to Sec. 412 of Act No. 190, the Code of Civil Procedure; Sec. 1 (f), Rule 59 of the Rules of 1940; Sec. 1(f), Rule 57, rules of 1964] in other words, a preliminary attachment may not be applied for and granted solely on the asserted fact that the defendant is a foreign corporation authorized to do business in the Philippines - and is consequently and necessarily, "a party who resides out of the Philippines." Parenthetically, if it may no be considered as a party who resides out of the country , then logically, it must be considered a party who does reside in the Philippines, who is a resident of the country. Be this as it may, this Court pointed out that: ". . . Our laws and jurisprudence indicate a purpose to assimilate foreign corporations, duly licensed to do business here, to the status of domestic corporations. (Cf. Section 73, Act No. 1459, and Marshall Wells Co. vs. henry W. Elser & Co., 46 Phil. 70, 76; Yu Cong Eng vs. Trinidad, 47 Phil. 385, 411) We think it would be entirely out of line with this policy should we make a discrimination against a foreign corporation, like the petitioner, and subject its property to the harsh writ of seizure by attachment when it has complied not

only with every requirement of law made specially of foreign corporations, but in addition with every requirement of law made of domestic corporations. . . ." Obviously, the assimilation of foreign corporations authorized to do business in the Philippines "to the status of domestic corporations," subsumes their being found and operating as corporations, hence, residing, in the country. The same principle is recognized in American law: that the "residence of a corporation, if it can be said to have a residence, is necessarily where it exercises corporate functions . . .;" that it is considered as dwelling "in the place where its business is done . . ." as being "located where its franchises are exercised . . .," and as being "present where it is engaged in the prosecution of the corporate enterprise;" that a "foreign corporation licensed to do business in a state is a resident of any country where it maintains an office or agent for transaction of its usual and customary business for venue purposes;" and that the "necessary element in its signification is locality of existence." [Words and Phrases, Permanent Ed., vol. 37, pp. 394, 412, 403]. Inasmuch as SHARP was admittedly doing business in Japan through its four duly registered branches at the time the collection suit against it was filed, then in the light of the processual presumption, SHARP may be deemed a resident of Japan, and, as such, was amenable to the jurisdiction of the courts therein and may be deemed to have assented to the said courts' lawful methods of serving process. 27 Accordingly, the extraterritorial service of summons on it by the Japanese Court was valid not only under the processual presumption but also because of the presumption of regularity of performance of official duty. We find NORTHWEST's claim for attorney's fees, litigation expenses, and exemplary damages to be without merit. We find no evidence that would justify an award for attorney's fees and litigation expenses under Article 2208 of the Civil Code of the Philippines. Nor is an award for exemplary damages warranted. Under Article 2234 of the Civil Code, before the court may consider the question of whether or not exemplary damages should be awarded, the plaintiff must show that he is entitled to moral, temperate, or compensatory damages. There being no such proof presented by NORTHWEST, no exemplary damages may be adjudged in its favor. WHEREFORE, the instant petition is partly GRANTED, and the challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for attorney's fees, litigation expenses, and exemplary damages but REVERSED insofar as it sustained the trial court's dismissal of NORTHWEST's complaint in Civil Case No. 83-17637 of Branch 54 of the Regional Trial Court of Manila, and another in its stead is hereby rendered ORDERING private respondent C.F. SHARP & COMPANY, INC. to pay to NORTHWEST the amounts adjudged in the foreign judgment subject of said case, with interest thereon at the legal rate from the filing of the complaint therein until the said foreign judgment is fully satisfied. Costs against the private respondent. SO ORDERED. Padilla, Bellosillo, Quiason and Kapunan, JJ., concur. --------------Footnotes 1. Annex "A" of Petition. per Associate Justice Antonio M. Martinez; concurred in by associate Justices Cancio C. Garcia and Ramon Mabutas, Jr. 2. This is Civil Case No. 83-17637. 3. Rollo, 28-31. 4. 67 Phil. 170 [1939]. 5. Rollo, 32-34. 6. 47 am Jur 2d Judgments 1237 (1969). 7. 47 Am Jur Judgments 1237 (1969). 8. JOVITO R. SALONGA, Private International Law, 100, 1967 3rd ed.; 16 Am Jur 2d Conflict of Laws 125 (1979). 9. FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, 1989 ed., 526, citing In re Estate of Johnson, 39 Phil. 156 [1918] and Fluemer vs. Hix, 54 Phil. 610 [1930]; EDGARDO L. PARAS, Philippine Conflict of Laws, 1984 ed., 45, citing Adong vs. Cheong Seng Gee, 43 Phil. 43 [1922] and Sy Joc Lieng vs. Syquia, 16 Phil. 137 [1910]. 10. Lim vs. Collector of Customs, 36 Phil. 472 [1917]; International Harvester Co. vs. Hamburg-American Line, 42 Phil. 845 [1918]; Suntay vs, Suntay, 95 Phil. 500 [1954]; Beam vs. Yatco, 82 Phil. 30 [1948]; collector of Internal Revenue vs. Fisher, 1 SCRA 93 [1961]. 11. Poizant vs. Morgan, 28 Phil. 597 [1914]; H.B. Zachry Co. vs. Court of Appeals, G.R. No. 106989, 10 May 1994. 12. Section 190, Insurance Code; Section 17, General Banking Act; Section 128, Corporation Code. 13. It reads: SEC. 128. Resident Agent; service of process. - . . . Any such foreign corporation shall likewise execute and file with the Securities and Exchange Commission an agreement or stipulation, executed by the proper authorities of said corporation, in form and substance as follows: . . . if at any time said corporation shall cease to transact business in the Philippines, or shall be without any resident agent in the Philippines on whom any summons or other legal processes may be served, then in any action or proceeding arising out of any business or transaction which occurred in the Philippines, service of any summons or other legal process may be made upon the Securities and Exchange Commission and that such service shall have the same force and effect as if made upon the duly-authorized officers of the corporation at its home office. 14. It reads: SEC. 190. . . . Any such foreign corporation shall, as further condition precedent to the transaction of insurance business in the Philippines, make and file with the Commissioner and agreement or stipulation, executed by the proper authorities of said company in form and substance as follows :

. . . if at any time said company shall leave the Philippines, or cease to transact business therein, or shall be without any agent in the Philippines on whom any notice, proof of loss, summons, or legal process may be served, then in any action or proceeding out of any business or transaction which occurred in the Philippines, service of any notice provided by law, or insurance policy, proof of loss, summons or other legal process may be made upon the Insurance Commissioner, and that such service upon the Insurance Commissioner shall have the same force and effect as if made upon the company. 15. It provides: SEC. 17. . . . xxx xxx xxx

Should there be no person authorized by the corporation upon whom service of summons, processes, and all legal notices may be made, service of summons, processes, and legal notices may be made upon the Superintendent of Banks and such service shall be as effective as if made upon the corporation or upon its duly authorized agent. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. Decision of the Court of Appeals, 2; Rollo, 29. Appellee's Brief, 18. Supra note 4 at 174-175 (citations omitted). 125 SCRA 758 [1983]. 161 SCRA 737 [1988]. 150 Iowa 511, 129 NW 494. 311 U.S. 457. Id. at 463-464 (citations omitted). 18 Am Jur 2d Corporations 159 (1965). 36 Am 2d Foreign Corporations 32 (1968). 203 SCRA 9, 18-20 [1991]. 36 Am Jur 2d foreign Corporations 516 (1968). ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1988V450] THE DIAL CORPORATION, ET AL. petitioner Vs. CLEMENTE M. SORIANO, ET AL. Respondents1988 May 311st DivisionG.R. No. 82330D E C I S I O N GRIO-AQUINO, J.: The petitioners are foreign corporations organized and existing under the laws of the United States, the United Kingdom, and Malaysia, are not domiciled in the Philippines, nor do they have officers or agents, place of business, or property in the Philippines; they are not licensed to engage, and are not engaged, in business here. The respondent Imperial Vegetable Oil Company, Inc. (or "IVO" for brevity) is a Philippine corporation which through its president, Dominador Monteverde, had entered into several contracts for the delivery of coconut oil to the petitioners. Those contracts stipulate that any dispute between the parties will be settled through arbitration under the rules of either the Federation of Oils Seeds and Fats Association (FOSFA) or the National Institute of Oil Seed Products (NIOP). Because IVO defaulted under the contracts, the petitioners and 15 others, initiated arbitration proceedings abroad, and some have already obtained arbitration awards against IVO. On April 8, 1987, IVO filed a complaint for injunction and damages against nineteen (19) foreign coconut oil buyers including the petitioners, with whom its president, Dominador Monteverde, had entered into contracts for the delivery of coconut oil (Civil Case No. 87-40166, RTC Manila entitled "Imperial Vegetable Oil Co., Inc. vs. Dial Corporation et al."). IVO repudiated Monteverde's contracts on the grounds that they were mere "paper trading in futures" as no actual delivery of the coconut oil was allegedly intended by the parties; that the Board of Directors of IVO convened in a special meeting on March 21, 1987 and removed Dominador Monteverde from his position as president of the corporation, named in his place, Rodrigo Monteverde, and disowned Dominador Monteverde's allegedly illegal and unauthorized acts; that the defendants have allegedly "harassed" IVO to comply with Dominador's contracts and to come to a settlement with them. IVO prayed for the issuance of a temporary restraining order or writ of preliminary injunction to stop the defendants from harassing IVO with their insistent demands to recognize the contracts entered into by Dominador Monteverde and from portraying the IVO as one that defaults on its contracts and obligations and has fallen into bad times and from interfering with IVO's normal conduct of business. IVO also prayed that the defendants pay it moral damages of P5 million, actual damages of P10 million, exemplary damages of P5 million, attorney's fees of P1 million, P3,000 per appearance of counsel, and litigation expenses. On motion of IVO, respondent Judge authorized it to effect extraterritorial service of summons to all the defendants through DHL Philippines corporation (Annex B). Pursuant to that order, the petitioners were served with summons and copy of the complaint by DHL courier service. On April 25, 1987, without submitting to the court's jurisdiction and only for the purpose of objecting to said jurisdiction over their persons, the petitioners filed motions to dismiss the complaint against them on the ground that the extraterritorial service of summons to them was improper and that hence the court did not acquire jurisdiction over them. On December 15, 1987, the court denied their motions to dismiss and upheld the validity of the extraterritorial service of summons to them on the ground that "the present action relates to property rights which he in contracts within the Philippines, or which defendants claim liens or interests, actual or inchoate, legal or equitable (par. 2, complaint). And one of the reliefs demanded consists, wholly or in part, in excluding the defendants from any interest in such property for the reason that their transactions with plaintiff's former president are ultra vires." Furthermore, "as foreign corporations doing business in the Philippines without a license, they opened themselves to suit before Philippine courts, pursuant to Sec. 133 of the Corporation Code of the Philippines." (Annex H) The petitioners' motions for reconsideration of that order were also denied by the court (Annex M), hence this petition for certiorari with a prayer for the issuance of a temporary retraining order which We granted.

The petition is meritorious. Section 17, Rule 14 of the Rules of Court provides: Section 17. Extraterritorial service. When the defendant does not recide and is not found in the Philippines and the action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims alien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court, be effected out of the Philippines by personal service as undersection 7; or 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 shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the defendant must answer." Only in four (4) instances is extraterritorial service of summons proper, namely: "(1) when the action affects the personal status of the plaintiffs; (2) when the action relates to, or the subject of which is, property within the Philippines, in which the defendant has or claims a lien or interest, actual or contingent; (3) when the relief demanded in such action consists, wholly or in part, in excluding the defendant from any interest in property located in the Philippines; and (4) when the defendant non-resident's property has been attached within the Philippines" (De Midgely vs. Ferandos, 64 SCRA 23). The complaint in this case does not involve the personal status of the plaintiff, nor any property in the Philippines in which the defendants have or claim an interest, or which the plaintiff has attached. The action is purely an action for injunction to restrain the defendants from enforcing against IVO ("abusing and harassing") its contracts for the delivery of coconut oil to the defendants, and to recover from the defendants P21 million in damages for such "harassment." It is clearly a personal action as well as an action in personam, not an action in rem or quasi in rem. "An action in personam is an action against a person on the basis of his personal liability, while an action in rem is an action against the thing itself, instead of against the person." (Hernandez vs. Rural Bank of Lucena, Inc., 76 SCRA 85). A personal action is one brought for the recovery of personal property, for the enforcement of some contract or recovery of damages for its breach, or for the recovery of damages for the commission of an injury to the person or property (Hernandez vs. Development Bank of the Philippines, 71 SCRA 292). As Civil Case No. 87-40166 is a personal action, personal or substituted service of summons on the defendants, not extraterritorial service, is necessary to confer jurisdiction on the court. The rule is explained in Moran's Comments on the Rules of Court thus: "As a general rule, when the defendant is not residing and is not found in the Philippines, the Philippine courts cannot try any case against him because of the impossibility of acquiring jurisdiction over his person unless he voluntarily appears in court. But, when the action affects the personal status of the plaintiff residing in the Philippines, or is intended to seize or dispose of any property, real or personal, of the defendant located in the Philippines, it may be validly tried by the Philippines courts, for then, they have jurisdiction over the res, i.e., the personal status of the plaintiff or the property of the defendant and their jurisdiction over the person of the nonresident defendant is not essential. Venue in such cases may be laid in the province where the property of the defendant or a part thereof involved in the litigation is located." (5 Moran's Comments on the Rules of Court, 2nd Ed., p. 105.) In an action for injunction, extraterritorial service of summons and complaint upon the non-resident defendants cannot subject them to the processes of the regional trial courts which are powerless to reach them outside the region over which they exercise their authority (Sec. 3-a, Interim Rules of Court; Sec. 21, subpar. 1, B.P. Blg. 129). Extraterritorial service of summons will not confer on the court jurisdiction or power to compel them to obey its orders: Neither may the court by extraterritorial service of summons acquire jurisdiction to render and enforce a money judgment against a non-resident defendant who has no property in the Philippines for "the fundamental rule is that jurisdiction in personam over nonresidents, so as to sustain a money judgment, must be based upon personal service within the state which renders the judgment" (Boudard vs. Tait, 67 Phil. 170, 174). Respondents' contention that "the action below is related to property within the Philippines, specifically contractual rights that petitioners are enforcing against IVO" is specious for the "contractual rights" of the petitioners are not property found in the Philippines for the petitioners have not filed an action in the local courts to enforce said rights. They have not submitted to the jurisdiction of our courts. The lower court invoked Section 33 of the Corporation Code which provides that a "foreign corporation transacting business in the Philippines without a license may be sued or proceeded against before Philippine courts or administrative tribunal on any valid cause of action recognized under Philippine laws." It assumed that the defendants (herein petitioners) are doing business in the Philippines, which allegation the latter denied. Even if they can be considered as such, the Corporation Code did not repeal the rules requiring proper service of summons to such corporations as provided in Rule 14 of the Rules of Court and Section 128 of the Corporation Code. The respondent court's finding that, by filing motions to dismiss, the petitioners hypothetically admitted the allegations of the complaint that they are doing business in the Philippines without any license, and that they may be served with summons and other court processes through their agents or representatives enumerated in paragraph 2 of the complaint, is contradicted by its order authorizing IVO to summon them by extraterritorial service, a mode of service which is resorted to when the defendant is not found in the Philippines, does not transact business here, and has no resident agent on whom the summons may be served. WHEREFORE, We hold that the extraterritorial service of summons on the petitioners was improper, hence null and void. The petition for certiorari is granted. The orders dated April 24, 1987 (Annex B) and December 15, 1987 (Annex II) of the respondent Judge are hereby set aside. The complaint in Civil Case No. 87-40166 is hereby dismissed as against the petitioners for failure of the court to acquire jurisdiction over them. SO ORDERED.

Narvasa, Cruz and Gancayco, JJ., concur. ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1988V1067] ALBERTO SIEVERT, petitioner, vs. COURT OF APPEALS, HON. JUDGE ARTEMON D. LUNA and AURELIO CAMPOSANO, respondents.1988 December 223rd DivisionG.R. No. 84034D E C I S I O N FELICIANO, J.: On 18 May 1988 petitioner Alberto Sievert a citizen and resident of the Philippines received by mail a Petition for Issuance of a Preliminary Attachment filed with the Regional Trial Court of Manila Branch 32 in Civil Case No. 88-44346. Petitioner had not previously received any summons and any copy of a complaint against him in Civil Case No. 88-44346. On the day set for hearing of the Petition for a Preliminary Writ of Attachment, petitioner's counsel went before the trial court and entered a special appearance for the limited purpose of objecting to the jurisdiction of the court. He simultaneously filed a written objection to the jurisdiction of the trial court to hear or act upon the Petition for Issuance of a Preliminary Writ of Attachment. In this written objection, petitioner prayed for denial of that Petition for lack of jurisdiction over the person of the petitioner (defendant therein) upon the ground that since no summons had been served upon him in the main case, no jurisdiction over the person of the petitioner had been acquired by the trial court. The trial court denied the petitioner's objection and issued in open court an order which, in relevant part, read as follows: "Under Section 1, Rule 57, Rules of Court, it is clear that a plaintiff or any proper party may '. . . at the commencement of the action or at any time thereafter, have the property of the adverse party attached as the security for the satisfaction of any judgment . . .' This rule would overrule the contention that this Court has no jurisdiction to act on the application, although if counsel for defendant so desire, she is given five (5) days from today within which to submit her further position why the writ should not be issued, upon the receipt of which or expiration of the period, the pending incident shall be considered submitted for resolution." 1 Thereupon, on the same day, petitioner filed a Petition for Certiorari with the Court of Appeals. On 13 July 1988, the respondent appellate court rendered a decision, notable principally for its brevity, dismissing the Petition. The relevant portion of the Court of Appeals' decision is quoted below: "The grounds raised in this petition state that the court a quo had not acquired jurisdiction over defendant (now petitioner) since no summons had been served on him, and that respondent Judge had committed a grave abuse of discretion in issuing the questioned order without jurisdiction. In short, the issue presented to us is whether respondent Judge may issue a writ of preliminary attachment against petitioner before summons is served on the latter. We rule for respondent Judge. Under Sec. 1, Rule 57, it is clear that, at the commencement of the action, a party may have the property of the adverse party attached as security. The resolution of this issue depends, therefore, on what is meant by 'Commencement of the action.' Moran, citing American jurisprudence on this point, stated thus: 'Commencement of action ---- Action is commenced by filing of the complaint, even though summons is not issued until a later date.' (Comment on the Rules of Court, Vol. I, p. 150, 1979). Thus, a writ of preliminary attachment may issue upon filing of the complaint even before issuance of the summons. WHEREFORE, for lack of merit, the petition is hereby denied and, accordingly, dismissed." 2 The petitioner is now before this Court on a Petition for Review on Certiorari, assailing the above-quoted decision of the Court of Appeals. The petitioner assigns two (2) errors: "1. The proceedings taken and the order issued on plaintiff's petition for attachment prior to the service of summons on the defendant were contrary to law and jurisprudence and violated the defendant's right to due process. 2. The Court of Appeals committed a grave abuse of discretion amounting to lack of jurisdiction in ruling that 'a writ of preliminary attachment may issue upon filing of the complaint even prior to issuance of the summons.'" 3 The two (2) assignments of error relate to the single issue which we perceive to be at stake here, that is, whether a court which has not acquired jurisdiction over the person of the defendant in the main case, may bind such defendant or his property by issuing a writ of preliminary attachment. Both the trial court and the Court of Appeals held that the defendant may be bound by a writ of preliminary attachment even before summons together with a copy of the complaint in the main case has been validly served upon him. We are unable to agree with the respondent courts. There is no question that a writ of preliminary attachment may be applied for a plaintiff "at the commencement of the action or at any time thereafter" in the cases enumerated in Section 1 of Rule 57 of the Revised Rules of Court. The issue posed in this case, however, is not to be resolved by determining when an action may be regarded as having been commenced, a point in time which, in any case, is not necessarily fixed and identical regardless of the specific purpose for which the determination is to be made. The critical time which must be identified is, rather, when the trial court acquires authority under law to act coercively against the defendant or his property in a proceeding in attachment. We believe and so hold that critical time is the time of the vesting of jurisdiction in the court over the person of the defendant in the main case.

Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to realize upon relief sought and expected to be granted in the main or principal action. 4 A court which has not acquired jurisdiction over the person of defendant, cannot bind that defendant whether in the main case or in any ancillary proceeding such as attachment proceedings. The service of a petition for preliminary attachment without the prior or simultaneous service of summons and a copy of the complaint in the main case ---- and that is what happened in this case ---- does not of course confer jurisdiction upon the issuing court over the person of the defendant. Ordinarily, the prayer in a petition for a writ of preliminary attachment is embodied or incorporated in the main complaint itself as one of the forms of relief sought in such complaint. Thus, valid service of summons and a copy of the complaint will in such case vest jurisdiction in the court over the defendant both for purposes of the main case and for purposes of the ancillary remedy of attachment. In such case, notice of the main case is at the same time notice of the auxiliary proceeding in attachment. Where, however, the petition for a writ of preliminary attachment is embodied in a discrete pleading, such petition must be served either simultaneously with service of summons and a copy of the main complaint, or after jurisdiction over the defendant has already been acquired by such service of summons. Notice of the separate attachment petition is not notice of the main action. Put a little differently, jurisdiction whether ratione personae or ratione materiae in an attachment proceeding is ancillary to jurisdiction ratione personae or ratione materiae in the main action against the defendant. If a court has no jurisdiction over the subject matter or over the person of the defendant in the principal action, it simply has no jurisdiction to issue a writ of preliminary attachment against the defendant or his property. It is basic that the requirements of the Rules of Court for issuance of preliminary attachment must be strictly and faithfully complied with in view of the nature of this provisional remedy. In Salas v. Adil, 5 this Court described preliminary attachment as "a rigorous remedy which exposes the debtor to humiliation and annoyance, such [that] it should not be abused as to cause unnecessary prejudice. It is, therefore; the duty of the court, before issuing the writ, to ensure that all the requisites of the law have been complied with; otherwise the judge acts in excess of his jurisdiction and the writ so issued shall be null and void. 6 The above words apply with greater force in respect of that most fundamental of requisites, the jurisdiction of the court issuing attachment over the person of the defendant. In the case at bar, the want of jurisdiction of the trial court to proceed in the main case against the defendant is quite clear. It is not disputed that neither service of summons with a copy of the complaint nor voluntary appearance of petitioner Sievert was had in this case. Yet, the trial court proceeded to hear the petition for issuance of the writ. This is reversible error and must be corrected on certiorari. WHEREFORE, the Petition for Review on Certiorari is GRANTED due course and the Order of the trial court dated 20 May 1988 and the Decision of the Court of Appeals dated 13 July 1988 are hereby SET ASIDE and ANNULLED. No pronouncement as to costs. SO ORDERED. Fernan, (C.J.), Gutierrez, Jr., Bidin and Cortes, JJ., concur. -------------Footnotes 1. Rollo, p. 4. 2. Rollo, pp. 16-17. 3. Rollo, p. 5. 4. We should perhaps make explicit that we are here addressing the situation of known, resident defendants only. Where the defendant is a non-resident, attachment of property may be sought in order to bring a res within the jurisdiction of the court, in substitution, as it were, of the body of the defendant (Section 1 [fl, Rule 57, Revised Rules of Court). Jurisdiction over the res and the person of the defendant is, in such case, acquired by service of summons by publication (Sections 16, 17 and 18, Rule 14, id.) though that jurisdiction may be made effective only in respect of the res attached. In Lincoln Tavern v. Snader, et al., 165 Ohio St., 61, 133 NE, 2d 606 [1956], the Supreme Court of Ohio said: ". . . under our present law the only notice is that of the principal action and it is upon such notice, i.e., personal or constructive service of summons, that jurisdiction rests; and, even though, where the defendant is a nonresident, it is necessary that there be an attachment of property of the defendant in order to clothe the court with jurisdiction to render a judgment, the attachment is an ancillary proceeding and there must be a proper service of summons for the court to become invested with jurisdiction to make an order which will affect the attached res. xxx xxx xxx

Under the provisions of the Ohio statute, an attachment may issue at or after the commencement of an action for the recovery of money, where the defendant is a nonresident of the state. Section 11819, General Code, Section 2715.01, Revised Code. However, an attachment is a provisional remedy; an ancillary proceeding which must be appended to a principal action and whose very validity must necessarily depend upon the validity of the commencement of the principal action. xxx xxx xxx

Thus it may be seen that, although in an action based upon constructive service an attachment may issue prior to the completion of service by publication, such attachment has only a tentative validity which ripens into a completely valid attachment when and if service is completed as provided by law. If, for any reason, such as defective service, the court is found wanting in jurisdiction in the principal action, then it follows that the attachment never attained more than a tentative validity and falls with the principal action. xxx xxx xxx

5. 90 SCRA 121 (1979). 6. 90 SCRA at 125. ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1971V115E] CITIZENS' SURETY & INSURANCE COMPANY, INC., petitioner, vs. HON. JUDGE A. MELENCIO-HERRERA, SANTIAGO DACANAY, and JOSEFINA DACANAY, respondents.1971 Mar 31En BancG.R. No. L-32170D E C I S I O N REYES, J.B.L., J: Petitioner Citizens' Surety & Insurance Company, Inc. seeks review of an order of respondent Judge in Civil Case No. 77134 of the Court of First Instance of Manila, Branch XVII, entitled "Citizens' Surety & Insurance Co., Inc. vs. Santiago Dacanay and Josefina Dacanay," dismissing the complaint for lack of proper service of summons upon defendants. The record is to the effect that petitioner had filed its complaint in the Court below, alleging that at request of defendant Santiago Dacanay, the plaintiff Surety Company had issued its Surety Bonds Nos. 4942 and 4944, the first, in favor of Gregorio Fajardo to guarantee payment of a P5,000-promissory note executed by said Dacanay, and the second, in favor of Manufacturers Bank & Trust Co., to guarantee payment of another promissory note in like amount; that in consideration of said bonds, Santiago and Josefina Dacanay executed Indemnity Agreements, binding themselves jointly and severally to indemnify plaintiff for any losses, costs and expenses which it might sustain in connection with the issuance of the bonds aforesaid, with interest at 12% per annum; that as additional security, the Dacanays mortgaged to plaintiff a parcel of land in Baguio City, covered by Certificate of Title No. T-8116, the mortgage having been duly recorded; that the promissory notes were not paid .and as a result, plaintiff Surety was compelled to pay P5,000.00 to Gregorio Fajardo and P4,081.69 to the Manufacturers' Bank; that the Dacanays failed to reimburse the Surety for such payments, whereupon the Surety caused the extrajudicial foreclosure of the mortgage to pay its claim of P12,941.69 representing its payments, interest and stipulated liquidated damages: that at the foreclosure sale, the land mortgaged was sold to plaintiff, as highest bidder, for the sum of P2,000.00 leaving an unsatisfied balance of P10,491.69, that plaintiff sought to recover from defendants Dacanay, plus 10% thereof as attorneys' fees, and the costs. At petitioner's request, respondent Judge caused summons to be made by publication in the newspaper Philippines Herald. But despite the publication and deposit of a prepaid copy of the complaint at the Manila post office, defendants did not appear within the period of 60 days from last publication, as required by the summons. Plaintiff then asked that defendants be declared in default; but :instead, the Judge, by order of May 16, 1970, asked it to show cause why the action should not be dismissed, the suit being in personam and defendants not having appeared. Then, on May 29, 1970, respondent Judge dismissed the case, despite plaintiff Surety's argument that the summons by publication was sufficient and valid under section 16 of Rule 14 of the Revised Rules of Court. We agree with respondent Judge that the action of plaintiff petitioner, being in personam, the Court could not validly acquire jurisdiction on a non-appearing defendant, absent a personal service of summons within the forum. We have explicitly so ruled in Pantaleon vs. Asuncin, 105 Phil. 765, pointing out without such personal service, any judgment on a non-appearing defendant would be violative of due process. In the aforecited case this Court, through Justice Roberto Concepcin, now Chief Justice, ruled as follows: "Apart from the foregoing, it is well-settled principle of Constitutional Law that, in an action strictly in personam, like the one at bar, personal service 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. In other words, summons by publication cannot consistently with the due process clause in the Bill of Rights confer upon the court jurisdiction over said defendants. 'Due process of law requires personal service to support a personal judgment, and. when the proceeding is strictly in personam brought to determine the personal rights and obligations of the parties, personal service within the state or a voluntary appearance in the case is essential to the acquisition of jurisdiction so as to constitute compliance with the constitutional requirement of due process. . . . 'Although a state legislature has more control over the form of service on its own residents than nonresidents, it has been held that in actions in personam . . . service by publication on resident defendants, who are personally within the state and can be found therein is not "due process of law," and a statute allowing it is unconstitutional.' (16A C.J.S., pp. 786, 789; .)" The proper recourse for a creditor in the same situation as petitioner is to locate properties, real or personal, of the resident defendant debtor with unknown address and cause them to be attached under Rule 57, section 1(f), in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may then accordingly be deemed valid and effective. But because debtors who abscond and conceal themselves are also quite adept at concealing their properties, the dismissal of the case below by respondent Judge should be set aside and the case held pending in the court's archives, until petitioner as plaintiff succeeds in determining the whereabouts of the defendants' person or properties and causes valid summons to be served personally or by publication as the case may be. In this manner, the tolling of the period of prescription for as long as the debtor remains in hiding would properly be a matter of court records and he can not emerge after a sufficient lapse of time from the dismissal of the case to profit from his own misdeed and claim prescription of his just debt. WHEREFORE, the order of dismissal of the case issued by the Court below is hereby set aside, and in the interest of justice, the proceedings are ordered suspended, to be held pending until the plaintiff petitioner succeeds in ascertaining the whereabouts of the defendants and/or locating properties of the same, to enable proper summons to be issued conformably to this Opinion. No costs. Concepcion, C.J., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ., concur. Dizon and Castro, JJ., reserve their votes. ~*~

/---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1988V884] CONSOLIDATED PLYWOOD INDUSTRIES, INC., petitioner, vs. HON. AUGUSTO B. BREVA and MINDANAO HEMP EXPORT CORPORATION, respondents.1988 October 181st DivisionG.R. No. L-82811D E C I S I O N NARVASA, J.: Not infrequently, appeals are resolved on grounds not precisely assigned as error which upon review are however seen to be more decisive than those actually raise and argued. This appeal is one such instance. The dismissal of the petitioner's action, decreed in the appealed Decision of the Trial Court, must be upheld, not for the reason therein stated, but on quite a different ground. The case involves the claim of one of two co-owners for reimbursement from the other of expenses incurred for the repair and preservation of the common property. Based on the petitioner's pleadings and the intendment of its proofs, as well as the findings of the appealed Decision, the factual background is hereunder set forth. The property in question consists of a parcel of land measuring 5,263 square meters, with a warehouse and office building standing thereon, covered by Transfer Certificate of Title No. 11679 of the Registry of Deeds of Davao City. One of the registered co-owners is the petitioner, Consolidated Plywood Industries, Inc. (hereafter simply referred to as CPII); it had purchased an undivided one-half (1/2) portion of the property from the Consolidated Bank & Trust Company which, in turn, had acquired that share at a foreclosure sale. The other registered co-owner is the Mindanao Hemp Export Corporation (hereafter MHEC). After having acquired its undivided half share, CPII occupied the property, using the warehouse to store its products and the nearby building to quarter its personnel. It also employed guards to secure the premises. 1 In July 1984, it made repairs and improvements on the property, as follows: replacement of the dilapidated G.I. sheet roofing; construction of a new perimeter fence; putting of earth filling on the driveway to keep out flood waters; and installation of a steel gate. For the repairs, improvements and guard fees CPII allegedly spent P239,837.21, one-half of which, with interests, it sought to recover from MHEC. When extra-judicial demands produced no results, it filed suit for collection against MHEC in the Regional Trial Court of Davao City. 2 Summons was issued to MHEC whose address was stated in the complaint to be at 413 Jaboneros St., Binondo, Manila. It went unserved for the reason, stated in the return of the Sheriff of Manila, that ". . . Mindanao Hemp Export Corp. is no longer doing business at said address (and) (n)obody around the place knows the present whereabouts of said defendant." 3 The Trial Court sought to ascertain the defendant's whereabouts from the Securities and Exchange Commission, but that office simply furnished the same address: 413 Jaboneros St., Binondo, Manila as the latest address of that corporation in its records. 4 Service at that address having already been attempted and failed, CPII moved for, and the Trial Court ordered on April 28, 1987, service of summons by publication. 5 Publication was effected in the newspaper, Philippine Daily Inquirer, on May 18 and 15, 1987 and June 1, 1987. 6 Copy of the alias summons was also sent by registered mail addressed to MHEC at 413 Jaboneros Street, Binondo, Manila. 7 No answer being filed within the sixty-day period after last publication prescribed in the alias summons, MHEC was declared in default 8 and CPII thereafter presented its evidence ex parte. The Trial Court also conducted an ocular inspection and found that CPII was using the entire warehouse as well as the office building standing on the property. 9 On March 29, 1988, the Trial Court rendered judgment which, while finding that CPII had in fact incurred expenses in the amount of P161,951.70 (instead of the claimed P239,837.21), denied said plaintiff reimbursement of one-half of that amount and instead dismissed the complaint "for lack of merit," ruling that: ". . . It is very apparent that the plaintiff made the necessary repairs on the warehouse and fence and put the earth fills on the land so that it could use the property, and in fact it has been using the property after said repairs and earth filling in July 1984 . . . without paying any rentals to the defendant for the use of its 50% undivided portion thereof In the conservative estimate of the Court said property can easily fetch a monthly rental of P20,000.00 and, if sold, can realize several millions of pesos. Considering that the plaintiff is the one using the entire property exclusively without any rentals, the Court believes that it has no right to compel the defendant to reimburse it for half of the cost of said necessary repairs on the warehouse and fence and earth filling on the land." 10 Quite evidently, it was the Trial Court's view, 11 based on Article 500 of the Civil Code (to the effect that upon partition of common property the co-owners are bound to render mutual accounting for "benefits received and reimbursements for expenses made") that a co-owner cannot put the property to his sole use and benefit gratis without the express agreement of the other co-owners. CPII has applied directly to this Court for a reversal of said judgment, arguing in the main that a co-owner has the right to use the whole of the property owned in common without obligation for rentals and, hand-in-hand with such right of use, the right to reimbursement from the other co-owners of their proportionate share in necessary expenses incurred by him for the preservation of the property. Petitioner argues further that it is entitled to attorney's fees and expenses of litigation, having been compelled to sue because of MHEC's failure to fulfill reportorial requirements of the Securities and Exchange Commission had rendered extrajudicial collection well-nigh impossible. That MHEC may no longer be found at 413 Jaboneros St., Binondo, Manila, is made more apparent by the fact that the copy of this Court's resolution of May 2, 1988 requiring its comment on CPII's petition, which was sent by registered mail to said address, was returned unclaimed after three notices. 12 While from the foregoing it may appear that resolution of the appeal is a simple and straightforward matter of applying law and precedent to the facts established by the evidence, such a result is precluded by the circumstance that due to a failure to effect proper service of summons on MHEC, the Trial Court never acquired jurisdiction over the person of said defendant and therefore could not lawfully render valid judgment thereon.

Petitioner's suit is for the collection of a sum of money ---- a personal action, as distinguished from a real action, i.e., one ". . . affecting title to, or for recovery of possession of, or for partition or condemnation of, or foreclosure of mortgage on, real property." 13 It is, too, an action strictly in personam, as to which in a line of cases starting with Pantaleon vs. Asuncion, 14 this Court laid down and consistently hewed to the rule that ". . . personal service 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. In other words, summons by publication cannot consistently with the due process clause in the Bill of Rights ---- confer upon the Court jurisdiction over said defendant," and that ". . . (t)he proper recourse for a creditor in the same situation as petitioner is to locate properties, real or personal, of the resident defendant debtor with unknown address and cause them to be attached under Rule 57, section l(fl, in which case, the attachment converts the action into a proceeding in rem or quasi in rem and the summons by publication may then accordingly be deemed valid and effective." 15 Accordingly, and service of summons by publication here not having been preceeded by attachment of property of MHEC, it did not confer on the Trial Court jurisdiction over the person of said defendant, and it is on this score that petitioner's action must be, as it is hereby, DISMISSED. In view of the peculiar circumstances of this case, it is hereby directed that in the not unlikely event that the petitioner pursue its claim for reimbursement against its co-owner by filing a second action therefor, efforts be exerted, prior to effecting service of summons by publication, to cause personal service on respondent corporation on its president, manager, secretary, cashier, agent or any of its directors, at such of their individual addresses as may become known to the petitioner from an examination of the records of the Securities and Exchange Commission or such others as may be or become otherwise available, failure of this latter mode of service being hereby made a condition precedent to summons by publication. SO ORDERED. Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur. ---------------Footnotes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Complaint, Original Record, pp. 1-4; Appealed Decision; Rollo, pp. 18-19. Docketed at Civil Case No. 18279. Original Record , p. 14. Id., p. 16. Order dated April 28, 1987; Original Record, p. 54. Exhibit D; Original Record, p. 54. Id., p. 55. Order dated October 2, 1987; Original Record, p. 66. Appealed Decision; Rollo, pp. 21-22. Rollo, p. 23. Later affirmed in said Court's Comment on the Petition for Review; Rollo, pp. 146, 147. Rollo, p. 157-158. Rule 4, sec. 2(a), Rules of Court. 105 Phil. 765. Citizens Surety and Ins. Co. vs. Melencio-Herrera, 38 SCRA 369; see also Magdalena Estate vs. Nieto, 125 SCRA 758. ~*~ /---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---\ [1993V302] DOLORES DELOS SANTOS, NICOLAS DELOS SANTOS and RICARDO DELOS SANTOS, petitioners, vs. HON. JUDGE CAMILO MONTESA, JR. and JUANA DELOS SANTOS, respondents.1993 Apr 63rd DivisionG.R. No. 73531D E C I S I O N MELO, J.: In the suit for desahucio initiated below by herein private respondent against petitioners, the court of origin ordered petitioners to vacate the lot in question to pay P5,000.00 per year as reasonable rental from 1985 until possession is surrendered, and to pay P1,000.00 as attorney's fees and the costs of the suit (pp. 37-38, Rollo). Upon appeal, Branch XIX of the Regional Trial Court of the Third Judicial Region stationed in Malolos and presided over by herein respondent judge, granted private respondents motion for execution pending appeal on account of petitioners' failure to post a supersedeas bond (p. 21, Rollo). To set aside the proceedings below, the petition at hand was instituted anchored on the supposition that petitioners were deprived of their day in court. Petitioners' mental distress started when private respondent, who supposedly owns Lot 39 of the Cadastral survey of Bustos with an area of 5,358 square meters covered by Original Certificate of Title No. U-7924 a portion of which petitioners entered and occupied, lodged the complaint geared towards petitioners' eviction. Summons was served through the mother of petitioners when the process server was unable to locate Dolores, Nicolas, and Ricardo delos Santos in Talampas, Bustos, Bulacan. For failure of petitioners to submit the corresponding answer, judgment was rendered pursuant to the rules on summary procedure (pp. 2-3, Decision; pp. 37-38, Rollo). Upon learning of said decision, petitioners sought to reconsider on the principal thesis that they were never served notice of the conciliation meeting at the barangay level, as well as the summons. They insist that private respondent was referring to a different piece of realty because petitioners actually occupied Lot No. 3568 owned by Nicolas delos Santos under Original Certificate of Title No. F-10418. Moreover, petitioners advanced the proposition that Dolores' husband should have been impleaded. All of these arguments were to no avail. As indicated earlier, execution pending appeal was ordered due to petitioners' failure to post a supersedeas bond.

To stave off the impending eviction of petitioners, this Court issued a restraining order on April 28, 1986 directed against the reviewing authority and private respondent until further orders (p. 52, Rollo). At first blush, it would appear that the recourse pursued by petitioners could elicit a favorable response from us in as much as the proof of service of the summons upon petitioners does not indicate impossibility of personal service, a condition precedent for resorting to substituted service. Even then, and assuming in gratia argumenti that the statutory norms on service of summons have not been strictly complied with, still, any defect in form and in the manner of effecting service thereof were nonetheless erased when petitioners' counsel moved to re-examine the impugned decision and posed a subsequent bid on appeal to impede immediate execution (Boticano vs. Chu. Jr., 145 SCRA 541 [1987]); 1 Regalado, Remedial Law Compendium, 1988 Fifth Rev. Ed., p. 136). Indeed, such demeanor is tantamount to voluntary submission to the competencia of the court within the purview of Section 23, Rule 14 of the Revised Rules of Court since any mode of appearance in court by a defendant or his lawyer is equivalent to service of summons, absent any indication that the appearance of counsel for petitioner was precisely to protest the jurisdiction of the court over the person of defendant (Carballo vs. Encarnacion, 49 O.G. 1383; 1 Regalado, supra, p. 144; Flores vs. Zurbito, 37 Phil. 746 [1918]; 1 Martin, Rules of Court in the Philippines, 1989 Rev. Ed., p. 473 Sison, et al. vs. Gonzales, 50 O.G. 4756; 1 Moran, Comments on the Rules of Court, 1970 Ed., p. 467). Neither can We treat the motion for reconsideration directed against the unfavorable disposition as a special appearance founded on the sole challenge on invalid service of summons since the application therefor raised another ground on failure to state a cause of action when conciliation proceedings at the barangay level were allegedly bypassed, nay, disregarded (Republic vs. Ker and Co., Ltd., 64 O.G. 3761; Regalado, supra, p. 152). The fact that petitioners are supposedly occupying a parcel of land other than the realty claimed by private respondent deserves scant consideration since a clarification on a factual query of this nature is proscribed by the second paragraph, Section 2 of Rule 45 of the Revised Rules of Court. Verily, counsel for petitioners' assertion in the notice of appeal filed with respondent judge that the grievance to be elevated to this Court will focus "fully on a question of law" (p. 32 Rollo) is a self-defeating posture and operates as a legal bar for us to dwell into the truth or falsehood of such factual premise (Article 1431, New Civil Code; Section 4, Rule 129; Section 2(a), Rule 131, Revised Rules on Evidence). Petitioners argue next that execution pending appeal was ordered without any prior notice to them (p. 3, Petition; p. 7, Rollo). This notion is also devoid of substance since it erroneously suggests that the court is duty-bound to notify petitioners of the immediate enforcement of the appealed .appeal under Section 2, Rule 39 of the Revised Rules of Court who is obliged to serve a copy of such motion on the adverse party's counsel, which, on the face of the subject motion, was effected by personal delivery (p. 23, Rollo; Lao vs. Mencias, 21 SCRA 1021 [1967]; 2 Martin, Rules of Court in the Philippines, 1973 Ed., p. 288). In fine, petitioners may not press the idea that they were deprived of their day in court amidst the implicit forms of waiver performed by their lawyer in submitting every conceivable defense for petitioners via the two motions for reconsideration below. WHEREFORE, the petition is hereby DISMISSED for lack of merit and the restraining order issued on April 28, 1986 LIFTED. SO ORDERED. Feliciano (Acting Chairman), Bidin, Davide, Jr. and Romero, JJ., concur. \---!e-library! 6.0 Philippines Copyright 2000 by Sony Valdez---/ ([1993V302] DOLORES DELOS SANTOS, NICOLAS DELOS SANTOS and RICARDO DELOS SANTOS, petitioners, vs. HON. JUDGE CAMILO MONTESA, JR. and JUANA DELOS SANTOS, respondents., G.R. No. 73531, 1993 Apr 6, 3rd Division) ~*~END~*~