108 OG No. 34, 4272 (August 20, 2012)
Where service of summons upon the defendant
principal is coursed thru its co-defendant agent, and the latter happens
to be a domestic corporation, the rules on service of summons upon a
domestic private juridical entity
[1]
must be strictly complied with. Otherwise, the court cannot be said to
have acquired jurisdiction over the person of both defendants. And
insofar as the principal is concerned, such jurisdictional flaw cannot
be cured by the agent's subsequent voluntary appearance.
This Petition for Review on
Certiorari assails the December 10, 2004 Decision
[2] of the Court of Appeals (CA) in CA-G.R. SP No. 82547 which affirmed the April 8, 2003 Decision
[3] of the Regional Trial Court (RTC), Branch 150, Makati City. Said Decision of the RTC affirmed the August 6, 2002 Decision
[4] of the Metropolitan Trial Court (MeTC), Branch 63, Makati City, which disposed as follows:
WHEREFORE,
judgment is rendered declaring defendants Cheng Lie Navigation Co.,
Ltd. and Atiko Trans, Inc. solidarily liable to pay plaintiff Prudential
Guarantee & Assurance, Inc. the following amounts:
- P205,220.97 as actual damages with interest of 1% per month from 14 December 1999 until full payment;
- P10,000.00 as Attorney's fees; and
- Costs of suit.
SO ORDERED.[5]
Likewise assailed is the CA's Resolution
[6] dated March 16, 2005 which denied the Motion for Reconsideration of the said December 10, 2004 Decision.
Factual AntecedentsOn
December 11, 1998, 40 coils of electrolytic tinplates were loaded on
board M/S Katjana in Kaohsiung, Taiwan for shipment to Manila. The
shipment was covered by Bill of Lading No. KNMNI-15126
[7]
issued by petitioner Cheng Lie Navigation Co., Ltd. (Cheng Lie) with
Oriental Tin Can & Metal Sheet Manufacturing Co., Inc. (Oriental) as
the notify party. The cargoes were insured against all risks per
Marine Insurance Policy No. 20RN-18749/99 issued by respondent
Prudential Guarantee and Assurance, Inc. (Prudential).
On
December 14, 1998, M/S Katjana arrived in the port of Manila. Upon
discharge of the cargoes, it was found that one of the tinplates was
damaged, crumpled and dented on the edges. The sea van in which it was
kept during the voyage was also damaged, presumably while still on board
the vessel and during the course of the voyage.
Oriental then
filed its claim against the policy. Satisfied that Oriental's claim was
compensable, Prudential paid Oriental P205,220.97 representing the
amount of losses it suffered due to the damaged cargo.
Proceedings before the Metropolitan Trial CourtOn December 14, 1999, Prudential filed with the MeTC of Makati City a Complaint
[8]
for sum of money against Cheng Lie and Atiko Trans, Inc. (Atiko). In
addition to the above undisputed facts, Prudential alleged that:
1.
Plaintiff (Prudential) is a domestic insurance corporation duly
organized and existing under the laws of the Philippines with office
address at Coyiuto House, 119 Carlos Palanca[,] Jr. St., Legaspi
Village, Makati City;
2. Defendant Cheng Lie Navigation Co. Ltd.,
is [a] foreign shipping company doing business in the Philippines
[thru] its duly authorized shipagent defendant Atiko Trans Inc. which is
a domestic corporation duly established and created under the laws of
the Philippines with office address at 7th Floor, Victoria
Bldg., United Nation[s] Ave., Ermita, Manila, where both defendants may
be served with summons and other court processes;
3. At all times
material to the cause of action of this complaint, plaintiff was and
still is engaged in, among others, marine insurance business; Whereas
Defendant Cheng Lie Navigation Co. Ltd. was and still is engaged in,
among others, shipping, transportation and freight/cargo forwarding
business, and as such, owned, operated and/or chartered the ocean going
vessel M/S "Katjana" as common carrier to and from any Philippine [port]
in international trade [thru] its duly authorized shipagent defendant
Atiko Trans Inc. (Both defendants are hereinafter referred to as the
"CARRIER");
x x x x
9. Plaintiff, as cargo-insurer and
upon finding that the consignee's insurance claim was in order and
compensable, paid the latter's claim in the amount of P205,220.97 under
and by virtue of the aforesaid insurance policy, thereby subrogating
herein plaintiff to all the rights and causes of action appertaining to
the consignee against the defendants;[9]
On March 20, 2000, Prudential filed a Motion to Declare Defendant in Default,
[10]
alleging among others that on March 1, 2000 a copy of the summons was
served upon petitioners thru cashier Cristina Figueroa and that despite
receipt thereof petitioners failed to file any responsive pleading.
Acting on the motion, the MeTC issued an Order
[11] declaring Cheng Lie and Atiko in default and allowing Prudential to present its evidence
ex-parte.
On August 6, 2002, the MeTC rendered its judgment by default. Atiko then filed a Notice of Appeal
[12] dated November 4, 2002.
Proceedings before the Regional Trial Court and the Court of AppealsIn its Memorandum of Appeal,
[13]
Atiko argued that Prudential failed to prove the material allegations
of the complaint. Atiko asserted that Prudential failed to prove by
preponderance of evidence that it is a domestic corporation with legal
personality to file an action; that Cheng Lie is a private foreign
juridical entity operating its shipping business in the Philippines thru
Atiko as its shipagent; that Cheng Lie is a common carrier, which owns
and operates M/S Katjana; that Prudential was subrogated to the rights
of Oriental; and, that Atiko can be held solidarily liable with Cheng
Lie.
Although assisted by the same counsel, Cheng Lie filed its own Memorandum of Appeal
[14] maintaining that the MeTC never acquired jurisdiction over its person.
On
April 8, 2003, the RTC rendered its Decision dismissing the appeal and
affirming the Decision of the MeTC. Atiko and Cheng Lie challenged the
RTC Decision before the CA
via a Petition for Review
[15] under Rule 42 of the Rules of Court but the appellate court affirmed the RTC's Decision.
Hence, this petition.
Issues
In their Memorandum,
[16] petitioners raised the following issues:
- WHETHER
X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY MAKATI RTC
AND THE COURT OF APPEALS IS NULL AND VOID FOR FAILURE TO ACQUIRE
JURISDICTION OVER THE PERSONS OF THE PETITIONERS-DEFENDANTS CONSIDERING
THAT THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE 14
OF THE RULES OF COURT.
- WHETHER X X X THE
RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE MATERIAL ALLEGATIONS IN
THE COMPLAINT EVEN IN DEFAULT JUDGMENT OR WHETHER OR NOT IN DEFAULT
JUDGMENT, ALL ALLEGATIONS IN THE COMPLAINT ARE DEEMED CONTROVERTED,
HENCE, MUST BE PROVED BY COMPETENT EVIDENCE.
2.1. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS LEGAL PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.
2.2.
WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE THAT
PETITIONER-DEFENDANT ATIKO IS THE SHIPAGENT OF PETITIONER-DEFENDANT
CHENG LIE EVEN IN DEFAULT JUDGMENT.
2.3. WHETHER X X X THE
TESTIMONIES OF THE WITNESSES AND THE DOCUMENTARY EXHIBITS CAN BE
CONSIDERED FOR PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE
OFFERED.
2.4. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN
DEFAULT ADDRESSED AND SENT TO ONLY ONE OF THE DEFENDANTS WOULD BIND THE
OTHER DEFENDANT TO WHOM THE MOTION WAS NOT ADDRESSED AND NOT SENT.[17]
Our Ruling
The
petition is partly meritorious. We shall first tackle the factual
matters involved in this case, then proceed with the jurisdictional
issues raised.
Petitioners raised factual matters which
are not the proper subject of this appeal.Petitioners
contend that the lower courts grievously erred in granting the
complaint because, even if they were declared in default, the respondent
still has the burden of proving the material allegations in the
complaint by preponderance of evidence. Petitioners further argue that
respondent miserably failed to discharge this burden because it failed
to present sufficient proof that it is a domestic corporation. Hence,
respondent could not possibly maintain the present action because only
natural or juridical persons or entities authorized by law can be
parties to a civil action. Petitioners also claim that respondent
failed to present competent proof that Cheng Lie is a foreign shipping
company doing business in the Philippines thru its duly authorized
shipagent Atiko. Lastly, petitioners assert that respondent failed to
prove that Cheng Lie is a common carrier which owned, operated and/or
chartered M/S Katjana thru its duly authorized shipagent Atiko.
Petitioners emphasize that there is no proof, testimonial or otherwise,
which would support the material allegations of the complaint. They
also insist that respondent's witnesses do not have personal knowledge
of the facts on which they were examined.
Respondent, for its
part, assails the propriety of the remedy taken by the petitioners. It
posits that petitioners advanced factual matters which are not the
proper subject of a petition for review on
certiorari. Besides,
the lower courts consistently held that the allegations in respondent's
complaint are supported by sufficient evidence.
We agree with respondent.
A
cursory reading of the issues raised readily reveals that they involve
factual matters which are not within the province of this Court to look
into. Well-settled is the rule that in petitions for review on
certiorari under Rule 45, only questions of law can be raised. While there are recognized exceptions to this rule,
[18]
none is present in this case. "[A]s a matter of x x x procedure,
[this] Court defers and accords finality to the factual findings of
trial courts, [especially] when such findings were [affirmed by the RTC
and the CA. These] factual determination[s], as a matter of long and
sound appellate practice, deserve great weight and shall not be
disturbed on appeal x x x. [I]t is not the function of the Court to
analyze and weigh all over again the evidence or premises supportive of
the factual holding of the lower courts."
[19]MeTC properly acquired jurisdiction
over the person of Atiko.Petitioners
also argue that the MeTC did not acquire jurisdiction over the person
of Atiko as the summons was received by its cashier, Cristina Figueroa.
They maintain that under Section 11, Rule 14 of the Rules of Court,
when the defendant is a domestic corporation like Atiko, summons may be
served only upon its president, general manager, corporate secretary,
treasurer or in-house counsel.
We are not persuaded. True, when
the defendant is a domestic corporation, service of summons may be made
only upon the persons enumerated in Section 11, Rule 14 of the Rules of
Court.
[20] However,
jurisdiction over the person of the defendant can be acquired not only
by proper service of summons but also by defendant's voluntary
appearance without expressly objecting to the court's jurisdiction, as
embodied in Section 20, Rule 14 of the Rules of Court,
viz:
SEC. 20. Voluntary appearance. - The
defendant's voluntary appearance in the action shall be equivalent to
service of summons. The inclusion in a motion to dismiss of other
grounds aside from lack of jurisdiction over the person of the defendant
shall not be deemed a voluntary appearance.
In the case at bench, when Atiko filed its Notice of Appeal,
[21] Memorandum of Appeal,
[22] Motion for Reconsideration
[23] of the April 8, 2003 Decision of the RTC, and Petition for Review,
[24]
it never questioned the jurisdiction of the MeTC over its person. The
filing of these pleadings seeking affirmative relief amounted to
voluntary appearance and, hence, rendered the alleged lack of
jurisdiction moot. In
Palma v. Galvez,
[25]
this Court reiterated the oft-repeated rule that "the filing of motions
seeking affirmative relief, such as, to admit answer, for additional
time to file answer, for reconsideration of a default judgment, and to
lift order of default with motion for reconsideration, are considered
voluntary submission to the jurisdiction of the court."
Moreover, petitioners' contention is a mere afterthought. It was only in their Memorandum
[26] filed with this Court where they claimed, for the first time, that Atiko was not properly served with summons. In
La Naval Drug Corporation v. Court of Appeals,
[27]
it was held that the issue of jurisdiction over the person of the
defendant must be seasonably raised. Failing to do so, a party who
invoked the jurisdiction of a court to secure an affirmative relief
cannot be allowed to disavow such jurisdiction after unsuccessfully
trying to obtain such relief.
[28]It may not be amiss to state too that in our February 13, 2006 Resolution,
[29] we reminded the parties that they are not allowed to interject new issues in their memorandum.
MeTC did not acquire jurisdiction over
the person of Cheng Lie.Petitioners
likewise challenge the validity of the service of summons upon Cheng
Lie, thru Atiko. They claim that when the defendant is a foreign
private juridical entity which has transacted business in the
Philippines, service of summons may be made, among others, upon its
resident agent. In this case, however, there is no proof that Atiko is
the local agent of Cheng Lie.
On this score, we find for the petitioners. Before it was amended by A.M. No. 11-3-6-SC,
[30] Section 12 of Rule 14 of the Rules of Court reads:
SEC. 12. Service upon foreign private juridical entity. - When
the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its
resident agent designated in accordance with law for that purpose, or,
if there be no such agent, on the government official designated by law
to that effect, or on any of its officers or agents within the
Philippines.
Elucidating on the above provision of the Rules of Court, this Court declared in
Pioneer International, Ltd. v. Guadiz, Jr.[31] that when the defendant is a foreign juridical entity,
service of summons may be made upon:
- Its resident agent designated in accordance with law for that purpose;
- The government official designated by law to receive summons if the corporation does not have a resident agent; or,
- Any of the corporation's officers or agents within the Philippines.
In
the case at bench, no summons was served upon Cheng Lie in any manner
prescribed above. It should be recalled that Atiko was not properly
served with summons as the person who received it on behalf of Atiko,
cashier Cristina Figueroa, is not one of the corporate officers
enumerated in Section 11 of Rule 14 of the Rules of Court. The MeTC
acquired jurisdiction over the person of Atiko not thru valid service of
summons but by the latter's voluntary appearance. Thus, there being no
proper service of summons upon Atiko to speak of, it follows that the
MeTC never acquired jurisdiction over the person of Cheng Lie. To rule
otherwise would create an absurd situation where service of summons is
valid upon the purported principal but not on the latter's co-defendant
cum putative
agent despite the fact that service was coursed thru said agent.
Indeed, in order for the court to acquire jurisdiction over the person
of a defendant foreign private juridical entity under Section 12, Rule
14 of the Rules of Court, there must be prior valid service of summons
upon the agent of such defendant.
Also, the records of this case
is bereft of any showing that cashier Cristina Figueroa is a government
official designated by law to receive summons on behalf of Cheng Lie or
that she is an officer or agent of Cheng Lie within the Philippines.
Hence, her receipt of summons bears no significance insofar as Cheng Lie
is concerned. At this point, we emphasize that the requirements of the
rule on summons must be strictly followed,
[32] lest we ride roughshod on defendant's right to due process.
[33]With
regard to Cheng Lie's filing of numerous pleadings, the same cannot be
considered as voluntary appearance. Unlike Atiko, Cheng Lie never sought
affirmative relief other than the dismissal of the complaint on the
ground of lack of jurisdiction over its person. From the very
beginning, it has consistently questioned the validity of the service of
summons and the jurisdiction of the MeTC over its person.
It
does not escape our attention though that Cheng Lie's pleadings do not
indicate that the same were filed by way of special appearance. But
these, to our mind, are mere inaccuracies in the title of the
pleadings. What is important are the allegations contained therein
which consistently resisted the jurisdiction of the trial court. Thus,
Cheng Lie cannot be considered to have submitted itself to the
jurisdiction of the courts.
[34]In
fine, since the MeTC never acquired jurisdiction over the person of
Cheng Lie, its decision insofar as Cheng Lie is concerned is void.
[35]Cheng Lie was improperly declared in default.Applying
the above disquisition, the MeTC likewise erred in declaring Cheng Lie
in default. Settled is the rule that a defendant cannot be declared in
default unless such declaration is preceded by a valid service of
summons.
[36]WHEREFORE, the instant petition is
PARTIALLY GRANTED. The assailed December 10, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 82547 is
AFFIRMED with the MODIFICATION that the judgment insofar as Cheng Lie Navigation Co., Ltd. is concerned is declared
VOID for failure to acquire jurisdiction over its person as there was improper service of summons.
SO ORDERED.
Corona, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and
Villarama, Jr., JJ., concur.
[1] Rules of Court, Rule 14, Section 11. It reads:
Section 11.
Service upon domestic private juridical entity.
- When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical
personality, service may be made on the president, managing partner,
general manager, corporate secretary, treasurer, or in-house counsel.
[2] CA
rollo,
pp. 160-181; penned by Associate Justice Monina Arevalo-Zenarosa and
concurred in by Associate Justices Remedios A. Salazar-Fernando and
Danilo B. Pine.
[3] Id. at 35-39; penned by Judge Zeus C. Abrogar.
[4] Id. at 49-50; penned by Judge Evelyn S. Arcaya-Chua.
[5] Id. at 50.
[6] Id. at 205-207.
[7] Id. at 46.
[8] Id. at 42-45. Docketed as Civil Case No. 68976.
[9] Id. at 42-44.
[10] Id. at 46-47.
[11] Id. at 48; penned by Judge Socorro B. Inting.
[12] Id. at 51.
[13] Id. at 54-65.
[14] Id. at 75-83.
[15] Id. at 2-34.
[16] Rollo, pp. 204-225.
[17] Id. at 207.
[18]
"[S]uch as when: (1) the conclusion is grounded on speculations,
surmises or conjectures; (2) the inference is manifestly mistaken,
absurd or impossible; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of
fact are conflicting; (6) there is no citation of specific evidence on
which the factual findings are based; (7) the findings of absence of
facts are contradicted by the presence of evidence on record; (8) the
findings of the [Court of Appeals] are contrary to those of the trial
court; (9) the [Court of Appeals] manifestly overlooked certain relevant
and undisputed facts that, if properly considered, would justify a
different conclusion; (10) the findings of the [Court of Appeals] are
beyond the issues of the case; and (11) such findings are contrary to
the admissions of both parties." (
International Container Terminal Services, Inc. v. FGU Insurance Corporation, G.R. No. 161539, June 27, 2008, 556 SCRA 194, 199.)
[19] Tapuroc v. Loquellano Vda. de Mende, G.R. No. 152007, January 22, 2007, 512 SCRA 97, 105-106.
[20] Supra note 1.
[21] CA
rollo, p. 51.
[22] Id. at 54-65.
[23] Id. at 98-108.
[24] Id. at 2-34.
[25] G.R. No. 165273, March 10, 2010, 615 SCRA 86, 99.
[26] Rollo, pp. 204-225.
[27] G.R. No. 103200, August 31, 1994,
236 SCRA 78, 91.
[28] Tijam v. Sibonghanoy, 131 Phil. 556, 564 (1968).
[29] Rollo, pp. 202-203.
[30]
AMENDMENT OF SECTION 12, RULE 14 OF THE RULES OF COURT ON SERVICE UPON
FOREIGN PRIVATE JURIDICAL ENTITY. As amended, said provision of the
Rules of Court now reads:
SEC. 12.
Service upon foreign private juridical entity.
-- When the defendant is a foreign private juridical entity which has
transacted business in the Philippines, service may be made on its
resident agent designated in accordance with law for that purpose, or,
if there be no such agent, on the government official designated by law
to that effect, or on any of its officers or agents within the
Philippines.
If the foreign private juridical entity is not
registered in the Philippines or has no resident agent, service may,
with leave of court, be effected out of the Philippines through any of
the following means:
a) By personal service coursed through the
appropriate court in the foreign country with the assistance of the
Department of Foreign Affairs;
b) By publication once in a
newspaper of general circulation in the country where the defendant may
be found and by serving a copy of the summons and the court order
by-registered mail at the last known address of the defendant;
c) By facsimile or any recognized electronic means that could generate proof of service; or
d) By such other means as the court may in its discretion direct.
[31] G.R. No. 156848, October 11, 2007, 535 SCRA 584, 601.
[32] Id. at 600.
[33] Pascual v. Pascual, G.R. No. 171916, December 4, 2009, 607 SCRA 288, 291.
[34] See also the similar case of
Hongkong and Shanghai Banking Corporation Limited v. Catalan, 483 Phil. 525 (2004).
[35] Pascual v. Pascual, supra at 306.
[36] Vlason Enterprises Corporation v. Court of Appeals, 369 Phil. 269, 307 (1999).